<PAGE>
As filed with the Securities and Exchange Commission on February 22, 1999
Registration No. 333-70693
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------
AMENDMENT NO. 1
to
FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-------------------
Multex.com, Inc.
(Exact Name of Registrant as Specified in its Charter)
-------------------
Delaware 7375 22-3253344
(State or Other (Primary Standard Industrial (I.R.S. Employer
Jurisdiction of Classification Code Number)Identification Number)
Incorporation or
Organization)
33 Maiden Lane, 5th Floor
New York, New York 10038
(212) 859-9800
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
-------------------
Isaak Karaev
President and Chief Executive Officer
Multex.com, Inc.
33 Maiden Lane, 5th Floor
New York, New York 10038
(212) 859-9800
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
-------------------
Copies to:
Alexander D. Lynch, Esq. Philip P. Rossetti, Esq.
Brian B. Margolis, Esq. Joseph E. Mullaney III, Esq.
Brobeck, Phleger & Harrison LLP Hale and Dorr LLP
1633 Broadway, 47th Floor 60 State Street
New York, New York 10019 Boston, Massachusetts 02109
(212) 581-1600 (617) 526-6000
-------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
-------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ +
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This prospectus is not an +
+offer to sell securities, and we are not soliciting offers to buy these +
+securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED FEBRUARY 22, 1999
[LOGO] MULTEX.COM
3,000,000 Shares
Common Stock
Multex.com, Inc. is offering 3,000,000 shares of its common stock. This is
Multex.com's initial public offering, and no public market currently exists for
its shares. We have applied to have the shares we are offering approved for
quotation on the Nasdaq National Market under the symbol "MLTX." We anticipate
that the initial public offering price will be between $9.00 and $11.00 per
share.
--------------
Investing in our common stock involves risks.
See "Risk Factors" beginning on page 7.
--------------
<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public Offering Price....................................... $ $
Underwriting Discounts and Commissions...................... $ $
Proceeds to Multex.com...................................... $ $
</TABLE>
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
Multex.com and some of its existing stockholders have granted the
underwriters a 30-day option to purchase up to an additional 450,000 shares of
common stock to cover over-allotments. BancBoston Robertson Stephens Inc.
expects to deliver the shares of common stock to purchasers on , 1999.
--------------
BancBoston Robertson Stephens
CIBC Oppenheimer
Dain Rauscher Wessels
a division of Dain Rauscher Incorporated
The date of this prospectus is , 1999.
<PAGE>
Description of graphics on inside front and back cover pages of prospectus:
Inside front cover (first page of six-page gate-fold):
The page depicts the four types of Multex.com subscribers and users:
. brokers and research providers;
. corporations;
. institutional investors;
. and individual investors.
The caption on the bottom of the page is:
Multex.com
The Online Investment Research Network(TM)
First inside page of gate-fold (second page of six-page gate-fold):
The diagram on this page presents how Multex.com distributes investment
research and information. At the top of the diagram is a block of text
listing on a separate line, the general category of "global investment
research providers," and then on separate lines, the following sub-
categories: "brokerage firms, investment banks and third-party research
providers." Connected to this block of text by an arrow is a rectangle
representing the Internet. The Internet rectangle is connected by an
arrow to the Multex.com logo, which in turn is connected by an arrow to
a rectangle called "Distribution." The "Distribution" rectangle is
connected to four circles. The first circle represents brokers and
research providers. The second circle represents institutional
investors. The third circle represents corporations. The fourth circle
represents individual investors.
The text on the top of this page is:
"Multex.com"
"The Online Investment Research Network"
"Multex.com is a leading provider of online investment research
services. Multex.com enables timely access to over 1,000,000 research
reports from more than 400 investment banks, brokerage firms and third-
party research providers worldwide. More than 600,000 investors and
financial professionals have access to Multex.com's online research
services."
"The diagram below highlights the way Multex.com collects and
processes investment research. Multex.com distributes research reports
and investment information over the Internet and through strategic
distribution relationships to brokers and research providers,
institutional investors, corporations and individual investors."
Second inside page (third inside page of six-page gate-fold):
This page pictures the logos of selected research providers.
The text on the top of the page is:
"Selected Research Providers (from over 400 providers worldwide)"
<PAGE>
Logos for each of the following are pictured:
<TABLE>
<S> <C> <C>
Merrill Lynch JP Morgan PaineWebber
Warburg Dillon Read BTAlex.Brown Morgan Stanley Dean Witter
BancBoston Robertson
Stephens Dresdner Kleinwort Benson CIBC Oppenheimer
Hambrecht & Quist Schroder Securities Ltd. Salomon Smith Barney
ING Barings Keefe, Bruyette & Woods Deutsche Morgan Grenfell
SG Securities PTE ABN Amro Chicago Corporation Dain Rauscher Wessels
Piper Jaffray Brown Brothers Harriman & Co. Jardine Fleming Holdings Ltd.
Credit Lyonnais Europe Credit Suisse First Boston J.C. Bradford & Co.
Commerzbank AG Interstate/Johnson Lane Gruntal & Co.
Bear Stearns & Co.
Inc. RBC Dominion Securities Inc. Standard & Poor's
Daiwa Institute of
Research Ltd. Cazenove & Co. Jefferies & Company, Inc.
</TABLE>
Two inside pages of back cover:
The pages fold out to four quadrants with each dedicated to a Multex.com
product.
On the top left of the two pages is a square diagram divided into four
sections. Three sections show different web pages of MultexEXPRESS. The fourth
section has a line-drawing depicting brokers and research providers. The text
along the left side of the boxes reads "Brokers & Research Providers." The text
on the right side of the boxes reads:
"Brokers & Research Providers"
"Over 400 investment banks, brokerage firms and third-party providers
contribute financial research reports to Multex.com for real-time
commingled distribution to their institutional clients via MultexNET.
With MultexEXPRESS these firms can distribute their own proprietary
financial research and corporate documents to their internal staff and
customers over the Internet or through their own corporate intranet.
On the bottom left of the two pages is a square diagram divided into four
sections. Three sections show different web pages of MultexNET. The fourth
section has a line-drawing depicting institutional investors. The text along
the left side of the boxes reads "Institutional Investors." The text on the
right side of the boxes reads:
"Institutional Investors"
"Over 11,000 mutual fund managers, portfolio managers, and other
institutional investors are able to use MultexNET, which offers timely
online access to over 1,000,000 research reports and other investment
information from more than 400 contributors."
On the top right of the two pages is a square diagram divided into four
sections. Three sections show different web pages of Multex Research-On-Demand.
The fourth section has a line-drawing depicting a presentation in a corporate
conference room. The text on the right side of the boxes reads "Corporations."
The text on the left side of the boxes reads:
"Corporations"
"Financial institutions and corporations access Multex Research-On-
Demand both directly and through various online distribution partners.
This service provides access to recently published reports on a pay-
per-view basis."
On the bottom right of the two pages is a square diagram divided into four
sections. Three sections show different web pages of Multex Investor Network.
The fourth section has a line-drawing depicting a person reading a paper on a
chair. The text on the right side of the boxes reads "Individual Investors."
The text on the left side of the boxes reads:
<PAGE>
"Individual Investors"
"The Multex Investor Network (www.multexinvestor.com) is an
interactive member community for individual investors. The service
offers investment content from Multex.com, sponsoring brokerage firms
and investment banks, as well as member generated content. Members also
have access to over 250,000 premium "pay-per-view" reports from over
250 research providers."
The center of the two pages has the Multex.com logo with lines attaching it
to each of the four square diagrams.
The inside fold of the back cover is divided into two parts. The top half
pictures logos of online distribution partners targeting institutional
investors and the bottom half pictures logos for online distribution partners
targeting individual investors.
The text on the top of the page is:
"Online Distribution Partners Targeting Institutional Investors"
Logos for each of the following are pictured:
<TABLE>
<S> <C> <C>
Bloomberg Reuters Disclosure/Global Access
Bridge Automatic Data Processing Inc. Dow Jones Interactive
Wavephore
Newscast CompuServe
</TABLE>
A caption under this section notifies the reader that partnerships
with Bridge and CompuServe are expected to commence in 1999.
The text on the bottom half of this page is:
"Online Distribution Partners Targeting Individual Investors"
Logos for each of the following are pictured:
<TABLE>
<S> <C> <C>
America Online CBS MarketWatch.com Wall Street Journal.com
Quote.com CNNfn Bloomberg.com
Data Broadcasting Corporation Edgar Online Hoover's Online
MediaOne Big Charts ZD Net
</TABLE>
The back cover contains the Multex.com logo in the center.
<PAGE>
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus. In this prospectus, references to "Multex.com",
"we", "us" and "our" refer to Multex.com, Inc. and its consolidated
subsidiaries.
Until , 1999 (25 days after the date of this prospectus), all dealers
that buy, sell or trade our common stock, whether or not participating in this
offering, may be required to deliver a prospectus. This requirement is in
addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................. 4
Risk Factors............................................................. 7
Forward-Looking Statements............................................... 19
Our Address and Telephone Number......................................... 19
Use of Proceeds.......................................................... 20
Dividend Policy.......................................................... 20
Capitalization........................................................... 21
Dilution................................................................. 22
Selected Consolidated Financial Data..................................... 23
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 24
Business................................................................. 33
Management............................................................... 47
Certain Transactions..................................................... 56
Principal Stockholders................................................... 58
Description of Capital Stock............................................. 61
Shares Eligible for Future Sale.......................................... 65
Underwriting............................................................. 67
Legal Matters............................................................ 69
Experts.................................................................. 69
Additional Information................................................... 70
Index to Consolidated Financial Statements............................... F-1
</TABLE>
---------------------
MultexNET(R) and the Multex.com logos are registered trademarks and service
marks of Multex.com. MultexEXPRESS, Multex Research-On-Demand, Multex Investor
Network and the Multex.com logo are trademarks and service marks of Multex.com.
This prospectus contains other trade names, trademarks and service marks of
Multex.com and of other companies.
3
<PAGE>
SUMMARY
Because this is only a summary, it does not contain all the information that
may be important to you. You should read the entire prospectus, including "Risk
Factors" and the Consolidated Financial Statements and the related Notes,
before deciding to invest in our common stock.
Multex.com
Multex.com is a leading provider of online investment research and
information services designed to meet the needs of individual and institutional
investors, including investment banks, brokerage firms and corporations. Our
services enable timely online access to over 1,000,000 research reports and
other investment information on over 15,000 companies from more than 400
investment banks, brokerage firms and third-party research providers worldwide.
We offer research reports from 18 of the 20 leading U.S. investment banks and
brokerage firms according to the Institutional Investor rankings, including
Merrill Lynch, Morgan Stanley Dean Witter, Goldman Sachs and Salomon Smith
Barney. Through various arrangements, more than 600,000 individual investors,
institutional investors and financial professionals, including mutual fund
managers, portfolio managers, brokers and their clients, are able to use our
services. In addition to making our services available through our own Web
sites, we have established a number of strategic distribution relationships to
reach both the individual investor market and the institutional investor
market, including relationships with America Online, Automatic Data Processing,
Bloomberg, Bridge, Dow Jones and Reuters.
In recent years, there has been substantial growth in the ownership of equity
and fixed income securities worldwide. The proliferation in equity ownership
and associated trading activity has created a need for more investment research
and market information on the part of investors who seek higher returns on
their portfolios. The emergence of the Internet as a tool for communications
and commerce is also rapidly changing the markets for financial transactions
and information services. Consequently, individuals are showing strong
preferences for transacting various types of business, including trading
securities, via the Internet, rather than in person or over the telephone.
Individual investors have accepted and even welcomed self-directed online
transactions because these transactions can be faster, less expensive and more
convenient than transactions conducted through a human intermediary. As these
individual investors seek to independently manage their financial assets, they
are increasingly seeking investment research and other financial reports
online.
Our services facilitate the timely receipt and exchange of investment
research and information between individual and institutional investors and
investment banks, brokerage firms and third-party research providers worldwide.
We provide access to the investment research and information necessary to make
critical investment decisions and enable research providers to target their
research more effectively. Our services include:
. MultexNET--enables institutional investors to access commingled
investment research reports from multiple sources on a real-time basis;
. MultexEXPRESS--enables investment banks, brokerage firms and other
financial institutions to distribute their proprietary financial research
as well as other corporate documents to their employees and selected
customers;
. Multex Research-On-Demand--offers corporations, financial institutions
and advisors, institutional investors, other professional service firms
and libraries the ability to access more than 450,000 research reports and
other information from over 250 MultexNET research providers; and
. Multex Investor Network--targets the rapidly growing individual investor
market and offers its members access to over 250,000 research reports from
over 250 investment banks, brokerage firms and third-party research
providers.
4
<PAGE>
Our objective is to become the leading provider of online investment research
services for the individual and institutional investment community. Key
elements of our strategy are to:
. continue to grow the size and quality of our investment research
database, as well as add distribution channels, in order to increase the
sales of MultexNET and Multex Research-On-Demand;
. leverage our proprietary Web-based technology platform in order to
increase the number of MultexEXPRESS installations;
. increase awareness of (i) the Multex.com brand among individual investors
as a means to grow membership of the Multex Investor Network, which will
drive the sale of sponsorships and advertising and generate pay-per-view
revenue, and (ii) the family of Multex.com branded and co-branded Web
sites; and
. utilize our existing proprietary technology to create additional revenue
sources from new products and services.
--------------------
Except as otherwise noted, all information in this prospectus:
. reflects the automatic conversion of all of our outstanding shares of
preferred stock into an aggregate of 14,861,112 shares of common stock
upon the completion of this offering;
. reflects a one-for-two reverse stock split of all of our outstanding
shares of common stock to be effected before the completion of this
offering; and
. assumes no exercise of the underwriters' over-allotment option.
--------------------
Information contained on our Web sites should not be considered a part of this
prospectus.
5
<PAGE>
The Offering
Common stock offered by Multex.com...... 3,000,000 shares
Common stock to be outstanding after
this offering.......................... 21,112,237 shares
Use of proceeds......................... For expansion of our sales and mar-
keting efforts, expansion of our in-
ternational operations, capital ex-
penditures, general corporate pur-
poses and possible acquisitions. See
"Use of Proceeds."
Proposed Nasdaq National Market MLTX
symbol.................................
Summary Consolidated Financial Data
(in thousands, except per share data)
Set forth below are the consolidated statement of operations data for the
years ended December 31, 1996, 1997 and 1998, and the consolidated balance
sheet data, as of December 31, 1998, on an actual basis and on a pro forma as
adjusted basis to give effect to (i) the sale by Multex.com of 3,000,000 shares
of common stock in this offering at an assumed initial public offering price of
$10.00 per share, after deducting the underwriting discounts and estimated
offering expenses payable by Multex.com, and the application of the net
proceeds from this offering, and (ii) the conversion of our preferred stock
into an aggregate of 14,861,112 shares of common stock upon the completion of
this offering.
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1996 1997 1998
------- ------- --------
<S> <C> <C> <C>
Statement of Operations Data:
Revenues........................................... $ 2,647 $ 6,014 $ 13,182
Gross profit....................................... 1,837 4,782 10,287
Loss from operations............................... (6,470) (8,162) (8,901)
Net loss........................................... $(6,410) $(8,037) $ (9,743)
Pro forma net loss per share....................... -- -- $ (0.55)
Pro forma weighted average shares outstanding...... -- -- 17,708
</TABLE>
<TABLE>
<CAPTION>
December 31, 1998
---------------------
Pro forma
Actual as adjusted
-------- -----------
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents, and marketable securities..... $ 22,332 $ 49,332
Working capital.......................................... 19,736 46,736
Total assets............................................. 27,968 54,968
Deferred revenues........................................ 2,683 2,683
Convertible preferred stock.............................. 59,860 --
Total stockholders' (deficit) equity .................... (37,215) 49,645
</TABLE>
6
<PAGE>
RISK FACTORS
Any investment in our shares of common stock involves a high degree of risk.
You should consider carefully the following information about these risks,
together with the other information contained in this prospectus, before you
decide to buy our common stock. If any of the following risks actually occur,
our business, results of operations and financial condition would likely
suffer. In these circumstances, the market price of our common stock could
decline, and you may lose all or part of the money you paid to buy our common
stock.
Risks Related to Our Operations
We have a limited operating history
Although we commenced our operations in April 1993, all of our current
services were launched since June 1996. Accordingly, we have a limited
operating history upon which you can evaluate our business. In order to be
successful, we must increase our revenues from subscription fees for MultexNET
and MultexEXPRESS, generate additional sales of investment research on a pay-
per-view basis through Multex Research-On-Demand and attract more users to
Multex Investor Network. However, as an early stage company in the new and
rapidly evolving market for the distribution of investment research and other
information over the Internet, we face numerous risks and uncertainties. Some
of these risks relate to our ability to:
. anticipate and adapt to the changing Internet market;
. attract more subscribers;
. continue to collect investment research and other financial information
from our research and information providers;
. implement our sales and marketing initiatives, both domestically and
internationally;
. attract, retain and motivate qualified personnel;
. respond to actions taken by our competitors;
. continue to build an infrastructure to effectively manage our growth and
handle any future increased usage; and
. integrate acquired businesses, technologies, products and services.
If we are unsuccessful in addressing these risks or in executing our business
strategy, our business, results of operations and financial condition will be
materially and adversely affected. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
We have a history of losses and expect future losses
Since our incorporation, we have not been profitable on an annual or
quarterly basis. We incurred net losses of $6.4 million, $8.0 million and $9.7
million for the years ended December 31, 1996, 1997 and 1998. We expect
operating losses and negative cash flows to continue for the foreseeable future
as we continue to incur significant operating expenses and make capital
investments in our business. We may not ever generate sufficient revenues to
achieve profitability. Even if we do achieve profitability, we may not sustain
or increase profitability on a quarterly or annual basis in the future. At
December 31, 1998, we had an accumulated deficit of $32.1 million. We have
financed our operations to date primarily through the sale of equity
securities. See "Selected Consolidated Financial Data" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
7
<PAGE>
Fluctuations in our operating results may negatively impact our stock price
Our revenues, margins and operating results have fluctuated significantly in
the past and are expected to continue to fluctuate significantly in the future
due to a variety of factors, many of which are outside of our control. These
factors include:
.demand for our services;
.the size and timing of both new and renewal subscriptions;
.the number, timing and significance of new services introduced by us and
our competitors;
.our ability to develop, market and introduce new and enhanced services on
a timely basis;
.the level of service and price competition;
.changes in operating expenses;
.changes in the mix of services offered;
.changes in our sales incentive strategy;
.sharp declines in the volume of securities transactions or the prices of
securities generally; and
.general economic factors.
Our cost of revenues consists principally of distribution fees and royalties
which fluctuate depending upon the demand for our services, and fixed
telecommunications costs. In addition, a substantial portion of our operating
expenses is related to personnel costs, marketing programs and overhead, which
cannot be adjusted quickly and are therefore relatively fixed in the short
term. Our operating expense levels are based, in significant part, on our
expectations of future revenues on a quarterly basis. If actual revenues on a
quarterly basis are below management's expectations, or if our expenses precede
increased revenues, both gross margins and results of operations would be
materially and adversely affected because a relatively small amount of our
costs and expenses varies with our revenues in the short term.
Due to all of the foregoing factors and the other risks discussed in this
prospectus, you should not rely on period-to-period comparisons of our results
of operations as an indication of future performance. It is possible that in
some future periods our results of operations may be below the expectations of
public market analysts and investors. In this event, the market price of our
common stock is likely to fall. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Selected Unaudited Quarterly
Results of Operations."
We are dependent on research and information providers and our business would
be materially and adversely affected if we were to lose one or more significant
research or information providers
The loss of a major research or information provider would harm our business
We are dependent upon the continued provision of high-quality investment
research reports from investment banks, brokerage firms and third-party
research providers. Some of these arrangements are not embodied in written
contracts and many of these arrangements can be terminated by the provider on
short notice. At present, approximately 60% of our over 400 information
providers permit us to offer the research for sale after a specified embargo
period, generally 15 days. The remaining information providers do not permit
these sales. Many of our providers of research reports and other information
compete with one another and, to some extent, with us for subscribers. None of
these information providers have arrangements to provide research or
information exclusively to us. The loss of one or more significant information
providers would decrease the research and other information which we can offer
our users and would have a material and adverse effect on our business, results
of operations and financial condition.
8
<PAGE>
Royalty payments to research providers increase our costs
Royalties payable to our information providers to obtain distribution rights
to research reports included in Multex Research-On-Demand constitute a
significant portion of our cost of revenues. If we are required to increase the
royalties payable to these information providers, these increased royalty
payments could have a material and adverse effect on our business, results of
operations and financial condition. See "Business--Research and Information
Providers."
Some of our competitors are parties to exclusive distribution agreements
A number of leading investment banks, brokerage firms and third-party
research providers are parties to exclusive distribution arrangements with our
competitors, including First Call Corporation and The Investext Group (both of
which are subsidiaries of Thomson Financial Services, Inc., a leading worldwide
provider of financial information services). Consequently, we cannot provide
our users with the investment research and other information provided by these
investment banks, brokerage firms and third-party research providers, which may
put us at a competitive disadvantage. In the event that additional investment
banks, brokerage firms and third-party research providers enter into exclusive
distribution arrangements or that we are hindered in our ability to offer our
own services due to the lack of content from these investment banks, brokerage
firms and third-party research providers, our business, results of operations
and financial condition would be materially and adversely affected. See
"Business--Strategy" and "--Services."
Unauthorized distribution of research reports could harm us
Our proprietary software technology enables us to distribute a particular
research report or other financial information only to those users who have
been authorized or entitled to access the report by the information provider.
In particular, approximately 40% of our information providers currently supply
us with research reports and other financial information that is available only
to the customers of that information provider. We might inadvertently
distribute a particular report to a user who is not so authorized or entitled,
which could subject us to a claim for damages by the information provider or
which could harm our reputation in the marketplace, either of which could have
a material and adverse effect on our business, results of operations and
financial condition.
Our business would be materially and adversely affected if the emerging market
for online investment research does not continue to grow
The market for the distribution of investment research and other information
over the Internet has only recently begun to develop, is rapidly evolving and
is characterized by an increasing number of market entrants who have introduced
or developed electronic investment research distribution services by facsimile
and over public and private networks, online services and the Internet. As is
typical of a rapidly evolving market, demand and market acceptance for new
services are subject to a high level of uncertainty.
Because the market for our services is new and rapidly evolving, it is
difficult to predict with any assurance the growth rate, if any, and the
ultimate size of this market. We cannot assure you that the market for our
services will develop or that our services will ever achieve market acceptance.
If the market fails to develop, develops more slowly than expected, or becomes
saturated with competitors, if our services do not achieve market acceptance,
or if pricing becomes subject to significant competitive pressures, our
business, results of operations and financial condition would be materially and
adversely affected.
Our future results of operations will depend, in substantial part, on our
ability to increase the market acceptance of our services. The future viability
of MultexNET will depend upon, among other factors, our ability to expand our
direct and indirect sales and marketing channels, to attract and retain high-
quality information providers and to deliver our services across multiple
delivery platforms. The future viability of MultexEXPRESS will depend upon,
among other factors, the continued desire of investment banks, brokerage
9
<PAGE>
firms and other information providers to distribute proprietary investment
research and corporate documents over the Internet or through private networks
to their employees and customers. The future viability of Multex Research-On-
Demand will depend upon, among other factors, the acceptance of the Internet as
a medium for the distribution and sale of investment research, as well as on
our ability to build a direct and indirect sales force to sell our services, to
attract and retain high-quality information providers, and to develop and
increase our base of users. The future viability of Multex Investor Network
will depend upon, among other factors, the acceptance of the Internet as a
medium for the distribution and sale of investment research to individual
investors, and our ability to attract and retain advertisers and sponsors, new
members and additional distribution partners. In addition, in order to download
research reports and other information from Multex Investor Network, users are
required to first download the Adobe Acrobat reader, which may be difficult for
some users to accomplish. If we are unable to increase the number of users of
MultexNET, MultexEXPRESS, Multex Research-On-Demand and Multex Investor
Network, or to attract and retain information providers, our business, results
of operations and financial condition would be materially and adversely
affected. See "Business--Strategy" and "--Services."
We are dependent on strategic distribution relationships and our business would
be adversely affected if we were to lose one of our strategic distributors
We have distribution arrangements for our services with a number of third-
party distributors, including America Online, Inc., Automatic Data Processing,
Inc., Bloomberg L.P., Dow Jones & Co. Inc. and Reuters Limited, all of which
are currently generating revenues for us, and with Bridge Information Systems,
Inc., which is not currently generating revenues for us. We are dependent on
our strategic relationships for the marketing and distribution of investment
research reports and other information. Our future results of operations will
be affected by the extent to which customers of these third-party distributors
choose to subscribe to our various services. We cannot assure you that the
customers of these third-party distributors will continue to subscribe to our
services or that these third-party distributors will continue to actively
market our services. If we are unable to retain and increase the utilization of
our services by these customers, our business, results of operations and
financial condition would be materially and adversely affected. See "Business--
Strategy" and "--Services."
We cannot assure you that we will be successful in entering into additional
strategic relationships, or that any additional relationships, if entered into,
will be on terms favorable to us. Our receipt of revenues from our strategic
relationships is directly affected by the levels of effort of these
distributors. We cannot assure you that our strategic distributors will devote
the resources necessary to successfully market our services. Each of these
distributors offers services, either of their own or from our competitors,
which are in one or more respects competitive with our service offerings. In
addition, our strategic distributors have the right to terminate their
agreements with us under various specified circumstances, in some circumstances
on short notice. Furthermore, we cannot assure you that we will be able to
renew these agreements when they expire on acceptable terms, if at all. If we
are unable to maintain our existing strategic relationships or to enter into
new strategic relationships, our business, results of operations and financial
condition would be materially and adversely affected. See "Business--Strategic
Distribution Relationships."
Our business will be adversely affected if we are not successful in
establishing brand awareness for Multex Investor Network
The future success of the Multex Investor Network will depend, in part, on
our ability to increase its brand awareness. In order to build our brand
awareness we must succeed in our marketing efforts, provide high-quality
services and increase traffic to the Multex Investor Network. We intend to
increase our marketing budget substantially as part of our brand-building
efforts. Our ability to increase advertising and sponsorship revenue from the
Multex Investor Network will depend in part on our ability to increase the
number of users of our Web sites. If our marketing efforts are unsuccessful or
if we cannot increase our brand awareness, our business, financial condition
and results of operations would be materially and adversely affected.
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Our business may be adversely affected by competitive pressures
The market for the distribution of investment research and other information
over the Internet is intensely competitive. We expect competition to continue
to increase because our market poses no substantial barriers to entry.
Competition may also increase as a result of industry consolidation. Increased
competition could result in price reductions, reduced gross margins and loss of
market share, any of which would have a material and adverse effect on our
business, results of operations and financial condition.
Competition with other providers of investment research
We face direct and indirect competition for both providers of investment
research and other reports, and for subscribers, with the following types of
companies and media:
. large and well-established distributors of financial information,
including Thomson Financial Services, through its subsidiaries First Call
and Investext, and Institutional Brokers Estimate System, a subsidiary of
Primark Corp.;
. companies that provide investment research, including investment banks
and brokerage firms, many of whom have their own Web sites;
. other providers of either free or subscription research services on the
Internet;
. services provided by some of our strategic distributors which are
competitive in one or more respects with our service offerings;
. numerous prospective competitors, including Standard & Poor's, Market
Guide, Moody's and Zacks Investment Research, that offer investment
research-based services;
. various written publications, including traditional media, investment
newsletters, personal financial magazines and industry research appearing
in financial periodicals; and
. services provided by in-house management information services personnel
and independent systems integrators.
Extensive company information is available for free
We also face competition due to the fact that extensive company-specific
information, as well as general investment research relating to particular
industries, may be obtained, frequently without charge, from various public
sources, including:
. annual reports;
. Standard & Poor's company-specific reports; and
. Value Line investment research reports.
These reports are all available from public libraries and from the companies
about which these reports relate.
We believe that our ability to compete will depend upon many factors, many of
which are outside of our control. These factors include our ability to sustain
our relationships with leading providers of investment research, the timing and
market acceptance of new services and enhancements to existing services
developed by us and our competitors, ease of use, performance, price,
reliability, customer service and support, and sales and marketing efforts. Our
competitors vary in size and in the scope and breadth of services offered.
Many of our existing competitors, as well as a number of potential new
competitors, have longer operating histories, greater name recognition, larger
customer bases and significantly greater financial, technical and marketing
resources than we do. This may enable them to respond more quickly to new or
emerging technologies and changes in investor requirements, or to devote
greater resources to the development, promotion and sale of their services than
we can. Our competitors may be able to undertake more extensive marketing
campaigns, adopt more aggressive pricing policies and make more attractive
offers to potential
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<PAGE>
employees, subscribers, strategic partners and information providers. Our
competitors may develop services that are equal or superior to the services
offered by us or that achieve greater market acceptance than our services do.
In addition, current and potential competitors have established or may
establish cooperative relationships among themselves or with third parties to
improve their ability to address the needs of our existing and prospective
customers. As a result, it is possible that new competitors may emerge and
rapidly acquire significant market share. Increased competition is likely to
result in price reductions, reduced gross margins and loss of market share,
which could materially and adversely affect our business, results of operations
and financial condition. See "Business--Competition."
We have a high level of customer concentration and our business would be
materially and adversely affected if we were to lose a major subscriber or
distributor
Historically, a few of our subscribers and distributors have accounted for a
substantial majority of our revenues. Specifically, 75% of our revenues in the
year ended December 31, 1996, 68% in the year ended December 31, 1997, and 28%
in the year ended December 31, 1998 were generated by Bloomberg, Reuters,
Merrill Lynch & Co. and Gruntal & Co., each of which individually generated 10%
or more of our consolidated revenues during some of these years. In addition,
approximately 450,000 of the 500,000 end-users of MultexEXPRESS are generated
from one MultexEXPRESS installation. The loss of any major subscriber or
distributor, or any reduction or delay in subscriptions by any subscriber or
distributor, or our failure to successfully market our services to new
subscribers or distributors could have a material and adverse effect on our
business, results of operations and financial condition. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Overview" and Note 12 of Notes to the Consolidated Financial Statements.
Our business may be adversely affected by a downturn in the financial services
industry
We are dependent upon the continued demand for the distribution of investment
research and other information over the Internet, making our business
susceptible to a downturn in the financial services industry. For example, a
decrease in the number of analysts that prepare investment research reports or
in the capital dedicated to the dissemination of this research could result in
a decrease in the number of research reports and other financial information
available for distribution and a concomitant decrease in demand by our
subscribers for these reports and other information. In addition, U.S.
financial institutions are continuing to consolidate, increasing the leverage
of our information providers to negotiate price and decreasing the overall
potential market for some of our services. These factors, as well as other
changes occurring in the financial services industry, could have a material and
adverse effect on our business, results of operations and financial condition.
We may not be able to effectively manage any future growth
We have experienced rapid growth in our operations. At December 31, 1998, we
had a total of 149 employees, as compared to 106 employees at December 31, 1997
and 79 employees at December 31, 1996. We expect that the number of our
employees will continue to increase for the foreseeable future. This rapid
growth has placed, and our anticipated future growth will continue to place, a
significant strain on our managerial, operational and financial resources. As a
result, we will need to continue to improve our operational and financial
systems and managerial controls and procedures. In addition, our future success
will also depend on our ability to expand, train and manage our workforce, in
particular our sales and marketing organization, both domestically and
internationally. We will also have to maintain close coordination among our
technical, accounting, finance, marketing, sales and editorial personnel. If we
are unable to accomplish any of these objectives, our business, results of
operations and financial condition could be materially and adversely affected.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
We are dependent on our key personnel for our future success
Our future success will depend, in substantial part, on the continued service
of our senior management, including Mr. Isaak Karaev, our Chairman, President
and Chief Executive Officer, and key technical and sales
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<PAGE>
personnel, none of whom has entered into an employment agreement with us other
than a non-competition/non-disclosure agreement. We maintain a key person life
insurance policy in the amount of $1.5 million on the life of Mr. Karaev. The
loss of the services of one or more of our key personnel could have a material
and adverse effect on our business, results of operations and financial
condition. Our future success will also depend on our continuing ability to
attract, retain and motivate highly qualified technical, sales and marketing,
customer support, financial and accounting, and managerial personnel.
Competition for this personnel, in particular information technology
professionals, is intense, and we cannot assure you that we will be able to
retain our key personnel or that we will be able to attract, assimilate or
retain other highly qualified personnel in the future. We have from time to
time in the past experienced, and we expect to continue to experience in the
future, difficulty in hiring and retaining highly skilled employees with
appropriate qualifications. See "Management."
We face risks associated with international operations which could materially
and adversely affect our business
We have only limited business experience outside of the United States
We have recently commenced operations in a number of international markets
and a key component of our strategy is to continue to expand our international
operations. To date, we have only limited experience in developing and
obtaining research and other financial information relating to companies whose
securities are traded on foreign markets and in marketing, selling and
distributing our services internationally. We cannot assure you that we will be
able to successfully market, sell and deliver our services in these markets. In
some markets, including Hong Kong, we intend to rely on the sales and marketing
efforts of independent representatives. The failure of our independent
representatives to successfully solicit information providers or market our
services in these markets could have a material and adverse effect on our
business, results of operations and financial condition.
General risks of doing business internationally
There are risks inherent in doing business in international markets,
including unexpected changes in regulatory requirements, potentially adverse
tax consequences, export restrictions and controls, tariffs and other trade
barriers, difficulties in staffing and managing foreign operations, political
instability, fluctuations in currency exchange rates, and seasonal reductions
in business activity during the summer months in Europe and various other parts
of the world, any of which could have a material and adverse effect on the
success of our international operations and, consequently, on our business,
results of operations and financial condition. Furthermore, we cannot assure
you that governmental regulatory agencies in one or more foreign countries will
not determine that the services provided by us constitute the provision of
investment advice, which could result in our having to register in these
countries as an investment advisor or in our having to cease selling our
services in these countries, either of which could have a material and adverse
effect on our business, results of operations and financial condition. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
We may not be successful in implementing our acquisition strategy
We may, from time to time, pursue acquisitions of businesses, customer lists,
products or technologies that complement or expand our existing business. We
evaluate potential acquisition opportunities from time to time, including those
that could be material in size and scope. Acquisitions involve a number of
risks, including the diversion of management's attention from day-to-day
operations to the assimilation of the operations and personnel of the acquired
companies and the incorporation of acquired operations, customer lists,
products or technologies. Acquisitions could also have a material and adverse
effect on our business, results of operations or financial condition, and could
result in dilutive issuances of equity securities, the incurrence of debt and
the loss of key employees. In addition, many acquisitions must be accounted for
using the purchase method of accounting and, because most software-related
acquisitions involve the purchase of significant intangible assets, these
acquisitions typically result in substantial amortization charges and charges
for acquired research and
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<PAGE>
development projects, which could have a material and adverse effect on our
business, results of operations and financial condition. We cannot assure you
that any acquisitions will be successfully completed or that, if one or more
acquisitions are completed, the acquired businesses, customer lists, products
or technologies will generate sufficient revenue to offset the associated costs
or other adverse effects.
We may not be able to keep pace with technological changes
The market in which we operate is characterized by rapidly changing
technology, evolving industry standards, frequent new service announcements,
introductions and enhancements, and evolving customer demands. These market
characteristics are exacerbated by the emerging nature of the Internet and the
electronic distribution of investment research. Accordingly, our future success
will depend on our ability to adapt to rapidly changing technologies and
industry standards, and our ability to continually improve the performance,
features and reliability of our services in response to both evolving customer
demands and competitive service offerings. Our inability to successfully adapt
to these changes in a timely manner could have a material and adverse effect on
our business, results of operations and financial condition. Furthermore, we
cannot assure you that we will not experience difficulties that could delay or
prevent the successful design, development, testing, introduction or marketing
of new services, or that any enhancements to existing services will adequately
meet the requirements of our current and prospective customers and achieve any
degree of significant market acceptance. If we are unable, for technological or
other reasons, to develop and introduce new services or enhancements to
existing services in a timely manner or in response to changing market
conditions or customer requirements, or if our services or enhancements contain
defects or do not achieve a significant degree of market acceptance, our
business, results of operations and financial condition would be materially and
adversely affected.
Because our business is dependent upon one computer system, we are particularly
susceptible to problems caused by system failures, security breaches or other
damage to our system
Our electronic distribution of investment research utilizes proprietary
technology which resides principally on one computer system. The continued and
uninterrupted performance of our computer system is critical to our success.
Any system failure that causes interruptions in our ability to provide our
services to our customers, including failures that affect our ability to
collect research from our information providers or provide electronic
investment research to our users, could reduce customer satisfaction and, if
sustained or repeated, would reduce the attractiveness of our services. An
increase in the volume of research reports handled by our computer system, or
in the rate of requests for this research, could strain the capacity of our
software or hardware, which could lead to slower response times or system
failures. Furthermore, we face the risk of a security breach of our computer
system which could disrupt the distribution of research and other reports. Our
business, results of operations and financial condition could be materially and
adversely affected if any of these problems occur.
Our operations are dependent on our ability to protect our computer system
against damage from computer viruses, fire, power loss, telecommunications
failures, vandalism and other malicious acts, and similar unexpected adverse
events. In addition, a failure of our telecommunications providers to provide
the data communications capacity in the time frame required by us for any
reason could cause interruptions in the delivery of our services. Despite
precautions we have taken, unanticipated problems affecting our systems have
from time to time in the past caused, and in the future could cause, delays and
interruptions in the delivery of our services. Although we carry general
liability insurance, our insurance may not cover any claims by dissatisfied
providers or subscribers or may not be adequate to indemnify us for any
liability that may be imposed in the event that a claim were brought against
us. Our business, results of operations and financial condition could be
materially and adversely affected by any system failure, security breach or
other damage that interrupts or delays our operations.
We are dependent on our intellectual property and face a risk of infringement
claims
Our future success will depend, in substantial part, on our proprietary
rights. We seek to protect our proprietary rights, but these actions may be
inadequate to protect the rights covered by our patents, patent applications,
trademarks or other proprietary rights or to prevent others from claiming
violations of their
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<PAGE>
proprietary rights. Our proprietary rights may not be viable or of value in the
future since the validity, enforceability and scope of protection of
proprietary rights in Internet-related industries is uncertain and still
evolving.
Furthermore, we cannot assure you that third parties will not claim that we
have infringed their patents or other proprietary rights. From time to time we
have been, and we expect to continue to be, subject to claims by third parties
in the ordinary course of our business, including claims of alleged
infringement of the trademarks and other proprietary rights of third parties.
Although there has not been any litigation relating to these claims to date,
these claims and any resultant litigation, should they occur, could subject us
to significant liability for damages and could result in the invalidation of
our proprietary rights. In addition, even if we prevail, this litigation could
be time-consuming and expensive to defend, and could result in the diversion of
our time and attention, any of which could materially and adversely affect our
business, results of operations and financial condition. Any claims or
litigation from third parties may also result in limitations on our ability to
use the trademarks and other intellectual property subject to these claims or
litigation unless we enter into agreements with the third parties responsible
for these claims or litigation which may be unavailable on commercially
reasonable terms.
We generally enter into confidentiality agreements with our employees,
consultants and strategic partners, and generally control access to and
distribution of our proprietary information. Despite our efforts to protect our
proprietary rights from unauthorized use or disclosure, parties may attempt to
disclose, obtain or use our proprietary information. The steps we have taken
may not prevent misappropriation of our proprietary information.
Problems relating to the "Year 2000 Issue" could adversely affect our business
We have made a preliminary assessment of our Year 2000 readiness. We plan to
perform a more comprehensive Year 2000 simulation on our software during the
first half of 1999. We are also in the process of contacting our third-party
vendors, licensors and providers of software, hardware and services regarding
their Year 2000 readiness. Following this testing and after contacting these
vendors and licensors, we will be better able to make a complete evaluation of
our Year 2000 readiness to determine what costs will be necessary to be Year
2000 compliant, and to determine whether contingency plans need to be
developed. Our inability to correct a material Year 2000 problem, if one
develops, could result in an interruption in, or a failure of, certain of our
normal business activities or operations. In addition, a significant Year 2000
problem concerning our database or the research reports and other information
provided to us by our information providers could cause our users to consider
seeking alternate providers of investment research or cause an unmanageable
burden on our customer service and technical support capabilities. Any
significant Year 2000 problem could require us to incur significant
unanticipated expenses to remedy these problems and could divert management's
time and attention, either of which could have a material and adverse effect on
our business, results of operation and financial condition. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Impact of the Year 2000" for information on our state of readiness, potential
risks and contingency plans regarding the Year 2000 issue.
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Risks Related to the Internet Industry
We are dependent on the continued growth of the Internet for our future success
The Internet is relatively new and is rapidly evolving. Our business would be
materially and adversely affected if Internet usage does not continue to grow.
Internet usage may be inhibited for a number of reasons, including:
. the Internet infrastructure may not be able to support the demands placed
on it or its performance and reliability may decline as usage grows;
. security and authentication concerns with respect to transmission over
the Internet of confidential information, including credit card numbers,
and attempts by unauthorized computer users to penetrate our network
security; and
. privacy concerns, including those related to the placement by Web sites
of information on a user's hard drive without the user's knowledge or
consent in order to gather user information.
Our market is characterized by rapidly changing technologies, evolving
industry standards, frequent new product and service introductions, and
changing customer demands. To be successful, we must adapt to our rapidly
changing market by continually enhancing our existing services and adding new
services to address our customers' changing demands. We could incur substantial
costs if we need to modify our services or infrastructure in order to adapt to
these changes. Our business, results of operation and financial condition would
be materially and adversely affected if we incurred significant costs without
generating related revenues or if we cannot rapidly adapt to these changes.
We are dependent on the Internet infrastructure
Our future success will depend, in substantial part, upon the maintenance of
the Internet infrastructure, including a reliable network backbone with the
necessary speed, data capacity and security, and the timely development of
enabling products, including high-speed modems, for providing reliability and
timely Internet access and services. To the extent that the Internet continues
to experience increased numbers of users, frequency of use or increased
bandwidth requirements of users, we cannot assure you that the Internet
infrastructure will continue to be able to support the demands placed on it or
that the performance or reliability of the Internet will not be adversely
affected. Furthermore, the Internet has experienced a variety of outages and
other delays as a result of damage to portions of its infrastructure or
otherwise, and these outages or delays could adversely affect the Web sites of
our contributors, subscribers or distributors. In addition, the Internet could
lose its viability as a form of media due to delays in the development or
adoption of new standards and protocols that can handle increased levels of
activity. We cannot assure you that the infrastructure and complementary
products and services necessary to maintain the Internet as a viable commercial
medium will be developed or maintained. Moreover, critical issues concerning
the commercial use of the Internet (including security, cost, ease of use and
access, intellectual property ownership and other legal liability issues)
remain unresolved and could materially and adversely affect both the growth of
the Internet generally and our business, results of operations and financial
condition in particular.
We may be held liable for information retrieved from the Internet
As a publisher and distributor of online content, we face potential direct
and indirect liability for defamation, negligence, copyright, patent or
trademark infringement, violation of the securities laws and other claims based
upon the reports and data that we publish. For example, by distributing a
negative investment research report, we may find ourselves subject to
defamation claims, regardless of the merits of these claims. Computer failures
may also result in incorrect data being published and distributed widely. In
these and other instances, we may be required to engage in protracted and
expensive litigation, which could have the effect of diverting management's
attention and require us to expend significant financial resources. Our general
liability insurance may not necessarily cover any of these claims or may not be
adequate to protect us against all liability that may be imposed. Any claims or
resulting litigation could have a material and adverse effect on our business,
results of operations and financial condition.
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We may become subject to burdensome government regulation and legal
uncertainties
The laws governing the Internet remain largely unsettled, even in areas where
there has been some legislative action. It may take years to determine whether
and how existing laws, including those governing intellectual property,
privacy, libel and taxation, apply to the Internet generally and the electronic
distribution of investment research in particular. Legislation could dampen the
growth in the use of the Internet generally and decrease the acceptance of the
Internet as a communications and commercial medium, which could have a material
and adverse effect on our business, results of operations and financial
condition. In addition, because the growing popularity and use of the Internet
has burdened the existing telecommunications infrastructure and many areas with
high Internet usage have begun to experience interruptions in phone service,
some local telephone carriers have petitioned governmental agencies to regulate
Internet service providers and online service providers in a manner similar to
long distance telephone carriers and to impose access fees on Internet service
providers and online service providers. If any of these petitions or the relief
that they seek is granted, the costs of communicating on the Internet could
increase substantially, potentially adversely affecting the growth in the use
of the Internet. Further, due to the global nature of the Internet, it is
possible that, although transmissions relating to our services originate in the
State of New York, governments of other states or foreign countries might
attempt to regulate our services or levy sales or other taxes on our
activities. We cannot assure you that violations of local or other laws will
not be alleged or charged by local, state or foreign governments, that we might
not unintentionally violate these laws or that these laws will not be modified,
or new laws enacted, in the future. Any of these developments could have a
material and adverse effect on our business, results of operations and
financial condition. See "Business--Government Regulation."
Risks Related to the Offering
There has been no prior public market for our common stock; our shares may
experience extreme price and volume fluctuations
Prior to this offering, there has been no public market for our common stock.
We cannot predict the extent to which investor interest in our common stock
will lead to the development of an active trading market or how liquid that
market might become. The market price of the common stock may decline below the
initial public offering price. The initial public offering price for the shares
will be determined by negotiations between us and the representatives of the
underwriters and may not be indicative of prices that will prevail in the
trading market following the completion of this offering. See "Underwriting."
The market price of our common stock could be subject to significant
fluctuations due to a variety of factors, including:
. public announcements concerning us or our competitors;
. fluctuations in operating results;
. a downturn in the financial services industry generally or the market for
securities trading in particular;
. introductions of new products or services by us or our competitors;
. changes in analysts' earnings estimates; and
. announcements of technological innovations.
The stock market has, from time to time, experienced extreme price and volume
fluctuations. The market prices of the securities of Internet-related companies
have been especially volatile, including fluctuations that are often unrelated
to the operating performance of the affected companies. Broad market
fluctuations of this type may adversely affect the market price of our common
stock. In the past, companies that have experienced volatility in the market
price of their stock have been the object of securities class action
litigation. If we were the object of securities class action litigation, it
could result in substantial costs and a diversion of our management's attention
and resources.
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Our executive officers, directors and existing stockholders will have the
ability to exercise significant control over us
We anticipate that the directors, executive officers and stockholders who
owned greater than 5% of the outstanding common stock prior to this offering
and their affiliates will, in the aggregate, beneficially own approximately
60.8% of our outstanding common stock following the completion of this offering
(59.1% if the underwriters' over-allotment option is exercised in full),
assuming no exercise of outstanding options as of December 31, 1998. As a
result, these stockholders will be able to exercise significant control over
all matters requiring approval by our stockholders, including the election of
directors and approval of significant corporate transactions. This
concentration of ownership may also have the effect of delaying or preventing a
change in control of us. See "Management" and "Principal Stockholders."
We currently have no specific use for a substantial portion of the net proceeds
We currently have no specific uses for a substantial portion of the net
proceeds of this offering. Accordingly, investors in this offering will be
relying on management's judgment with only limited information about our
specific intentions regarding the use of proceeds. We may spend most of the net
proceeds from this offering in ways with which you may not agree. Our failure
to apply these funds effectively could have a material and adverse effect on
our business, results of operations and financial condition. See "Use of
Proceeds."
We have anti-takeover provisions which may make it more difficult for a third
party to acquire us
Various provisions of our certificate of incorporation, bylaws and Delaware
law could make it more difficult for a third party to acquire us, even if doing
so might be beneficial to our stockholders. See "Description of Capital Stock."
The future sale of shares of our common stock may negatively affect our stock
price
If our stockholders sell substantial amounts of our common stock (including
shares issued upon the exercise of outstanding options and warrants) in the
public market following this offering, the market price of our common stock
could fall. These sales also might make it more difficult for us to sell equity
securities in the future at a time and price that we deem appropriate. After
this offering, we will have outstanding 21,112,237 shares of common stock. Of
these shares, the 3,000,000 shares being offered in this offering will be
freely tradeable.
Our directors, executive officers and substantially all of our stockholders
have agreed that they will not sell, directly or indirectly, any common stock
without the prior written consent of BancBoston Robertson Stephens Inc. for a
period of 180 days from the date of this prospectus. However, BancBoston
Robertson Stephens Inc. may, in its sole discretion and at any time or from
time to time, without notice, release all or any portion of the securities
subject to the lock-up agreements.
The shares of common stock outstanding upon the completion of this offering
will be available for sale in the public market, subject to these lock-up
agreements, as follows:
<TABLE>
<CAPTION>
Approximate
Number of
Shares Description
----------- ----------------------------------------------------------------
<C> <S>
3,766,683 After the date of this prospectus, freely tradable shares sold
in this offering and shares saleable under Rule 144(k) that are
not subject to the 180-day lock-up
244,625 Upon the filing of a registration statement to register for
resale shares of common stock issued upon the exercise of stock
options, which shares are not subject to the lock-up
142,050 After 90 days from the date of this prospectus, shares saleable
under Rule 144 that are not subject to the 180-day lock-up
12,833,879 After 180 days from the date of this prospectus, the 180-day
lock-up is released and these shares are saleable under Rule 144
(subject, in some cases, to volume limitations), Rule 144(k), or
pursuant to a registration statement to register for resale
shares of common stock issued upon the exercise of stock options
4,125,000 Over 180 days from the date of this prospectus, restricted
securities that are held for less than one year and are not yet
saleable under Rule 144
</TABLE>
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Upon the completion of this offering, we intend to file a registration
statement to register for resale the 3,411,375 shares of common stock reserved
for issuance under our 1999 Stock Option Plan. We expect this registration
statement to become effective immediately upon filing. As of December 31, 1998,
options to purchase a total of 2,410,625 shares of common stock and a warrant
to purchase 318,050 shares of common stock were outstanding. Of the outstanding
options as of December 31, 1998, approximately 811,596 shares were then
exercisable.
Upon exercise, these shares and shares subject to options granted after the
date hereof will be covered by that registration and will be eligible for
resale in the public market from time to time subject to vesting and, in the
case of some options, the expiration of lock-up agreements. These stock options
generally have exercise prices significantly below the assumed initial public
offering price of our common stock. The possible sale of a significant number
of these shares may cause the market price of our common stock to fall.
Some of our existing stockholders, representing approximately 16,111,112
shares of common stock, have the right, subject to customary conditions, to
include their shares in registration statements relating to our securities. By
exercising their registration rights and causing a large number of shares to be
registered and sold in the public market, these holders may cause the market
price of our common stock to fall. In addition, any demand to include these
shares in our registration statements could have an adverse effect on our
ability to raise needed capital. See "Management--1999 Stock Option Plan,"
"Principal Stockholders," "Description of Capital Stock--Registration Rights,"
"Shares Eligible for Future Sale" and "Underwriting."
Investors in this offering will suffer immediate and substantial dilution
Investors purchasing shares in this offering will incur immediate and
substantial dilution in net tangible book value per share. To the extent
outstanding options and warrants to purchase common stock are exercised, there
will be further dilution. See "Dilution."
We do not intend to pay cash dividends and, as a result, stockholders will need
to sell shares to realize a return on their investment
We have not declared or paid any cash dividends on our common stock and do
not intend to pay any cash dividends on our common stock in the foreseeable
future. We currently intend to retain our future earnings, if any, to fund the
development and growth of our business. Future dividends, if any, will be
determined by our board of directors. Consequently, stockholders will need to
sell shares of common stock in order to realize a return on their investment.
See "Dividend Policy."
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements." These forward-looking
statements include, without limitation, statements about the market opportunity
for the distribution of investment research and other information over the
Internet, our strategy, competition and expected expense levels, and the
adequacy of our available cash resources. Our actual results could differ
materially from those expressed or implied by these forward-looking statements
as a result of various factors, including the risk factors described above and
elsewhere in this prospectus. We undertake no obligation to update publicly any
forward-looking statements for any reason, even if new information becomes
available or other events occur in the future.
OUR ADDRESS AND TELEPHONE NUMBER
We were incorporated in Delaware in 1993. Our principal executive offices are
located at 33 Maiden Lane, 5th Floor, New York, New York 10038, and our
telephone number at that address is (212) 859-9800.
19
<PAGE>
USE OF PROCEEDS
The net proceeds we will receive from the sale of the 3,000,000 shares of
common stock offered by us are estimated to be $27.0 million ($29.6 if the
underwriters' over-allotment option is exercised in full) after deducting the
estimated underwriting discounts and commissions and offering expenses payable
by us and assuming a public offering price of $10.00 per share (the mid-point
of the range set forth on the cover page of this prospectus). We will not
receive any proceeds from the sale of shares by the over-allotment selling
stockholders.
We currently intend to use the net proceeds of this offering as follows:
. expansion of our sales and marketing efforts;
. expansion of our international operations;
. capital expenditures;
. general corporate purposes, including working capital; and
. possible acquisitions of or investments in complementary businesses,
products and technologies.
Pending these uses, the net proceeds will be invested in short-term,
investment grade instruments, certificates of deposit or direct or guaranteed
obligations of the United States. There are no agreements or pending
negotiations with respect to any acquisitions, investments or similar
transactions.
DIVIDEND POLICY
We have not declared or paid any cash dividends on our common stock and do
not intend to pay any cash dividends on our common stock in the foreseeable
future. We currently intend to retain future earnings, if any, to fund the
development and growth of our business. Future dividends, if any, will be
determined by our board of directors.
20
<PAGE>
CAPITALIZATION
The following table sets forth, as of December 31, 1998, the capitalization
of Multex.com on an actual basis, and on a pro forma as adjusted basis to give
effect to (i) the sale of 3,000,000 shares of common stock offered by us in
this offering at an assumed initial public offering price of $10.00 per share,
after deducting the underwriting discounts and commissions and offering
expenses payable by us, and the application of the net proceeds from this
offering and (ii) the conversion of our preferred stock into an aggregate of
14,861,112 shares of common stock upon the completion of this offering. See
"Use of Proceeds." This information should be read in conjunction with our
Consolidated Financial Statements and the related Notes appearing elsewhere in
this prospectus.
<TABLE>
<CAPTION>
December 31, 1998
---------------------
Pro forma
Actual as adjusted
-------- -----------
(in thousands)
<S> <C> <C>
Convertible preferred stock, $.01 par value, Series A,
Series B, Series C, Series D and Series E, $53,000,000
aggregate liquidation preference, 297,222 shares issued
and outstanding on an actual basis; no shares issued
and outstanding on a pro forma as adjusted basis....... $ 59,860 --
Stockholders' (deficit) equity:
Preferred stock, $.01 par value, 5,000,000 shares
authorized; no shares issued and outstanding on an
actual, pro forma as adjusted basis.................. -- --
Common stock, $.01 par value, 50,000,000 shares
authorized; and
3,251,125 shares issued and outstanding on an actual
basis and
21,112,237 shares issued and outstanding on a pro
forma as adjusted basis.............................. 32 211
Additional paid-in capital.............................. (3,634) 83,047
Accumulated deficit..................................... (32,137) (32,137)
Deferred compensation................................... (1,460) (1,460)
Translation adjustment.................................. (16) (16)
-------- --------
Total stockholders' (deficit) equity.................. (37,215) 49,645
-------- --------
Total capitalization................................ $ 22,645 $ 49,645
======== ========
</TABLE>
The foregoing capitalization table excludes (i) a warrant to purchase 318,050
shares of common stock with an exercise price of $4.80 per share, which was
issued in October 1998, and (ii) 2,410,625 shares of common stock issuable
pursuant to stock options outstanding as of December 31, 1998 (of which options
to purchase approximately 811,596 shares were then exercisable) with a weighted
average price of $2.30 per share. See "Management--1999 Stock Option Plan" and
"Description of Capital Stock--Options."
21
<PAGE>
DILUTION
The pro forma net tangible book value of Multex.com as of December 31, 1998,
after giving effect to the conversion of preferred stock, was $22.6 million, or
$1.25 per share of common stock. Pro forma net tangible book value per share is
equal to the amount of our total tangible assets (total assets less intangible
assets and total liabilities), divided by the number of shares of common stock
outstanding as of December 31, 1998. Assuming the sale by us of 3,000,000
shares of common stock offered in this offering at an assumed initial public
offering price of $10.00 per share (the mid-point of the range set forth on the
cover page of this prospectus), and the application of the estimated net
proceeds from this offering, our pro forma net tangible book value as of
December 31, 1998 would have been $49.6 million, or $2.35 per share of common
stock. This represents an immediate increase in pro forma net tangible book
value of $1.10 per share to our existing stockholders and an immediate dilution
in pro forma net tangible book value of $7.65 per share to new investors. The
following table illustrates this per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................... $10.00
Pro forma net tangible book value per share as of December 31,
1998........................................................... $1.25
Pro forma increase attributable to new investors................ 1.10
-----
Pro forma net tangible book value per share after the offering.... 2.35
------
Pro forma dilution per share to new investors..................... $ 7.65
======
</TABLE>
The following table summarizes, on a pro forma basis as of December 31, 1998,
the total number of shares of common stock purchased from us, the total
consideration paid to us and the average price per share paid by existing
stockholders and by new investors.
<TABLE>
<CAPTION>
Shares Purchased Total Consideration
------------------ ------------------- Average Price
Number Percent Amount Percent Per Share
---------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders...... 18,112,237 85.8% $54,175,085 64.1% $ 2.99
New investors.............. 3,000,000 14.2 30,000,000 35.9 $10.00
---------- ----- ----------- -----
Total.................... 21,112,237 100.0% $84,175,085 100.0%
========== ===== =========== =====
</TABLE>
If the underwriters' over-allotment option is exercised in full, the number
of shares of common stock held by existing stockholders will be reduced to
17,945,737, or 83.2% of the total number of shares of common stock to be
outstanding after this offering, and will increase the number of shares of
common stock held by the new investors to 3,450,000 shares, or 16.0% of the
total number of shares of common stock to be outstanding immediately after this
offering. See "Principal Stockholders."
The foregoing tables and calculations assume no exercise of outstanding
options and exclude a warrant to purchase 318,050 shares of common stock with
an exercise price of $4.80 per share, which was issued in October 1998. At
December 31, 1998, there were 2,410,625 shares of common stock reserved for
issuance upon exercise of outstanding options with a weighted average exercise
price of $2.30 per share. To the extent that this warrant or these options are
exercised, there will be further dilution to new investors. See "Management--
1999 Stock Option Plan."
22
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and our Consolidated Financial Statements and the
related Notes included elsewhere in this prospectus. The selected consolidated
statement of operations data for the years ended December 31, 1994 and 1995 and
the selected consolidated balance sheet data as of December 31, 1994, 1995 and
1996 are derived from our audited Consolidated Financial Statements not
included elsewhere in this prospectus.
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------------
1994 1995 1996 1997 1998
------- ------- -------- -------- -------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues................ $ 2,155 $ 1,005 $ 2,647 $ 6,014 $13,182
Cost of revenues........ 752 404 810 1,232 2,895
------- ------- -------- -------- -------
Gross profit............ 1,403 601 1,837 4,782 10,287
Operating expenses:
Sales and marketing... 943 1,892 2,339 3,507 7,622
Research and
development.......... 975 1,520 1,415 1,601 2,180
General and
administrative....... 1,553 2,709 4,553 7,836 9,386
------- ------- -------- -------- -------
Total operating
expenses........... 3,471 6,121 8,307 12,944 19,188
------- ------- -------- -------- -------
Loss from operations.... (2,068) (5,520) (6,470) (8,162) (8,901)
Net interest income
(expense).............. 52 26 60 125 (126)
Other income (expense).. 23 -- -- -- (716)
------- ------- -------- -------- -------
Net loss................ $(1,993) $(5,494) $ (6,410) $ (8,037) $(9,743)
======= ======= ======== ======== =======
Basic and diluted loss
per common share....... $ (1.18) $ (3.13) $ (3.86) $ (4.69) $ (4.36)
======= ======= ======== ======== =======
Pro forma net loss per
share (1)(2)........... $ (0.55)
=======
Pro forma weighted
average shares
outstanding(1)(2)...... 17,708
=======
<CAPTION>
December 31,
---------------------------------------------
1994 1995 1996 1997 1998
------- ------- -------- -------- -------
(in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents, and
marketable securities.. $ 4,975 $ 255 $ 8,730 $ 10,197 $22,332
Working capital
(deficit).............. 4,803 (1,487) 7,249 8,021 19,736
Total assets............ 6,295 2,799 12,548 14,733 27,968
Deferred revenues....... -- 286 1,085 1,447 2,683
Long-term debt.......... 340 717 1,384 1,053 --
Convertible preferred
stock.................. 8,146 8,798 25,066 37,234 59,860
Total stockholders'
equity (deficit)....... (2,657) (8,791) (16,601) (26,750) (37,215)
</TABLE>
- --------
(1) See Note 4 of Notes to Consolidated Financial Statements for an explanation
of the method used to determine the number of shares used to compute pro
forma net loss per share.
(2) Pro forma to give effect to the conversion of preferred stock and excludes
a warrant to purchase 318,050 shares of common stock with an exercise price
of $4.80 per share, which was issued in October 1998.
23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations
of Multex.com should be read in conjunction with the Consolidated Financial
Statements and the related Notes included elsewhere in this prospectus. This
discussion contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of various factors, including,
but not limited to, those set forth under "Risk Factors" and elsewhere in this
prospectus.
Overview
Multex.com is a leading provider of online investment research and
information services designed to meet the needs of individual and institutional
investors, including investment banks, brokerage firms and corporations. Our
services enable timely online access to over 1,000,000 research reports and
other investment information on over 15,000 companies. These reports are
published by more than 400 investment banks, brokerage firms and third-party
research providers worldwide. In the United States, we offer research reports
from 18 out of the 20 leading investment banks and brokerage firms according to
the Institutional Investor rankings, including Merrill Lynch, Morgan Stanley
Dean Witter, Goldman Sachs and Salomon Smith Barney. In Europe, we offer
research reports from 18 out of the 20 leading investment banks and brokerage
firms as ranked by the Reuters Tempest survey, and in Asia, we offer research
reports from 19 out of the 20 leading investment banks and brokerage firms as
ranked by Asia Money. Through various arrangements, more than 600,000
individual investors, institutional investors and financial professionals,
including mutual fund managers, portfolio managers, brokers and their clients,
are able to use our services. In addition to making our services available
through our own Web sites, we have established a number of strategic
distribution relationships to reach both the institutional market and the
individual investor market. For the institutional market, we have established a
number of strategic distribution relationships, including ADP, Bloomberg,
Bridge, Dow Jones and Reuters. For the individual investor market, we have
established a number of strategic distribution relationships, including AOL,
CBS MarketWatch and CNNfn.
We offer four main services: (i) MultexNET, which was launched in June 1996;
(ii) MultexEXPRESS, which was launched in January 1997; (iii) Multex Research-
On-Demand, which was launched in April 1997; and (iv) Multex Investor Network,
which was launched in November 1998. MultexNET, typically offered as a one to
three year subscription, allows entitled institutional investors to access
full-text investment research reports on a real-time basis from investment
banks, brokerage firms and other third-party research providers over the
Internet or through other distribution channels. MultexEXPRESS, also provided
pursuant to one to three year subscriptions, enables financial institutions to
distribute their proprietary financial research, as well as other corporate
documents, over the Internet, through intranets and other private networks.
Multex Research-On-Demand gives corporations, financial institutions and
advisors, and institutional investors the ability to access research reports on
a pay-per-view basis from a majority of the contributors to MultexNET, over the
Internet or through other distribution channels. Multex Investor Network gives
individual investors who register as members access to a range of financial
reports and services, including research reports on pay-per-view basis, over
the Internet from a majority of the contributors to MultexNET. Multex Investor
Network also includes banner advertising and sponsorship advertising throughout
the site. Sponsors to Multex Investor Network include full-service brokerage
firms and other financial institutions interested in attracting individual
investors to their products, services and brands.
Pricing of our services is based on a number of factors. The annual
subscription fee for MultexNET typically ranges from $1,000 to $3,540 per
subscriber based on the number of users within the subscribing organization. As
of December 31, 1998, we had approximately 2,580 paying subscribers to
MultexNET, as compared to approximately 2,040 paying subscribers on December
31, 1997. In addition, we have an agreement with Reuters pursuant to which
approximately 6,000 Reuters' customers had obtained MultexNET user passwords to
use MultexNET on a trial basis as of December 31, 1998, whereas no Reuters'
customers had obtained passwords as of December 31, 1997. Pursuant to the
agreement, Reuters paid us $500,000 in 1997
24
<PAGE>
and $500,000 in 1998. For MultexEXPRESS, the subscription fees vary based on
the number of users, but typically average $150,000 annually per subscriber
installation. As of December 31, 1998, we had 30 installations of MultexEXPRESS
under contract and in operation, as compared to 18 installations as of December
31, 1997. Fees for information and research offered through Multex Research-On-
Demand and Multex Investor Network typically range from $10.00 to $150.00 per
report, depending on the length and type of document. Sponsorship fees for
Multex Investor Network range from $7,500 to $100,000 per month based on the
level of sponsorship.
Revenues from subscriptions to MultexNET and MultexEXPRESS are recognized in
equal installments over the term of the subscription. Revenues from Multex
Research-On-Demand and pay-per-view transactions on Multex Investor Network are
recognized upon sale. Revenues from sponsorships to Multex Investor Network are
recognized in equal installments over the term of the sponsorship. Some of the
users of Multex Research-On-Demand pay a flat annual fee for the service, which
entitles them to receive research and other reports at a discounted rate.
Revenues from these users are recognized in equal installments over the term of
the subscription. All costs associated with revenues from MultexNET,
MultexEXPRESS, Multex Research-On-Demand and Multex Investor Network are
expensed as and when incurred. We pay distribution fees to our distributors
and, with respect to Multex Research-On-Demand and pay-per-view transactions on
Multex Investor Network, royalties to the investment banks, brokerage firms or
third-party research providers that authored the research.
On February 27, 1998, we established a new subsidiary, Multex Data Group,
Inc. On March 27, 1998, Multex Data Group acquired from Research Data Group,
Inc. assets consisting of an earnings estimate database and related software
that generates independent investment reports, in exchange for 49% of the
common stock of Multex Data Group. In connection with this transaction, we
issued to a principal of Research Data Group, Inc., 75,000 shares of common
stock at a purchase price of $4.00 per share and a one year option to acquire
125,000 shares of common stock at an exercise price of $5.00 per share. On
December 15, 1998, we acquired the remaining 49% of Research Data Group, Inc.
in exchange for 125,000 shares of common stock we valued at approximately
$625,000. The acquisition has been accounted for using the purchase method of
accounting and accordingly, we are consolidating the results of operations of
Multex Data Group effective March 27, 1998.
We have expanded our operations in recent years and have grown from 79
employees at December 31, 1996 to 106 employees at December 31, 1997 and to 149
employees at December 31, 1998. In January 1997, we opened a London office and
in 1998 we engaged the services of two independent representatives in Hong
Kong. We expect to add additional personnel both in the United States and
abroad as our operations expand. We currently expect to significantly increase
our operating expenses both on an absolute basis and as a percentage of
revenues in order to expand our sales and marketing operations, to continue to
expand internationally and to continuously upgrade and enhance our services and
technologies. As a result of these and other factors, there can be no assurance
that we will not incur significant losses on a quarterly and annual basis for
the foreseeable future.
We have incurred significant losses since our inception, and as of December
31, 1998 had an accumulated deficit of $32.1 million. We also incurred $841,000
of expenses relating to a proposed financing in 1998, which were expensed in
the three months ended September 30, 1998. In addition, we have recorded
cumulative deferred compensation of $1.9 million, which represents the
difference between the exercise price and the fair market value of our common
stock at the date of grant for shares of common stock issuable upon the
exercise of stock options granted to some of our employees. Of the total
deferred compensation amount, $25,000 was amortized in 1997 and $440,000 was
amortized during the year ended December 31,1998. The remaining deferred
compensation amount is expected to be amortized over the remaining vesting
periods of the related options. We believe that period-to-period comparisons of
our operating results are not necessarily meaningful and that the results for
any period should not be relied upon as an indication of future performance.
Historically, a few of our subscribers and distributors have accounted for a
substantial majority of our revenues. Specifically, for the year ended December
31, 1997, Bloomberg, Reuters, Merrill Lynch & Co. and
25
<PAGE>
Gruntal & Co. accounted for 21%, 20%, 16% and 11% of our consolidated revenues,
respectively, and for the year ended December 31, 1998, Merrill Lynch accounted
for 10% of the our consolidated revenues. The loss of any of these subscribers
or distributors could have a material and adverse effect on our business,
results of operations and financial condition. See "Risk Factors--We have a
high level of customer concentration and our business would be materially and
adversely affected if we were to lose a major subscriber or distributor" and
Note 12 of Notes to the Consolidated Financial Statements.
We were incorporated in April 1993. In October 1993, Multex Systems, Inc., a
New York corporation, merged with and into Multex Publisher, Inc., a Delaware
corporation, which subsequently changed its name to Multex Systems, Inc. From
1993 to June 1996, we were engaged in the development of software which became
the underlying technology of MultexNET, and also provided software development
services to ADP. Starting in September 1995, we generated revenues from the
distribution of research reports and other information through Bloomberg. In
January 1999, we changed our name to Multex.com, Inc.
Results of Operations
The following table sets forth the consolidated statement of operations data
for the periods indicated as a percentage of revenues:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1996 1997 1998
-------- -------- -------
<S> <C> <C> <C>
Revenues........................................ 100.0% 100.0% 100.0%
Cost of revenues................................ 30.6 20.5 22.0
-------- -------- -------
Gross profit.................................... 69.4 79.5 78.0
Operating expenses:
Sales and marketing........................... 88.4 58.3 57.8
Research and development...................... 53.5 26.6 16.5
General and administrative.................... 172.0 130.3 71.2
-------- -------- -------
Total operating expenses...................... 313.9 215.2 145.5
-------- -------- -------
Loss from operations............................ (244.5) (135.7) (67.5)
Net interest income (expense)................... 2.3 2.1 (1.0)
Other expense................................... -- -- 5.4
-------- -------- -------
Net loss........................................ (242.2)% (133.6)% (73.9)%
======== ======== =======
</TABLE>
Years Ended December 31, 1998, 1997 and 1996
Revenues
Multex.com's revenues consist of subscription fees for MultexNET and
MultexExpress, and sales of investment research on a pay-per-view basis through
Multex Research-On-Demand. We also provide professional services to select
MultexEXPRESS clients, including software development, customization and
integration services. These services are typically billed to clients on a time
and material basis. On occasion, as a service to our clients, we have acquired
equipment for resale. To date, we have not derived significant revenues from
international operations.
Total revenues increased 119.2% to $13.2 million in 1998 from $6.0 million in
1997, and increased 127.2% in 1997 from $2.6 million in 1996. The increase in
revenues in 1998 was primarily due to several factors: a significant increase
in the number of institutions and individuals using our pay-per-view service,
Multex Research-On-Demand, and the availability of that service for all of
1998, as compared to 1997, when the availability commenced in April; an
increase in the number of installations utilizing MultexEXPRESS to distribute
their proprietary research to their employees and customers, combined with the
fact that 18 of these installations were revenue-producing for all of 1998, as
compared to only four that were revenue-producing for
26
<PAGE>
all of 1997; an increase in the number of MultexNET users, primarily as a
result of the addition of Reuters Web as a distribution channel; and the launch
of Multex Investor Network in November 1998. The increase in revenues in 1997
was primarily due to increased demand for MultexNET, and the introduction of
MultexEXPRESS and Multex Research-On-Demand.
Cost of Revenues
Cost of revenues consists primarily of fees payable to distributors of
MultexNet and Multex Research-On-Demand, royalties payable to the providers of
investment research offered through Multex Research-On-Demand, Web site
development costs of MultexEXPRESS customers, purchases of equipment for resale
and telecommunications costs.
Cost of revenues increased 135.0% to $2.9 million in 1998 from $1.2 million
in 1997, and increased 52.2% in 1997 from $809,000 in 1996. As a percentage of
revenues, cost of revenues increased to 22.0% in 1998 from 20.5% in 1997 and
increased to 30.6% in 1996. The increase in cost of revenues in dollar terms in
each period was primarily due to royalty and distribution fee payments as a
result of increased sales of Multex Research-On-Demand, the increased cost of
equipment purchased for resale, increased Web site development costs resulting
from the increased number of MultexEXPRESS installations, and additional
telecommunications charges resulting from increased sales of subscriptions for
MultexNET and MultexEXPRESS. We incurred approximately $1.7 million of royalty
and distribution expense in the year ended December 31, 1998 as compared to
approximately $450,000 in the year ended December 31, 1997. The gross margin
for the year ended December 31, 1998 was slightly less than that achieved for
the year ended December 31, 1997 due to higher margins achieved on the sale of
our services due to raising the prices of various services and improved
operating efficiencies, which was more than offset by the lower margins
associated with Multex Research-On-Demand sales and equipment resales. Cost of
revenues as a percentage of revenues decreased from 1996 to 1997 as we have
been able to raise the prices of our services and improve operating
efficiencies. We have also reduced the proportion of our revenues resulting
from equipment resales, which have significantly lower margins as compared to
revenues generated by our services.
Operating Expenses
Sales and Marketing. Sales and marketing expenses consist primarily of
salaries, commissions, advertising, public relations, tradeshow expenses and
costs of marketing materials. Sales and marketing expenses increased 117.4% to
$7.6 million in 1998 from $3.5 million in 1997, and increased 49.9% in 1997
from $2.3 million in 1996. As a percentage of revenues, sales and marketing
expenses decreased to 57.8% in 1998 from 58.3% in 1997 and 88.4% in 1996. The
increase in sales and marketing expenses in dollar terms in each period was due
to an expansion of our sales force both domestically and internationally, and
increased marketing activities, including the complete redesign of our
marketing materials and additional costs resulting from commencing and
expanding our international marketing efforts. We expect sales and marketing
expenses to increase significantly in dollar terms as we continue to expand the
Multex Investor Network, increase brand awareness, hire additional sales and
marketing personnel, and expand internationally.
Research and Development. Research and development expenses consist primarily
of salaries and benefits. Research and development expenses increased to $2.2
million in 1998 from $1.6 million in 1997, and increased from $1.4 million in
1996, representing an increase of 36.2% in 1998 and a decrease of 13.1% in
1997. As a percentage of revenues, research and development expenses decreased
to 16.5% in 1998 from 26.6% and 53.5% in 1997 and 1996, respectively. The
increase in research and development expenses in dollar terms was primarily due
to an increase in the number of developers employed by us, salary increases
and, following the acquisition of our Multex Data Group subsidiary in March
1998, expenses incurred by developers based at Multex Data Group. The research
and development expenses incurred by developers at Multex Data Group in 1998
were approximately $234,000. We believe that continued investment in product
development is critical to attaining our strategic objectives and, as a result,
expect research and development expenses to increase significantly in dollar
terms in future periods.
27
<PAGE>
General and Administrative. General and administrative expenses consist
primarily of salaries and benefits, fees for professional services and facility
expenses, including depreciation of assets. General and administrative expenses
increased 19.8% to $9.4 million in 1998 from $7.8 million in 1997, and
increased 72.1% in 1997 from $4.6 million in 1996. As a percentage of revenues,
general and administrative expenses decreased to 71.2% in 1998 from 130.3% and
172.0% in 1997 and 1996, respectively. The increase in general and
administrative expenses in dollar terms in each period was primarily due to
increased personnel, professional service fees and facility expenses necessary
to support our domestic and international growth, including costs associated
with our London and Multex Data Group offices of approximately $800,000 and
$680,000, respectively, in the year ended December 31, 1998, as compared to
approximately $600,000 and $0, respectively, in the year ended December 31,
1997. We expect that general and administrative expenses will increase in
future periods as we hire additional personnel and incur additional costs
related to the growth of our business and our operations as a public company.
Loss from Operations
As described above, we have invested heavily in establishing a brand name for
our services, expanding internationally, continuing to develop new services and
maintaining our technological advantage, and increasing the number of our
employees and offices as we seeks to increase our market share. For the
foregoing reasons, loss from operations increased 9.0% to $8.9 million in 1998
from $8.2 million in 1997 and 26.2% in 1997 from $6.5 million in 1996. As a
percentage of revenues, loss from operations was (67.5)%, (135.7)% and (244.5)%
for 1998, 1997 and 1996, respectively.
Interest Income (Expense) and Other Income
Net interest expense was $126,000 in 1998 as compared to net interest income
of $125,000 in 1997, which was 108% higher than net interest income of $60,000
in 1996. The changes in net interest income/expense are attributable to the
changes in cash available for investing and fluctuations in borrowings.
Income Taxes
At December 31, 1998, we had net operating loss carryforwards of
approximately $26,200,000 and research and development credits of approximately
$700,000 for income tax purposes that expire in 2009 through 2013. The
utilization of approximately $15,600,000 and $400,000 of these loss
carryforwards and credits, respectively, are subject to an annual limitations
of approximately $1,900,000, pursuant to Section 382 of the Internal Revenue
Code of 1986. The utilization of the loss carryforwards and credits may be
subject to further limitations upon the completion of this offering.
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Selected Unaudited Quarterly Results of Operations
The following table sets forth unaudited quarterly statement of operations
data for each of the eight quarters ended December 31, 1998. In the opinion of
management, the unaudited financial results include all adjustments, consisting
only of normal recurring adjustments, necessary for the fair presentation of
our consolidated results of operations for those periods. The consolidated
quarterly data should be read in conjunction with the audited Consolidated
Financial Statements and the Notes thereto appearing elsewhere in this
prospectus. The results of operations for any quarter are not necessarily
indicative of the results of operations for any future period.
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------------------------------------------
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, June 30, Sept. 30, Dec. 31,
1997 1997 1997 1997 1998 1998 1998 1998
-------- -------- --------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(in thousands)
Revenues................ $ 950 $ 1,212 $ 1,404 $ 2,448 $ 2,714 $ 3,115 $ 3,492 $3,861
Cost of revenues........ 242 284 302 404 694 752 684 765
------- ------- ------- ------- ------- ------- ------- --------
Gross profit............ 708 928 1,102 2,044 2,020 2,363 2,808 3,096
Operating expenses:
Sales and marketing... 652 943 733 1,179 1,164 1,334 1,819 3,305
Research and
development.......... 370 393 423 415 440 513 573 654
General and
administrative....... 1,932 1,849 1,875 2,180 2,004 2,379 2,380 2,623
------- ------- ------- ------- ------- ------- ------- --------
Total operating
expenses........... 2,954 3,185 3,031 3,774 3,608 4,226 4,772 6,582
------- ------- ------- ------- ------- ------- ------- --------
Loss from operations.... (2,246) (2,257) (1,929) (1,730) (1,588) (1,863) (1,964) (3,486)
Net interest income
(expense).............. 23 (5) 39 68 (196) 56 54 (40)
Other income (expense).. -- -- -- -- 125 -- (841) --
------- ------- ------- ------- ------- ------- ------- --------
Net loss................ $(2,223) $(2,262) $(1,890) $(1,662) $(1,659) $(1,807) $(2,751) $ (3,526)
======= ======= ======= ======= ======= ======= ======= ========
<CAPTION>
Percentage of Total Revenues
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenues........ 25.5 23.4 21.5 16.5 25.6 24.1 19.6 19.8
------- ------- ------- ------- ------- ------- ------- --------
Gross profit............ 74.5 76.6 78.5 83.5 74.4 75.9 80.4 80.2
Operating expenses:
Sales and marketing... 68.7 77.8 52.2 48.2 42.9 42.8 52.1 85.6
Research and
development.......... 38.9 32.4 30.1 16.9 16.2 16.5 16.4 16.9
General and
administrative....... 203.3 152.6 133.6 89.1 73.8 76.4 68.1 68.0
------- ------- ------- ------- ------- ------- ------- --------
Total operating
expenses........... 310.9 262.8 215.9 154.2 132.9 135.7 136.6 170.5
------- ------- ------- ------- ------- ------- ------- --------
Loss from operations.... (236.4) (186.2) (137.4) (70.7) (58.5) (59.8) (56.2) (90.3)
Net interest income
(expense).............. 2.5 (0.4) 2.8 2.7 (7.2) 1.8 1.5 (1.0)
Other income (expense).. -- -- -- -- 4.6 -- (24.1) --
------- ------- ------- ------- ------- ------- ------- --------
Net loss................ (233.9)% (186.6)% (134.6)% (68.0)% (61.1)% (58.0)% (78.8)% (91.3)%
======= ======= ======= ======= ======= ======= ======= ========
</TABLE>
Our revenues have increased in all quarters presented as a result of
increased acceptance of MultexNET, which was launched in June 1996,
MultexEXPRESS, which was launched in January 1997, and increased purchases of
the Multex Research-On-Demand service, which was launched in April 1997. Our
gross margins fluctuate due to several factors. Increased prices and improved
operating efficiencies lead to an increase in gross margin, which is also
enhanced when significant volumes of professional services are supplied, as in
the three months ended December 31, 1997. In other quarters, when we have
significant amounts of equipment resale transactions, including, for example,
in the three months ended March 31, 1998, gross margin tends to decrease.
Operating expenses have increased in dollar terms during the quarters
presented. Sales and marketing expenses have increased in dollar terms as a
result of increased personnel and increased marketing, advertising and
promotional activity. Research and development expenses increased in dollar
terms as a result of expanded
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technological development efforts to support the launch of new services and to
enhance the features and functionality of its services.
Our quarterly revenues, margins and results of operations have fluctuated
significantly in the past and are expected to continue to fluctuate
significantly in the future. Causes of these fluctuations have included and may
include, among other factors, demand for our services, the size and timing of
both new and renewal subscriptions, the number, timing and significance of new
services introduced by us and our competitors, our ability to develop, market
and introduce new and enhanced services on a timely basis, the level of service
and price competition, changes in operating expenses, changes in the mix of
services offered, changes in our sales incentive strategy, sharp declines in
the volume or price levels of securities transactions and general economic
factors. Any one or more of these factors could have a material and adverse
effect on our business, results of operation and financial condition, and makes
the prediction of results of operations on a quarterly basis unreliable. See
"Risk Factors--Fluctuations in our operating results may negatively impact our
stock price."
Liquidity and Capital Resources
We have financed our operations primarily through the sale of equity
securities as we have generated only negative cash flow from operations since
our inception. Through December 31, 1998, we have received an aggregate of
$52.7 million in net proceeds from the sale of five series of convertible
preferred stock. At December 31, 1998, we had $2.3 million of cash and cash
equivalents. Our principal commitments consist of obligations under operating
leases.
Net cash used in operating activities was $6.0 million, $7.1 million and $5.5
million for the years ended December 31, 1998, 1997 and 1996, respectively. The
principal use of cash for all periods was to fund our losses from operations.
Net cash used in investing activities was $13.2 million, $945,000 and $9.2
million for the years ended December 31, 1998, 1997 and 1996, respectively.
Cash used in investing activities was primarily related to purchases of
property, equipment and marketable securities and cash provided by investing
activities was primarily related to the sale of marketable securities. In 1998
and 1996, we purchased marketable securities following preferred stock
financings pending use of those funds.
Net cash provided by financing activities was $19.0 million, $9.7 million and
$15.4 for the years ended December 31, 1998, 1997 and 1996, respectively. Net
cash provided by and used by financing activities primarily consisted of net
proceeds from the sale of equity securities and borrowings under bank lines of
credit, which were offset in part by repayments of bank debt and lease
obligations.
Although we have no material commitments for capital expenditures, we
anticipate that we will experience a substantial increase in our capital
expenditures and lease commitments consistent with our anticipated growth in
operations, infrastructure and personnel, including the implementation of an
off-site backup computer system and various capital expenditures associated
with expanding our facilities. We currently anticipate that we will continue to
experience significant growth in our operating expenses for the foreseeable
future and that our operating expenses will be a material use of our cash
resources. We believe that the net proceeds of the offering, together with our
existing cash, cash equivalents and marketable securities, will be sufficient
to meet our anticipated cash needs for working capital and capital expenditures
at least for the next twelve months.
Impact of the Year 2000
Many currently installed computer systems and software products are coded to
accept or recognize only two digit entries in the date code field. These
systems may recognize a date using "00" as the year 1900 rather than the year
2000. As a result, computer systems and/or software used by many companies and
governmental agencies may need to be upgraded to comply with Year 2000
requirements or risk system failure or miscalculations causing disruptions of
normal business activities.
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State of Readiness. We have begun to assess the Year 2000 readiness of our
information technology ("IT") systems, including the hardware and software that
enable us to provide and deliver our MultexNET, MultexEXPRESS, Multex Research-
On-Demand and Multex Investor Network services, and our non-IT systems. Our
assessment plan consists of the following:
. quality assurance testing of our internally developed proprietary
software incorporated in our MultexNET, MultexEXPRESS, Multex Research-
On-Demand and Multex Investor Network services ("Services Software");
. contacting third-party vendors and licensors of material hardware,
software and services that are both directly and indirectly related to
the delivery of our MultexNET, MultexEXPRESS, Multex Research-On-Demand
and Multex Investor Network services;
. contacting providers of material non-IT systems;
. assessment of repair or replacement requirements;
. repair or replacement;
. implementation; and
. creation of contingency plans in the event of Year 2000 failures.
We plan to perform a more comprehensive Year 2000 simulation on our Services
Software during the first half of 1999 to test system readiness. Based on the
results of this simulation, we intend to revise the code of our Services
Software as necessary to improve the Year 2000 compliance of our Services
Software. We have been informed by many of our vendors of material hardware and
software components of our IT systems that the products used by us are
currently Year 2000 compliant. We will require vendors of our other material
hardware and software components of our IT systems to provide assurances of
their Year 2000 compliance. We plan to complete this vendor process during the
first half of 1999. We are currently assessing the materiality of our non-IT
systems and will seek assurances of Year 2000 compliance from providers of
material non-IT systems. Until this testing is complete and these vendors and
providers are contacted and have responded, we will not be able to completely
evaluate whether our IT systems or non-IT systems will need to be revised or
replaced.
Costs. To date, we have not incurred any material costs in identifying or
evaluating Year 2000 compliance issues. Most of our expenses have related to,
and are expected to continue to relate to, the operating costs associated with
time spent by employees in the evaluation process and Year 2000 compliance
matters generally. At this time, we do not possess the information necessary to
estimate the potential costs of revisions to our Services Software should
revisions be required or the replacement of third-party software, hardware or
services that are determined not to be Year 2000 compliant. Although we do not
anticipate that these expenses will be material, these expenses, if higher than
anticipated, could have a material and adverse effect on our business, results
of operations and financial condition.
Risks. We are not currently aware of any Year 2000 compliance problems
relating to our Services Software or our IT or non-IT systems that would have a
material and adverse effect on our business, results of operations and
financial condition, without taking into account our efforts to avoid or fix
these problems. There can be no assurance that we will not discover Year 2000
compliance problems in our Services Software that will require substantial
revisions or replacements. In addition, there can be no assurance that third-
party software, hardware or services incorporated into our material IT and non-
IT systems will not need to be revised or replaced, which could be time-
consuming and expensive. Our inability to fix our Services Software or to fix
or replace third-party software, hardware or services on a timely basis could
result in lost revenues, increased operating costs and other business
interruptions, any of which could have a material and adverse effect on our
business, results of operations and financial condition. Moreover, the failure
to adequately address Year 2000 compliance issues in our Services Software, and
our IT and non-IT systems could result in claims of
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<PAGE>
mismanagement, misrepresentation or breach of contract and related litigation,
which could be costly and time-consuming to defend.
In addition, there can be no assurance that governmental agencies, utility
companies, Internet access companies, third-party service providers and others
outside our control will be Year 2000 compliant. The failure by these entities
to be Year 2000 compliant could result in a systemic failure beyond our
control, including, for example, a prolonged Internet, telecommunications or
electrical failure, which could also prevent us from delivering our MultexNET,
MultexEXPRESS, Multex Research-On-Demand and Multex Investor Network services,
decrease the use of the Internet or prevent users from accessing our MultexNET,
MultexEXPRESS, Multex Research-On-Demand and Multex Investor Network services,
any of which would have a material and adverse effect on our business, results
of operations and financial condition.
Contingency Plan. As discussed above, we are engaged in an ongoing Year 2000
assessment and have not developed any contingency plans. The results of our
Year 2000 simulation testing and the responses received from third-party
vendors and service providers will be taken into account in determining the
need for and nature and extent of any contingency plans.
Our inability to correct a material Year 2000 problem, if one develops, could
result in an interruption in, or a failure of, certain of our normal business
activities or operations. In addition, a significant Year 2000 problem
concerning our database or the research reports and other information provided
to us by our research and information providers could cause our customers to
seek alternate providers of investment research or cause an unmanageable burden
on our customer service and technical support capabilities. Any material Year
2000 problem could require us to incur significant unanticipated expenses to
remedy and could divert our management's time and attention, either of which
could have a material and adverse effect on our business, results of operation
and financial condition.
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BUSINESS
The following section contains forward-looking statements which involve risks
and uncertainties. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including those set forth in "Risk Factors" and elsewhere in this Prospectus.
Multex.com is a leading provider of online investment research and
information services designed to meet the needs of individual and institutional
investors, including investment banks, brokerage firms and corporations. Our
services enable timely online access to over 1,000,000 research reports and
other investment information on over 15,000 companies. These reports are
published by more than 400 investment banks, brokerage firms and third-party
research providers worldwide. In the United States, we offer research reports
from 18 out of the 20 leading investment banks and brokerage firms, according
to the Institutional Investor rankings, including Merrill Lynch, Morgan Stanley
Dean Witter, Goldman Sachs and Salomon Smith Barney. In Europe, we offer
research reports from 18 out of the 20 leading investment banks and brokerage
firms, as ranked by the Reuters Tempest survey, and in Asia, we offer research
reports from 19 out of the 20 leading investment banks and brokerage firms, as
ranked by Asia Money. Through various arrangements, more than 600,000
individual investors, institutional investors and financial professionals,
including mutual funds managers, portfolio managers, brokers and their clients,
are able to use our services. In addition to making our services available
through our own Web sites, we have established a number of strategic
distribution relationships to reach both the institutional market and the
individual investor market. For the institutional market, we have established a
number of strategic distribution relationships, including ADP, Bloomberg,
Bridge, Dow Jones and Reuters.
For the individual investor market, we recently launched the Multex Investor
Network, an Internet service targeting the rapidly growing individual investor
market. Multex Investor Network is an interactive community for individual
investors. Visitors to Multex Investor Network can join as a "member" at no
cost. Members of Multex Investor Network have free access to a range of member
services, investment research reports and other financial information from
Multex.com, sponsoring brokerage firms and investment banks, as well as member
generated content. Members also have access to over 250,000 premium "pay-per-
view" investment and brokerage research reports from over 250 brokerage firms,
investment banks and third-party information providers. We have established a
number of strategic distribution relationships to promote the Multex Investor
Network, including a strategic distribution relationship with America Online to
serve as the anchor tenant for brokerage research on the AOL Personal Finance
channel. America Online is also a recent investor in Multex.com. In addition,
we have established distribution relationships for the Multex Investor Network
with other Internet portals and financial sites, including The Wall Street
Journal Interactive, CNNfn, CBS MarketWatch, Quote.com, Hoovers and Edgar On-
Line.
Industry Overview
In recent years, there has been substantial growth in the ownership of equity
and fixed income securities worldwide. According to the Investment Company
Institute, total financial assets of U.S. households were $14.0 trillion at the
end of 1995, and are expected to grow to over $22.5 trillion by the year 2000.
These assets are invested in, among other things, over 8,500 publicly traded
companies in the United States, including over 2,900 companies that have
completed initial public offerings in the last five years, and thousands more
internationally. The growth in financial assets has resulted from a number of
factors, including an increase in the number of mutual funds and increased cash
flows into those mutual funds, households allocating more of their assets to
equity investments, sustained high returns in the equity markets over a number
of years, and lower trading costs as a result of regulatory changes and
improved technologies. The proliferation in equity ownership and associated
trading activity has created a need for more investment research and market
information on the part of investors who seek higher returns on their
portfolios.
The emergence of the Internet as a tool for communications and commerce is
changing the markets for financial transactions and information services.
Individuals are rapidly embracing the Internet because it is
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simple to access and it makes vast amounts of information quickly available.
According to International Data Corporation, the number of users of the
Internet grew to 34 million users worldwide by the end of 1996, and is expected
to reach approximately 139 million users by the end of 2000.
Individuals are showing strong preferences for transacting various types of
business, including trading securities, via the Internet, rather than in person
or over the telephone. These transactions are being streamlined and can now be
performed directly virtually anywhere at any time. Individual investors have
accepted and even welcomed self-directed online transactions because these
transactions can be faster, less expensive and more convenient than
transactions conducted through a human intermediary. We believe that these
trends evidence a fundamental change in the way many individual investors
manage their financial assets. As individual investors seek to independently
manage their financial assets, these investors are increasingly looking for
investment research and other financial reports online.
Investment research is one of the primary tools individual and institutional
investors use to assist them in deciding whether to invest in a company or
industry and when to buy and sell a particular security. Investment banks and
brokerage firms, as the primary providers of investment research, have invested
billions of dollars developing their research capabilities, which they use to
build their brand name recognition, enhance customer loyalty and generate
investment banking and trading revenues. Many of these firms are expanding the
breadth and scope of their research by hiring additional analysts and
increasing the number of companies and industries covered by their research and
providing research on international markets. The ability to offer investment
research to investors who traditionally have not had timely access to
investment research is increasingly becoming a competitive advantage and a key
distinguishing feature for brokerage firms. As the industry becomes more
competitive, investment banks and brokerage firms want to distribute their
research in the fastest and most efficient manner possible in order to meet
increasing investor demand for better access to investment research and market
information.
Individual and institutional investors are increasingly demanding access to
investment research and other market information--including SEC reports,
business and financial news, stock quotes, stock price graphs and annual
reports--on a "real-time" or near "real-time" basis. Investment research
traditionally has been mailed to investors, which results in a delay in the
receipt of the research and significant printing, duplicating and mailing
costs. In order to distribute research reports on a more timely basis, some
reports are increasingly being sent by facsimile transmission to investors.
However, these conventional distribution methods do not allow investment banks
or brokerage firms to control which investors access and view their research.
Moreover, large institutional investors often receive hundreds of paper
reports, totaling thousands of pages, each week. These paper-based reports must
be manually sorted, distributed, stored, reviewed and prioritized, which can be
time consuming and expensive. Likewise, large users of investment research and
other financial information also include investment banks and brokerage firms,
which utilize their proprietary research and other corporate documents, as well
as research purchased from other sources, to support their own banking, sales,
trading and marketing functions. These firms seek to quickly and efficiently
distribute research and other documents to their investment bankers, brokers
and traders in geographically dispersed locations.
In response to the shortcomings of the traditional research distribution
methods, investment banks and brokerage firms have tried new distribution
methods, including e-mail and distribution through their Web sites, with
varying degrees of success. Distribution by e-mail is inefficient because it
not only requires the recipient to open and view the e-mail messages, but it
also lacks a way for the recipient to differentiate one message from another.
Also, e-mail messages cannot be searched on a full-text basis and are not
easily archived or retrieved by others. Web-site distribution by investment
banks and brokerage firms requires the investor to visit and search numerous
Web sites that provide research, which is time-consuming and inefficient.
Investment banks and brokerage firms need a solution to their internal and
client investment research distribution needs. Institutional investors need a
real-time, commingled source for their investment research needs. Individual
investors need access to research from investment banks, brokerage firms and
other third-party providers.
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The Multex.com Solution
We are a leading provider of online investment research services designed to
meet the needs of individual and institutional investors, including investment
banks, brokerage firms and corporations. Our services provide users with online
access to a wide range of research and other investment information from
leading investment banks, brokerage firms and third-party research providers
worldwide, including Merrill Lynch, Morgan Stanley Dean Witter, Goldman Sachs
and Salomon Smith Barney. Our Internet-based technology solution ensures timely
receipt of information for critical investment decisions and enables research
providers to target their research more efficiently. At the same time,
recipients of the information can use our proprietary search tools to locate
and retrieve the desired information, saving the time and expense of manually
searching through printed reports. Online availability also eliminates costs
otherwise incurred in printing, mailing, sorting and filing printed reports.
Finally, we enable research and information providers to market more
efficiently, not only by reaching their target customers more effectively, but
also by providing feedback regarding their access and usage patterns. Our
services provide the following key benefits:
Extensive Research Database. We provide entitled investors access to an
online database of research reports and other investment information on over
15,000 companies. These reports are published by more than 400 investment
banks, brokerage firms and third-party research providers worldwide. In the
United States, we offer research reports from 18 out of the 20 leading
investment banks and brokerage firms according to the Institutional Investor
rankings, including Merrill Lynch, Morgan Stanley Dean Witter, Goldman Sachs
and Salomon Smith Barney. In Europe, we offer research reports from 18 out of
the 20 leading investment banks and brokerage firms as ranked by the Reuters
Tempest survey, and in Asia, we offer research reports from 19 out of 20
leading investment banks and brokerage firms as ranked by Asia Money. Through
various arrangements, more than 600,000 individual investors, institutional
investors and financial professionals, including mutual fund managers,
portfolio managers, brokers and their clients, are able to use our services. We
typically add reports to our database at the rate of more than 15,000 new
reports each week. We also provide electronic access on a pay-per-view basis to
more than 250,000 published research reports from more than 250 contributors to
individual investors, buy-side professionals, corporate executives and investor
relations specialists. Research reports in our database include all text,
charts, graphs, tables, color and document formatting contained in the original
report. For some of our customers, we also provide access to delayed stock
quotes through Quote.com and real-time Securities and Exchange Commission
filings through EDGAR Online as part of their subscription.
Efficient, Cost-Effective Research Distribution. We enable investment banks,
brokerage firms and third-party research providers to electronically distribute
their research reports to their brokers, bankers and traders and their
customers via the Internet or intranets on a real-time basis. Our services
permit research to be distributed to multiple locations simultaneously. By
using these services, research providers can target investors worldwide,
monitor investor requests for research reports and determine who has accessed
their reports. Because our services are distributed over the Internet or
intranets, research providers save printing and mailing costs and can more
easily target their research to their customers. Our services are password
protected and research included in our database can be accessed only by
authorized users.
Comprehensive Search Capabilities. We have incorporated extensive search
capabilities into our services, thereby enabling users to rapidly and easily
locate relevant commingled research from hundreds of sources and to reduce the
costs of indexing, organizing and distributing research reports. Users can
search for a particular research report by a number of criteria, including
company name, industry, ticker symbol or analyst. Additionally, users can
search on a full text basis for words or phrases. We also enable users to
create searchable, customized research profiles and portfolios, to further
facilitate finding and retrieving the document.
Ease and Efficiency of Use. Our services are designed to facilitate the
electronic contribution and online distribution of investment research. Our
proprietary software allows sell-side research departments and third-party
information providers to easily contribute research reports, financial models,
graphic presentations and
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<PAGE>
other documents in real-time directly to our database. Research providers can
use existing word processing and desktop publishing software, including
Microsoft Word, Excel, PowerPoint, WordPerfect, HTML and multimedia creation
software, and are not required to modify their method of document creation. For
users accessing research, our proprietary technology incorporates a graphical
user interface and provides access through leading browser technologies to
simplify finding, retrieving, viewing and printing research reports.
Strategy
Our objective is to be the leading provider of online investment research
services for the individual and institutional investment community. We use
leading Internet technologies to provide a unique, integrated platform for the
efficient distribution of investment research and financial information
worldwide. The following are the key elements of our strategy:
Provide Extensive Investment Research and Information. We intend to continue
to leverage our success as an investment research and information source for
institutional investors. We continuously target leading investment banks and
brokerage firms in an effort to add their research to our research database.
Our database is growing rapidly and we add approximately 15,000 new research
reports to our database each week. By establishing relationships with other
third-party providers of investment and financial information, including EDGAR
Online, Standard & Poor's, ValueLine and others, we can offer extensive third-
party investment research and information. Through our Multex Data Group
subsidiary we are also developing the ability to provide proprietary earnings
estimates and related financial reports. We believe that by continually
incorporating additional sources of investment and financial information into
our database, we will be well positioned to become the premier source of high-
value investment information.
Expand Distribution Channels. We employ a broad array of distribution
channels for our services and are continuously identifying and developing new
channels. For the institutional investor market, we have entered into
agreements with leading distributors of financial information, including ADP,
Bloomberg, Bridge, Dow Jones, Reuters and Disclosure. In order to enhance the
distribution of investment research to individual investors, we have entered
into an agreement with America Online to be an anchor tenant on the investment
research area within the AOL Personal Finance channel, and have also entered
into agreements to distribute our services with a number of leading Internet-
based financial Web sites and distributors, including CNNfn, Data Broadcasting
Corporation (which includes CBS MarketWatch) and Disclosure.
Increase Multex Brand Awareness. We believe that increasing the brand name
awareness of Multex.com and our services in the financial community will
contribute to our future success. We have successfully built a brand name among
institutional investors and research providers and are targeting our marketing
efforts to expand the recognition of our corporate and service names through
advertising, direct mail, trade shows, seminars and conferences as well as
joint marketing initiatives with information providers and distributors. We
seek to incorporate our branded logo on each Web site that utilizes our
technology to increase the brand name awareness of Multex.com and our services.
Target Individual Investor Market. Through our Multex Investor Network, we
are targeting the expanding individual investor market. We intend to expand our
related sales and marketing efforts in order to increase traffic on the Multex
Investor Network and expand our member base. In addition, to address the
individual investor market, we intend to capitalize on our arrangement with
America Online and to develop links to the Multex Investor Network from other
leading Internet portals and personal finance Web sites. We are also seeking to
expand the amount of research available to individual investors on the Multex
Investor Network from leading investment banks and brokerage firms. We believe
that the Multex Investor Network will significantly increase individual
investors' access to institutional quality research and enhance our position as
a leading online provider of this research.
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Extend Global Presence. To provide U.S. and foreign investors with access to
investment research prepared by leading investment banks and brokerage firms
throughout the world, we target international contributors and subscribers from
our headquarters in New York, from an office in London and through independent
representatives in Hong Kong. We intend to open offices in other leading
financial centers. We believe that institutional investors in Europe, the
Pacific Rim and numerous emerging markets require access to high quality online
investment research and information. Since many investors are investing in
markets throughout the world, they also require research and information from
investment banks and brokerage firms in local markets. In addition, many
investment banks and brokerage firms in U.S. and foreign markets are seeking to
distribute their research worldwide.
Maintain Technology Leadership. We intend to continuously develop and
incorporate new technologies to enhance our services. We intend to maintain our
leadership position by continuing to improve our technology through investment
in research and development activities, use of new Internet, intranet and
extranet technologies and integration of each of our services. In particular,
we are extending the available document formats to support spreadsheets,
presentation applications, HTML-based pages, URL references, and audio and
video files. We are also developing integrated and directed user alerts and e-
mail and fax capabilities. Using our technological capabilities and expertise,
we focus on enhancing our scalable and open architecture.
Focus on Multiple Revenue Opportunities. We are pursuing multiple revenue
opportunities for future growth with a particular focus on establishing a
recurring revenue stream from subscriptions. We believe that subscriptions,
professional service fees, pay-per-view transactions and advertising represent
key opportunities. By expanding the number of research providers and the amount
and formats of information available, we believe that we can generate
additional revenue from new and enhanced services. In addition, we believe that
by targeting individual investors and corporations, we may be able to increase
the pay-per-view revenues from Multex Research-On-Demand and the Multex
Investor Network. We also expect to generate advertising and sponsorship
revenue from the Multex Investor Network and our other Web sites.
Services
The following table sets forth information concerning our principal service
offerings:
Multex.com Service Offerings
<TABLE>
<CAPTION>
Name of Revenue
Service Description Target Market Model
---------------- --------------------------- ----------------------------------- -------------------
<S> <C> <C> <C>
MultexNET Access to real-time Buyside institutions Annual subscription
commingled research and corporations
MultexEXPRESS Real-time distribution of Sellside investment Annual subscription
proprietary research to a banks and brokerage firms
provider's employees and
clients
Multex Research- Access to commingled, Commercial and investment banks, Pay-per-view
On-Demand pay-per-view research on corporations, financial advisors
a delayed basis and professional services firms
Multex Investor Access to free and Individual investors, corporations, Advertising,
Network pay-per-view investment financial advisors and professional sponsorship and
research on a delayed basis services firms pay-per-view
</TABLE>
MultexNET
MultexNET enables subscribers to access on a real-time basis over the
Internet commingled full-text investment research reports supplied by leading
investment banks, brokerage firms and third-party research providers. Over
11,000 mutual fund managers, portfolio managers and other institutional
investors, as well as research analysts and other financial services
professionals, are able to use MultexNET, which offers timely
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online access to over 1,000,000 research reports and other investment
information from more than 400 information provides. Subscribers to MultexNET
are offered advanced searching and filtering capabilities, and the ability to
retrieve investment research reports over the Internet. Our proprietary
software enables us to distribute a particular research or other financial
report only to those users who have been authorized or entitled to access the
report by the firm that authored the report. MultexNET enables research and
other information providers to monitor requests for their research reports and
determine who has accessed and viewed the report. Subscribers whose
subscription does not entitle them to access particular embargoed research and
third-party research information may be able to access these reports through
Multex Research-On-Demand on a pay-per-view basis after the embargo period has
ended (typically 15 days).
Features of MultexNET include real-time access to high-quality multimedia and
rich text research reports, the ability to utilize advanced searching features
which permit searches by company name, ticker symbol, brokerage firm, analyst,
industry/subject codes and date, the ability to create and modify customized
portfolios and profiles in order to ensure the delivery of updated research
information about those companies in a particular user's portfolio or profile,
and easy-to-use document viewing, printing, faxing and e-mail options. We also
provide access to delayed stock quotes through Quote.com and real-time filings
with the Securities and Exchange Commission filings through EDGAR Online as
part of the MultexNET subscription. In addition, features currently under
development will enable subscribers to arrange for automated fax and/or e-mail
distribution of research reports to the subscriber's end-users.
Research reports and other financial information available through MultexNET
are stored on our database servers and delivered over our Internet servers.
MultexNET requires subscribers to have an Internet connection, or a connection
to an extranet maintained by us, Microsoft Internet Explorer or Netscape
Navigator Web browsers, and the Adobe Acrobat viewer installed on their
workstation, desktop or laptop computer.
The annual subscription fee for MultexNET typically ranges from $1,000 to
$3,540 per subscriber depending upon the number of users at the particular
buyside institution or corporation who have access to the service. As of
December 31, 1998, we had approximately 2,580 paying subscribers to MultexNET,
as compared to approximately 2,040 paying subscribers on December 31, 1997. In
addition, pursuant to our agreement with Reuters, approximately 6,000 Reuters'
customers obtained MultexNET user passwords to use MultexNET as of December 31,
1998, whereas no Reuters' customers had obtained passwords as of December 31,
1997.
MultexEXPRESS
MultexEXPRESS enables investment banks, brokerage firms and other financial
institutions to distribute their own proprietary financial research, as well as
corporate documents, forms, news and other proprietary content, over the
Internet or through intranets and other private networks. Using MultexEXPRESS,
investment banks, brokerage firms and other financial institutions are able to
reduce the cost of printing and distributing research reports and other
internal information and can disseminate more timely information to their
employees and customers. Like MultexNET, MultexEXPRESS offers the contributing
firm the ability to identify which users actually access research through the
usage reporting system incorporated into MultexEXPRESS. MultexEXPRESS can be
implemented as a unique Internet site or seamlessly integrated into a firm's
existing online presence to target information to employees and key clients on
a real-time basis. MultexEXPRESS is built on the same technology platform and
provides users with the same core functionality found in MultexNET.
MultexEXPRESS also offers additional features and integration options targeted
to the internal distribution needs of investment banks, brokerage firms and
other financial institutions.
MultexEXPRESS has been installed at 30 investment banking and brokerage
firms, with more than 530,000 users (approximately 450,000 of which are
generated from one MultexEXPRESS installation), at December 31, 1998. This
compares to 18 MultexEXPRESS installations, with more than 500,000 users
(approximately 450,000 of which are generated from one MultexEXPRESS
installation) at December 31, 1997. MultexEXPRESS is generally contracted for a
one to three year period at a fixed rate dependent upon the scale of the
enterprise-wide solution offered to the customer. Currently, the average price
per installation is approximately $150,000 for each year of the contract.
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Multex Research-On-Demand
Multex Research-On-Demand gives corporations, financial institutions and
advisors, institutional investors, other professional service firms and
libraries, the ability to access more than 450,000 research reports and other
information from over 250 MultexNET research providers. Each report can be
purchased on a pay-per-view basis after an embargo period during which the
research providers make the report available on a proprietary basis only to
their own employees and customers. A growing subset of the content in our
database, approximately 50% as of December 31, 1998, is available on Multex
Research-On-Demand. This service is available either on a stand-alone basis,
through strategic distribution channels or as a part of MultexNET,
MultexEXPRESS or Multex Investor Network. While the majority of the reports
available on Multex Research-On-Demand relate to U.S. equities and investment
opportunities, we are adding information relating to foreign equities and
investment opportunities.
Multex Research-On-Demand customers can purchase and download the research
reports to their own computer using advanced searching and filtering technology
that locates documents by symbol, industry, brokerage firm, full-text words and
phrases, or user-defined portfolios and profiles. Users can receive e-mail
alerts throughout the day, which may be keyed to their portfolios or other
user-provided criteria. The financial research reports available to Multex
Research-On-Demand customers include both those relating to a particular
company and those relating to an industry as a whole. Research from independent
research providers (including Standard & Poor's, Disclosure and Value Line
Mutual Fund Survey) is also available for purchase. An online purchase history
provides a specific list of all of the reports purchased by an individual user.
Prices per document available through Multex Research-On-Demand generally
range from $10.00 to $150.00, based on the length and type of document. The
pay-per-view fees are generally shared between the investment bank, brokerage
firm or third-party research provider that supplied the original research
report, the distributor through which the purchase was initiated, if any, and
us. There is no registration or subscription fee for use of this service. Some
of our users have purchased an annual subscription which enables them to
purchase individual research reports at a discounted price. We are also adding
analysis from leading third-party advisory services.
Multex Investor Network
Multex Investor Network is an Internet service targeting the rapidly growing
individual investor market. Multex Investor Network is an interactive community
for individual investors. Visitors to Multex Investor Network can join as a
"member" at no cost. Members of Multex Investor Network can download, view and
print at no cost a wide range of investment research reports and investment
content from us, sponsoring brokerage firms and investment banks, as well as
member-generated content. Members also have access to over 250,000 premium
"pay-per-view" investment and brokerage research reports from over 250
brokerage firms, investment banks and third-party information providers. We
have established a number of strategic distribution relationships to promote
the Multex Investor Network, including a strategic distribution relationship
with America Online to serve as the anchor tenant for brokerage research on the
AOL Personal Finance channel. In addition, we have established distribution
relationships for the Multex Investor Network with other Internet portals and
financial sites, including The Wall Street Journal Interactive, CNNfn, CBS
MarketWatch, Quote.com, Hoovers and Edgar On-Line.
We generate revenue from our Multex Investor Network through the sale of
sponsorships to investment banks and brokerage firms, the sale of banner
advertisements that allow interested users to link directly to the advertisers'
own Web sites, and pay-per-view sales of investment research and other
financial reports. To date, we have signed sponsorship agreements with Merrill
Lynch, Salomon Smith Barney and Gruntal & Co.
In connection with the Merrill Lynch sponsorship, we recently assisted
Merrill Lynch in the launch of www.askmerrill.com, a four-month trial Web site
that makes Merrill Lynch's award-winning research available to individual
investors with access to the Internet. Specifically, the trial Web site,
developed by us and co-branded in partnership with Merrill Lynch, gives
registered users access to: (i) Merrill Lynch Research reports on specific
companies, including analyst reports and earnings estimates; (ii) an at-a-
glance listing of the latest research reports available from Merrill Lynch
analysts and (iii) a research tracker feature that automatically displays
reports for as many as ten companies specified by the user.
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<PAGE>
Other Services
Through Multex Data Group, we maintain an earnings estimate database and
generate related, proprietary financial reports, which are resold through
various distributors. These reports, which combine information from our
earnings estimates database with other fundamental data obtained from a variety
of sources, are sold on a pay-per-view basis through Multex Research-On-Demand
and Multex Investor Network, and may be offered in the future on a subscription
basis.
Research and Information Providers
We have dedicated substantial resources to develop relationships with an
extensive range of domestic and international investment banks, brokerage firms
and third-party research providers, and we have a dedicated sales force which
is continually recruiting research providers. We manage our relationship with
each major research provider through our staff of account representatives.
Set forth below is a representative list of our research and information
providers:
Selected North American Information Providers
<TABLE>
<S> <C>
ABN Amro Chicago ING Barings PaineWebber
Corporation Interstate/Johnson Lane* Piper Jaffray*
BancBoston Robertson J.P. Morgan Securities Ragen McKenzie*
Stephens* J.C. Bradford & Co. * Raymond James &
Bear Stearns & Co. Inc. Janney Montgomery Scott* Associates*
Brown Brothers Harriman* Jefferies & Co. * Robinson-Humphrey*
BT Alex. Brown* Keefe, Bruyette & Woods* Salomon Smith Barney*
Chase Securities* Legg Mason Wood Walker* Sanford Bernstein
CIBC Oppenheimer* Merrill Lynch* Schroder Securities
CS First Boston Morgan Keegan & Company* Ltd.
Dain Rauscher Wessels* Morgan Stanley Dean SG Cowen*
Goldman Sachs & Co. Witter Soundview Financial
Gruntal & Co.* NationsBanc Montgomery Group*
Hambrecht & Quist* Securities Volpe Brown Whelan
Warburg Dillon Read*
</TABLE>
Selected International Information Providers
<TABLE>
<S> <C>
ABN Amro Dresdner Kleinwort Benson PaineWebber
Alfred Berg Fox Pitt, Kelton* International
Auerbach Grayson* Goldman Sachs Paribas*
Bankers Trust Australia International RBC Dominion
Limited HSBC James Capel Securities Inc.
Cazenove & Co. Indosuez WI Carr* Robert Fleming & Co.
Clarion Securities ING Barings Salomon Smith Barney*
Commerzbank AG Jardine Fleming Holdings Santander Investment
Credit Lyonnais Europe Ltd. Securities*
Credit Suisse First JP Morgan Securities Ltd. SBC Warburg Dillon
Boston Merrill Lynch Read
Daiwa Institute of International* Schroder & Co. Ltd.*
Research Ltd.* Morgan Stanley SG Securities PTE
Deutsche Morgan Grenfell International Union Bank of
Nomura Securities Switzerland
International Yorktown Securities*
</TABLE>
Selected Third-Party Information Providers
<TABLE>
<S> <C>
Baseline* Instinet Research* The Red Chip Review*
CNBC/Dow Jones* IPO Maven* Value Line Mutual Fund
Disclosure* Renaissance Capital* Survey*
Ford Investor Services* Standard & Poor's* Wall Street
Transcript*
WEFA*
- --------
* Also provides research and information for Multex Research-On-Demand
</TABLE>
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Customers
Multex.com has dedicated substantial resources to developing relationships
with an extensive range of buyside institutions, investment banks, brokerage
firms, libraries, corporations and other professional service firms. As a
result, MultexNET is used at over 4,000 financial institutions and
corporations, MultexEXPRESS is used by 30 of the world's leading brokerage
firms, and thousands of users access Multex Research-On-Demand. Multex Investor
Network, which was launched in November 1998, had more than 145,000 registered
members on January 31, 1999.
Set forth below is a representative list of our institutional customers:
<TABLE>
<S> <C> <C>
AIM Advisors Gabelli Asset Management Morgan Stanley Asset
Alliance Capital Management GE Capital Management
Arthur Andersen & Company Goldman Sachs & Co. Oppenheimer Funds
BancBoston Robertson Stephens Gruntal & Co. PaineWebber
Barclays Global Investors Heidrick & Struggles Piper Jaffray
BT Alex. Brown Hewlett-Packard Putnam Investments
Conseco Inc. Invesco Asset Management T. Rowe Price
Dain Rauscher Wessels J.C. Bradford & Co. Ragen McKenzie
Delaware Management Jefferies & Co. Salomon Smith Barney
Dresdner/RCM Global Investors John Hancock Advisors Asset Management
Ernst & Young Kleinwort Benson Investment SBC Warburg Dillon Read
Fidelity Capital Markets Management SG Cowen
Fleet Investment Advisors-- Legg Mason Wood Walker Soundview Financial Group
Equity Partners McKinsey & Co. UBS Securities
Franklin Research and Development Merrill Lynch Asset Vanguard
Management
</TABLE>
Strategic Distribution Relationships
Multex.com has established a number of strategic distribution relationships
to provide marketing and additional distribution for its services, to build
traffic on our Web sites and to increase investor awareness of our services and
the Multex.com brand name. These strategic relationships target one of two
markets: institutional investors and individual investors.
We have entered into agreements and strategic relationships with ADP,
Bloomberg, Bridge, Dow Jones, Reuters and Disclosure to assist us in marketing
our services to institutional investors, although in the case of Bridge, the
services are not expected to become available until the third quarter of 1999.
In each case, we share in revenues generated from sales to end-users through
the strategic partners' distribution networks. The principal services
distributed by these strategic partners are MultexNET, which is made available
as a service through the partners' distribution network on similar terms to
those available to subscribers to MultexNET over the Internet, and Multex
Research-On-Demand. We recently renegotiated our strategic relationship with
Reuters for the five-year term beginning on January 1, 1999. See "Certain
Transactions."
In order to enhance the distribution of investment research to the individual
investor market, we have entered into an agreement with America Online. This
agreement is for an initial two-year term and is automatically renewable unless
either party gives advance notice of its intention not to renew. Under our
agreement with AOL, we have secured a position as an anchor tenant for
brokerage research on the AOL Personal Finance channel as well as a integrated
links on other screens within the AOL service, with links from those locations
back to Multex Investor Network.
In addition to the strategic relationships described above, we have entered
into agreements with numerous other distributors, including Big Charts, CBS
Marketwatch, CNNfn, Data Broadcasting Corp., Disclosure, Edgar Online,
Hoover's, MediaOne, Quote.com, Stock Smart and Ziff Davis Interactive Investor,
to further attract traffic to the Multex Investor Network and our other Web
sites.
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Sales and Marketing
Multex.com sells its services through a sales and marketing organization,
which consisted of an aggregate of 57 employees at December 31, 1998. Our sales
force is organized into geographic teams focused on sales of subscriptions to
MultexNET, sales of subscriptions to the MultexEXPRESS service and sales of
Multex Research-On-Demand on a pay-per-view or subscription basis. Furthermore,
sponsorships on the Multex Investor Network are sold directly by our sales
staff. In addition, we sell sponsorship and banner advertising, pursuant to an
agreement with DoubleClick.
Our sales force develops sales presentations, demonstrates our services and
manages the complete sales cycle. We currently have sales personnel in New York
and London, as well as two independent representatives in Hong Kong, who are
responsible for specific geographic territories as well as named accounts and
prospects around the world. We recently opened a sales office in San Francisco
and plan to add additional sales personnel from time to time as necessary.
In addition to our direct sales efforts, our services are also sold over a
growing number of third-party channels, including Bloomberg, Reuters and
Disclosure, which reach individual and institutional investors around the
world. We believe that our presence on these channels also serves as a
significant and continuous source of marketing for our services and the
Multex.com brand name. See "--Strategic Distribution Relationships."
To support our sales efforts, we employ a variety of methods to market and
promote our services and the Multex.com brand name. These methods include
direct mail, print advertisements, Internet advertisements, trade shows and
conferences, and telemarketing. We also utilize our Web sites, which are
continually updated with corporate and industry news, new information about our
services and other financial information, to provide links and other
registration opportunities, all designed to create awareness, generate leads
and sell services.
Research and Development
Our future success will depend upon our ability to maintain and develop
competitive technologies, to continue to enhance our current services and to
develop and introduce new services in a timely and cost-effective manner that
meet changing conditions, including evolving customer needs, new competitive
service offerings, emerging industry standards and rapidly changing technology.
We have a dedicated research and development organization that develops new
features and functionality for our existing services as well as the software
that supports new services. The research and development team has expertise in
network development and maintenance, Internet and intranet protocols, software
development, database maintenance and development and a variety of programming
tools and languages and operating systems. At December 31, 1998, we had 24
employees engaged in research and development. Research and development
expenses were $1.4 million in 1996, $1.6 million in 1997 and $2.2 million in
1998. We expect to continue making substantial expenditures on research and
development in the future.
The market for the electronic distribution of investment research and related
services is characterized by rapidly changing technology, evolving industry
standards in computer hardware, programming tools, programming languages,
operating systems, database technology and information delivery systems,
changes in customer requirements and frequent new product introductions and
enhancements. There can be no assurance that we will be able to develop and
market, on a timely basis, if at all, service enhancements or new services that
respond to changing market conditions or that will be accepted by individual
and institutional investors. Any failure by us to anticipate or to respond
quickly to changing market conditions, or any significant delays in service
development or introduction, could cause users to delay or decide against
purchases of our services and would have a material and adverse effect on our
business, results of operations and financial condition. See "Risk Factors--Our
business would be materially and adversely affected if the emerging market for
online investment research does not continue to grow."
Customer Service and Network Support
Multex.com is committed to providing a high level of service and support to
its customers. Because our services are available to users 24 hours-a-day, 7
days-a-week, our network support services are likewise
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continuously available. Customer service is generally available weekdays from
8AM to 6PM (New York time). Inquiries come in through our Web sites and via e-
mail and telephone. At December 31, 1998, we had 30 employees engaged in
customer service and network support.
System Architecture and Technology
We believe that our system architecture and proprietary technology provide us
with an important competitive advantage. We use only open standard components,
including Microsoft Windows NT, Microsoft Internet Information Server,
Microsoft SQL Server and Fulcrum Server. The infrastructure of our production
site is built to provide continuous availability of service to both
contributors and users over Internet and intranet channels. All the critical
components of the system are redundant, which allows continuous service in case
of unexpected component failure, maintenance and upgrades. Our infrastructure
is scalable, allowing us to quickly adjust to our expanding client and research
information database.
Our operations are dependent on our ability to maintain our computer and
telecommunications systems in effective working order and to protect our
systems against damage from fire, natural disaster, power loss,
telecommunications failure or similar events. Although we are currently in the
planning stages of acquiring and implementing a redundant back-up, off-site
computer system, this measure will not eliminate the significant risk to our
operations from a natural disaster or system failure at our principal site. In
addition, any failure or delay in the timely transmission or receipt of feeds
and computer downloads from our information providers, due to system failure of
the information providers, the public network or other failures, could disrupt
our operations. See "Risk Factors--Because our business is dependent upon one
computer system, we are particularly susceptible to problems caused by system
failures, security breaches or other damage to our system."
Competition
The market for the electronic distribution of investment research and related
services is intensely competitive and this competition is expected to continue
to increase. We believe that our ability to compete will depend upon many
factors both within and beyond our control, including continuing relationships
with leading providers of investment research, the timing and market acceptance
of new services and enhancements to existing services developed by us and our
competitors, ease of use, performance, price, reliability, customer service and
support, and sales and marketing efforts. Our competitors vary in size and in
the scope and breadth of services offered. Further, we encounter direct and
indirect competition from a number of sources, including traditional media,
companies that provide investment research (including investment banks and
brokerage firms, many of whom have their own Web sites), investment
newsletters, personal financial magazines and other Internet providers of
either free or subscription research services. In addition, extensive company-
specific information, as well as general investment research relating to
particular industries, may be obtained, frequently without charge, from public
sources, including annual reports, Standard & Poor's company-specific reports
and Value Line investment research reports, all of which are available from
public libraries and from the companies to which these reports relate, and
industry research appearing in financial periodicals.
We believe that the principal competitive factors in attracting and retaining
information providers include the ability to provide full-text, publication-
quality research reports electronically on a real-time basis, relationships
with institutional investors interested in receiving this research and the
flexibility of open architecture systems which enable any computer user with
access to a browser to receive research reports regardless of which operating
system controls the information provider's computer. We believe that the
principal competitive factors in attracting and retaining subscribers include
price of the service, the depth, breadth and timeliness of content, the full-
text search features available and the ease of use. We believe that the
principal competitive factors in attracting advertisers will include the number
of subscribers, the demographics of these subscribers and the "pre-
qualification" features that can be offered to investment banks and brokerage
firms. There can be no assurance that we will be able to compete favorably with
respect to these or any other competitive factors.
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Our MultexNET and Multex Research-On-Demand services compete with large and
well-established distributors of financial information, including First Call,
Investext and I/B/E/S. Our MultexEXPRESS service competes with services
provided by in-house management information services personnel and independent
systems integrators. Our Multex Investor Network service competes with Web
sites that offer personal finance information (e.g., Microsoft Investor and
Yahoo! Finance) and Web sites hosted by investment banks and brokerage firms
(e.g., DLJ Direct and Prudential Securities) offer a particular firm's research
reports online either exclusively to their customers or more generally to the
public. Numerous other competitors, including Market Guide, Standard & Poor's,
Moody's and others, offer similar investment research-based services that
compete, or may in the future compete, directly and indirectly with our
services. Many of our existing and prospective competitors have longer
operating histories, greater name recognition, larger customer bases and
significantly greater financial, technical and marketing resources than we do.
As a result, they may be able to respond more quickly to new or emerging
technologies and changes in investor requirements, or to devote greater
resources to the development, promotion and sale of their services than we can.
These competitors may be able to undertake more extensive marketing campaigns,
adopt more aggressive pricing policies and make more attractive offers to
potential employees, subscribers, strategic partners and providers of
investment research information. See "Risk Factors--Our business may be
adversely affected by competitive pressures."
Intellectual Property
Our future success will depend, in substantial part, on our intellectual
property, and we rely upon copyright, patent, trade secret and trademark laws
in the United States and other jurisdictions to protect our proprietary rights.
We own copyrights in the computer software and online materials that we have
developed or acquired, and currently hold limited licenses to use and
distribute software in which third parties own copyrights, including software
for electronic document and database management. We have also entered into
limited license agreements with some of the investment banks, brokerage firms
and other third-party research providers that own the copyrights in research
reports that we distribute electronically. We distribute other research reports
without the benefit of written licenses with the providers of those reports,
solely on the basis of implied licenses that we believe these providers have
granted. There can be no assurance that we will be able to maintain our
licenses of research content or of third-party software, that we will be able
to obtain these licenses in the future on commercially reasonable terms, if at
all, that we will be able to continue to distribute those research reports for
which we do not have written licenses or that our competitors will not be able
to independently develop competing software or on-line materials so as to avoid
infringing upon our copyrights. Also, because none of our licenses of third-
party software and research content are exclusive, this software and content is
and will be available to our current and future competitors. Our failure to
protect or secure ownership of, or to maintain licensed rights to use and
distribute software and content of others, or the ability of our competitors to
obtain rights to distribute the same research reports that we distribute, could
have a material and adverse effect on our business, results of operations and
financial condition.
We own three U.S. patents which claim certain aspects of an information
delivery system that provides electronic distribution of research documents
over the Internet. These patents expire June 4, 2016. We currently have two
pending international patent applications designating certain foreign countries
corresponding to two of the issued patents. We have also filed patent
applications in Canada and the United Kingdom corresponding to the third
patent. There can be no assurance that any of our pending patent applications
will be allowed, that any patents will be issued to us even if the respective
applications have been or will be allowed, or that any patents that are issued
to us will not be successfully challenged by others and invalidated through
agreements with employees, representatives, advisors and others. We also rely
on trade secrets and proprietary know-how for certain unpatented aspects of our
business information and technology. To protect such information, we generally
require all employees, consultants and licensees to enter into confidentiality
agreements limiting the disclosure and use of such information. There can be no
assurance that these agreements provide meaningful protection or that they will
not be breached, that we will have adequate remedies for any such breach, or
that our trade secrets, proprietary know-how, and technological advances will
not otherwise become known to
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others. In addition, there can be no assurance that, despite precautions we
have taken, others have not and will not obtain access to our proprietary
technology. Further, there can be no assurance that third parties will not
independently develop substantially equivalent or better technology or accrue
equivalent business information.
We rely upon and seek to protect the trademarks and service marks that we
currently use, and those that we intend to use in the future, through
registration in the United States and other jurisdictions. We have been granted
United States federal and German registrations for MultexNET, and two MultexNET
logos, as trademarks and service marks, and have applied for registration of
the same marks in Japan, Taiwan, Hong Kong, the United Kingdom and the European
Union. There can be no assurance that any of our pending trademark applications
will be allowed or granted and, if they are allowed or granted, that they, or
any of the registrations that have already been granted to us, will not be
successfully challenged by others and invalidated through administrative
process or litigation. We have not yet sought to register, in the United States
or elsewhere, other trademarks and service marks that we currently use or
intend to use, including MultexEXPRESS, Multex Research-On-Demand, Multex
Investor Network and Multex.com. There can be no assurance that our use of and
interest in these trademarks and service marks will be subject to any legal
protection in any of the jurisdictions in which we now do business or might do
business in the future. As our business is dependent on brand recognition in
the marketplace, any failure to maintain and protect our trademarks and service
marks could have a material and adverse effect on our business, results of
operations and financial condition.
We expect to license some of our proprietary technology to third parties,
including in connection with the establishment of our international business
operations, which may be controlled by these third parties. While we will
attempt to ensure that our proprietary rights will be protected by our business
partners, no assurances can be given that these partners will not take actions
that could materially and adversely affect the value of our proprietary rights
or the reputation of our services and technologies. We currently license some
aspects of our text search functionality and relational database technologies
from third parties. Our failure to maintain these licenses, or to find a
replacement for these technologies in a timely and cost-effective manner, could
have a material adverse effect on our business, results of operations and
financial condition.
Legal standards relating to the validity, enforceability and scope of
protection of proprietary rights in Internet-related businesses are uncertain
and still evolving, and no assurance can be given as to the future viability or
value of any of our proprietary rights or other companies within the industry.
See "Risk Factors--We are dependent on our intellectual property and face a
risk of infringement claims."
Government Regulation
We are subject, both directly and indirectly, to various laws and
governmental regulations relating to our business. There are currently few laws
or regulations directly applicable to access to or commerce on commercial
online services or the Internet. However, due to the increasing popularity and
use of commercial online services and the Internet, it is possible that a
number of laws and regulations may be adopted with respect to commercial online
services and the Internet. These laws and regulations may cover issues
including, for example, user privacy, pricing and characteristics and quality
of products and services. Moreover, the applicability to commercial online
services and the Internet of existing laws governing issues including, for
example, property ownership, libel and personal privacy is uncertain and could
expose us to substantial liability. Any new legislation or regulation or the
application of existing laws and regulations to the Internet could have a
material and adverse effect on our business, results of operations and
financial condition.
As our services are available over the Internet anywhere in the world,
multiple jurisdictions may claim that we are required to qualify to do business
as a foreign corporation in each of those jurisdictions. Our failure to qualify
as a foreign corporation in a jurisdiction where we are required to do so could
subject us to taxes and penalties for the failure to qualify. It is possible
that state and foreign governments might also attempt to regulate our
transmissions of content on our Web sites or prosecute us for violations of
their laws. There can be no assurance that violations of local laws will not be
alleged or charged by state or foreign governments, that we might not
unintentionally violate these laws or that these laws will not be modified, or
new laws enacted, in the future.
45
<PAGE>
Employees
At December 31, 1998, we employed 149 persons, of which 57 were in sales and
marketing, 30 were in network operations, 24 were in research and development,
21 were in contributor relations and 17 were in accounting, finance and
administration. In addition, we retain the services of two independent
representatives in Hong Kong to solicit research and information providers. Our
future success will depend in substantial part upon our ability to attract and
retain highly qualified employees. Competition for this personnel, in
particular information technology professionals, is intense, and there can be
no assurance that we will be able to retain our senior management or other key
employees, or that we will be able to attract and retain additional qualified
personnel in the future. Our employees are not represented by any collective
bargaining organization and we consider our relations with our employees to be
good. See "Risk Factors--We are dependent on our key personnel for our future
success."
Facilities
Our corporate headquarters are located in New York, New York. We lease
approximately 20,000 square feet, under a lease which expires in December 2000.
We also lease space for our sales and marketing efforts in San Francisco and
London. We currently are seeking additional facilities and believe that we will
be able to obtain additional space as needed on commercially reasonable terms.
Legal Proceedings
We are not a party to any material legal proceedings.
46
<PAGE>
MANAGEMENT
Directors, Executive Officers and Key Employees
Directors, executive officers and other key employees of Multex.com, and
their ages as of December 31, 1998, are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Isaak Karaev(1)......... 52 Chairman, President and Chief Executive Officer
James M. Tousignant..... 38 Executive Vice President
Philip Callaghan........ 46 Chief Financial Officer
Gregg B. Amonette....... 46 Senior Vice President, Sales and Marketing
John J. Mahoney......... 39 Senior Vice President, Product Development
Mikhail Akselrod........ 43 Vice President, Operations
Malcolm Draper, Jr...... 46 Vice President, Multex Data Group, Inc.
William Ferguson........ 50 Managing Director, International Operations
Eduard Kitain........... 32 Vice President, Software Engineering
Philip Scheps........... 52 Vice President, Finance and Controller
Davis Gaynes(2)(3)...... 36 Director
I. Robert Greene(1)(2).. 38 Director
Peter G. LaBonte........ 39 Director
Lennert J. Leader....... 43 Director
Milton J.
Pappas(1)(2)(3)........ 70 Director
</TABLE>
- --------
(1) Member of the Executive Committee.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
Isaak Karaev co-founded Multex.com in April 1993 and has served as President
and Chief Executive Officer and a director of Multex.com since that time. In
addition, Mr. Karaev served as Chairman of the board of directors from
Multex.com's inception to October 1996 and has served as Chairman of the board
of directors since April 1998. Before founding Multex.com, Mr. Karaev was the
Senior Vice President for Advanced Systems Development in the Brokerage
Services Information Group of ADP, a provider of front-office market data
services and back-office processing to the financial services industry, from
1989 to April 1993. Mr. Karaev was named to the board of directors pursuant to
an agreement which will terminate upon the completion of the offering. However,
he intends to continue to serve on the board of directors following the
completion of the offering.
James M. Tousignant co-founded Multex.com in April 1993 and has served as
Multex.com's Executive Vice President since December 1998. Mr. Tousignant
served as Multex.com's Senior Vice President from April 1993 to December 1998.
Before founding Multex.com, Mr. Tousignant was Senior Director of Sales in the
Brokerage Services Information Group of ADP from 1989 to April 1993.
Philip Callaghan has served as Multex.com's Chief Financial Officer since
December 1996. From 1992 to November 1996, Mr. Callaghan was Executive Vice
President and Chief Financial Officer of Graff Pay-Per-View, Inc., a
distributor of programming to the cable and direct satellite industries in the
United States and Europe. He served as the Managing Director of Media Computer
Systems Limited, a software developer for the radio and television industries,
from 1989 to 1992. From 1987 to 1989, Mr. Callaghan was Financial Director of
MTV Europe.
Gregg B. Amonette has served as Multex.com's Senior Vice President, Sales and
Marketing since December 1998, and also served as Multex.com's Vice President,
Sales and Marketing from August 1996 to December 1998. From January 1995 to
July 1996, Mr. Amonette was Vice President and General Manager of Micrognosis,
Inc., a division of CSK Software, Inc. and a provider of bank and brokerage
trading-room software and technology. From 1984 to December 1994, Mr. Amonette
served in various capacities in the Brokerage Services Information Group of
ADP, including most recently as Vice President of Retail Sales.
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<PAGE>
John J. Mahoney has served as Multex.com's Senior Vice President, Product
Development since December 1998, and also served as Multex.com's Vice
President, Product Development from August 1994 to December 1998. Prior to
joining Multex.com, Mr. Mahoney was Vice President of Workstation Products in
the Brokerage Services Information Group of ADP from 1987 to March 1993.
Mikhail Akselrod joined Multex.com in April 1993 and has served as
Multex.com's Vice President, Operations since April 1997. Prior to joining
Multex.com, Mr. Akselrod was an independent software consultant from 1991 to
March 1993 and previously was Chief Engineer at R.H. Lytle Co., an independent
systems integration consulting firm, from 1989 to 1991.
Malcolm Draper, Jr. has served as Multex.com's Vice President, Multex Data
Group, Inc. since April 1998, and served as Multex.com's Vice President,
International Operations from April 1997 to April 1998 and as its Vice
President, Operations from May 1995 to April 1997. From March 1994 to April
1995, Mr. Draper was Chief Financial and Administrative Officer of Paresco,
Inc., an asset management company. From 1991 to February 1994, he was Manager
of Software Development at Quies Corp., a software company.
William Ferguson has served as Multex.com's Managing Director, International
Operations since February 1998. From September 1997 to January 1998, Mr.
Ferguson was an independent consultant. From 1989 to September 1997, Mr.
Ferguson served as President of Thomson Technical Data Corporation, a division
of Thomson Financial Services, Inc. delivering real time fundamental and
technical analysis to bond, foreign exchange and derivative professionals.
Eduard Kitain has served as Multex.com's Vice President, Software Engineering
since January 1997 and has held various positions with Multex.com since
November 1993. From 1992 to October 1993, Mr. Kitain was a programmer analyst
for Cashflow Software, Inc., a software development company.
Philip Scheps has served as Multex.com's Vice President, Finance and
Controller since December 1993. From 1990 to November 1993, Mr. Scheps served
as Controller of Harve Benard Ltd., a wholesale and retail apparel company.
Davis Gaynes has served as a director of Multex.com since February 1997.
Since April 1995, Mr. Gaynes has been Executive Vice President for Reuters
America Holdings Inc., an affiliate of Reuters which oversees Reuters' main
operating businesses in the U.S. Mr. Gaynes currently serves as Executive Vice
President of Sales and Marketing of Instinet Corporation, an affiliate of
Reuters which provides electronic brokerage services to investment
professionals worldwide. He has held various positions at Instinet Corporation
since 1984. Reuters America Inc. is a significant stockholder of Multex.com.
Mr. Gaynes was named to the board of directors pursuant to an agreement which
will terminate upon the completion of this offering.
I. Robert Greene has served as a director of Multex.com since July 1996.
Since January 1999, Mr. Greene has been a General Partner of Chase Capital
Partners, a global private equity organization. From August 1994 to December
1998, he was a Principal with Chase Capital Partners. From 1988 to July 1994,
Mr. Greene was an Associate, a Director and a Principal of Prudential Equity
Investors. Chase Capital Partners is a significant stockholder of Multex.com.
Mr. Greene was named to the board of directors pursuant to an agreement which
will terminate upon the completion of this offering.
Peter G. LaBonte has served as a director of Multex.com since April 1998. Mr.
LaBonte is Vice President, International Marketing of Reuters, a position he
has held since January 1997. From April 1996 to February 1997, he was a
Managing Director, Emerging Markets Services of Moody's Investors Services.
From March 1995 to April 1996, Mr. LaBonte served as Vice President, Fidelity
Brokerage Group of Fidelity Investments. From 1988 to March 1995, he was Vice
President, Capital International of Morgan Stanley & Co. Reuters America Inc.
is a significant stockholder of Multex.com. Mr. LaBonte was named to the board
of directors pursuant to an agreement which will terminate upon the completion
of this offering.
48
<PAGE>
Lennert J. Leader has served as a director of Multex.com since December 1998.
Mr. Leader is President of America Online, Inc. Investments. Mr. Leader served
as Senior Vice President, Chief Financial Officer and Treasurer of America
Online, Inc. ("AOL") from September 1989 until July 1998 and was Chief
Accounting Officer from October 1993 until July 1998. Prior to joining AOL, Mr.
Leader was Vice President, Finance, of LEGENT Corporation, a computer software
and services company, from March 1989 to September 1989. He also served as
Chief Financial Officer of Morino, Inc., a computer software and services
company, from 1986 to March 1989 and as its Director of Finance from 1984 to
1986. Prior to joining Morino, Inc. in 1984, he was an audit manager at Price
Waterhouse. Mr. Leader was named to the board of directors pursuant to an
agreement which will terminate upon the completion of this offering.
Milton J. Pappas served as a director of Multex.com from November 1993 to
March 1994, and has served as a director since July 1996. In addition, Mr.
Pappas served as Chairman of the board of directors from October 1996 to April
1998. Since 1983, Mr. Pappas has served as Chairman of Euclid Partners
Corporation, a management company providing services to various venture capital
investment funds, including Euclid Partners III, L.P. and Euclid Partners IV,
L.P. (collectively, "Euclid Partners"). Mr. Pappas serves as a director of
Netegrity, Inc., a provider of Web security products. Euclid Partners is a
significant stockholder of Multex.com. Mr. Pappas was named to the board of
directors pursuant to an agreement which will terminate upon the completion of
this offering.
Composition of the Board of Directors
Upon the completion of this offering, we intend to file a Second Amended and
Restated Certificate of Incorporation pursuant to which our board of directors
will be divided into three classes, each of whose members will serve for a
staggered three-year term. Upon the expiration of the term of a class of
directors, directors in that class will be elected for three-year terms at the
annual meeting of stockholders in the year in which their term expires. Our
board of directors have resolved that Messrs. Pappas and Greene will be Class I
Directors whose terms expire at the 1999 annual meeting of stockholders.
Messrs. LaBonte and Leader will be Class II Directors whose terms expire at the
2000 annual meeting of stockholders. Messrs. Gaynes and Karaev will be Class
III Directors whose terms expire at the 2001 annual meeting of stockholders.
With respect to each class, a director's term will be subject to the election
and qualification of their successors or to their earlier death, resignation or
removal.
Board Committees
The audit committee of the board of directors reviews, acts on and reports to
the board of directors with respect to various auditing and accounting matters,
including the selection of our independent auditors, the scope of the annual
audits, fees to be paid to the auditors, the performance of our independent
auditors and our accounting practices. The members of the audit committee are
Messrs. Gaynes and Pappas.
The compensation committee of the board of directors determines the salaries
and incentive compensation of our officers and provides recommendations for the
salaries and incentive compensation of our other employees. The compensation
committee also administers our various incentive compensation, stock and
benefit plans. The members of the compensation committee are Messrs. Gaynes,
Greene and Pappas.
The executive committee of the board of directors meets periodically with
management to advise upon and approve the details of the execution of strategy
decided at board meetings, and to consider strategic developments that may
arise between the regularly scheduled board meetings. The members of the
executive committee are Messrs. Greene, Karaev and Pappas.
Director Compensation
We do not currently compensate directors for attending meetings of the board
of directors or committee meetings of the board of directors, but we do
reimburse directors for their reasonable travel expenses incurred in connection
with attending these meetings.
49
<PAGE>
Under the Automatic Option Grant Program of the 1999 Stock Option Plan (as
described below under "--1999 Stock Option Plan"), and subject to the last
sentence of this paragraph, each individual who is serving as a non-employee
member of the board of directors on the date the underwriting agreement is
executed and who has not previously been in our employ will receive at that
time an option to purchase 12,000 shares of common stock with an exercise price
equal to the public offering price set forth on the cover page of this
prospectus. Each individual who first joins the board of directors after the
completion of this offering as a non-employee member of the board of directors
will also receive an option grant for 12,000 shares of common stock at the time
of his or her commencement of service on the board of directors, provided such
individual has not otherwise been in our prior employ. In addition, at each
annual meeting of stockholders, beginning with the 2000 annual meeting, each
individual who is to continue to serve as a non-employee member of the board of
directors will receive an option to purchase 3,750 shares of common stock,
whether or not such individual has been in our prior employ. However, any non-
employee member of the board of directors who, directly or indirectly, is a 5%
or greater stockholder or is affiliated with or a representative of a 5% or
greater stockholder, will not be eligible to receive any options under the
Automatic Option Grant Program.
Executive Compensation
The following table sets forth all compensation earned during the fiscal year
ended December 31, 1998 by our Chief Executive Officer and our other four most
highly compensated executive officers of whose salaries and bonuses exceeded
$100,000 in 1998 (the "Named Executive Officers").
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation
Compensation(1) Awards
---------------- ------------
Securities
Underlying
Name and Principal Position Salary Bonus Options
- --------------------------- -------- ------- ------------
<S> <C> <C> <C>
Isaak Karaev..................................... $200,000 -- 250,000
President and Chief Executive Officer
James M. Tousignant.............................. 129,942 $90,000 92,500
Executive Vice President
Philip Callaghan................................. 130,769 90,000 25,000
Chief Financial Officer
Gregg B. Amonette................................ 130,000 90,000 67,500
Senior Vice President, Sales and Marketing
John J. Mahoney.................................. 126,730 75,000 17,500
Senior Vice President, Product Development
</TABLE>
- --------
(1) The column for "Other Annual Compensation" has been omitted because there
is no compensation required to be reported in that column. The aggregate
amount of perquisites and other personal benefits provided to each Named
Executive Officer is less than 10% of the total annual salary and bonus of
that officer.
50
<PAGE>
Option Grants in Last Fiscal Year
The following table sets forth information regarding options granted to the
Named Executive Officers during the fiscal year ended December 31, 1998. We
have never granted any stock appreciation rights.
<TABLE>
<CAPTION>
Individual Grants(1)
-------------------------------------------------
Potential Realizable
Value at Assumed
Annual Rates
Number of Percent of Total Of Stock Price
Securities Options Exercise Appreciation
Underlying Granted to Price For Option Term(3)
Options Employees Per Expiration ---------------------
Name Granted In 1998(2) Share($) Date 5% 10%
- ---- ---------- ---------------- -------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Isaak Karaev............ 250,000(4) 25.3% $5.00 11/29/08 $ 786,118 $ 1,992,178
James M. Tousignant..... 17,500 1.8 7.50 4/23/08 82,542 209,179
75,000(4) 7.6 5.00 11/29/08 235,835 597,653
Philip Callaghan........ 17,500 1.8 7.50 4/23/08 82,542 209,179
7,500 0.8 5.00 12/15/08 23,584 59,765
Gregg B. Amonette....... 17,500 1.8 7.50 4/23/08 82,542 209,179
50,000(4) 5.1 5.00 12/15/08 157,224 398,436
John J. Mahoney......... 17,500 1.8 7.50 4/23/08 82,542 209,179
</TABLE>
- --------
(1) Each option represents the right to purchase one share of common stock.
The options shown in this column were all granted pursuant to our 1993
Stock Incentive Plan. The options shown in this table, except as otherwise
indicated below, become exercisable at a rate of 25% annually over four
years from the date of grant. The options with an exercise price of $7.50
per share were granted on April 24, 1998. The options with an exercise
price of $5.00 were granted to Messrs. Karaev and Tousignant on November
30, 1998, and to Messrs. Callaghan and Amonette on December 16, 1998. In
addition, the options will vest in the event we are acquired (whether by
merger or asset sale) or if any person (other than Mr. Karaev) becomes the
owner of more than 50% of our common stock.
(2) In the year ended December 31, 1998, we granted options to employees to
purchase an aggregate of 989,000 shares of common stock.
(3) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. The 5% and
10% assumed annual rates of compounded stock price appreciation are
mandated by the rules of the Securities and Exchange Commission and do not
represent an estimate or projection of our future common stock prices.
These amounts represent certain assumed rates of appreciation in the value
of our common stock from the fair market value on the date of grant.
Actual gains, if any, on stock option exercises are dependent on the
future performance of the common stock and overall stock market
conditions. The amounts reflected in the table may not necessarily be
achieved.
(4) These options vest on the date which is six years following the date of
their grant, but may vest earlier if we achieve certain milestones.
Specifically, the options will vest earlier with respect to (i) 50% of the
shares when total gross revenues in any 12-month period exceed $25.0
million and (ii) the other 50% of the shares when total gross revenues in
any 12-month period exceed $40.0 million and we achieve positive earnings
before interest, taxes, depreciation and amortization.
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<PAGE>
Aggregated Option Exercises In The Year Ended December 31, 1998 And Fiscal
Year-End Option Values
The following table sets forth information concerning options to purchase
common stock exercised by the Named Executive Officers during the year ended
December 31, 1998 and the number and value of unexercised options held by each
of the Named Executive Officers at December 31, 1998.
<TABLE>
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Options at In-the-Money Options
Acquired December 31, 1998 at December 31, 1998(1)
on Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Isaak Karaev............ 100,000 $479,000 375,000 250,000 $1,593,750 --
James M. Tousignant..... 18,750 9,000 6,250 117,500 26,875 $110,500
Philip Callaghan........ 43,750 239,125 -- 81,250 -- 241,875
Gregg B. Amonette....... 37,500 190,125 -- 130,000 -- 268,750
John J. Mahoney......... 75,000 36,000 34,375 45,625 159,813 120,938
</TABLE>
- --------
(1) There was no public market for the common stock on December 31, 1998. The
fair market value on December 31, 1998 was determined by the board of
directors to be $4.80 per share.
Employment and Non-Competition Agreements
None of our executive officers has an employment agreement, although all of
our executive officers have entered into agreements that contain non-
competition, non-disclosure and non-solicitation restrictions and covenants,
including a provision prohibiting these officers from competing with Multex.com
during their employment with us and for a period of nine months after
termination of their employment with us.
1999 Stock Option Plan
Multex.com's 1999 Stock Option Plan is intended to serve as the successor
equity incentive program to Multex.com's existing 1993 Stock Incentive Plan
(the "Predecessor Plan") and will become effective prior to the date of this
prospectus. We have reserved for issuance 3,411,375 shares of common stock
under the 1999 Stock Option Plan. This initial share reserve is comprised of
the shares issuable upon exercise of outstanding stock options granted under
the Predecessor Plan plus the remaining share reserve available for option
grants under that plan. In addition, the share reserve will automatically be
increased on the first trading day of January each calendar year, beginning in
January 2000, by a number of shares equal to three percent (3%) of the total
number of shares of common stock outstanding on the last trading day of the
immediately preceding calendar year, but no such annual increase shall exceed
750,000 shares. However, in no event may any one participant in the 1999 Stock
Option Plan receive option grants or direct stock issuances for more than
375,000 shares in the aggregate per calendar year.
Outstanding options under the Predecessor Plan will be incorporated into the
1999 Stock Option Plan on the date of this prospectus, and no further option
grants will be made under the Predecessor Plan thereafter. The incorporated
options will continue to be governed by their existing terms, unless the Plan
Administrator elects to extend one or more features of the 1999 Stock Option
Plan to those options. However, except as otherwise noted below, the
outstanding options under the Predecessor Plan contain substantially the same
terms and conditions summarized below for the Discretionary Option Grant
Program in effect under the 1999 Stock Option Plan.
The 1999 Stock Option Plan is divided into four separate components:
. the Discretionary Option Grant Program under which eligible individuals
in (including officers, non-employee members of the board of directors
and consultants) may, at the discretion of the Plan Administrator, be
granted options to purchase shares of common stock at an exercise price
determined by the Plan Administrator;
. the Stock Issuance Program under which eligible individuals may, in the
Plan Administrator's discretion, be issued shares of common stock
directly, through the purchase of shares at a price determined by the
Plan Administrator or as a bonus tied to the performance of services;
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<PAGE>
. the Salary Investment Option Grant Program under which executive officers
and other highly compensated employees may elect to apply a portion of
their base salary to the acquisition of special below-market stock option
grants; and
. the Automatic Option Grant Program under which option grants will
automatically be made at periodic intervals to eligible non-employee
board members to purchase shares of common stock at an exercise price
equal to 100% of the fair market value of those shares on the grant date.
The Discretionary Option Grant Program and the Stock Issuance Program will be
administered by the compensation committee of the board of directors. The
compensation committee, as Plan Administrator, will have complete discretion to
determine which eligible individuals are to receive option grants or stock
issuances, the time or times when option grants or stock issuances are to be
made, the number of shares subject to each grant or issuance, the status of any
granted option as either an incentive stock option or a non-statutory stock
option under the Federal tax laws, the vesting schedule to be in effect for the
option grant or stock issuance and the maximum term for which any granted
option is to remain outstanding. The compensation committee will also have the
authority to select the executive officers and other highly compensated
employees who may participate in the Salary Investment Option Grant Program in
the event that program is activated for one or more calendar years, but neither
the compensation committee nor the board of directors will exercise any
administrative discretion with respect to option grants made under the Salary
Investment Option Grant Program or under the Automatic Option Grant Program for
the non-employee members of the board of directors. All grants under those two
latter programs will be made in compliance with the express provisions of these
programs.
The exercise price for the shares of common stock subject to option grants
made under the 1999 Stock Option Plan may be paid in cash or in shares of
common stock valued at fair market value on the exercise date. The option may
also be exercised through a same-day sale program without any cash outlay by
the optionee. In addition, the Plan Administrator may provide financial
assistance to one or more participants in the 1999 Stock Option Plan in
connection with their acquisition of shares, by allowing individuals to deliver
a full-recourse, interest-bearing promissory note in payment of the option
exercise price and or direct issue price any associated withholding taxes
incurred in connection with that acquisition.
In the event of an acquisition of Multex.com, whether by merger or asset sale
or a sale by the stockholders of more than 50% of the total combined voting
power of Multex.com recommended by the board of directors, each outstanding
option under the Discretionary Option Grant Program which is not to be assumed
by the successor corporation or otherwise continued will automatically
accelerate in full, and all unvested shares under the Discretionary Option
Grant and Stock Issuance Programs will immediately vest, except to the extent
our repurchase rights with respect to those shares are to be assigned to the
successor corporation or otherwise continued in effect. The Plan Administrator
will have the authority under the Discretionary Option Grant Program to provide
that the shares subject to options granted under that program will
automatically vest (i) upon an acquisition of Multex.com, whether or not those
options are assumed or continued, (ii) upon a hostile change in control of
Multex.com effected through a successful tender offer for more than 50% of the
outstanding voting stock or by proxy contest for the election of members of the
board of directors or (iii) in the event the individual's service is
terminated, whether involuntarily or through a resignation for good reason,
within a designated period (not to exceed eighteen (18) months) following an
acquisition in which those options are assumed or otherwise continued in effect
or a hostile change in control. The vesting of outstanding shares under the
Stock Issuance Program may be accelerated upon similar terms and conditions.
Options currently outstanding under the Predecessor Plan will vest in the event
of an acquisition of Multex.com (whether by merger or asset sale) or if any
person (other than Mr. Karaev) becomes the owner of more than 50% of the common
stock of Multex.com.
Stock appreciation rights are authorized for issuance under the Discretionary
Option Grant Program which provide the holders with the election to surrender
their outstanding options for an appreciation distribution from
us equal to the excess of (i) the fair market value of the vested shares of
common stock subject to the
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<PAGE>
surrendered option over (ii) the aggregate exercise price payable for those
shares. This appreciation distribution may be made in cash or in shares of
common stock. There are currently no outstanding stock appreciation rights
under the Predecessor Plan.
The Plan Administrator has the authority to effect the cancellation of
outstanding options under the Discretionary Option Grant Program (including
options incorporated from the Predecessor Plan) in return for the grant of new
options for the same or different number of option shares with an exercise
price per share based upon the fair market value of the common stock on the new
grant date.
In the event the compensation committee elects to activate the Salary
Investment Option Grant Program for one or more calendar years, each of our
executive officers and other highly compensated employees selected for
participation may elect, prior to the start of the calendar year, to reduce his
or her base salary for that calendar year by a specified dollar amount not less
than $10,000 nor more than $50,000. In return, the individual will
automatically be granted, on the first trading day in the calendar year for
which the salary reduction is to be in effect, a non-statutory option to
purchase that number of shares of common stock determined by dividing the
salary reduction amount by two-thirds of the fair market value per share of
common stock on the grant date. The option will be exercisable at a price per
share equal to one-third of the fair market value of the option shares on the
grant date. As a result, the total spread on the option shares at the time of
grant will be equal to the salary reduction amount. The option will become
exercisable in a series of twelve (12) equal monthly installments over the
calendar year for which the salary reduction is to be in effect and will be
subject to full and immediate vesting upon specified changes in the ownership
or control of Multex.com.
Under the Automatic Option Grant Program, and subject to the last sentence of
this paragraph, each individual who is serving as a non-employee member of the
board of directors on the date the underwriting agreement is executed and who
has not previously been in our employ will receive at that time an option grant
for 12,000 shares of common stock with an exercise price equal to the public
offering price set forth on the cover page of this prospectus. Each individual
who first joins the board of directors after the completion of this offering as
a non-employee member of the board of directors will also receive an option
grant for 12,000 shares of common stock at the time of his or her commencement
of service on the board of directors, provided that the individual has not
otherwise been in our prior employ. In addition, at each annual meeting of
stockholders, beginning with the 2000 annual meeting, each individual who is to
continue to serve as a non-employee member on the board of directors will
receive an option grant to purchase 3,750 shares of common stock, whether or
not that individual has been in our prior employ. However, any non-employee
member of the board of directors who, directly or indirectly, is a 5% or
greater stockholder or is affiliated with or a representative of a 5% or
greater stockholder, will not be eligible to receive any option grants under
the Automatic Option Grant Program.
Each automatic grant will have an exercise price equal to the fair market
value per share of common stock on the grant date and will have a maximum term
of ten years, subject to earlier termination following the optionee's cessation
of service on the board of directors. Each automatic option will be immediately
exercisable; however, any shares purchased upon exercise of the option will be
subject to repurchase, at the option exercise price paid per share, should the
optionee's service as a non-employee member of the board of directors cease
prior to vesting in the shares. The 12,000-share grant will vest in four equal
and successive annual installments over the optionee's period of service on the
board of directors. Each additional 3,750-share grant will vest upon the
optionee's completion of one year of service on the board of directors measured
from the grant date. However, each outstanding option will immediately vest
upon (i) specified changes in the ownership or control of Multex.com or (ii)
the death or disability of the optionee while serving as a member of the board
of directors.
Limited stock appreciation rights will automatically be included as part of
each grant made under the Automatic Option Grant and Salary Investment Option
Grant Programs and may be granted to one or more of our officers as part of
their option grants under the Discretionary Option Grant Program. Options with
this limited stock appreciation right may be surrendered to us upon the
successful completion of a hostile tender offer for more than 50% of our
outstanding voting stock. In return for the surrendered option, the optionee
will
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<PAGE>
be entitled to a cash distribution from us in an amount per surrendered option
share equal to the excess of (i) the highest price per share of common stock
paid in connection with the tender offer over (ii) the exercise price payable
for that share.
Our board of directors may amend or modify the 1999 Stock Option Plan at any
time, subject to any required stockholder approval. The 1999 Stock Option Plan
will terminate on the earliest of (i) ten years after the date that the board
of directors adopts the 1999 Stock Option Plan, (ii) the date on which all
shares available for issuance under the 1999 Stock Option Plan have been issued
as fully-vested shares or (iii) the termination of all outstanding options in
connection with specified changes in control or ownership of Multex.com.
1999 Employee Stock Purchase Plan
Multex.com has reserved for issuance 750,000 shares of common stock under
Multex.com's 1999 Employee Stock Purchase Plan, which will become effective on
or about the date of this prospectus. The Employee Stock Purchase Plan is
designed to allow eligible employees of Multex.com and participating
subsidiaries to purchase shares of common stock, at semi-annual intervals,
through their periodic payroll deductions under the Employee Stock Purchase
Plan.
The Employee Stock Purchase Plan will be implemented in a series of
successive offering periods, each with a maximum duration of 24 months.
However, the initial offering period will begin on the date of this prospectus
and will end on or about the last business day in April 2001. The next offering
period will commence on the first business day in May 2001, and subsequent
offering periods will commence as designated by the Plan Administrator.
Individuals who are eligible employees on the start date of any offering
period may enter the Employee Stock Purchase Plan on that start date or on any
subsequent semi-annual entry date (May 1 or November 1 each year). Individuals
who become eligible employees after the start date of the offering period may
join the Employee Stock Purchase Plan on any subsequent semi-annual entry date
within that period.
Payroll deductions may not exceed 10% of the participant's total cash
compensation for each semi-annual period of participation, and the accumulated
payroll deductions will be applied to the purchase of shares on the
participant's behalf on each semi-annual purchase date (the last business day
in April and October each year), at a purchase price per share not less than
eighty-five percent (85%) of the lower of (i) the fair market value of the
common stock on the participant's entry date into the offering period or (ii)
the fair market value on the semi-annual purchase date. In no event, however,
may any participant purchase more than 1,500 shares, nor may all participants
in the aggregate purchase more than 187,500 shares on any one semi-annual
purchase date. Should the fair market value of the common stock on any semi-
annual purchase date be less than the fair market value of the common stock on
the first day of the offering period, then the current offering period will
automatically end and a new offering period will begin, based on the lower fair
market value.
Our board of directors may amend or modify the Employee Stock Purchase Plan
following any semi-annual purchase date. The Employee Stock Purchase Plan will
terminate on the last business day in April 2009, unless sooner terminated by
the board of directors.
Compensation Committee Interlocks and Insider Participation
The compensation committee of the board of directors consists of Messrs.
Gaynes, Greene and Pappas, none of whom has been an officer or employee of
Multex.com at any time since our inception. No executive officer of Multex.com
serves as a member of the board of directors or compensation committee of any
entity that has one or more executive officers serving as a member of our board
of directors or compensation committee. Prior to the formation of the
compensation committee, the board of directors as a whole made decisions
relating to the compensation of our executive officers.
Mr. Gaynes, a member of the compensation committee, serves as Executive Vice
President of Reuters America Holdings Inc., an affiliate of Reuters, one of our
strategic distributors. Reuters America Inc., an affiliate of Reuters, is one
of our significant stockholders. See "Certain Transactions."
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CERTAIN TRANSACTIONS
Reuters Agreements
Reuters entered into a strategic distribution relationship with Multex.com in
June 1995. An affiliate of Reuters, Reuters America Inc., is one of our
significant stockholders. Under the terms of a Software and Reciprocal Data
License Agreement, dated June 1, 1995, as amended on September 1, 1996,
November 14, 1996 and December 18, 1997 (the "Old Reuters Agreement"), we
granted to Reuters a limited, non-exclusive license: (i) to use and distribute
some of our technology for production and delivery of research reports to
Reuters' customers, (ii) to market and distribute MultexNET research reports to
up to 15,000 Reuters' customers and (iii) to market Multex Research-on-Demand
service to Reuters' customers. In 1998, Reuters made aggregate payments to us
of approximately $1.5 million, which consisted of a $500,000 license fee and
payments for consulting and maintenance services.
On July 15, 1998, we and Reuters entered into a revised agreement (the "New
Reuters Agreement"), pursuant to which we renegotiated the terms of our
relationship described above. The New Reuters Agreement, which took effect on
January 1, 1999, is for a five-year term and is automatically renewable for
one-year periods thereafter, unless terminated by either party. Under the terms
of the New Reuters Agreement, Multex.com supplies subscribers of the Reuters
3000 product with the ability to access the Multex database via the Reuters
Web, an intranet controlled by Reuters that uses Internet technology to
retrieve and display data. Both MultexNET and Multex Research-On-Demand are
available to Reuters 3000 subscribers on a subscription and pay-per-view basis,
respectively. Revenues generated from the use of Multex products via the
Reuters Web are shared in accordance with the terms of the New Reuters
Agreement. Specifically, Reuters is required to pay us 50% of all revenues
generated from the first 20,000 Reuters' customers who subscribe to MultexNET,
and 40% of all revenues generated from subscribers in excess of 20,000. In
addition, Reuters is required to pay us a royalty payment of 75% of all
purchases by Reuters' customers of research reports and information from Multex
Research-on-Demand. Over the five year term, Reuters may terminate the
agreement if certain subscriber minimums are not met. Beginning on January 1,
2000, Reuters may terminate if the number of subscribers does not exceed 1000.
Over the remaining four year period, this minimum number of subscribers
increases by 1000 to 1500 each year, reaching a minimum of 5000 by December 31,
2003.
We believe that the terms of the Old Reuters Agreement are no less favorable
than the terms we would have otherwise negotiated with an unaffiliated third
party as we entered into the Old Reuters Agreement before an affiliate of
Reuters became a stockholder of Multex.com in June 1996. In addition, we
believe that the terms of the New Reuters Agreement are no less favorable than
the terms we would have otherwise negotiated with an unaffiliated third party.
Mr. Gaynes, who became a director of Multex.com in May 1997, and Mr. LaBonte,
who became a director in April 1998, are both executive officers of Reuters or
one of its affiliates.
AOL Agreement
In March 1998, Multex.com entered into an agreement with AOL, one of our
significant stockholders. Pursuant to the terms of the agreement, we secured a
position as an anchor tenant for brokerage research on the AOL Personal Finance
channel as well as a programming presence on other screens within the AOL
service, with links from those locations back to Multex Investor Network. The
agreement is for a two-year term and is automatically renewable unless either
party gives advance notice of its intention not to renew. In consideration of
the anchor tenant position, we paid AOL a carriage fee of $100,000 in 1998 and
are obliged to pay a second carriage fee payment of $100,000 in March 1999. In
addition, pursuant to the agreement, AOL receives 10% to 25% of both
advertising and merchandising revenues from advertisements and sales generated
from the Multex Investor Network, with links back to the AOL Network. This
revenue share is based on an advertising minimum of $30.00 for each thousand
times an advertisement is delivered to a user.
We believe that the terms of the agreement with AOL are no less favorable
than the terms we would have otherwise negotiated with an unaffiliated third
party as the parties entered into the agreement before AOL became one of our
stockholders in December 1998.
Mr. Leader, who is one of our directors, is the President of America Online,
Inc. Investments, an affiliate of AOL.
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Preferred Stock Financings
In November 1993 and March 1994, respectively, Multex.com sold 25,000 shares
of Series A convertible preferred stock to Euclid Partners III, L.P., Isaak
Karaev and other investors for an aggregate offering amount of $2,500,000. In
November 1994, we sold 36,666 shares of Series B convertible preferred stock to
Euclid Partners III, L.P., 77 Capital Partners, L.P., Venture Fund I, L.P. and
other investors for an aggregate offering amount of $5,500,000. In 1996, we
sold 100,000 shares of Series C convertible preferred stock in various tranches
to Chase Venture Capital Associates, L.P., Euclid Partners III and IV, L.P.,
Reuters America Inc., Softbank Ventures, Inc., 77 Capital Partners, L.P.,
Venture Fund I, L.P. and other investors for an aggregate offering amount of
$15,000,000. In July and August 1997, we sold 55,556 shares of Series D
convertible preferred stock to Chase Venture Capital Associates, L.P., Euclid
Partners IV, L.P., FGIC Services, Inc., The Fl@tiron Fund, LLC and Reuters
America Inc. for an aggregate offering amount of $10,000,000. In December 1998,
we sold 80,000 shares of Series E convertible preferred stock to Chase Venture
Capital Associates, L.P., Flatiron Associates LLC, The Flatiron Fund 1998/99
LLC, Rader Reinfrank Investors, L.P., America Online, Inc., Prospect Street NYC
Discovery Fund, L.P. and Mellon Ventures, L.P. for an aggregate offering amount
of $20,000,000. Mr. Karaev is a limited partner of Flatiron Associates LLC.
Upon the completion of this offering, all of these outstanding shares of
preferred stock will be automatically converted into an aggregate of
approximately 14,861,112 shares of common stock.
Stock Options Granted to Executive Officers
For additional information regarding the grant of stock options to executive
officers and directors, see "Management--Director Compensation," "--Executive
Compensation," "--1999 Stock Option Plan" and "Principal Stockholders."
Agreements with Underwriters
BancBoston Robertson Stephens Inc., CIBC Oppenheimer Corp. and Dain Rauscher
Wessels have entered into service agreements with Multex.com. The terms of
these agreements were negotiated by the parties in arms-length transactions and
the agreements were entered into prior to our selection of the underwriters of
this offering. Pursuant to their service agreements with us, BancBoston
Robertson Stephens and Dain Rauscher Wessels pay us fees for access to our
services and software. During a trial period from March 1998 to May 1998,
BancBoston Robertson Stephens was entitled to receive up to $50,000 free usage
of Multex Research-on-Demand. In accordance with these separate research
control agreements, we pay BancBoston Robertson Stephens, CIBC Oppenheimer
Corp. and Dain Rauscher Wessels royalties based on a percentage of gross and
net revenues from resales of their respective investment research reports.
Other underwriters of this offering may have entered into similar agreements
with us after the date of this prospectus, or may enter into similar agreements
with us from time to time in the future.
Employment of Michael Gavronsky
In February 1999, Michael Gavronsky became an employee of Multex.com, and
serves as Multex.com's Vice President, Application Development. Mr. Gavronsky
is the son-in-law of Isaak Karaev, Multex.com's President and Chief Executive
Officer. Pursuant to an offer letter dated February 1999, Multex.com granted
Mr. Gavronsky a stock option to purchase 30,000 shares of common stock at an
exercise price of $9.00 per share. In addition, six months after the
commencement of his employment, Mr. Gavronsky may receive an option to purchase
40,000 shares of common stock, subject to satisfactory work performance.
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PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to the beneficial
ownership of the common stock as of December 31, 1998 (after giving effect to
the conversion of convertible preferred stock, and as adjusted to reflect the
sale of the shares of common stock offered in this offering) by (i) each person
(or group of affiliated persons) who we know to beneficially own 5% or more of
the outstanding shares of common stock, (ii) each of our directors and Named
Executive Officers and (iii) all of our directors and executive officers as a
group. Unless otherwise indicated, the address of each beneficial owner listed
below is c/o Multex.com, Inc., 33 Maiden Lane, 5th Floor, New York, New York
10038.
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. Except as indicated by the footnotes below,
we believe, based on information furnished to us, that the persons and entities
named in the table below have sole voting and investment power with respect to
all shares of common stock shown as beneficially owned by them. Percentage of
beneficial ownership is based on 18,112,237 shares of common stock outstanding
as of December 31, 1998, and 21,112,237 shares of common stock outstanding
after the completion of this offering. In computing the number of shares of
common stock subject to options held by that person that are exercisable within
60 days of December 31, 1998, these shares are deemed outstanding for the
purpose of determining the percentage ownership of the optionee. These shares,
however, are not deemed outstanding for the purpose of computing the percentage
ownership of any other stockholder.
<TABLE>
<CAPTION>
Percent
Beneficially Owned
Number --------------------
of Before After
Name of Beneficial Owner Shares Offering Offering(1)
- ------------------------ ---------- -------- -----------
<S> <C> <C> <C>
Executive Officers and Directors:
Isaak Karaev (2).............................. 1,357,668 7.3% 6.3%
James M. Tousignant (3)....................... 228,250 1.3 1.1
Philip Callaghan.............................. 43,750 * *
Gregg B. Amonette (4)......................... 43,750 * *
John J. Mahoney (5)........................... 193,750 1.1 0.9
Davis Gaynes (6).............................. 1,944,444 10.7 9.2
I. Robert Greene (7).......................... 3,042,118 16.8 14.4
Peter G. LaBonte (8).......................... 1,944,444 10.7 9.2
Lennert J. Leader (9)......................... 400,000 2.2 1.9
Milton J. Pappas (10)......................... 1,840,278 10.2 8.7
All directors and executive officers as a
group (10 persons) (11)...................... 11,038,452 59.5 51.2
Other 5% Stockholders:
Chase Venture Capital Associates, L.P. (12)... 3,042,118 16.8 14.4
Euclid Partners Corporation (13).............. 1,840,278 10.2 8.7
Multex Voting Trust (14)...................... 3,051,125 16.8 14.5
Rader Reinfrank Investors, L.P. (15).......... 1,000,000 5.5 4.7
Reuters America Inc. (16)..................... 1,944,444 10.7 9.2
77 Capital Partners, L.P. (17)................ 1,000,000 5.5 4.7
Softbank Ventures, Inc. (18).................. 1,083,333 6.0 5.1
Venture Fund I, L.P. (19)..................... 916,650 5.1 4.3
</TABLE>
- --------
*Less than one percent.
(1) Multex.com will sell 283,500 additional shares and the over-allotment
selling stockholders will sell an aggregate of 166,500 shares as follows:
if the over-allotment option is exercised in full, the following
stockholders will sell the following number of additional shares: George
C. Baird, III, 18,000 shares; Thomas V. D'Ambrosio, 3,000 shares; Jane
Gavronsky, 25,000 shares; Gregory Ginsburg, 5,000 shares; Isaak Karaev,
70,000 shares; Yefim Karayev, 5,000 shares; Mikhail Kolfman, 10,000
shares; John Mahoney, 7,500 shares; Olympia Romero, 1,000 shares; Philip
Scheps, 2,000 shares and James M. Tousignant, 20,000 shares.
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(2) Includes 375,000 shares of common stock issuable upon the exercise of
stock options which are exercisable within 60 days of December 31, 1998.
Does not include (i) the shares of common stock held by others through
the Multex Voting Trust, of which Mr. Karaev is the trustee and (ii)
8,000 shares of common stock held by Flatiron Associates LLC, of which
Mr. Karaev is a limited partner. See Note 14 below.
(3) Includes (i) 12,500 shares of common stock issuable upon the exercise of
stock options which are exercisable within 60 days of December 31, 1998
and (ii) 1,500 shares of common stock held by Mr. Tousignant's spouse.
Mr. Tousignant disclaims beneficial ownership of the shares held by his
spouse.
(4) Includes 6,250 shares of common stock issuable upon exercise of stock
options which are exercisable within 60 days of December 31, 1998.
(5) Includes 43,750 shares of common stock issuable upon the exercise of
stock options which are exercisable within 60 days of December 31, 1998.
(6) Consists of 1,944,444 shares of common stock held by Reuters America Inc.
Mr. Gaynes serves as Executive Vice President of Reuters America Holdings
Inc., an affiliate of Reuters America Inc. In this capacity, Mr. Gaynes
may be deemed to be the beneficial owner of these shares, although he
disclaims beneficial ownership of these shares except to the extent of
his pecuniary interest, if any.
(7) Consists of 3,042,118 shares of common stock held by Chase Venture
Capital Associates, L.P., of which Chase Capital Partners is a General
Partner. Mr. Greene is a General Partner of Chase Capital Partners. In
this capacity, Mr. Greene may be deemed to be the beneficial owner of
these shares, although he disclaims beneficial ownership of these shares
except to the extent of his pecuniary interest, if any.
(8) Consists of 1,944,444 shares of common stock held by Reuters America
Inc., Mr. LaBonte serves as a Vice President of Reuters, an affiliate of
Reuters America Inc. In this capacity, Mr. LaBonte may be deemed to be
the beneficial owner of these shares, although he disclaims beneficial
ownership of these shares except to the extent of his pecuniary interest,
if any.
(9) Consists of 400,000 shares of common stock held by America Online, Inc.
Mr. Leader serves as the President of an affiliate of America Online,
Inc., America Online, Inc. Investments. In this capacity, Mr. Leader may
be deemed to be a beneficial owner of these shares, although he disclaims
beneficial ownership of these shares to the extent of his pecuniary
interest, if any. The address of America Online, Inc. is 22000 AOL Way,
Dulles, Virginia 20166.
(10) Consists of (i) 1,000,000 shares of common stock held by Euclid Partners
III, L.P., of which Mr. Pappas is a General Partner and (ii) 840,278
shares of common stock held by Euclid Partners IV, L.P., of which Mr.
Pappas is a General Partner. In these capacities, Mr. Pappas may be
deemed to be the beneficial owner of these shares, although he disclaims
beneficial ownership of these shares except to the extent of his
pecuniary interest, if any.
(11) Includes 437,500 shares of common stock issuable upon exercise of stock
options which are exercisable within 60 days of December 31, 1998. See
Notes 2 through 15.
(12) Consists of 3,042,118 shares of common stock held by Chase Venture
Capital Associates, L.P., of which Chase Capital Partners is the General
Partner. Mr. Greene is a General Partner of Chase Capital Partners. In
this capacity, Mr. Greene may be deemed to be the beneficial owner of
these shares, although he disclaims beneficial ownership of these shares
except to the extent of his pecuniary interest, if any. The address for
Chase Venture Capital Associates, L.P. is 380 Madison Avenue, 12th Floor,
New York, New York 10017.
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(13) Consists of (i) 1,000,000 shares of common stock held by Euclid Partners
III, L.P. and (ii) 840,278 shares of common stock held by Euclid Partners
IV, L.P. Mr. Pappas is a General Partner of each of Euclid Partners III,
L.P. and Euclid Partners IV, L.P. In these capacities, Mr. Pappas may be
deemed to be the beneficial owner of these shares, although he disclaims
beneficial ownership of these shares except to the extent of his
pecuniary interest, if any. The address of Euclid Partners Corporation is
45 Rockefeller Plaza, Suite 907, New York, New York 10111.
(14) The Multex Voting Trust, of which Mr. Karaev is the trustee, was created
pursuant to a Shareholders' Agreement and Voting Trust (the "Voting Trust
Agreement"), dated as of October 31, 1993, and amended as of May 1, 1996,
by and among Multex.com, Mr. Karaev and each of the common stockholders
of Multex.com except for 125,000 shares of common stock held by Research
Data Group, Inc. and 75,000 shares held by a principal of Research Data
Group. The Voting Trust Agreement will terminate upon the completion of
this offering and the shares of common stock held in trust will be
distributed to Mr. Karaev and those stockholders in accordance with their
respective ownership of those shares. Mr. Karaev disclaims beneficial
ownership of these shares except to the extent of his pecuniary interest,
if any.
(15) Consists of 1,000,000 shares of common stock held by Rader Reinfrank
Investors, L.P., of which Rader Reinfrank & Co., LLC is a General
Partner. Stephen P. Rader is a Managing Member of Rader Reinfrank & Co.,
LLC. In this capacity, Mr. Rader may be deemed to be the beneficial owner
of these shares, although he disclaims beneficial ownership of these
shares except to the extent of his pecuniary interest, if any. The
address of Rader Reinfrank & Co. LLC is 9465 Wilshire Boulevard, Suite
950, Beverly Hills, California 90212.
(16) Consists of 1,944,444 shares of common stock held by Reuters America Inc.
Mr. Gaynes serves as Executive Vice President of Reuters America Holdings
Inc., an affiliate of Reuters America Inc. Mr. LaBonte serves as a Vice
President of Reuters, an affiliate of Reuters America Inc. In their
respective capacities, Messrs. Gaynes and LaBonte may be deemed to be the
beneficial owner of these shares, although each disclaims beneficial
ownership of these shares except to the extent of his pecuniary interest,
if any. The address for Reuters America Inc. is 1700 Broadway, 40th
Floor, New York, New York 10019.
(17) Consists of 1,000,000 shares of common stock held by 77 Capital Partners,
L.P., of which 77 Capital Corporation is a General Partner. Russell B.
Pyne is President of 77 Capital Corporation. In such capacity, Mr. Pyne
may be deemed to be the beneficial owner of such shares, although he
disclaims beneficial ownership except to the extent of his pecuniary
interest, if any. The address for 77 Capital Partners, L.P. is c/o Atrium
Capital Corporation, 3000 Sand Hill Road, Building 2, Suite 240, Menlo
Park, California 94025.
(18) Consists of 1,083,334 shares of common stock held by Softbank Ventures,
Inc., of which Mr. Yoshitaka Kitao is the President and Chief Executive
Officer. In this capacity, Mr. Kitao may be deemed to be the beneficial
owner of these shares, although he disclaims beneficial ownership of
these shares except to the extent of his pecuniary interest, if any. The
address for Softbank Ventures, Inc. is 10 Langley Road, Newton Centre,
Massachusetts 02159.
(19) Consists of 916,650 shares of common stock held by Venture Fund I, L.P.,
of which Venture Management I, G.P. is a General Partner. R. Bradford
Burnham is a General Partner of Venture Management I, G.P. In this
capacity, Mr. Burnham may be deemed to be the beneficial owner of these
shares, although he disclaims beneficial ownership of these shares except
to the extent of his pecuniary interest, if any. The address for Venture
Fund I, L.P. is 295 North Maple Avenue, Room 3361 C1, Basking Ridge,
New Jersey 07920.
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DESCRIPTION OF CAPITAL STOCK
The following description of our securities and various provisions of our
Second Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") and our Amended and Restated Bylaws (the "Bylaws") are
summaries. Statements contained in this prospectus relating to such provisions
are not necessarily complete, and reference is made to the Certificate of
Incorporation and the Bylaws that will be in effect upon the completion of this
offering, copies of which have been filed with the Securities and Exchange
Commission as exhibits to our Registration Statement of which this prospectus
constitutes a part. The Certificate of Incorporation and the Bylaws will become
effective at the time of completion of this offering.
Our authorized capital stock will consist of 50,000,000 shares of common
stock, par value $.01 per share, and 5,000,000 shares of preferred stock, par
value $.01 per share, at the time of completion of this offering.
Common Stock
As of December 31, 1998, there were 3,251,125 shares of common stock
outstanding and held of record by stockholders, without giving effect to the
conversion of our preferred stock. Based upon the number of shares outstanding
as of that date and giving effect to the issuance of the 3,000,000 shares of
common stock in this offering and the conversion of our outstanding shares of
preferred stock upon the completion of this offering, there will be 21,112,237
shares of common stock outstanding upon the closing of this offering.
Holders of common stock are entitled to one vote for each share held on all
matters submitted to a vote of stockholders and do not have cumulative voting
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive ratably
dividends, if any, as may be declared by the board of directors out of legally
available funds therefor, subject to any preferential dividend rights of any
outstanding preferred stock. Upon the liquidation, dissolution or winding up of
Multex.com, the holders of common stock are entitled to receive ratably our net
assets available after the payment of all debts and other liabilities and
subject to the prior rights of any outstanding shares of preferred stock.
Holders of common stock have no preemptive, subscription, redemption or
conversion rights. The outstanding shares of common stock are, and the shares
offered by us in this offering will be, when issued in consideration for
payment thereof, fully paid and nonassessable upon receipt of payment. The
rights, preferences and privileges of holders of common stock are subject to,
and may be adversely affected by, the rights of the holders of shares of any
series of preferred stock which we may designate and issue in the future. After
completion of this offering, there will be no shares of preferred stock
outstanding.
Preferred Stock
As of December 31, 1998, there were 297,222 shares of convertible preferred
stock outstanding. We will effect a one-for-two reverse stock split of all of
our outstanding shares of common stock prior to the completion of this
offering. The 297,222 shares of convertible preferred stock will convert into
an aggregate of 14,861,112 shares of common stock after giving effect to the
reverse stock split. These shares of convertible preferred stock will no longer
be authorized, issued or outstanding after completion of this offering.
Upon the completion of this offering, the board of directors will be
authorized, without further stockholder approval, to issue from time to time up
to an aggregate of 5,000,000 shares of preferred stock in one or more series
and to fix or alter the designations, preferences, rights and any
qualifications, limitations or restrictions of the shares of each series
thereof, including the dividend rights, dividend rates, conversion rights,
voting rights, terms of redemption (including sinking fund provisions),
redemption price or prices, liquidation preferences and the number of shares
constituting any series or designations of that series. We have no present
plans to issue any shares of preferred stock. See "--Anti-Takeover Effects of
Various Provisions of Delaware Law and Multex.com's Certificate of
Incorporation and Bylaws."
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Options
As of December 31, 1998, options to purchase a total of 2,410,625 shares of
common stock were outstanding, approximately 2,392,000 of which are subject to
lock-up agreements entered into with the underwriters. A total of 3,411,375
shares of common stock have been reserved for issuance under the 1998 Stock
Option Plan shares. See "Management--1999 Stock Option Plan" and "Shares
Eligible for Future Sale."
Warrant
As of December 31, 1998, a warrant to purchase 318,050 shares of common stock
at an exercise price of $4.80 per share was outstanding. The warrant contains
anti-dilution provisions providing for adjustments of the exercise price and
the number of shares of common stock underlying the warrant upon the occurrence
of specified events, including any recapitalization, reclassification, stock
dividend, stock split, stock combination or similar transaction. The warrant
provides for registration rights with respect to the common stock issuable upon
its exercise, which are described below. See "Shares Eligible for Future Sale."
Registration Rights
Pursuant to the terms of a registration rights agreement entered into among
us and some of our stockholders, after the completion of this offering the
holders of 14,861,112 shares of common stock will be entitled to demand
registration rights with respect to the registration of these shares under the
Securities Act. The holders of 33% or more of these shares are entitled to
demand that we register their shares under the Securities Act, subject to
various limitations. We are not required to effect more than two registrations
pursuant to these demand registration rights. In addition, pursuant to the
terms of the stockholders agreement, after the completion of this offering, the
holders of 14,861,112 shares of common stock will be entitled to piggyback
registration rights with respect to the registration of shares of common stock
under the Securities Act. In the event that we propose to register any shares
of common stock under the Securities Act, either for our own account or for the
account of other security holders. The stockholders having piggyback rights are
entitled to receive notice of that registration and are entitled to include
their shares in the registration, subject to various limitations described
below. Further, at any time after we become eligible to file a registration
statement on Form S-3, the stockholders may require us to file one or more
registration statements under the Securities Act on Form S-3 with respect to
their shares of common stock. The above registration rights are subject to
customary conditions and limitations, including the right of the underwriters
of an offering to limit the number of shares of common stock held by security
holders with registration rights to be included in that registration. We are
generally required to bear all of the expenses of all these registrations,
except underwriting discounts and commissions. The registration of any of the
shares of common stock held by stockholders with registration rights would
result in these shares becoming freely tradable without restriction under the
Securities Act immediately upon effectiveness of that registration statement.
The holders of the registration rights described above have waived their
rights to register any shares in this Registration Statement of which this
prospectus constitutes a part.
Anti-Takeover Effects of Various Provisions of Delaware Law and Multex. com's
Certificate of Incorporation and Bylaws
Following the completion of this offering, we will be subject to the
provisions of Section 203 of the Delaware General Corporation Law. Subject to
various exceptions, Section 203 prohibits a publicly held Delaware corporation
from engaging in a "business combination" with an "interested stockholder" for
a period of three years after the date of the transaction in which the person
became an interested stockholder, unless the interested stockholder attained
that status with the approval of the board of directors or unless the business
combination is approved in a prescribed manner. A "business combination"
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. Subject to various exceptions, an
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within
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<PAGE>
three years did own, fifteen percent (15%) or more of the corporation's voting
stock. This statute could prohibit or delay the accomplishment of mergers or
other takeover or change in control attempts with respect to Multex.com and,
accordingly, may discourage attempts to acquire us.
In addition, various provisions of our Certificate of Incorporation and
Bylaws, which provisions will be in effect upon the completion of this offering
and are summarized in the following paragraphs, may be deemed to have an anti-
takeover effect and may delay, defer or prevent a tender offer or takeover
attempt that a stockholder might consider in its best interest, including those
attempts that might result in a premium over the market price for the shares
held by stockholders.
Classified Board of Directors. Following the completion of this offering, our
board of directors will be divided into three classes of directors serving
staggered three-year terms. As a result, approximately one-third of the board
of directors will be elected each year. These provisions, when coupled with the
provision of the Certificate of Incorporation authorizing the board of
directors to fill vacant directorships or increase the size of the board of
directors, may deter a stockholder from voting to remove incumbent directors
and simultaneously gaining control of the board of directors by filling the
vacancies created by that removal with its own nominees.
Stockholder Action; Special Meeting of Stockholders. The Certificate of
Incorporation provides that stockholders may not take action by written
consent, but only at duly called annual or special meetings of stockholders.
The Certificate of Incorporation further provides that special meetings of
stockholders may be called only by the Chairman of the board of directors or a
majority of the board of directors.
Advance Notice Requirements for Stockholder Proposals and Director
Nominations. The Bylaws provide that stockholders who wish to bring business
before an annual meeting of stockholders, or to nominate candidates for
election as directors at an annual meeting of stockholders, must provide timely
notice in writing. To be timely, a stockholder's notice must be delivered to or
mailed and received at our principal executive offices, not less than 120 days
nor more than 150 days prior to the first anniversary of the date of Multex.com
notice of annual meeting for the previous year's annual meeting of
stockholders. However, if no annual meeting of stockholders was held in the
previous year or the date of the annual meeting of stockholders has been
changed to be more than 30 calendar day earlier than or 60 calendar days after
the anniversary, notice by the stockholder, to be timely, must be received by
us not more than 90 days after the later of (i) 60 days before the annual
meeting of stockholders or (ii) the close of business on the 10th day following
the date on which notice of the date of the meeting is given to stockholders or
made public, whichever occurs first. The Bylaws also specify various
requirements as to the form and content of a stockholder's notice. These
provisions may preclude stockholders from bringing matters for a vote before an
annual meeting of stockholders or from making nominations for directors at an
annual meeting of stockholders.
Authorized But Unissued Shares. The authorized but unissued shares of common
stock and preferred stock are available for future issuance without further
stockholder approval. These additional shares may be used for a variety of
corporate purposes, including future public or private offerings to raise
additional capital, corporate acquisitions and employee benefit plans. The
existence of authorized but unissued and unreserved common stock and preferred
stock could make more difficult or discourage an attempt to obtain control of
Multex.com by means of a proxy contest, tender offer, merger or otherwise.
The Delaware General Corporation Law generally provides that the affirmative
vote of a majority of the shares entitled to vote on any matter is required to
amend a corporation's certificate of incorporation or bylaws, unless a
corporation's certificate of incorporation or bylaws, as the case may be,
requires a greater percentage, or unless the bylaw provision being amended was
originally adopted by the board of directors, in which case the amendment
requires only the affirmative vote of a majority of the members of the board of
directors.
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<PAGE>
Limitation of Liability and Indemnification Matters
Our Certificate of Incorporation provides that, except to the extent
prohibited by Delaware General Corporation Law, our directors shall not be
personally liable to us or our stockholders for monetary damages for any breach
of fiduciary duty as directors of Multex.com. Under the Delaware General
Corporation Law, the directors have a fiduciary duty to us which is not
eliminated by this provision of the Certificate of Incorporation and, in
appropriate circumstances, equitable remedies including injunctive or other
forms of nonmonetary relief will remain available. In addition, each director
will continue to be subject to liability under the Delaware General Corporation
Law for breach of the director's duty of loyalty, for acts or omissions which
are found by a court of competent jurisdiction to be not in good faith or which
involve intentional misconduct, or knowing violations of law, for actions
leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are prohibited
by Delaware General Corporation Law. This provision also does not affect the
directors' responsibilities under any other laws, including the federal
securities laws or state or federal environmental laws.
Section 145 of the Delaware General Corporation Law empowers a corporation to
indemnify its directors and officers and to purchase insurance with respect to
liability arising out of their capacity or status as directors and officers,
provided that this provision shall not eliminate or limit the liability of a
director as follows:
. for any breach of the director's duty of loyalty to the corporation or
its stockholders,
. for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law,
. arising under Section 174 of the Delaware General Corporation Law, or
. for any transaction from which the director derived an improper personal
benefit.
The Delaware General Corporation Law provides further that the indemnification
it provides for shall not be deemed exclusive of any other rights to which the
directors and officers may be entitled under the corporation's bylaws, any
agreement, a vote of stockholders or otherwise. Our Certificate of
Incorporation eliminates the personal liability of directors to the fullest
extent permitted by Section 102(b)(7) of the Delaware General Corporation Law
and provides that we will fully indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that the person is or was a director or
officer, or is or was serving at our request as a director or officer of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by that
person in connection with that action, suit or proceeding.
We have obtained liability insurance for our officers and directors. At
present, there is no pending litigation or proceeding involving any director,
officer, employee or agent as to which indemnification will be required or
permitted under the Certificate of Incorporation. We are not aware of any
threatened litigation or proceeding that may result in a claim for
indemnification.
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is American Stock
Transfer and Trust Company, New York, New York.
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<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has not been any public market for Multex.com's
common stock, and no prediction can be made as to the effect, if any, that
sales of shares of common stock or the availability of shares of common stock
for sale will have on the market price of the common stock prevailing from time
to time. Nevertheless, sales of substantial amounts of common stock in the
public market, or the perception that such sales could occur, could adversely
affect the market price of our common stock and could impair our future ability
to raise capital through the sale of our equity securities.
Upon the completion of this offering, we will have an aggregate of 21,112,237
shares of common stock outstanding, assuming no exercise of the underwriters'
over-allotment option and no exercise of options or a warrant outstanding at
December 31, 1998. Of the outstanding shares, the 3,000,000 shares sold in this
offering will be freely tradeable, except that any shares held by our
"affiliates" (as that term is defined in Rule 144 promulgated under the
Securities Act) may be sold only in compliance with the limitations described
below. The remaining 18,112,237 shares of common stock will be deemed
"restricted securities" as defined under Rule 144 and may not be sold publicly
unless they are registered under the Securities Act or are sold pursuant to
Rule 144 or another exemption from registration. Our directors, executive
officers and substantially all of our other stockholders, holding 16,878,879
shares in the aggregate, have agreed that they will not sell, directly or
indirectly, any shares of common stock without the prior written consent of
BancBoston Robertson Stephens Inc. for a period of 180 days from the date of
this prospectus. Subject to these lock-up agreements, the shares of common
stock outstanding upon the completion of this offering will be available for
sale in the public market as follows:
<TABLE>
<CAPTION>
Approximate
Number of
Shares Description
----------- -------------------------------------------------------------
<C> <S>
3,766,683 After the date of this prospectus, freely tradeable shares
sold in this offering and shares saleable under Rule 144(k)
that are not subject to the 180-day lock-up
244,625 Upon the filing of a registration statement to register for
resale shares of common stock issued upon the exercise of
stock options, which shares are not subject to the lock-up
142,050 After 90 days the date of this prospectus, shares saleable
under Rule 144 that are not subject to the 180-day lock-up
12,833,879 After 180 days from the date of this prospectus, the 180-day
lockup is released and these shares are saleable under Rule
144 (subject, in some cases, to volume limitations), Rule
144(k), or pursuant to a registration statement to register
for resale shares of common stock issued upon the exercise of
stock options
4,125,000 Over 180 days from the date of this prospectus, restricted
securities that are held for less than one year and are not
yet saleable under Rule 144
</TABLE>
In general, under Rule 144, as currently in effect, a person (or persons
whose shares are required to be aggregated), including an affiliate, who has
beneficially owned shares for at least one year is entitled to sell, within any
three-month period commencing 90 days after the date of this prospectus, a
number of shares that does not exceed the greater of (i) 1% of the then
outstanding shares of common stock (approximately 210,000 shares immediately
after this offering) or (ii) the average weekly trading volume in the common
stock during the four calendar weeks preceding the date on which notice of such
sale is filed, subject to certain restrictions. In addition, a person who is
not deemed to have been an affiliate of ours at any time during the 90 days
65
<PAGE>
preceding a sale and who has beneficially owned the shares proposed to be sold
for at least two years would be entitled to sell such shares under Rule 144(k)
without regard to the requirements described above. To the extent that shares
were acquired from an affiliate such person's holding period for the purpose of
effecting a sale under Rule 144 commences on the date of transfer from the
affiliate.
As of December 31, 1998, options to purchase a total of 2,410,625 shares of
common stock and a warrant were outstanding, of which 811,596 exercisable. Upon
the completion of this offering, we intend to file a registration statement to
register for resale the 3,411,375 shares of common stock reserved for issuance
under our 1999 Stock Option Plan. That registration statement will become
effective immediately upon filing. Accordingly, shares covered by that
registration statement will become eligible for sale in the public markets,
subject to vesting restrictions or the lock-up agreements with BancBoston
Robertson Stephens Inc. Holders of options to purchase 2,392,000 shares of
common stock and the holder of a warrant to purchase 318,050 shares of common
stock have entered into lock-up agreements.
We have agreed not to sell or otherwise dispose of any shares of common stock
during the 180-day period following the date of the prospectus, except we may
issue, and grant options to purchase, shares of common stock under the 1999
Stock Option Plan. In addition, we may issue shares of common stock in
connection with any acquisition of another company if the terms of such
issuance provide that the common stock so issued shall not be resold prior to
the expiration of the 180-day lock-up period. See "Risk Factors--The future
sale of shares of our common stock may negatively affect our stock price."
Following this offering, under specified circumstances and subject to
customary conditions, holders of 16,111,112 shares of common stock will have
demand registration rights with respect to their shares of common stock
(subject to the 180-day lock-up arrangement described above) to require us to
register their shares of common stock under the Securities Act, and they will
have rights to participate in any future registration of securities by us. We
are not required to effect more than an aggregate of three demand registrations
on behalf of these holders. These holders of registration rights are subject to
lock-up periods of not more than 180 days following the date of this prospectus
or any subsequent prospectus. See "Description of Capital Stock--Registration
Rights."
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<PAGE>
UNDERWRITING
The underwriters named below, acting through their representatives,
BancBoston Robertson Stephens Inc., CIBC Oppenheimer Corp. and Dain Rauscher
Wessels, a division of Dain Rauscher Incorporated (the "Representatives"), have
severally agreed with us, subject to the terms and conditions of the
underwriting agreement, to purchase from us the number of shares of common
stock set forth below opposite their respective names. The underwriters are
committed to purchase and pay for all shares if any are purchased.
<TABLE>
<CAPTION>
Number
Underwriter of Shares
----------- ---------
<S> <C>
BancBoston Robertson Stephens Inc.................................
CIBC Oppenheimer Corp.............................................
Dain Rauscher Wessels.............................................
---------
Total...........................................................
=========
</TABLE>
The Representatives have advised us that the underwriters propose to offer
the shares of common stock to the public at the public offering price set forth
on the cover page of this prospectus and to certain dealers at that price less
a concession of not in excess of $ per share, of which $ may be
reallowed to other dealers. After this offering, the public offering price,
concession and reallowance to dealers may be reduced by the Representatives. No
such reduction shall change the amount of proceeds to be received by us as set
forth on the cover page of this prospectus. The common stock is offered by the
underwriters as stated herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part.
Over-Allotment Option. We have granted to the underwriters an option,
exercisable during the 30-day period after the date of this prospectus, to
purchase up to 283,500 additional shares of common stock and the over-allotment
selling stockholders (the stockholders listed in footnote 1 to the Principal
Stockholders table on page 58) have granted to the underwriters an option, on
similar terms, to purchase up to 166,500 additional shares of common stock, to
cover over-allotments, if any, at the public offering price less the
underwriting discount set forth on the cover page of this prospectus. If the
underwriters exercise their over-allotment option to purchase any of the
additional 450,000 shares of common stock, the underwriters have severally
agreed, subject to certain conditions, to purchase approximately the same
percentage thereof as the number of shares to be purchased by each of them
bears to the total number of shares of common stock offered in this offering.
If purchased, these additional shares will be sold by the underwriters on the
same terms as those on which the shares offered hereby are being sold. We and
the over-allotment selling stockholders will be obligated, pursuant to the
over-allotment option, to sell shares to the underwriters to the extent the
over-allotment option is exercised. The underwriters may exercise the over-
allotment option only to cover over-allotments made in connection with the sale
of the shares of common stock offered in this offering.
The following table summarizes the compensation to be paid to the
underwriters by Multex.com and the over-allotment selling stockholders who have
granted the underwriters this option:
<TABLE>
<CAPTION>
Total
-------------------
Without With
Per Over- Over-
Share allotment allotment
----- --------- ---------
<S> <C> <C> <C>
Underwriting Discounts and Commissions
payable by Multex.com.............................. $ $ $
Underwriting Discounts and Commissions
payable by the over-allotment selling stockhold-
ers................................................ $ $ $
</TABLE>
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<PAGE>
Multex.com estimates expenses payable by us in connection with this offering
(other than the underwriting discounts and commissions referred to above) will
be approximately $900,000.
Indemnity. The underwriting agreement contains covenants of indemnity among
the underwriters, us and the over-allotment selling stockholders against
certain civil liabilities, including liabilities under the Securities Act, and
liabilities arising from breaches of representations and warranties contained
in the underwriting agreement.
Lock-Up Agreements. Each executive officer and director of Multex.com and
substantially all of our other stockholders have agreed, during the period of
180 days after the effective date of this prospectus ("the lock-up period"),
subject to specified exceptions, not to offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
any shares of common stock or any options or warrants to purchase any shares of
common stock, or any securities convertible into or exchangeable for shares of
common stock owned as of the date of this prospectus or thereafter acquired
directly by those holders or with respect to which they have the power of
disposition, without the prior written consent of BancBoston Robertson Stephens
Inc. However, BancBoston Robertson Stephens Inc. may, in its sole discretion
and at any time or from time to time, without notice, release all or any
portion of the securities subject to lock-up agreements. There are no existing
agreements between the Representatives and any of our stockholders who have
executed a lock-up agreement providing consent to the sale of shares prior to
the expiration of the lock-up period.
In addition, we have agreed that during the lock-up period we will not,
without the prior written consent of BancBoston Robertson Stephens Inc.,
subject to certain exceptions, (i) consent to the disposition of any shares
held by stockholders subject to lock-up agreements prior to the expiration of
the lock-up period or (ii) issue, sell, contract to sell, or otherwise dispose
of, any shares of common stock, any options or warrants to purchase any shares
of common stock or any securities convertible into, exercisable for or
exchangeable for shares of common stock other than our sale of shares in this
offering, the issuance of our common stock upon the exercise of outstanding
options or warrants, and the issuance of options under existing stock option
and incentive plans provided that those options do not vest prior to the
expiration of the lock-up period. See "Shares Eligible for Future Sale."
The underwriters have advised us that they do not intend to confirm sales to
any accounts over which they exercise discretionary authority.
Prior to this offering, there has been no public market for the common stock.
Consequently, the public offering price for the common stock offered by this
prospectus will be determined through negotiations among the representatives
and us. Among the factors to be considered in such negotiations are prevailing
market conditions, certain of our financial information, market valuations of
other companies that we and the representatives believe to be comparable to us,
estimates of our business potential, the present state of our development and
other factors deemed relevant.
Listing. Application has been made to have the shares of common stock
approved for quotation on the Nasdaq National Market under the symbol "MLTX."
Stabilization. The Representatives have advised us that, pursuant to
Regulation M under the Securities Exchange Act of 1934, some persons
participating in the offering may engage in transactions, including stabilizing
bids, syndicate covering transactions or the imposition of penalty bids, that
may have the effect of stabilizing or maintaining the market price of the
shares of common stock at a level above that which might otherwise prevail in
the open market. A "stabilizing bid" is a bid for or the purchase of shares of
common stock on behalf of the underwriters for the purpose of fixing or
maintaining the price of the common stock. A "syndicate covering transaction"
is the bid for or purchase of common stock on behalf of the underwriters to
reduce a short position incurred by the underwriters in connection with the
offering. A "penalty bid" is an arrangement permitting the Representatives to
reclaim the selling concession otherwise accruing to an underwriter or
syndicate member in connection with the offering if the common stock originally
sold by such
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<PAGE>
underwriter or syndicate member purchased by the Representatives in a syndicate
covering transaction and has therefore not been effectively placed by such
underwriter or syndicate member. The Representatives have advised us that such
transactions may be effected on the Nasdaq National Market or otherwise and, if
commenced, may be discontinued at any time.
Directed Share Program. The underwriters have reserved up to five percent
(5%) of the common stock to be issued by us and offered for sale in this
offering, at the initial public offering price, to directors, officers,
employees, business associates and persons otherwise connected to Multex.com.
The number of shares of common stock available for sale to the general public
will be reduced to the extent these individuals purchase reserved shares. Any
reserved shares which are not purchased will be offered by the underwriters to
the general public on the same basis as the other shares offered in this
offering.
Other Agreements. Some of the underwriters are subscribers of our services.
See "Certain Transactions--Agreements with Underwriters."
LEGAL MATTERS
The validity of the common stock offered will be passed upon for us by
Brobeck, Phleger & Harrison LLP, New York, New York. Various legal matters in
connection with the offering will be passed upon for the underwriters by Hale
and Dorr LLP, Boston, Massachusetts.
EXPERTS
The consolidated financial statements of Multex.com as of December 31, 1997
and 1998 and for each of the years in the three-year period ended December 31,
1998 appearing in this prospectus and Registration Statement of which this
prospectus constitutes a part, and the related consolidated financial statement
schedule included elsewhere in this Registration Statement, have been audited
by Ernst & Young LLP, independent auditors, as set forth in their reports
thereon appearing elsewhere herein, are included in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.
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<PAGE>
ADDITIONAL INFORMATION
We have filed with the Securities and Exchange Commission a Registration
Statement on Form S-1, including exhibits, schedules and amendments filed with
this Registration Statement, under the Securities Act with respect to the
shares of common stock to be sold in this offering. This prospectus does not
contain all the information set forth in this Registration Statement. For
further information with respect to Multex.com, and the shares of our common
stock to be sold in this offering, reference is made to this Registration
Statement. Complete exhibits have been filed with our Registration Statement on
Form S-1.
You may read and copy any contract, agreement or other document referred to
in this prospectus and any portion of our Registration Statement or any other
information from our filings at the Securities and Exchange Commission's public
reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You can
request copies of these documents, upon payment of a duplicating fee, by
writing to the Securities and Exchange Commission. Please call the Securities
and Exchange Commission at 1-800-SEC-0330 for further information on the
operation of the public reference rooms. Our Securities and Exchange Commission
filings, including our Registration Statement, are also available to you on the
Securities and Exchange Commission's Web site (http://www.sec.gov).
As a result of this offering, we will become subject to the information and
reporting requirements of the Securities Exchange Act of 1934, and will file
periodic reports, proxy statements and other information with the Securities
and Exchange Commission. Once the common stock is approved for quotation on the
Nasdaq National Market, reports, proxy and information statements and other
information may also be inspected at the offices of Nasdaq Operations, 1735 K
Street, N.W., Washington, D.C. 20006.
We intend to furnish our stockholders with annual reports containing audited
financial statements, and make available to our stockholders quarterly reports
for the first three quarters of each year containing unaudited interim
financial information.
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<PAGE>
MULTEX.COM, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Auditors............................................ F-2
Consolidated Balance Sheets as of December 31, 1997 and 1998.............. F-3
Consolidated Statements of Operations for the years ended December 31,
1996, 1997 and 1998...................................................... F-4
Consolidated Statements of Stockholders' Deficit for the years ended
December 31, 1996, 1997 and 1998......................................... F-5
Consolidated Statements of Cash Flows for the years ended December 31,
1996, 1997 and 1998...................................................... F-6
Notes to Consolidated Financial Statements................................ F-7
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders of
Multex.com, Inc.
We have audited the accompanying consolidated balance sheets of Multex.com,
Inc. (the "Company") as of December 31, 1997 and 1998, and the related
consolidated statements of operations, stockholders' deficit and cash flows for
each of the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Multex.com, Inc. as of December 31, 1997 and 1998, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended December 31, 1998 in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
New York, New York
January 29, 1999, except for
Note 14, as to which the
date is March , 1999
---------------------
The foregoing report is in the form that will be signed upon the completion
of the restatement of capital accounts described in Note 14 to the financial
statements.
ERNST & YOUNG LLP
New York, New York
February 22, 1999
F-2
<PAGE>
MULTEX.COM, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Pro Forma
December 31, December 31,
-------------------------- ------------
1997 1998 1998
------------ ------------ ------------
(Unaudited)
(Note 14)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........... $ 2,532,983 $ 2,317,675 $ 2,317,675
Marketable securities............... 7,663,585 20,014,680 20,014,680
Accounts receivable, less allowance
of $240,000 and $138,000
in 1997 and 1998, respectively..... 1,813,570 2,447,299 2,447,299
Other current assets................ 259,606 221,184 221,184
------------ ------------ ------------
Total current assets................ 12,269,744 25,000,838 25,000,838
Property and equipment, net.......... 2,161,315 2,843,477 2,843,477
Other................................ 302,341 124,078 124,078
------------ ------------ ------------
Total assets........................ $ 14,733,400 $ 27,968,393 $ 27,968,393
============ ============ ============
LIABILITIES AND STOCKHOLDERS'
(DEFICIT) EQUITY
Current liabilities:
Accounts payable.................... $ 344,901 $ 981,905 $ 981,905
Accrued expenses.................... 1,091,324 1,599,609 1,599,609
Deferred revenues................... 1,446,699 2,682,939 2,682,939
Current portion of long-term debt... 1,053,188 -- --
Other current liabilities........... 312,783 -- --
------------ ------------ ------------
Total current liabilities........... 4,248,895 5,264,453 5,264,453
Other................................ -- 58,619 58,619
Commitments (Note 11)
Redeemable preferred stock authorized
2,000,000 shares:
Series A redeemable preferred
stock; $.01 par value,
$2,500,000 aggregate liquidation
preference:
Issued and outstanding--25,000
shares at December 31, 1997 and
1998.............................. 3,251,303 3,459,696 --
Series B redeemable preferred
stock; $.01 par value,
$5,500,000 aggregate liquidation
preference:
Issued and outstanding--36,666
shares at December 31, 1997 and
1998.............................. 6,850,679 7,294,411 --
Series C redeemable preferred
stock; $.01 par value,
$15,000,000 aggregate liquidation
preference:
Issued and outstanding--100,000
shares at December 31, 1997 and
1998.............................. 16,840,299 18,064,794 --
Series D redeemable preferred
stock; $.01 par value,
$10,000,000 aggregate liquidation
preference:
Issued and outstanding--55,556
shares at December 31, 1997 and
1998.............................. 10,291,743 11,101,685 --
Series E redeemable preferred
stock; $.01 par value,
$20,000,000 aggregate liquidation
reference:
Issued and outstanding--80,000
shares at December 31, 1998....... -- 19,939,452 --
Stockholders' (deficit) equity:
Preferred stock--$.01 par value:
Authorized--5,000,000 shares; none
issued and outstanding
at December 31, 1997 and 1998..... -- -- --
Common stock--$.01 par value:
Authorized--50,000,000 shares;
issued and outstanding--
2,445,000 shares and 3,251,125
shares at December 31, 1997 and
1998, respectively, and
18,112,237 shares on a pro forma
basis............................. 24,450 32,511 181,122
Additional paid-in capital.......... (3,313,260) (3,634,083) 56,077,344
Accumulated deficit................. (22,394,473) (32,137,197) (32,137,197)
Deferred compensation............... (1,052,112) (1,460,000) (1,460,000)
Translation adjustment.............. (14,124) (15,948) (15,948)
------------ ------------ ------------
Total stockholders' (deficit)
equity........................... (26,749,519) (37,214,717) 22,645,321
------------ ------------ ------------
Total liabilities and
stockholders' (deficit) equity... $ 14,733,400 $ 27,968,393 $ 27,968,393
============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
MULTEX.COM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Revenues............................. $ 2,646,527 $ 6,013,766 $ 13,181,589
Cost of revenues..................... 809,380 1,231,692 2,894,563
------------ ------------ ------------
Gross profit......................... 1,837,147 4,782,074 10,287,026
Operating expenses:
Sales and marketing................ 2,339,110 3,506,935 7,622,348
Research and development........... 1,414,908 1,600,893 2,180,244
General and administrative......... 4,552,936 7,836,639 9,385,418
------------ ------------ ------------
Total operating expenses............. 8,306,954 12,944,467 19,188,010
------------ ------------ ------------
Loss from operations................. (6,469,807) (8,162,393) (8,900,984)
Other income (expense):
Gain on sale of equipment.......... -- -- 124,796
Offering expenses (Note 1)......... -- -- (840,781)
Interest expense................... (250,175) (309,769) (481,997)
Interest and investment income..... 310,177 434,986 356,242
------------ ------------ ------------
Net loss............................. (6,409,805) (8,037,176) (9,742,724)
Redeemable preferred stock
dividends........................... 1,402,788 2,181,472 2,679,445
------------ ------------ ------------
Net loss available to common
stockholders'....................... $( 7,812,593) $(10,218,648) $(12,422,169)
------------ ------------ ------------
Basic and diluted loss per common
share............................... $ (3.86) $ (4.69) $ (4.36)
============ ============ ============
Number of shares used in computing
basic and diluted loss per share.... 2,021,919 2,179,261 2,846,963
============ ============ ============
Pro forma basic and diluted loss per
share............................... -- -- $ (0.55)
============
Number of shares used in computing
pro forma
basic and diluted loss per share.... -- -- 17,708,075
============
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
MULTEX.COM, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
<TABLE>
<CAPTION>
Accumulated
Common Stock Additional Other
----------------- Paid-in Accumulated Deferred Comprehensive
Shares Amount Capital Deficit Compensation Loss Total
--------- ------- ----------- ------------ ------------ ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1995................... 1,963,750 $19,638 $ (863,094) $ (7,947,492) -- -- $ (8,790,948)
Net loss............... -- -- -- (6,409,805) -- -- (6,409,805)
Redeemable preferred
stock dividend........ -- -- (1,402,788) -- -- -- (1,402,788)
Exercise of options.... 105,625 1,056 1,132 -- -- -- 2,188
--------- ------- ----------- ------------ ----------- -------- ------------
Balance at December 31,
1996................... 2,069,375 20,694 (2,264,750) (14,357,297) -- -- (16,601,353)
------------
Net loss............... -- -- -- (8,037,176) -- -- (8,037,176)
Translation
adjustment............ -- -- -- -- -- (14,124) (14,124)
------------
Comprehensive loss..... -- -- -- -- -- -- (8,051,300)
------------
Redeemable preferred
stock dividend........ -- -- (2,181,472) -- -- -- (2,181,472)
Stock issued for
services.............. 35,000 350 10,150 -- -- -- 10,500
Exercise of options.... 340,625 3,406 45,593 -- -- -- 48,999
Amortization of
deferred compensation
relating to stock
options............... -- -- -- -- 25,107 -- 25,107
Deferred compensation
related to stock
options............... -- -- 1,077,219 -- (1,077,219) -- --
--------- ------- ----------- ------------ ----------- -------- ------------
Balance at December 31,
1997................... 2,445,000 24,450 (3,313,260) (22,394,473) (1,052,112) (14,124) (26,749,519)
------------
Net loss............... -- -- -- (9,742,724) -- -- (9,742,724)
Translation
adjustment............ -- -- -- -- -- (1,824) (1,824)
------------
Comprehensive loss..... -- -- -- -- -- -- (9,744,548)
------------
Redeemable preferred
stock dividend........ -- -- (2,679,445) -- -- -- (2,679,445)
Exercise of options.... 606,125 6,061 143,062 -- -- -- 149,123
Amortization of
deferred compensation
relating to stock
options............... -- -- -- -- 439,672 -- 439,672
Cancellation of stock
options............... -- -- (24,898) -- 24,898 -- --
Deferred compensation
related to stock
options............... -- -- 872,458 -- (872,458) -- --
Sale of stock and
issuance of options in
connection with the
acquisition of certain
assets of Multex Data
Group................. 75,000 750 644,250 -- -- -- 645,000
Issuance of stock in
connection with the
acquisition of Multex
Data Group............ 125,000 1,250 623,750 -- -- -- 625,000
Issuance of warrant in
connection with long-
term debt............. -- -- 100,000 -- -- -- 100,000
--------- ------- ----------- ------------ ----------- -------- ------------
Balance at December 31,
1998 .................. 3,251,125 $32,511 $(3,634,083) $(32,137,197) $(1,460,000) $(15,948) $(37,214,717)
========= ======= =========== ============ =========== ======== ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
MULTEX.COM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
------------------------------------- ---
1996 1997 1998
----------- ----------- -----------
<S> <C> <C> <C> <C>
Operating activities
Net loss........................... $(6,409,805) $(8,037,176) $(9,742,724)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Amortization of deferred
compensation.................... -- 25,107 439,672
Gain on sale of equipment........ -- -- (124,796)
Depreciation and amortization.... 1,096,754 1,368,318 1,433,191
Amortization of issuance and
financing costs................. 29,384 40,988 146,569
Bad debt expense................. 130,000 168,130 138,000
Stock issued for services........ -- 10,500 --
Changes in operating assets and
liabilities:
Accounts receivable............ (798,099) (1,058,303) (771,729)
Other current assets........... (64,225) (94,082) 38,422
Other assets................... (56,254) 54,063 178,263
Accounts payable............... (843,560) (136,797) 509,304
Accrued expenses............... 608,251 194,297 508,285
Deferred revenue............... 798,812 361,637 1,236,240
Other liabilities.............. -- -- 58,619
----------- ----------- -----------
Net cash used in operating
activities........................ (5,508,742) (7,103,318) (5,952,684)
Investing activities
Purchase of marketable securities.. (12,044,939) (7,663,585) (21,283,209)
Proceeds from sale of marketable
securities........................ 4,215,304 7,829,635 8,932,114
Proceeds from sale of equipment.... -- -- 200,953
Purchase of property and
equipment......................... (1,372,224) (1,111,196) (1,093,810)
----------- ----------- -----------
Net cash used in investing
activities........................ (9,201,859) (945,146) (13,243,952)
Financing activities
Proceeds from issuances of stock... 15,002,188 10,048,999 20,449,123
Preferred stock issuance costs..... (164,245) (54,095) (100,000)
Proceeds from long-term debt....... 1,231,525 474,667 1,850,000
Repayment of long-term debt........ (564,299) (805,822) (2,903,188)
Repayment of short-term debt....... (327,000) -- --
Other liabilities.................. 177,837 31,224 (312,783)
----------- ----------- -----------
Net cash provided by financing
activities........................ 15,356,006 9,694,973 18,983,152
Effect of exchange rate changes on
cash.............................. -- (14,124) (1,824)
----------- ----------- -----------
Increase (decrease) in cash and
cash equivalents.................. 645,405 1,632,385 (215,308)
Cash and cash equivalents,
beginning of year................. 255,193 900,598 2,532,983
----------- ----------- -----------
Cash and cash equivalents, end of
year.............................. $ 900,598 $ 2,532,983 $ 2,317,675
=========== =========== ===========
Supplemental disclosures of cash
flow information
Noncash investing and financing
activity:
Accrued purchases of fixed
assets.......................... $ 210,046 $ 46,336 $ 127,700
=========== =========== ===========
Fair market value of stock and
options given in connection with
the acquisition of certain
assets of Multex Data Group..... $ -- $ -- $ 345,000
=========== =========== ===========
Fair market value of stock issued
in connection with the
acquisition
of Multex Data Group............ $ -- $ -- $ 625,000
=========== =========== ===========
Stock issued for services........ $ -- $ 10,500 $ --
=========== =========== ===========
Interest paid...................... $ 158,277 $ 159,705 $ 325,181
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 1996, 1997 and 1998
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Organization
Multex.com, Inc. (the "Company") is a leading provider of online investment
research and information services designed to meet the needs of individual and
institutional investors, including investment banks, brokerage firms and
corporations.
The Company was founded in 1993 as the result of the merger of Multex
Systems, Inc., a New York corporation, with and into Multex Publisher, Inc., a
Delaware corporation, which subsequently changed its name to Multex Systems,
Inc. In January 1999, the Company changed its name to Multex.com, Inc.
During December 1996, the Company commenced the operations of Multex Systems
International Inc., a wholly owned subsidiary of the Company, and opened an
office in London.
Acquisition
On February 27, 1998, the Company established a new wholly owned subsidiary,
RDG-Multex, Inc. In September 1998, the subsidiary's name was changed to Multex
Data Group, Inc. ("Multex Data Group"). Multex Data Group acquired assets
(earnings estimate database and related software) of Research Data Group, Inc.
in exchange for 49 shares of the common stock (49%) of Multex Data Group on
March 27, 1998.
In connection with the transaction above, the Company issued to a principal
of Research Data Group, Inc., 75,000 shares of the Company's common stock at a
purchase price of $4.00 per share ($300,000) and a one year option ("One Year
Option") to acquire 125,000 shares of the Company's common stock at an exercise
price of $5.00 per share. The Company has estimated the fair market value of
the 75,000 shares to be approximately $450,000 and has valued the option at
approximately $195,000 as of the date of grant using the Black-Scholes option
pricing model. The purchase price of the assets acquired was $345,000, the
estimated fair market value of the consideration given to a principal of
Research Data Group, Inc. (see calculation of fair market value below)
<TABLE>
<S> <C>
Fair market value of 75,000 shares sold..................... $ 450,000
Fair market value of One Year Option........................ 195,000
Less cash consideration received by the Company............. (300,000)
---------
Fair market value of consideration given (49 shares of
Multex Data Group) for assets acquired..................... $ 345,000
=========
</TABLE>
On December 15, 1998, the Company acquired the remaining 49% of Multex Data
Group in exchange for 125,000 shares of the Company's common stock, which was
valued at approximately $625,000. Such value was based on the estimated fair
market value of the Company's common stock of $5.00 per share. The purchase
price was fully allocated to the earnings estimate database.
The acquisition has been accounted for by the purchase method of accounting
and accordingly, the Company is consolidating the results of operations of
Multex Data Group effective March 27, 1998.
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
Multex.com, Inc. and its wholly owned and majority-owned subsidiaries. All
intercompany account balances and transactions have been eliminated.
F-7
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of 90
days or less when purchased to be cash equivalents.
Concentration of Credit Risk
At December 31, 1997 and December 31, 1998, substantially all cash and cash
equivalents were held in one bank.
The Company's customers are concentrated among institutional investors and
financial professionals, including mutual fund managers, portfolio managers,
brokers and their clients. Except for the customers noted at Note 12, no
customers accounted for revenues in excess of 1.5%, 2.7% and 3.6% of total
revenues for the years ended December 31, 1996, 1997 and 1998, respectively.The
Company performs ongoing credit evaluations, generally does not require
collateral and establishes an allowance for doubtful accounts based upon
factors surrounding the credit risk of customers, historical trends and other
information; to date, such losses have been within management's expectations.
Marketable Securities
Marketable securities are classified as available-for-sale. Marketable
securities consisted of United States treasury bills with maturities of 360
days or less when purchased and an investment in a money market mutual fund
which invests in federal agency notes and government agreements. Marketable
securities are carried at fair value, which approximates cost.
Property and Equipment
Property and equipment are stated at cost, and depreciation is computed using
the straight-line method over the estimated useful life of the asset which
ranges from two to five years.
Advertising
The Company expenses the costs of advertising as incurred. Advertising
expense for the years ended December 31, 1996, 1997 and 1998 was approximately
$422,000, $732,000 and $2.3 million, respectively.
Revenue Recognition
Revenues from subscriptions are recognized in equal installments over the
term of the subscriptions. Non-subscription revenues from the Multex Research-
On-Demand service are recognized upon sale. Revenues from sponsorships are
recognized in equal installments over the term of the contract. Revenues from
professional services are recognized when the services are accepted by the
client. Such services are primarily customization software services which allow
the Company's services to interface and function with the customers' existing
software platforms.
F-8
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred Revenue
Deferred revenue represents the unamortized portion of annual subscriptions
received in advance, and fees received from customers in advance of performance
of services.
Offering Expenses
Offering expenses represent costs incurred in connection with a proposed
financing in 1998. On October 19, 1998, the Company withdrew the registration
statement relating to such proposed financing, and accordingly, the offering
costs incurred prior to that date were expensed.
Earnings (Loss) Per Share
In 1997, the Financial Accounting Standards Board (the "FASB") issued
Statement No. 128, Earnings per Share, which replaced the calculation of
primary and fully diluted earnings per share with basic and diluted earnings
per share. Unlike primary earnings per share, basic earnings per share excludes
any dilutive effects of options, warrants and convertible securities.
Accounting for Stock-Based Compensation
In October 1995, the FASB issued Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123"). SFAS No.
123 prescribes accounting and reporting standards for all stock-based
compensation plans, including employee stock options, restricted stock,
employee stock purchase plans and stock appreciation rights. SFAS No. 123
requires compensation expense to be recorded (i) using the new fair value
method or (ii) using existing accounting rules prescribed by Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25") and related interpretations with pro forma disclosure of what net
income and earnings per share would have been had the Company adopted the new
fair value method. The Company accounts for its stock-based compensation plans
in accordance with the provisions of APB 25.
Comprehensive Income
As of January 1, 1998, the Company adopted FASB Statement No. 130, Reporting
Comprehensive Income. Statement No. 130 establishes new rules for the reporting
and display of comprehensive income and its components; however, the adoption
of this statement had no impact on the Company's net loss or stockholders'
deficit. Statement No. 130 requires unrealized gains or losses on the Company's
available-for-sale securities and foreign currency translation adjustments,
which prior to adoption were reported separately in stockholders' deficit, to
be included in other comprehensive loss.
Segment Information
Effective January 1, 1998, the Company adopted the Financial Accounting
Standards Board's Statement of Financial Accounting Standards No. 131,
Disclosures about Segments of an Enterprise and Related Information (Statement
131). Statement 131 superseded FASB Statement No. 14, Financial Reporting for
Segments of a
F-9
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Business Enterprise. Statement 131 establishes standards for reporting of
financial information about operating segments in annual financial statements
and requires reporting selected information about operating segments in interim
financial reports. The adoption of Statement 131 did not affect the Company's
results of operations or financial position. The disclosure of segment
information was not required as the Company operates in only one business
segment.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
2. STOCKHOLDERS' EQUITY
Common Stock (see Note 14)
During 1997, the Company increased the number of authorized shares of its
common stock from 14,000,000 shares to 19,000,000 shares. In December 1998, the
Company increased the number of authorized shares of its common stock to
50,000,000 shares.
Common Stock Reserved for Issuance
At December 31, 1997 and 1998, the Company has reserved approximately
13,278,000 shares and 18,397,000 shares, respectively of its common stock for
issuance in connection with shares issuable under the Company's stock option
plan and the conversion of its redeemable preferred stock.
3. REDEEMABLE PREFERRED STOCK
The Company has recorded issuance costs of redeemable preferred stock as
discounts at issuance and is accreting the discount over the life of the
redeemable preferred stock. The Company accrues all cumulative dividends on
redeemable preferred stock.
During 1997, the Company authorized 83,334 shares of $.01 par value Series D
convertible preferred stock ("Series D Stock") and issued 55,556 shares of the
Series D Stock for $10,000,000. In connection with the issuance of the Series D
Stock, the Company incurred issuance costs of approximately $54,000.
During 1998, the Company authorized 80,000 shares of $.01 par value Series E
convertible preferred stock ("Series E Stock") and issued 80,000 shares of the
Series E Stock for $20,000,000. In connection with the issuance of the Series E
Stock, the Company incurred issuance costs of approximately $100,000.
The holders of Series C, Series D and Series E Stock are entitled to a
liquidation preference over the Series A and Series B Stock. The Series C,
Series D and Series E Stock share ratably on a pari passu basis in the event of
a liquidation and the Series A and Series B Stock share ratably on a pari passu
basis in the event of a liquidation.
The holders of redeemable preferred stock are entitled to vote upon any
matter as to which the holders of common stock are entitled to vote.
F-10
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
3. REDEEMABLE PREFERRED STOCK (continued)
The holders of shares of redeemable preferred stock have the right to convert
such shares into the number of shares of common stock (adjusted for stock
splits) as is obtained by multiplying the number of redeemable preferred shares
to be converted by the liquidation preference ($100 for Series A, $150 for
Series B and C, $180 for Series D and $250 for Series E) and dividing the
result by $1.00 for Series A, $1.50 for Series B and C, $1.80 for Series D,
$250 for Series E or by the conversion price, as defined, as last adjusted and
in effect.
In the event the Company completes an underwritten public offering of its
common stock (a) at a per share price to the public of not less than $8.00 and
(b) in which the gross proceeds paid by the public are at least $15,000,000,
then all outstanding redeemable preferred shares shall automatically be
converted into shares of common stock in the manner described in the preceding
paragraph.
In the event the offering is not consummated, the Company will be required to
redeem all outstanding shares of redeemable preferred stock on December 31,
2003. In the event of the consolidation or merger of the Company (other than a
merger in which the Company is the surviving corporation and which will not
result in more than 50% of the capital stock of the Company outstanding
immediately after the effective date of such merger being owned of record or
beneficially by persons other than the holders of such capital stock
immediately prior to such merger), and in the case of a sale of all or
substantially all of the properties and assets of the Company as an entirety to
any other person, any holder can elect to have any or all of their shares of
redeemable preferred stock redeemed. The redemption price for each share of
redeemable preferred stock shall be the sum of the liquidation preference plus
cumulative unpaid dividends at the rate of 8% per annum on the liquidation
preference. No redeemable preferred stock dividends have been declared or paid
as of December 31, 1998. At December 31, 1997 and 1998 the total cumulative
dividends in arrears is approximately $4,467,000 and $7,146,000, respectively.
The Company is not authorized to pay or declare any dividends on outstanding
common shares unless dividends on all outstanding shares of convertible
preferred stock for all past dividend periods have been paid.
F-11
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
4. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted earnings
per share:
<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------
1996 1997 1998
----------- ------------ ------------
<S> <C> <C> <C>
Numerator:
Net loss............................ $(6,409,805) $ (8,037,176) $ (9,742,724)
Redeemable preferred stock dividends.. 1,402,788 2,181,472 2,679,445
----------- ------------ ------------
Numerator for basic and diluted loss
per share--net loss available for
common stockholders.................. $(7,812,593) $(10,218,648) $(12,422,169)
=========== ============ ============
Denominator:
Denominator for basic and dilutive
loss per share--weighted average
shares............................. 2,021,919 2,179,261 2,846,963
=========== ============ ============
Basic and diluted loss per share...... $ (3.86) $ (4.69) $ (4.36)
=========== ============ ============
</TABLE>
The following securities have been excluded from the dilutive per share
computation as they are antidilutive:
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------
1996 1997 1998
--------- --------- ---------
<S> <C> <C> <C>
Redeemable preferred stock--Series A.............. 25,000 25,000 25,000
Redeemable preferred stock--Series B.............. 36,666 36,666 36,666
Redeemable preferred stock--Series C.............. 100,000 100,000 100,000
Redeemable preferred stock--Series D.............. -- 55,556 55,556
Redeemable preferred stock--Series E.............. -- -- 80,000
Stock options..................................... 1,276,875 2,054,000 2,410,625
</TABLE>
The following table sets forth the computation of pro forma basic and diluted
loss per share, assuming conversion of the redeemable preferred shares to
shares of common stock on January 1, 1998:
<TABLE>
<CAPTION>
<S> <C>
Numerator:
Net loss available to common stockholders...................... $(12,422,169)
Redeemable preferred stock dividends........................... 2,679,445
------------
Numerator for pro forma loss available to common stockholders.. $ (9,742,724)
============
Denominator:
Weighted average number of common shares....................... 2,846,963
Assumed conversion of preferred shares to common shares (if
converted method)............................................. 14,861,112
------------
Denominator for pro forma basic and diluted loss per share..... 17,708,075
============
Pro forma basic and diluted loss per share....................... $ (0.55)
============
</TABLE>
F-12
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
5. PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
<TABLE>
<CAPTION>
December 31,
---------------------
1997 1998
---------- ----------
<S> <C> <C>
Computer and telecommunications equipment and
related software................................... $4,932,499 $6,671,162
Furniture and fixtures.............................. 266,852 302,839
Leasehold improvements.............................. 237,393 237,393
---------- ----------
5,436,744 7,211,394
Less accumulated depreciation and amortization...... 3,275,429 4,367,917
---------- ----------
$2,161,315 $2,843,477
========== ==========
</TABLE>
6. ACCRUED EXPENSES
Accrued expenses consist of the following:
<TABLE>
<CAPTION>
December 31,
---------------------
1997 1998
---------- ----------
<S> <C> <C>
Payroll and related costs............................. $ 170,976 $ 298,455
Accrued vacation...................................... 125,000 125,000
Accrued bonuses....................................... 130,000 132,000
Royalties............................................. 424,971 597,444
Other................................................. 240,377 446,710
---------- ----------
$1,091,324 $1,599,609
========== ==========
</TABLE>
7. SHORT-TERM DEBT
Short-term debt was payable to three stockholders. The notes bore interest at
8% per annum and were fully repaid during 1996.
8. LONG-TERM DEBT
The Company had available lines of credit provided by two lenders totaling
$3,900,000. At December 31, 1997, total notes of approximately $2,699,000 were
issued under the lines of credit. The notes were payable in monthly
installments of principal and interest of approximately $75,000 and bore
interest ranging from 10% to 12% per annum. The balance of the notes,
approximately $1,053,000, was fully repaid in 1998.
The Company was obligated to pay additional financing costs equal to a
minimum of 10% of original amounts advanced under the lines of credit. At
December 31, 1997, the Company recorded approximately $313,000 in other
liabilities related to such obligation, which was fully paid in 1998.
In January 1998, the Company entered into agreements with respect to a
$1,250,000 term loan and a $1,000,000 revolving line of credit with a bank,
whereby it could borrow up to 75% of eligible accounts receivable, as defined
therein. Substantially all of the assets of the Company were pledged as
collateral for the above obligations. The term loan and the revolving line of
credit bore interest at the prime rate plus 2%, as
F-13
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
8. LONG-TERM DEBT (continued)
defined therein, and the prime rate plus 1%, as defined therein, respectively.
The term loan was payable in twenty four monthly installments of approximately
$52,000 and was fully repaid in June 1998, and the revolving line of credit was
cancelled.
In October 1998, the Company entered into agreements with respect to a
$2,000,000 equipment line and a $4,000,000 revolving credit facility with a
bank. The Company may borrow up to 80% of eligible accounts receivable, as
defined, in the revolving credit facility, and advances under the equipment
line cannot exceed 75% of the net book value of equipment purchased within the
last twelve months. Substantially all of the assets of the Company are pledged
as collateral for the above obligations. The equipment line and revolving
credit facility bear interest at the prime rate plus 1%, as defined.
The above obligations also provide for, among other things, the maintenance
of certain covenants, including a liquidity ratio, leverage ratio and a minimum
tangible capital base, as defined. Borrowings under this agreement were repaid
in December 1998.
In connection with the above obligations, the Company granted to the bank a
warrant to purchase 318,050 shares of the Company's common stock at $4.80 per
share, which was valued at $100,000 based upon the Company's incremental
borrowing rate. The warrant expires on December 28, 2003.
9. INCOME TAXES
Under FASB Statement No. 109, "Accounting for Income Taxes," the liability
method is used in accounting for income taxes. Under this method, deferred
income tax assets and liabilities result from temporary differences between the
income tax basis of assets and liabilities and their reported amounts in the
financial statements that will result in taxable income and deductions in
future years.
At December 31, 1998, the Company had net operating loss carryforwards of
approximately $26,200,000 and research and development credits of approximately
$700,000 for income tax purposes that expire in 2009 through 2013. The
utilization of approximately $15,600,000 and $400,000 of such net operating
loss carryforwards and research and development credits, respectively, are
subject to an annual limitations of approximately $1,900,000, pursuant to
Section 382 of the Internal Revenue Code. The utilization of net operating loss
carryforwards and research and development credits may be subject to further
limitations upon the completion of an initial public offering.
Significant components of the Company's deferred tax assets are as follows:
<TABLE>
<CAPTION>
December 31,
-------------------------
1997 1998
----------- ------------
<S> <C> <C>
Net operating loss
carryforward.............. $ 7,423,000 $ 10,483,000
Research and development
credits................... 494,000 711,000
Depreciation and
amortization.............. 565,000 686,000
Deferred revenue........... 579,000 1,073,000
Other...................... 96,000 55,000
----------- ------------
9,157,000 13,008,000
Valuation allowance........ (9,157,000) (13,008,000)
----------- ------------
$ -- $ --
=========== ============
</TABLE>
F-14
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
9. INCOME TAXES (continued)
Due to the uncertainty of the realization of the tax assets, a valuation
allowance has been provided. The valuation allowance was increased by
approximately $3,232,000 and $3,851,000 for the years ended December 31, 1997
and 1998, respectively.
The effective income tax rate differs from the statutory rate as follows:
<TABLE>
<CAPTION>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Statutory rate..................... (34)% (34)% (34)%
Loss for which no tax benefit was
provided.......................... 33 33 33
Other.............................. 1 1 1
--- --- ---
Effective tax rate................. 0 % 0 % 0 %
=== === ===
</TABLE>
10. STOCK OPTIONS
1993 Stock Incentive Plan
The Company had reserved 2,900,000 shares of the Company's common stock to be
issued under its 1993 Stock Incentive Plan (the "Plan"). In 1998, the number of
shares reserved for issuance under the Plan was increased to 4,500,000.
During the years ended December 31, 1997 and 1998, the difference between the
estimated fair market value of the Company's common stock and the options'
exercise price on the date of grant was determined to be approximately
$1,077,000 and $872,000, respectively. This deferred compensation is being
amortized for financial reporting purposes over the vesting period of the
options and the amount recognized as expense during the years ended December
31, 1997 and 1998 amounted to approximately $25,000 and $440,000, respectively.
Pro forma information regarding net loss and net loss per share is required
by SFAS 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that statement. The fair
value of the options was estimated at date of grant using a Black-Scholes
option pricing model with the following assumptions:
<TABLE>
<CAPTION>
Assumptions 1996 1997 1998
----------- ------- ------- -------
<S> <C> <C> <C>
Volatility factor of the expected market price
of the Company's common stock................. 0.558 0.558 0.823
Average risk-free interest rate................ 6.5% 6.1% 5.19%
Dividend yield................................. 0.0% 0.0% 0.0%
Average life................................... 4 years 3 years 4 years
</TABLE>
The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because the Company's stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a reliable
single measure of the fair value of its stock options.
F-15
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
10. STOCK OPTIONS (continued)
The Company's pro forma information is as follows:
<TABLE>
<CAPTION>
1996 1997 1998
----------- ------------ ------------
<S> <C> <C> <C>
Pro forma net loss available to
common stockholders............. $(7,816,122) $(10,231,110) $(12,413,223)
Pro forma basic and diluted loss
per share....................... $ (3.87) $ (4.69) $ (4.36)
</TABLE>
The following transactions occurred with respect to the Plan:
<TABLE>
<CAPTION>
Weighted-
Average
1993 Stock Exercise
Incentive Plan Price
-------------- ---------
<S> <C> <C>
Outstanding December 31, 1995....................... 931,000 0.02
Granted during the year............................. 519,000 0.86
Cancelled during the year........................... (67,500) (0.04)
Exercised during the year........................... (105,625) (0.02)
---------
Outstanding December 31, 1996....................... 1,276,875 0.36
Granted during the year............................. 1,396,000 0.50
Cancelled during the year........................... (278,250) (0.50)
Exercised during the year........................... (340,625) (0.14)
---------
Outstanding December 31, 1997....................... 2,054,000 0.38
Granted during the year............................. 989,000 5.00
Cancelled during the year........................... (26,250) (1.10)
Exercised during the year........................... (606,125) (0.25)
---------
Outstanding December 31, 1998....................... 2,410,625 2.30
=========
</TABLE>
Exercise prices for options outstanding as of December 31, 1998 ranged from
$.02 to $7.50 per share. In April 1997, the Board of Directors authorized a
$0.50 reduction in the exercise price per share for all outstanding options
issued with an exercise price of $1.00, with all other terms remaining
unchanged. The weighted average fair value of options granted during 1996, 1997
and 1998 was $0.10, $.85, and $4.03, respectively. The weighted average
remaining contractual life of those options outstanding as of December 31, 1998
is 7.8 years.
The number of shares of common stock issuable upon exercise of outstanding
stock options that were fully exercisable as of December 31, 1996, 1997 and
1998 were 350,407; 581,313 and 811,596, respectively. The weighted average
exercise price of exercisable options as of December 31, 1996, 1997 and 1998 is
$0.02, $0.26 and $0.44, respectively.
The options outstanding under the Plan generally vest in four equal annual
installments commencing on the day after the first anniversary of the grant and
expire ten years after the date of grant.
F-16
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
10. STOCK OPTIONS (continued)
Other Stock Options
During June and December 1996, the Company granted to one of its major
customers two options to purchase 833,334 and 833,334 shares, respectively, of
the Company's common stock at $3.00 and $4.00 per share, respectively. Such
options were valued at $0 on the date of grant using the Black-Scholes option
pricing model. The options expired unexercised in December 1996 and June 1997.
11. COMMITMENTS
Operating Leases
The Company is obligated to make payments under noncancellable operating
leases for office space expiring in 2002. The approximate future minimum annual
rental payments under these operating leases are as follows:
<TABLE>
<S> <C>
1999................................................................ $390,000
2000................................................................ 390,000
2001................................................................ 60,000
2002................................................................ 30,000
--------
$870,000
========
</TABLE>
Total rental expense for the years ended December 31, 1996, 1997 and 1998 was
approximately $306,000, $425,000 and $455,000, respectively.
12. RELATED PARTY TRANSACTIONS, MAJOR CUSTOMERS AND GEOGRAPHICAL CONCENTRATION
In March 1998, the Company entered into an agreement with an independent
third party (the "Third Party") to secure a position as an anchor tenant on the
Third Party's Internet site. The agreement is for two years and is
automatically renewable unless either party elects not to renew. In 1998 the
Company made aggregate royalty payments of approximately $100,000. In December
1998, the Third Party became a Series E stockholder.
One customer accounted for approximately 31% and 21% of revenues for the
years ended December 31, 1996 and 1997, respectively. The same customer
accounted for approximately 36% and 31% of accounts receivable at December 31,
1996 and 1997, respectively.
Another customer accounted for approximately 14%, 16% and 10% of revenues for
the years ended December 31, 1996, 1997 and 1998, respectively. The same
customer accounted for approximately 15% of accounts receivable at December 31,
1996 and16% at December 31, 1998.
A third customer accounted for approximately 16% and 11% of revenues for the
years ended December 31, 1996 and 1997, respectively.
F-17
<PAGE>
MULTEX.COM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(continued)
Years ended December 31, 1996, 1997 and 1998
12. RELATED PARTY TRANSACTIONS, MAJOR CUSTOMERS AND GEOGRAPHICAL CONCENTRATION
(continued)
A holder of preferred stock entered into a strategic distribution
relationship with the Company. As a result the Company granted the preferred
stockholder a limited non-exclusive license to use and distribute the Company's
technology and products. The preferred stockholder made license payments and
payments for consulting and maintenance services which amounted to
approximately 14% and 20% of revenues for the years ended December 31, 1996 and
1997, respectively. This preferred stockholder accounted for approximately 26%
and 19% of accounts receivable at December 31, 1996 and 1997, respectively.
The Company derives substantially all of its revenues from customers located
within the United States.
13. PENSION PLAN
The Company established a defined contribution plan (the "Plan") under
Section 401(k) of the Internal Revenue Code. All employees of the Company are
eligible to participate in the Plan upon hire. Participants may contribute up
to 20% of their eligible earnings, as defined. The Company may decide to make
an additional contribution to the Plan on behalf of the Plan participants. No
additional contributions have been made by the Company for the years ended
December 31, 1996, 1997 and 1998.
14. SUBSEQUENT EVENTS AND PRO FORMA ADJUSTMENTS
Stock Split
In March 1999, the Company effected a 1-for-2 reverse stock split. All common
share information included in the accompanying financial statements has been
adjusted to reflect the one-for-two reverse stock split.
Preferred Stock
In March 1999, the Company authorized the issuance of 5,000,000 shares of
preferred stock, par value $0.01 per share.
Pro Forma Financial Information
Upon the completion of an initial public offering at a per share price to the
public of not less than $8.00 and in which the gross proceeds paid by the
public are at least $15,000,000, all outstanding redeemable preferred shares
will automatically be converted into shares of common stock in the manner
described in Note 3. The pro forma balance sheet at December 31, 1998 gives
effect to such conversion as if it occurred on that date. The pro forma loss
for the year ended December 31, 1998 gives effect to the conversion of such
shares as if it occurred on January 1, 1998.
F-18
<PAGE>
[LOGO] MULTEX.COM
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
The expenses, other than underwriting commissions, expected to be incurred by
Multex.com in connection with the issuance and distribution of the securities
being registered under this Registration Statement are estimated to be as
follows:
<TABLE>
<S> <C>
SEC registration fee............................................. $ 11,510
NASD filing fee.................................................. 4,640
Nasdaq National Market listing fee............................... 95,000
Printing and engraving........................................... 175,000
Legal fees and expenses.......................................... 350,000
Accounting fees and expenses..................................... 175,000
Blue sky fees and expenses (including legal fees)................ 12,500
Transfer agent fees.............................................. 15,000
Miscellaneous.................................................... 61,350
--------
Total........................................................ $900,000
========
</TABLE>
Item 14. Indemnification of Directors and Officers
The Second Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") provides that, except to the extent prohibited
by the Delaware General Corporation Law (the "DGCL"), the Registrant's
directors shall not be personally liable to the Registrant or its stockholders
for monetary damages for any breach of fiduciary duty as directors of the
Registrant. Under the DGCL, the directors have a fiduciary duty to the
Registrant which is not eliminated by this provision of the Certificate of
Incorporation and, in appropriate circumstances, equitable remedies such as
injunctive or other forms of nonmonetary relief will remain available. In
addition, each director will continue to be subject to liability under the DGCL
for breach of the director's duty of loyalty to the Registrant, for acts or
omissions which are found by a court of competent jurisdiction to be not in
good faith or involving intentional misconduct, for knowing violations of law,
for actions leading to improper personal benefit to the director, and for
payment of dividends or approval of stock repurchases or redemptions that are
prohibited by DGCL. This provision also does not affect the directors'
responsibilities under any other laws, such as the Federal securities laws or
state or Federal environmental laws. The Registrant has obtained liability
insurance for its officers and directors.
Section 145 of the DGCL empowers a corporation to indemnify its directors and
officers and to purchase insurance with respect to liability arising out of
their capacity or status as directors and officers, provided that this
provision shall not eliminate or limit the liability of a director: (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) arising under
Section 174 of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit. The DGCL provides further that the
indemnification permitted thereunder shall not be deemed exclusive of any other
rights to which the directors and officers may be entitled under the
corporation's bylaws, any agreement, a vote of stockholders or otherwise. The
Certificate of Incorporation eliminates the personal liability of directors to
the fullest extent permitted by Section 102(b)(7) of the DGCL and provides that
the Registrant shall fully indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (whether civil, criminal, administrative or investigative)
by reason of the fact that such person is or was a director or officer of the
Registrant, or is or was serving at the request of the Registrant as a director
or officer of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise,
II-1
<PAGE>
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection
with such action, suit or proceeding.
At present, there is no pending litigation or proceeding involving any
director, officer, employee or agent as to which indemnification will be
required or permitted under the Certificate of Incorporation. The Registrant is
not aware of any threatened litigation or proceeding that may result in a claim
for such indemnification.
Item 15. Recent Sales of Unregistered Securities
Common Stock. In February 1998, the Registrant established a subsidiary under
the name, RDG-Multex, Inc. In September 1998, RDG-Multex changed its name to
Multex Data Group, Inc. When the Registrant established RDG-Multex, it issued
to a principal of Research Data Group (i) 75,000 shares of the Registrant's
common stock in April 1998 at a price per share of $4.00 and (ii) a one-year
option to acquire 125,000 shares of the Registrant's common stock at an
exercise price of $5.00 per share.
Until December 1998, the Registrant held 51% of the common stock of Multex
Data Group, and Research Data Group held the remaining 49%. On December 15,
1998, the Registrant exercised an option to acquire all of the shares of Multex
Data Group's common stock held by Research Data Group in exchange for the
issuance of 125,000 shares of the Registrant's common stock.
Preferred Stock and Warrants. In November 1993 and March 1994, respectively,
the Registrant sold 25,000 shares of Series A convertible preferred stock to
Euclid Partners III, L.P., Isaak Karaev, 77 Capital Partners, L.P. and other
investors for an aggregate offering amount of $2,500,000. Upon the closing of
this offering, all of the outstanding shares of Series A convertible preferred
stock will convert into an aggregate of 1,250,000 shares of common stock.
In November 1994, the Registrant sold 36,666 shares of Series B convertible
preferred stock to Euclid Partners III, L.P., 77 Capital Partners, L.P.,
Venture Fund I, L.P. and ADP Financial Information Services, Inc. for an
aggregate offering amount of approximately $5,500,000. Upon the closing of this
offering, all of the outstanding shares of Series B convertible preferred stock
will convert into an aggregate of 1,833,300 shares of common stock.
In connection with a bridge financing completed by the Registrant in December
1995, January 1996 and February 1996, the Registrant issued to Euclid Partners
III, L.P., 77 Capital Partners, L.P. and Venture Fund I, L.P. (collectively,
the "Bridge Participants") promissory notes in an aggregate principal amount of
$1.1 million and warrants to purchase an aggregate of 131,250 shares of common
stock at an exercise price of $0.50 per share. The bridge notes and warrants
were subsequently cancelled in connection with the issuance of Series C
convertible preferred stock in February 1996.
In February, April and June 1996, the Registrant sold an aggregate of 100,000
shares of Series C convertible preferred stock to Chase Venture Capital
Associates, L.P., Euclid Partners III and IV, L.P., Reuters America Inc.,
Softbank Ventures, Inc., 77 Capital Partners, L.P., Venture Fund, I, L.P. and
other investors for an aggregate offering amount of $15,000,000. In February
and April 1996, the Registrant issued to the Bridge Participants, Massachusetts
Mutual Life Insurance Company and Alce Partners, L.P., warrants to purchase an
aggregate of 2,464,617 shares of common stock at an exercise price of $0.50 per
share. In connection with the issuance of Series C convertible preferred stock
in June 1996, the common stock purchase warrants were subsequently cancelled
pursuant to an automatic termination provision contained in such warrants,
which provided for cancellation upon the receipt by the Registrant of an
aggregate of $5,000,000 in gross proceeds. Upon the closing of this offering,
all of the outstanding shares of Series C convertible preferred stock will
convert into an aggregate of 5,000,034 shares of common stock.
In July and August 1997, the Registrant sold 55,556 shares of Series D
convertible preferred stock to Chase Venture Capital Associates, L.P., Euclid
Partners IV, L.P., FGIC Services, Inc., The Fl@tiron Fund, LLC and Reuters
America Inc. for an aggregate offering amount of $10,000,000. Upon the closing
of this offering, all of the outstanding shares of Series D convertible
preferred stock will convert into an aggregate of 2,777,778 shares of common
stock.
II-2
<PAGE>
In October 1998, the Registrant entered into a loan agreement with Fleet
National Bank relating to a $2,000,000 equipment line and a $4,000,000
revolving credit facility. In connection with this loan, the Registrant issued
to Fleet National Bank a warrant to purchase 6,361 shares of Series D
convertible preferred stock at an exercise price of $240 per share. Upon the
closing of this offering, all of the shares of Series D convertible preferred
stock subject to the warrant will convert into an aggregate of 318,050 shares
of common stock at an exercise price of $4.80 per share.
In December 1998, the Registrant sold an aggregate of 80,000 shares of Series
E convertible preferred stock to Chase Venture Capital Associates, L.P.,
Flatiron Associates LLC, The Flatiron Fund 1998/99 LLC, Rader Reinfrank
Investors, L.P., America Online, Inc., Prospect Street NYC Discovery Fund, L.P.
and Mellon Ventures, L.P. for an aggregate offering amount of $20,000,000. Upon
the closing of this offering, all of the outstanding shares of Series E
convertible preferred stock will convert into an aggregate of 4,000,000 shares
of common stock.
Options. The Registrant from time to time has granted stock options to
employees. The following table sets forth information regarding such grants
during the past three fiscal years:
<TABLE>
<CAPTION>
Number of Exercise
Options Prices
--------- ----------
<S> <C> <C>
January 1, 1996 to December 31, 1996................... 519,000 0.50
January 1, 1997 to December 31, 1997................... 1,396,000 0.50
January 1, 1998 to December 31, 1998................... 989,000 0.50-7.50
</TABLE>
The above securities were offered and sold by the Registrant in reliance upon
exemptions from registration pursuant to either (i) Section 4(2) of the
Securities Act of 1933, as transactions not involving any public offering, or
(ii) Rule 701 under the Securities Act of 1933. No underwriters were involved
in connection with the sales of securities referred to in this Item 15.
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits.
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
1.1* Form of Underwriting Agreement.
3.1+ Amended and Restated Certificate of Incorporation.
3.2 Form of Second Amended and Restated Certificate of Incorporation to be
in effect upon the consummation of this offering.
3.3+ Bylaws.
3.4 Form of Amended and Restated Bylaws to be in effect upon the
consummation of this offering.
3.5 Form of Certificate of Amendment of Amended and Restated Certificate
of Incorporation to be in effect immediately prior to the
effectiveness of this registration statement.
3.6 Certificate of Amendment of Amended and Restated Certificate of
Incorporation authorizing change of name to Multex.com, Inc.
4.1 Specimen common stock certificate.
4.2 See Exhibits 3.1, 3.2, 3.3, 3.4 and 3.5 for provisions of the
Certificate of Incorporation and Bylaws of the Registrant defining the
rights of holders of Common Stock of the Registrant.
5.1* Opinion of Brobeck, Phleger & Harrison LLP.
10.1+ Sublease, dated August 23, 1995, between International Business
Machines Corporation and the Registrant.
10.2+** Interactive Services Agreement, dated as of March 20, 1998, by and
between America Online, Inc. and the Registrant.
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Number Description
------ -----------
<C> <S>
10.3+** Distribution and Joint Sourcing Agreement, dated as of June 4, 1996,
by and between Bloomberg, L.P. and the Registrant.
10.4+** Specialist Data Agreement, dated as of July 15, 1998, by and between
Reuters Limited and the Registrant.
10.5 1999 Stock Option Plan.
10.6 Employee Stock Purchase Plan.
10.7+ Fourth Amended and Restated Registration Rights Agreement, dated as
of December 15, 1998.
10.8+** Agreement for Internal Electronic Distribution Services, dated as of
April 10, 1997, by and between Robertson, Stephens & Company LLC and
the Registrant.
10.9+** Amendment No.1, dated as of March 9, 1998, to the Agreement for
Internal Electronic Distribution Services, dated as of April 10,
1997, by and between Robertson, Stephens & Company LLC and the
Registrant.
10.10+ Amendment No. 2, dated as of July 29, 1998, to the Agreement for
Internal Electronic Distribution Services, dated as of April 10,
1997, by and between Robertson, Stephens & Company LLC and the
Registrant.
10.11+** Amendment No. 3, dated as of September 10, 1998, to the Agreement for
Internal Electronic Distribution Services, dated as of April 10,
1997, by and between Robertson, Stephens & Company LLC and the
Registrant.
10.12+ Agreement for Electronic Distribution Services, dated as of June 30,
1998, by and between CIBC Wood Gundy Securities, Inc. and the
Registrant.
10.13+** Master Services Agreement, dated as of November 23, 1998, by and
between Dain Rauscher Incorporated and the Registrant.
10.14+ Agreement for Internal Distribution Services, dated as of February
17, 1998, by and between CIBC Oppenheimer Corp. and the Registrant.
10.15+ Letter Agreement, dated February 5, 1999, by and between CIBC
Oppenheimer Corp. and the Registrant.
11.1 Statement re: Computation of Per Share Earnings.
21.1+ Subsidiaries of the Registrant.
23.1* Consent of Brobeck, Phleger & Harrison LLP (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP.
24.1+ Powers of Attorney.
27.1 Financial Data Schedule for the year ended December 31, 1997.
27.2 Financial Data Schedule for the year ended December 31, 1998.
</TABLE>
- --------
+ Previously filed.
* To be supplied by amendment.
+ Confidential treatment to be requested for certain portions of this Exhibit
pursuant to Rule 406 promulgated under the Securities Act. Confidential
portions of this Exhibit have been filed separately with the Securities and
Exchange Commission.
** Refiled pursuant to the Registrant's request for confidential treatment of
certain portions of this Exhibit, pursuant to Rule 406 promulgated under
the Securities Act.
(b) Financial Statement Schedules.
Report of Independent Public Accountants on Schedule
Schedule II: Valuation and Qualifying Accounts
Item 17. Undertakings
The undersigned Registrant hereby undertakes to provide to the Underwriter at
the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriter to
permit prompt delivery to each purchaser.
II-4
<PAGE>
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation of the Registrant, the Underwriting Agreement, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Registrant will,
unless in the opinion of counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) That for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to Rule
424 (b) (1) or (4), or 497 (h) under the Securities Act of 1933 shall be
deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) That for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused Amendment No. 1 to this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized in The City of New
York, State of New York, on this 22nd day of February, 1999.
Multex.com, Inc.
/s/ Isaak Karaev
By____________________________________
Name: Isaak Karaev
Title: President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to this Registration Statement has been signed by the
following persons in the capacities indicated on February 22, 1999:
<TABLE>
<S> <C>
</TABLE>
Signature Title(s)
/s/ Isaak Karaev President, Chief Executive Officer
- ------------------------------------ and Chairman of the Board of
Isaak Karaev Directors (Principal Executive
Officer)
/s/ Philip Callaghan Chief Financial Officer (Principal
- ------------------------------------ Financial Officer)
Philip Callaghan
/s/ Philip Scheps Vice President, Finance and
- ------------------------------------ Controller (Principal Accounting
Philip Scheps Officer)
Director
*
- ------------------------------------
<TABLE> Davis Gaynes
<S> <C>
</TABLE>
Director
*
- ------------------------------------
I. Robert Greene
Director
*
- ------------------------------------
Peter LaBonte
Director
*
- ------------------------------------
Lennert J. Leader
Director
*
- ------------------------------------
Milton J. Pappas
/s/ Isaak Karaev
*By: __________________________
Isaak Karaev
Attorney-in-Fact
<TABLE>
<S> <C>
</TABLE>
II-6
<PAGE>
Report of Independent Auditors
To the Board of Directors and Stockholders of
Multex.com, Inc.
We have audited the consolidated financial statements of Multex.com, Inc. as
of December 31, 1998 and 1997, and for each of the three years in the period
ended December 31, 1998, and have issued our report thereon dated January 29,
1999 except for Note 14 as to which the date is March , 1999 (included
elsewhere in this Registration Statement). Our audits also included the
financial statement schedule listed in Item 16(b) of this Registration
Statement. This schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set forth therein.
Ernst & Young LLP
New York, New York
January 29, 1999
---------------------
The foregoing report is in the form that will be signed upon the completion
of the restatement of capital accounts described in Note 14 to the financial
statements.
Ernst & Young LLP
New York, New York
February 22, 1999
S-1
<PAGE>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
MULTEX.COM, INC. AND SUBSIDIARIES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D COL. E
- ------------------------------------------------------------------------------------------------
Additions
Balance at ---------------------------------
Beginning of Charged to Costs Charged to Other Balance at
Description Period and Expenses Accounts Deductions End of Period
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1998:
Deducted from asset
account
Allowance for doubtful
accounts............... $240,000 $138,000 $ -- $240,000 $138,000
Year Ended December 31,
1997:
Deducted from asset
account
Allowance for doubtful
accounts............... $130,000 $168,130 $ -- $ 58,130 $240,000
Year Ended December 31,
1996:
Deducted from asset
account
Allowance for doubtful
accounts............... $ -- $130,000 $ -- $ -- $130,000
</TABLE>
S-2
<PAGE>
EXHIBIT 3.2
-----------
SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MULTEX.COM, INC.
(Pursuant to Sections 228, 242 and 245 of the
General Corporation Law of the State of Delaware)
Multex.com, Inc. (the "Corporation"), a corporation organized and
existing under General Corporation Law of the State of Delaware (the "General
Corporation Law"),
DOES HEREBY CERTIFY:
FIRST: That the Corporation was originally incorporated in Delaware
under the name Multex Publisher, Inc., and the date of its filing of its
original Certificate of Incorporation with the Secretary of State of Delaware
was April 23, 1993. On October 28, 1993, the Corporation filed with the
Secretary of State of Delaware a Certificate of Agreement of Merger which merged
Multex Systems, Inc., a New York corporation, with and into Multex Publisher,
Inc., pursuant to which the Corporation changed its name to Multex Systems, Inc.
The Corporation changed its name to Multex.com, Inc. on ________ _____, 1999.
SECOND: That the Board of Directors duly adopted resolutions
proposing to amend and restate the Amended and Restated Certificate of
Incorporation of the Corporation, and that thereafter, pursuant to such
resolutions of the Board of Directors, a consent of stockholders in lieu of
meeting was signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize of take such action
at a meeting at which all shares entitled to vote thereon would have been
present and voted.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Sections 228, 242 and 245 of the General Corporation Law of the
State of Delaware.
FOURTH: The Amended and Restated Certificate of Incorporation of the
Corporation shall be amended and restated in its entirety as follows:
ARTICLE I
The name of the Corporation is Multex.com, Inc.
<PAGE>
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is 1013 Centre Road, Wilmington, Delaware 19805. The name of its
registered agent at such address is Corporation Service Company, New Castle
County.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful business or purposes for which a corporation may be
organized under the GCL.
ARTICLE IV
A. Classes of Stock. The Corporation is authorized to issue two classes
----------------
of stock to be designated, respectively, "Common Stock" and "Preferred Stock."
The total number of shares which the Corporation is authorized to issue is Fifty
Five Million (55,000,000) shares. Fifty Million (50,000,000) shares, par value
$0.01 per share, shall be Common Stock and Five Million (5,000,000) shares, par
value $0.01 per share, shall be Preferred Stock.
B. Common Stock.
------------
(1) General. All shares of Common Stock will be identical and will
-------
entitle the holders thereof to the same rights, powers and privileges. The
rights, powers and privileges of the holders of the Common Stock are subject to
and qualified by the rights of holders of any then outstanding Preferred Stock.
(2) Dividends. Dividends may be declared and paid on the Common Stock
---------
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
(3) Dissolution, Liquidation or Winding Up. In the event of any
--------------------------------------
dissolution, liquidation or winding up of the affairs of the Corporation,
whether voluntary or involuntary, each issued and outstanding share of Common
Stock shall entitle the holder thereof to receive an equal portion of the net
assets of the Corporation available for distribution to the holders of Common
Stock after the payment of all debts and other liabilities and subject to any
preferential rights of any then outstanding Preferred Stock.
(4) Voting Rights. Except as otherwise required by law or this Second
-------------
Amended and Restated Certificate of Incorporation, each holder of Common Stock
shall have one vote in respect of each share of stock held of record by such
holder on the books of the Corporation for the election of directors and on all
matters submitted to a vote of stockholders of the Corporation. Except as
otherwise required by law or provided herein, holders of Preferred Stock shall
vote together with holders of Common Stock as a single class, subject to any
special or preferential voting rights of any then outstanding Preferred Stock.
There shall be no cumulative voting.
(5) Redemption. The Common Stock is not redeemable.
----------
2
<PAGE>
C. Preferred Stock. The Board of Directors is authorized, subject to
---------------
limitations prescribed by law, by the rules of a national securities exchange,
if applicable, and by the provisions of this ARTICLE IV, to provide for the
issuance of up to an aggregate of Five Million (5,000,000) shares of Preferred
Stock in one or more series, and by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish from time to time the
number of shares to be included in each such series, and to fix the designation,
powers, preferences, and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof.
The authority of the Board of Directors with respect to each series
shall include, but not be limited to, determination of the following:
(1) The number of shares constituting that series and the distinctive
designation of that series;
(2) The dividend rate on the shares of that series, whether dividends
shall be cumulative, and, if so, from which date or dates, and the relative
rights of priority, if any, of payment of dividends on shares of that series;
(3) Whether that series shall have voting rights, in addition to the
voting rights provided by law, and, if so, the terms of such voting rights;
(4) Whether that series shall have conversion privileges, and, if so,
the terms and conditions of such conversion, including provision for adjustment
of the conversion rate in such events as the Board of Directors shall determine;
(5) Whether or not the shares of that series shall be redeemable, and,
if so, the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share payable
in case of redemption, which amount may vary under different conditions and at
different redemption dates;
(6) Whether that series shall have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of such
sinking fund;
(7) The rights of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, and the
relative rights or priority, if any, of payment of shares of that series; and
(8) Any other relative rights, preferences and limitations of that
series.
Dividends on outstanding shares of Preferred Stock shall be paid or
declared and set apart for payment before any dividends shall be paid or
declared and set apart for payment on the Common Stock with respect to the same
dividend period.
If upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, the assets available for distribution to holders
of shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series of Preferred
3
<PAGE>
Stock in accordance with the respective preferential amounts (including unpaid
cumulative dividends, if any) payable with respect thereto.
D. Preemptive Rights. No holder of any of the shares of any class or
-----------------
series of stock or of options, warrants or other rights to purchase shares of
any class or series of stock or of other securities of the Corporation shall
have any preemptive right to purchase or subscribe for any unissued stock of any
class or series, or any unissued bonds, certificates of indebtedness, debentures
or other securities convertible into or exchangeable for stock of any class or
series or carrying any right to purchase stock of any class or series; but any
such unissued stock, bonds, certificates or indebtedness, debentures or other
securities convertible into or exchangeable for stock or carrying any right to
purchase stock may be issued pursuant to resolution of the Board of Directors to
such persons, firms, corporations or associations, whether or not holders
thereof, and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
ARTICLE V
A. Number. The number of directors of the Corporation shall be fixed
------
from time to time by, or in the manner provided in the Bylaws or by resolution
duly adopted by the Board of Directors, provided that no action shall be taken
to decrease or increase the number of directors unless at least 66.67% of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose approve
such decrease or increase. Vacancies occurring in the Board of Directors for any
reason and newly created directorships shall be filled by a vote of a majority
of the remaining members of the Board of Directors, although less than a quorum,
at any meeting of the Board of Directors. A director so chosen shall hold office
for the remainder of the full term of the director for which the vacancy was
created or occurred and until such director's successor shall have been duly
elected and qualified.
B. Classified Board of Directors. The directors of the Corporation shall
-----------------------------
be divided into three (3) classes as nearly equal in size as is practicable,
hereby designated Class I, Class II and Class III. For the purposes hereof, the
initial Class I, Class II and Class III directors shall be those directors so
designated by a resolution of the Board of Directors. At the first annual
meeting of stockholders following the closing of the initial public offering of
the Corporation's Common Stock, the term of office of the Class I directors
shall expire and Class I directors shall be elected for a full term of three (3)
years. At the second annual meeting of stockholders following the closing of the
initial public offering of the Corporation's Common Stock, the term of office of
the Class II directors shall expire and Class II directors shall be elected for
a full term of three (3) years. At the third annual meeting of stockholders
following the initial public offering of the Corporation's Common Stock, the
term of office of the Class III directors shall expire and Class III directors
shall be elected for a full term of three (3) years. At each succeeding annual
meeting of stockholders, directors shall be elected for a full term of three (3)
years to succeed the directors of the class whose terms expire at such annual
meeting. If the number of directors is hereafter changed, each director then
serving as such shall nevertheless continue as a director of the Class of which
he is a member until the expiration of his current term and any newly created
directorships or decrease in directorships shall be so apportioned among the
classes as to make all classes as nearly equal in number as is practicable.
4
<PAGE>
In the event of any increase or decrease in the authorized number of
directors, (1) each director then serving as such shall nevertheless continue as
a director of the class of which he is a member until the expiration of his
current term, or his earlier resignation, removal from office or death, and (2)
the newly created or eliminated directorship resulting from such increase or
decrease shall be appointed by the Board of Directors among the three classes of
directors so as to maintain such classes as nearly equal as possible.
C. Removal of Directors. Notwithstanding any other provisions of this
--------------------
Second Amended and Restated Certificate of Incorporation or the Bylaws of the
Corporation, any director or the entire Board of Directors may be removed, at
any time, but only for cause and only by the affirmative vote of the holders of
not less than 66.67% of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors (considered
for this purpose as one class) cast at a meeting of the stockholders called for
that purpose. Notwithstanding the foregoing, whenever the holders of any one or
more series of preferred stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
preceding provisions of this ARTICLE V shall not apply with respect to the
director or directors elected by such holders of preferred stock.
ARTICLE VI
Stockholders of the Corporation shall take action by meetings held
pursuant to this Second Amended and Restated Certificate of Incorporation and
the Bylaws and shall have no right to take any action by written consent without
a meeting. Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws.
ARTICLE VII
Except to the extent that the GCL prohibits the elimination or
limitation of liability of directors for breaches of fiduciary duty, no director
of the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty as a
director, notwithstanding any provision of law imposing such liability. If the
GCL is amended after approval by the stockholders of this ARTICLE VII to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the GCL, as so
amended. No amendment to or repeal of this provision shall apply to or have any
effect on the liability or alleged liability of any director of the Corporation
for or with respect to any acts or omissions of such director occurring prior to
such amendment.
ARTICLE VIII
To the fullest extent permitted by applicable law, this Corporation is
authorized to provide indemnification of (and advancement of expenses to)
directors, officers, employees and agents (and any other persons to which
Delaware law permits this Corporation to provide indemnification) through Bylaw
provisions, agreements with such agents or other persons, vote
5
<PAGE>
of stockholders or disinterested directors or otherwise, in excess of the
indemnification and advancement otherwise permitted by Section 145 of the GCL
subject only to limits created by applicable Delaware law (statutory or non-
statutory), with respect to action for breach of duty to the Corporation, its
stockholders, and others.
No director of the Corporation shall be personally liable to the
Corporation or any stockholder for monetary damages for breach of fiduciary duty
as a director, except for any matter in respect of which such director shall be
liable under Section 174 of the GCL or any amendment thereto or shall be liable
by reason that, in addition to any and all other requirements for such
liability, such director (1) shall have breached the director's duty or loyalty
to the Corporation or its stockholders, (2) shall have acted in manner involving
intentional misconduct or a knowing violation of law or, in failing to act,
shall have acted in a manner involving intentional misconduct or a knowing
violation of law, or (3) shall have derived an improper personal benefit. If
the GCL is hereafter amended to authorize the further elimination or limitation
of the liability of a director, the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the GCL, as so
amended.
Each person who was or is made a party or is threatened to be made a
party to or is in any way involved in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), including any appeal therefrom, by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the Corporation or a direct
or indirect subsidiary of the Corporation, or is or was serving at the request
of the Corporation as a director or officer of another entity or enterprise, or
was a director or officer of a foreign or domestic corporation which was a
predecessor corporation of the Corporation or of another entity or enterprise at
the request of such predecessor corporation, shall be indemnified and held
harmless by the Corporation, and the Corporation shall advance all expenses
incurred by any such person in defense of any such proceeding prior to its final
determination, to the fullest extent authorized by the GCL. In any proceeding
against the Corporation to enforce these rights, such person shall be presumed
to be entitled to indemnification and the Corporation shall have the burden of
proving that such person has not met the standards of conduct for permissible
indemnification set forth in the GCL. The rights to indemnification and
advancement of expenses conferred by this Article VIII shall be presumed to have
been relied upon by the directors and officers of the Corporation in serving or
continuing to serve the Corporation and shall be enforceable as contract rights.
Said rights shall not be exclusive of any other rights to which those seeking
indemnification may otherwise be entitled. The Corporation may, upon written
demand presented by a director or officer of the Corporation or of a direct or
indirect subsidiary of the Corporation, or by a person serving at the request of
the Corporation as a director or officer of another entity or enterprise, enter
into contracts to provide such persons with specified rights to indemnification,
which contracts may confer rights and protections to the maximum extent
permitted by the GCL, as amended and in effect from time to time.
If a claim under this Article VIII is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expenses of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to
6
<PAGE>
enforce the right to be advanced expenses incurred in defending any proceeding
prior to its final disposition where the required undertaking, if any, has been
tendered to the Corporation ) that the claimant has not met the standards of
conduct which make it permissible under the GCL for the Corporation to indemnify
the claimant for the amount claimed, but the claimant shall be presumed to be
entitled to indemnification and the Corporation shall have the burden of proving
that the claimant has not met the standards of conduct for permissible
indemnification set forth in the GCL.
If the GCL is hereafter amended to permit the Corporation to provide
broader indemnification rights that said Law permitted the Corporation to
provide prior to such amendment, the indemnification rights conferred by this
Article VIII shall be broadened to the fullest extent permitted by the GCL, as
so amended.
ARTICLE IX
In furtherance of and not in limitation of powers conferred by
statute, the Board of Directors of the Corporation is expressly authorized to
adopt, repeal, alter, amend and rescind any or all of the Bylaws of the
Corporation.
ARTICLE X
The Corporation reserves the right to repeal, alter, amend or rescind
any provision contained in this Second Amended and Restated Certificate of
Incorporation in the manner now or hereafter prescribed by law, and all rights
conferred on stockholders herein are granted subject to this reservation.
Notwithstanding the foregoing, the provisions set forth in ARTICLES V, VI, VII,
VIII, IX and this ARTICLE X may not be repealed, altered, amended or rescinded
in any respect without the affirmative vote of holders at least 66.67% of the
outstanding voting stock of the Corporation entitled to vote at election of
directors.
* * *
FIFTH: The foregoing amendment and restatement has been duly adopted
by the Board of Directors in accordance with the applicable provisions of
Section 242 and 245 of the GCL.
SIXTH: The foregoing amendment and restatement was approved by the
holders of the requisite number of shares of the Corporation in accordance with
Section 228 of the GCL.
7
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this certificate on
______ __, 1999.
MULTEX.COM, Inc.
By:____________________________
Isaak Karaev,
President, Chief Executive Officer and
Chairman of the Board of Directors
Attest:
By:___________________________
Philip Callaghan, Secretary
<PAGE>
Exhibit 3.4
AMENDED AND RESTATED BYLAWS
OF
MULTEX.COM, INC.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I - Offices 1
1.1 Registered Office.................................... 1
1.2 Other Offices........................................ 1
ARTICLE II - Meetings of Stockholders 1
2.1 Place of Meetings.................................... 1
2.2 Annual Meeting....................................... 1
2.3 Special Meeting...................................... 2
2.4 Notice of Stockholder's Meeting...................... 2
2.5 Fixing Record Date for Stockholder Notice............ 2
2.6 List of Stockholders Entitled to Vote................ 2
2.7 Adjournments; Notice................................. 2
2.8 Waiver of Notice..................................... 3
2.9 Quorum............................................... 3
2.10 Voting and Proxies................................... 3
2.11 Action at Meeting.................................... 3
2.12 General.............................................. 3
ARTICLE III - Directors 4
3.1 General Powers....................................... 4
3.2 Number; Election and Qualification................... 4
3.3 Enlargement or Reduction of the Board................ 4
3.4 Tenure............................................... 4
3.5 Vacancies............................................ 4
3.6 Resignation.......................................... 5
3.7 Regular Meetings..................................... 5
3.8 Special Meetings..................................... 5
3.9 Notice of Special Meetings........................... 5
3.10 Waiver of Notice..................................... 5
3.11 Meetings by Telephone Conference Calls............... 5
3.12 Quorum............................................... 5
3.13 Adjourned Meeting.................................... 6
3.14 Action at Meeting.................................... 6
3.15 Action by Consent.................................... 6
3.16 Fees and Compensation of Directors................... 6
3.17 Approval of Loans to Officers........................ 6
3.18 Removal.............................................. 6
<PAGE>
ARTICLE IV Committees 6
4.1 Enumeration of Committees............................ 6
4.2 Committee Minutes.................................... 7
4.3 Meetings and Action of Committees.................... 7
ARTICLE V - Officers 7
5.1 Enumeration of Officers................................ 7
5.2 Election of Officers................................... 7
5.3 Qualification and Tenure............................... 7
5.4 Subordinate Officers................................... 8
5.5 Resignation and Removal................................ 8
5.6 Vacancies.............................................. 8
5.7 Chairman of the Board and Vice Chairman of the Board... 8
5.8 President.............................................. 8
5.9 Vice Presidents........................................ 8
5.10 Secretary and Assistant Secretaries.................... 9
5.11 Treasurer and Assistant Treasurers..................... 9
5.12 Authority and Duties of Officers....................... 9
5.13 Salaries............................................... 10
ARTICLE VI Capital Stock 10
6.1 Stock Certificates..................................... 10
6.2 Special Designation on Certificates.................... 10
6.3 Lost Certificates...................................... 10
6.4 Transfer of Stock...................................... 11
6.5 Registered Stockholders................................ 11
6.6 Dividends.............................................. 11
ARTICLE VII Records and Reports 11
7.1 Maintenance and Inspection of Records.................. 11
7.2 Inspection by Directors................................ 12
7.3 Annual Statement to Stockholders....................... 12
7.4 Representation of Shares of Other Corporations......... 12
ARTICLE VIII - Indemnification 12
8.1 Indemnification of Directors and Officers.............. 12
8.2 Indemnification of Others.............................. 13
8.3 Insurance.............................................. 14
ARTICLE IX - General Provisions 14
9.1 Checks................................................. 14
9.2 Fiscal Year............................................ 14
ii
<PAGE>
9.3 Seal................................................... 14
9.4 Manner of Giving Notice................................ 14
9.5 Transactions with Interested Parties................... 14
ARTICLE X - Amendments.................................................... 15
iii
<PAGE>
AMENDED AND RESTATED BYLAWS
OF
MULTEX.COM, INC.
ARTICLE I - OFFICES
-------------------
1.1 Registered Office. The registered office of Multex.com, Inc. (the
-----------------
"Corporation") shall be in the City of Wilmington, County of New Castle, State
of Delaware. The name of the registered agent of the Corporation at such
location is Corporation Service Company.
1.2 Other Offices. The Corporation may also have offices at such other
--------------
places both within and without the State of Delaware as the Board of Directors
(or the "Board") may from time to time determine or the business of the
Corporation may require.
ARTICLE II - MEETINGS OF STOCKHOLDERS
-------------------------------------
2.1 Place of Meetings. All meetings of the stockholders for the
-----------------
election of directors shall be held at such place as may be fixed from time to
time by the Board of Directors, or at such other place either within or without
the State of Delaware as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting. Meetings of stockholders for
any other purpose may be held at such time and place, within or without the
State of Delaware, as shall be stated in the notice of the meeting or in a duly
executed waiver of notice thereof. In the absence of any such designation,
stockholders' meetings shall be held at the registered office of the
Corporation.
2.2 Annual Meeting. Annual meetings of stockholders shall be held at
--------------
such date and time as shall be designated from time to time by the Board of
Directors and stated in the notice of the meeting. At each annual meeting, the
stockholders shall elect directors to succeed those whose terms expire in that
year and shall transact such other business as may properly be brought before
the meeting.
Nominations of persons for election to the Board of Directors may be
made at an annual meeting of stockholders (a) pursuant to the Corporation's
notice of meeting, (b) by or at the direction of the Board of Directors or (c)
by any stockholder of the Corporation who was a stockholder of record at the
time of giving of notice, who is entitled to vote at the meeting and who
complies with the notice provisions set forth in the following sentence. For
nominations to be properly brought before an annual meeting by a stockholder
pursuant to clause (c) in the preceding sentence, the stockholder must have
given notice thereof in writing to the Secretary of the Corporation not later
than the close of business on the one hundred twentieth (120th) day preceding
the meeting nor earlier than the close of business on the one hundred fiftieth
(150th) day preceding the meeting and such notice must include the information
relating to such nominee(s) that is required to be disclosed in solicitations of
proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), including such
person's written consent to being named in the proxy statement as a nominee and
to serving as a director if elected.
<PAGE>
2.3 Special Meeting. Special meetings of the stockholders, for any
---------------
purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called only by the Board. Business
transacted at any special meeting of stockholders shall be limited to the
purposes stated in the notice.
2.4 Notice of Stockholder's Meeting. Written notice of meetings with
-------------------------------
stockholders shall state the place, date and hour of the meeting and shall be
given to each stockholder entitled to vote at such meeting not fewer than ten
(10) nor more than sixty (60) days before the date of the meeting. The notice
shall specify the place, date, and hour of the meeting, and, in the case of a
special meeting, the purpose or purposes for which the meeting is called.
2.5 Fixing Record Date for Stockholder Notice. In order that the
-----------------------------------------
Corporation may determine the stockholders entitled to notice of or to vote at
any meeting of stockholder or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.
2.6 List of Stockholders Entitled to Vote. The officer who has charge
-------------------------------------
of the stock ledger of the Corporation shall prepare and make, at least ten (10)
days before every meeting of stockholders, a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order, and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place where the meeting
is to be held. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
2.7 Adjournments; Notice. Any meeting of stockholders may be adjourned
--------------------
to any other time and to any other place at which a meeting of stockholders may
be held under these Bylaws by the stockholders present or represented at the
meeting and entitled to vote, although less than a quorum, or, if no stockholder
is present, by any officer entitled to preside at or to act as Secretary of such
meeting. It shall not be necessary to notify any stockholder of any adjournment
of less than thirty (30) days if the time and place of the adjourned meeting are
announced at the meeting at which adjournment is taken. If the adjournment is
for more than thirty (30) days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the meeting. At such
adjourned meeting at which a quorum shall be present or represented by proxy,
the Corporation may transact any business which might have been transacted at
the original meeting.
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2.8 Waiver of Notice. Whenever notice is required to be given under any
----------------
provision of the General Corporation Law of Delaware, the Certificate of
Incorporation or these Bylaws, a written waiver thereof, signed by the person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders need be specified in any written
waiver of notice unless so required by the Certificate of Incorporation or these
Bylaws.
2.9 Quorum. Except as otherwise provided by law, the Certificate of
------
Incorporation or these Bylaws, the holders of 50% of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented.
2.10 Voting and Proxies. Each stockholder shall have one (1) vote for
------------------
each share of stock entitled to vote held of record by such stockholder and a
proportionate vote for each fractional share so held, unless otherwise provided
in the Certificate of Incorporation. Each stockholder of record entitled to vote
at a meeting of stockholders may vote or express such consent or dissent in
person or may authorize another person or persons to vote or act for him by
written proxy executed by the stockholder or his authorized agent and delivered
to the secretary of the Corporation. No such proxy shall be voted or acted upon
after three (3) years from the date of its execution, unless the proxy expressly
provides for a longer period.
2.11 Action at Meeting. When a quorum is present at any meeting, the
-----------------
holders of shares of stock representing a majority of the votes cast on a matter
(or if there are two (2) or more classes of stock entitled to vote as separate
classes, then in the case of each such class, the holders of shares of stock of
that class representing a majority of the votes cast on a matter) shall decide
any matter to be voted upon by the stockholders at such meeting, except when a
different vote is required by express provision of law, the Certificate of
Incorporation or these Bylaws. When a quorum is present at any meeting, any
election by stockholders shall be determined by a plurality of the votes cast on
the election.
2.12 General. Only such persons who are nominated in accordance with
-------
the procedures set forth in this Article II shall be eligible to serve as
directors and only such business shall be conducted at a meeting of stockholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Article II. Except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws, the chairman of the meeting shall
have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in this Article II and, if any
proposed nomination or business is not in compliance herewith, to declare that
such defective proposal or nomination shall be disregarded.
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Notwithstanding the foregoing provisions of this Article II, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth herein. Nothing in this Article II shall be deemed to affect any rights
(a) of stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act or (b) of the holders of
any series of Preferred Stock to elect directors under specified circumstances.
Notwithstanding any other provision of law, the Certificate of
Incorporation or these Bylaws, and notwithstanding the fact that a lesser
percentage may be specified by law, the affirmative vote of the holders of at
least 66.67% of the votes which all the stockholders would be entitled to cast
at any annual election of directors or class of directors shall be required to
amend or repeal, or to adopt any provision inconsistent with, this Article II.
ARTICLE III - DIRECTORS
-----------------------
3.1 General Powers. The business and affairs of the Corporation shall
--------------
be managed by or under the direction of a Board of Directors, who may exercise
all of the powers of the Corporation except as otherwise provided by law or the
Certificate of Incorporation. In the event of a vacancy in the Board of
Directors, the remaining directors, except as otherwise provided by law, may
exercise the powers of the full Board until the vacancy is filled.
3.2 Number; Election and Qualification. The number of directors which
----------------------------------
shall constitute the whole Board of Directors shall be determined by resolution
of the stockholders or the Board of Directors, but in no event shall be less
than three (3). The Board shall be divided into three (3) classes as nearly
equal in number as possible. The members of each class shall be elected for a
term of three (3) years and until their successors are elected and qualified.
The Board of Directors shall be classified in accordance with the provisions of
the Corporation's Certificate of Incorporation. Directors need not be
stockholders of the Corporation.
3.3 Enlargement or Reduction of the Board. The number of directors may
-------------------------------------
only be increased or decreased if at least 66.67% of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose approve such increase or decrease;
provided, however, that no decrease in the number of directors shall have the
effect of shortening the term of an incumbent director.
3.4 Tenure. Each director shall hold office in accordance with the
------
provisions of the Corporation's Certificate of Incorporation.
3.5 Vacancies. Vacancies occurring in the Board of Directors for any
----------
reason and newly created directorships shall be filled by a vote of a majority
of the remaining members of the Board, although less than a quorum, at any
meeting of the Board of Directors. A director so chosen shall hold office for
the remainder of the full term of the director for which the vacancy was created
or occurred and until such director's successor shall have been duly elected and
qualified. If there are no directors in office, then an election of directors
may be held in the manner provided by statute.
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3.6 Resignation. Any director may resign by delivering his written
-----------
resignation to the Corporation at its principal office or to the president or
secretary. Such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event.
3.7 Regular Meetings. Regular meetings of the Board of Directors may be
----------------
held without notice at such time and place, either within or without the State
of Delaware, as shall be determined from time to time by the Board of Directors;
provided that any director who is absent when such a determination is made shall
be given notice of the determination. A regular meeting of the Board of
Directors may be held without notice immediately after, and at the same place
as, the annual meeting of stockholders.
3.8 Special Meetings. Special meetings of the Board of Directors may be
----------------
held at any time and place, within or without the State of Delaware, designated
in a call by the Chairman of the Board, president, two (2) or more directors, or
by one (1) director in the event that there is only a single director in office.
3.9 Notice of Special Meetings. Notice of any special meeting of
--------------------------
directors shall be given to each director by the secretary or by the officer or
one of the directors calling the meeting. Notice shall be duly given to each
director (a) by giving notice to such director in person or by telephone at
least 48 hours in advance of the meeting, (b) by sending a facsimile, telegram
or telex, or delivering written notice by hand, to his last known business or
home address at least 48 hours in advance of the meeting, or (c) by mailing
written notice to his last known business or home address at least 72 hours in
advance of the meeting. A notice or waiver of notice of a meeting of the Board
of Directors need not specify the purposes of the meeting.
3.10 Waiver of Notice. Whenever notice is required to be given under any
----------------
provision of the General Corporation Law of Delaware or of the Certificate of
Incorporation or these Bylaws, a written waiver thereof, signed by the person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the directors, or members of a committee of
directors, need be specified in any written waiver of notice unless so required
by the Certificate of Incorporation or these Bylaws.
3.11 Meetings by Telephone Conference Calls. Directors or any members
--------------------------------------
of any committee designated by the directors may participate in a meeting of the
Board of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation by such means shall constitute
presence in person at such meeting.
3.12 Quorum. A majority of the authorized number of directors shall
------
constitute a quorum at all meetings of the Board of Directors. In the event one
or more of the directors shall be disqualified to vote at any meeting, then the
required quorum shall be reduced by one for
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each such director so disqualified; provided, however, that in no case shall
less than one-third (1/3) of the authorized number constitute a quorum.
3.13 Adjourned Meeting. If a quorum is not present at any regular or
-----------------
special meeting of the Board of Directors, then the directors present thereat
may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present.
3.14 Action at Meeting. At any meeting of the Board of Directors at
-----------------
which a quorum is present, the vote of a majority of those present shall be
sufficient to take any action, unless a different vote is specified by law, the
Certificate of Incorporation, these Bylaws or any contractual arrangements among
the stockholders.
3.15 Action by Consent. Unless otherwise restricted by the Certificate
-----------------
of Incorporation or these Bylaws, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee of the Board of
Directors may be taken without a meeting, if all members of the Board or
committee, as the case may be, consent to the action in writing, and the written
consents are filed with the minutes of proceedings of the Board or committee.
3.16 Fees and Compensation of Directors. Unless otherwise restricted by
----------------------------------
the Certificate of Incorporation or these Bylaws, directors may be paid such
compensation for their services and such reimbursement for expenses of
attendance at meetings as the Board of Directors may from time to time
determine. No such payment shall preclude any director from serving the
Corporation or any of its parent or subsidiary corporations in any other
capacity and receiving compensation for such service.
3.17 Approval of Loans to Officers. The Corporation may lend money to,
-----------------------------
or guarantee any obligation of, or otherwise assist any officer or other
employee of the Corporation or of its subsidiary, including any officer or
employee who is a director of the Corporation or its subsidiary, whenever, in
the judgment of the directors, such loan, guaranty or assistance may reasonably
be expected to benefit the Corporation. The loan, guaranty or other assistance
may be with or without interest and may be unsecured, or secured in such manner
as the Board of Directors shall approve, including, without limitation, a pledge
of shares of stock of the Corporation. Nothing in this section contained shall
be deemed to deny, limit or restrict the powers of guaranty or warranty of the
Corporation at common law or under any statute.
3.18 Removal. Except as otherwise provided by the General Corporation
-------
Law of Delaware, a director or the entire Board of Directors may only be removed
in accordance with the provisions of the Corporation's Certificate of
Incorporation.
ARTICLE IV - COMMITTEES
-----------------------
4.1 Enumeration of Committees. The Board of Directors may, by
-------------------------
resolution passed by a majority of the whole Board, designate one (1) or more
committees, each committee to consist of one (1) or more of the directors of the
Corporation. The Board may designate one (1) or more directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee. In the absence or disqualification of a
6
<PAGE>
member of a committee, the member or members of the committee present at any
meeting and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors
and subject to the provisions of the General Corporation Law of Delaware, shall
have and may exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the Corporation and may authorize
the seal of the Corporation to be affixed to all papers which may require it.
Each such committee shall keep minutes and make such reports as the Board of
Directors may from time to time request. Except as the Board of Directors may
otherwise determine, any committee may make rules for the conduct of its
business, but unless otherwise provided by the directors or in such rules, its
business shall be conducted as nearly as possible in the same manner as is
provided in these Bylaws for the Board of Directors.
4.2 Committee Minutes. Each committee shall keep regular minutes of its
-----------------
meetings and report the same to the Board of Directors when required.
4.3 Meetings and Action of Committees. Meetings and action of committee
---------------------------------
shall be governed by, and held and taken in accordance with, the provisions of
Article III of these Bylaws, Section 3.7 (regular meetings), Section 3.8
(special meetings), Section 3.9 (notice of special meetings), Section 3.10
(waiver of notice), Section 3.11 (meetings by telephone conference calls),
Section 3.12 (quorum), Section 3.13 (adjourned meeting), Section 3.14 (action at
meeting) and Section 3.15 (action by consent), with such changes in the context
of these Bylaws as are necessary to substitute the committee and its members for
the Board of Directors and its members; provided, however, that the time of
regular meetings of committees may also be called by resolution of the Board of
Directors and that notice of special meetings of committees shall also be given
to all alternate members, who shall have the right to attend all meetings of the
committee. The Board of Directors may adopt rules for the government of any
committee not inconsistent with the provisions of these Bylaws.
ARTICLE V - OFFICERS
--------------------
5.1 Enumeration of Officers. The officers of the Corporation shall be
-----------------------
chosen by the Board of Directors and consist of a president, one or more vice
presidents, a secretary and a treasurer or chief financial officer. The Board of
Directors may elect from among its members a Chairman of the Board and a Vice
Chairman of the Board.
5.2 Election of Officers. The Officers of the Corporation, except such
--------------------
officers as may be appointed in accordance with the provisions of Section 5.4 or
5.6 of these Bylaws, shall be chosen by the Board of Directors, subject to the
rights, if any, of an officer under any contract of employment.
5.3 Qualification and Tenure. No officer need be a stockholder. Any two
------------------------
(2) or more offices may be held by the same person. Except as otherwise provided
by law, by the Certificate of Incorporation or by these Bylaws, each officer
shall hold office until his successor is elected and qualified, unless a
different term is specified in the vote choosing or appointing him, or until his
earlier death, resignation or removal.
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5.4 Subordinate Officers. The Board of Directors may appoint, or
--------------------
empower the president to appoint, such other officers and agents as the business
of the Corporation may require, each of whom shall hold office for such period,
have such authority, and perform such duties as are provided in these Bylaws or
as the Board of Directors may from time to time determine.
5.5 Resignation and Removal. Any officer may resign by delivering his
-----------------------
written resignation to the Corporation at its principal office or to the
president or secretary. Such resignation shall be effective upon receipt unless
it is specified to be effective at some other time or upon the happening of some
other event.
Subject to the rights, if any of an officer under any contract of
employment, any officer may be removed at any time, with or without cause, by
vote of a majority of the entire number of directors then in office.
Except as the Board of Directors may otherwise determine, no officer
who resigns or is removed shall have any right to any compensation as an officer
for any period following his resignation or removal, or any right to damages on
account of such removal, whether his compensation be by the month or by the year
or otherwise, unless such compensation is expressly provided in a duly
authorized written agreement with the Corporation.
5.6 Vacancies. The Board of Directors may fill any vacancy occurring in
---------
any office for any reason and may, in its discretion, leave unfilled for such
period as it may determine any offices other than those of president, treasurer
and secretary. Each such successor shall hold office for the unexpired term of
his predecessor and until his successor is elected and qualified, or until his
earlier death, resignation or removal.
5.7 Chairman of the Board and Vice Chairman of the Board. The Board of
----------------------------------------------------
Directors may appoint a Chairman of the Board and may, but is not obligated to,
designate the Chairman of the Board as chief executive officer. If the Board of
Directors appoints a Chairman of the Board, he shall perform such duties and
possess such powers as are assigned to him by the Board of Directors. If the
Board of Directors appoints a Vice Chairman of the Board, he shall, in the
absence or disability of the Chairman of the Board, perform the duties and
exercise the powers of the Chairman of the Board and shall perform such other
duties and possess such other powers as may from time to time be vested in him
by the Board of Directors.
5.8 President. The president shall, subject to the direction of the
---------
Board of Directors, have general charge and supervision of the business of the
Corporation. Unless otherwise provided by the Board of Directors, he shall
preside at all meetings of the stockholders and, if he is a director, at all
meetings of the Board of Directors. Unless the Board of Directors has designated
the Chairman of the Board or another officer as chief executive officer, the
president shall be the chief executive officer of the Corporation. The president
shall perform such other duties and shall have such other powers as the Board of
Directors may from time to time prescribe.
5.9 Vice Presidents. Any vice president shall perform such duties and
possess such powers as the Board of Directors or the president may from time to
time prescribe. In the
8
<PAGE>
event of the absence, inability or refusal to act of the president, the vice
president (or if there shall be more than one (1), the vice presidents in the
order determined by the Board of Directors) shall perform the duties of the
president and when so performing shall have all the powers of and be subject to
all the restrictions upon the president. The Board of Directors may assign to
any vice president the title of executive vice president, senior vice president
or any other title selected by the Board of Directors.
5.10 Secretary and Assistant Secretaries. The secretary shall perform
-----------------------------------
such duties and shall have such powers as the Board of Directors or the
president may from time to time prescribe. In addition, the secretary shall
perform such duties and have such powers as are incident to the office of the
secretary, including without limitation, the duty and power to give notices of
all meetings of stockholders and special meetings of the Board of Directors, to
attend all meetings of stockholders and the Board of Directors and keep a record
of the proceedings, to maintain a stock ledger and prepare lists of stockholders
and their addresses as required, to be custodian of corporate records and the
corporate seal and to affix and attest to the same on documents.
Any assistant secretary shall perform such duties and possess such
powers as the Board of Directors, the president or the secretary may from time
to time prescribe. In the event of the absence, inability or refusal to act of
the secretary, the assistant secretary, (or if there shall be more than one (1),
the assistant secretaries in the order determined by the Board of Directors)
shall perform the duties and exercise the powers of the secretary.
In the absence of the secretary or any assistant secretary at any
meeting of stockholders or directors, the person presiding at the meeting shall
designate a temporary secretary to keep a record of the meeting.
5.11 Treasurer and Assistant Treasurers. The treasurer shall perform
----------------------------------
such duties and shall have such powers as may from time to time be assigned to
him by the Board of Directors or the president. In addition, the treasurer or
chief financial officer shall perform such duties and have such powers as are
incident to the office of treasurer, including without limitation, the duty and
power to keep and be responsible for all funds and securities of the
Corporation, to deposit funds of the Corporation in depositories selected in
accordance with these Bylaws, to disburse such funds as ordered by the Board of
Directors, to make proper accounts of such funds, and to render as required by
the Board of Directors statements of all such transactions and of the financial
condition of the Corporation.
The assistant treasurers shall perform such duties and possess such
powers as the Board of Directors, the president or the treasurer may from time
to time prescribe. In the event of the absence, inability or refusal to act of
the treasurer, the assistant treasurer, (or if there shall be more than one (1),
the assistant treasurers in the order determined by the Board of Directors)
shall perform the duties and exercise the powers of the treasurer.
5.12 Authority and Duties of Officers. In addition to the foregoing
--------------------------------
authority and duties, all officers of the Corporation shall respectively have
such authority and perform such duties in the management of the business of the
Corporation as may be designated from time to time by the Board of Directors or
the stockholders.
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5.13 Salaries. Officers of the Corporation shall be entitled to such
--------
salaries, compensation or reimbursement as shall be fixed or allowed from time
to time by the Board of Directors.
ARTICLE VI - CAPITAL STOCK
--------------------------
6.1 Stock Certificates. The shares of the Corporation shall be
------------------
represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate, signed by, or in the name of the Corporation by,
the Chairman or Vice Chairman of the Board of Directors, or the president or a
vice president and the treasurer or an assistant treasurer, or the secretary or
an assistant secretary of the Corporation, certifying the number of shares owned
by such holder in the Corporation. Any of or all the signatures on the
certificate may be facsimile signature(s). In case any officer, transfer agent
or registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if such individual were such officer, transfer agent or registrar
at the date of issue.
6.2 Special Designation on Certificates. If the Corporation shall be
-----------------------------------
authorized to issue more than one class of stock or more than one series of any
class, the powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualification, limitations or restrictions or such preferences and/or rights
shall be set forth in full or summarized on the face or back of the certificate
which the Corporation shall issue to represent such class or series of stock,
provided that, except as otherwise provided in Section 202 of the General
Corporation Law of Delaware, in lieu of the foregoing requirements, there may be
set forth on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, a statement that the
Corporation will furnish without charge to each stockholder who so requests the
powers, designations, preferences and relative, participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
6.3 Lost Certificates. The Board of Directors may direct a new
-----------------
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.
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6.4 Transfer of Stock. Upon surrender to the Corporation or the
-----------------
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignation or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
6.5 Registered Stockholders. The Corporation shall be entitled to
-----------------------
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on its books as the owner of
shares and shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.
6.6 Dividends. Dividends upon the capital stock of the Corporation,
---------
subject to the provisions of the Certificate of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock, subject to the provisions of the Certificate of Incorporation.
Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purposes as the directors shall think conducive to the interest of the
Corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ARTICLE VII - RECORDS AND REPORTS
---------------------------------
7.1 Maintenance and Inspection of Records. The Corporation shall,
-------------------------------------
either at its principal executive office or at such place or places as
designated by the Board of Directors, keep a record of its stockholders listing
their names and addresses and the number and class of shares held by each
stockholder, a copy of these Bylaws as amended to date, accounting books, and
other records.
Any stockholder of record, in person or by attorney or other agent,
shall, upon written demand under oath stating the purpose thereof, have the
right during the usual hours of business to inspect for any proper purpose the
Corporation's stock ledger, a list of its stockholders, and its other books and
records and to make copies or extracts therefrom. A proper purpose shall mean a
purpose reasonably related to such person's interest as a stockholder. In every
instance where an attorney or other agent is the person who seeks the right to
inspection, the demand under oath shall be accompanied by a power of attorney or
such other writing that authorizes the attorney or other agent to so act on
behalf of the stockholder. The demand under oath shall be directed to the
Corporation at its registered office in Delaware or at its principal place of
business.
11
<PAGE>
The officer who has charge of the stock ledger of the Corporation
shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be opened to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
7.2 Inspection by Directors. Any director shall have the right to
-----------------------
examine the Corporation's stock ledger, a list of its stockholders, and its
other books and records for a purpose reasonably related to his position as a
director. The Court of Chancery is hereby vested with the exclusive jurisdiction
to determine whether a director is entitled to the inspection sought. The Court
may summarily order the Corporation to permit the director to inspect any and
all books and records, the stock ledger, and the stock list and to make copies
or extracts therefrom. The Court may, in its discretion, prescribe any
limitations or conditions with reference to the inspection, or award such other
and further relief as the Court may deem just and proper.
7.3 Annual Statement to Stockholders. The Board of Directors or, if
--------------------------------
designated by the Board of Directors, the president, shall present at each
annual meeting, and at any special meeting of the stockholders when called for
by vote of the stockholders, a full and clear statement of the business and
condition of the Corporation.
7.4 Representation of Shares of Other Corporations. The Chairman of the
----------------------------------------------
Board of Directors, the president, any vice president, the treasurer, the
secretary or assistant secretary of the Corporation, or any other person
authorized by the Board of Directors or the president or a vice president, is
authorized to vote, represent, and exercise on behalf of this Corporation all
rights incident to any and all shares of any other corporation or corporations
standing in the name of this Corporation. The authority granted herein may be
exercised either by such person directly or by any other persons authorized to
do so by proxy or power of attorney duly executed by such person having the
authority.
ARTICLE VIII - INDEMNIFICATION
-------------------------------
8.1 Indemnification of Directors and Officers. The Corporation shall,
-----------------------------------------
to the fullest extent authorized under the laws of the State of Delaware, as
those laws may be amended and supplemented from time to time, indemnify any
director or officer made, or threatened to be made, a party to an action or
proceeding, whether criminal, civil, administrative or investigative, by reason
of being a director or officer of the Corporation or a predecessor corporation.
The indemnification provided for in this Section 8.1 shall: (a) not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any bylaw, agreement or vote of stockholders or disinterested directors or
otherwise, both as to action in their official capacities and as to action in
another capacity while holding such office, (b) continue as to a person who has
ceased to be a director, and (c) inure to the benefit of the heirs, executors
and administrators
12
<PAGE>
of such a person. The Corporation's obligation to provide indemnification under
this Section 8.1 shall be offset to the extent of any other source of
indemnification or any otherwise applicable insurance coverage under a policy
maintained by the Corporation or any other person.
Expenses incurred by a director or officer of the Corporation in
defending a civil or criminal action, suit or proceeding by reason of the fact
that such individual is or was a director of the Corporation (or was serving at
the Corporation's request as a director or officer of another corporation) shall
be paid by the Corporation in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
director to repay such amount if it shall ultimately be determined that such
individual is not entitled to be indemnified by the Corporation as authorized by
relevant sections of the General Corporation Law of Delaware. Notwithstanding
the foregoing, the Corporation shall not be required to advance such expenses to
an agent who is a party to an action, suit or proceeding brought by the
Corporation and approved by a majority of the Board of Directors of the
Corporation which alleges willful misappropriation of corporate assets by such
agent, disclosure of confidential information in violation of such agent's
fiduciary or contractual obligations to the Corporation or any other willful and
deliberate breach in bad faith of such agent's duty to the Corporation or its
stockholders.
The foregoing provisions of this Section 8.1 shall be deemed to be a
contract between the Corporation and each director who serves in such capacity
at any time while this bylaw is in effect, and any repeal or modification
thereof shall not affect any rights or obligations then existing with respect to
any state of facts then or theretofore existing or any action, suit or
proceeding theretofore or thereafter brought based in whole or in part upon any
such state of facts.
To assure indemnification under this Section 8.1 of all directors and
officers who are determined by the Corporation or otherwise to be or to have
been "fiduciaries" of any employee benefit plan of the Corporation which may
exist from time to time, Section 145 of the General Corporation Law of Delaware
shall, for the purposes of this Article VIII, be interpreted as follows: an
"other enterprise" shall be deemed to include such an employee benefit plan,
including, without limitation, any plan of the Corporation which is governed by
the Act of Congress entitled "Employee Retirement Income Security Act of 1974,"
as amended from time to time; the Corporation shall be deemed to have requested
a person to serve an employee benefit plan where the performance by such person
of his duties to the Corporation also imposes duties on, or otherwise involves
services by, such person to the plan or participants or beneficiaries of the
plan; excise taxes assessed on a person with respect to an employee benefit plan
pursuant to such Act of Congress shall be deemed "fines."
8.2 Indemnification of Others. The Corporation shall have the power,
-------------------------
to the extent and in the manner permitted by the General
Corporation Law of Delaware, to indemnify each of its employees and agents
(other than directors and officers) against expenses (including attorneys'
fees), judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding, arising by reason of the fact that
such person is or was an agent of the Corporation. For purposes of this Section
8.2, an "employee" or "agent" of the Corporation (other than a director or
officer) includes any person (a) who is or was an employee or agent of the
Corporation, (b) who is or was serving at the request of the Corporation
13
<PAGE>
as an employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, or (c) who was an employee or agent of a corporation
which was a predecessor corporation of the Corporation or of another enterprise
at the request of such predecessor corporation.
8.3 Insurance. The Corporation may purchase and maintain insurance on
---------
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of the General Corporation Law of Delaware.
ARTICLE IX - GENERAL PROVISIONS
--------------------------------
9.1 Checks. All checks or demands for money and notes of the
------
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
9.2 Fiscal Year. The fiscal year of the Corporation shall end on
-----------
December 31, unless otherwise fixed by resolution of the Board of Directors.
9.3 Seal. The Board of Directors may adopt a corporate seal having
----
inscribed thereon the name of the Corporation, the year of its organization and
the words "Corporate Seal, Delaware." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
9.4 Manner of Giving Notice. Whenever, under the provisions of the
-----------------------
General Corporation Law of Delaware, the Certificate of Incorporation or these
Bylaws, notice is required to be given to any director or stockholder, it shall
not be construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such director or stockholder, at his address as
it appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given by
telegram. An affidavit of the secretary or an assistant secretary or of the
transfer agent of the Corporation that the notice has been given shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
9.5 Transactions with Interested Parties. No contract or transaction
------------------------------------
between the Corporation and one (1) or more of the directors or officers, or
between the Corporation and any other corporation, partnership, association, or
other organization in which one or more of the directors or officers are
directors or officers, or have a financial interest, shall be void or voidable
solely for this reason, or solely because such director or officer is present at
or participates in the meeting of the Board of Directors or a committee of the
Board of Directors which authorizes the contract or transaction or solely
because his, her or their votes are counted for such purpose, if:
(1) The material facts as to his or her relationship or interest
and as to the contract or transaction are disclosed or are known to the Board of
Directors or the committee,
14
<PAGE>
and the Board or committee in good faith authorizes the contract or transaction
by the affirmative vote of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum;
(2) The material facts as to his or her relationship or interest
and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or
(3) The contract or transaction is fair as to the Corporation as
of the time it is authorized, approved or ratified, by the Board of Directors, a
committee of the Board of Directors, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a committee which authorizes the contract or
transaction.
ARTICLE X- AMENDMENTS
---------------------
The original or other bylaws of the Corporation may be adopted,
amended or repealed by the stockholders entitled to vote; provided, however,
that the Corporation may, in its Certificate of Incorporation, confer the power
to adopt, amend or repeal bylaws upon the directors. The fact that such power
has been so conferred upon the directors shall not divest the stockholders of
the power, nor limit the power to adopt, amend or repeal bylaws.
15
<PAGE>
EXHIBIT 3.5
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MULTEX.COM, INC.
Multex.com, Inc. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation has duly
adopted resolutions setting forth a proposed amendment of the Amended and
Restated Certificate of Incorporation ("Certificate of Incorporation") of said
Corporation, declaring said amendment to be advisable and calling a meeting of
the stockholders of said Corporation for consideration thereof. The resolution
setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this
Corporation be amended by changing Article FOURTH
thereof to include the following paragraph:
"(d) Each two (2) shares of the Corporation's Common Stock, par value
$.01 per share, issued and outstanding on ___________ ____, 1999, shall be
converted and reclassified automatically effective as of ___________ ____, 1999,
into one (1) share of the Corporation's Common Stock, par value $.01 per share,
so that each share of the Corporation's Common Stock issued and outstanding is
hereby converted and reclassified. No fractional interests resulting from such
conversion shall be issued but, in lieu thereof, the Corporation will round the
number of shares of the Corporation's Common Stock issuable to each holder up to
the nearest whole share of Common Stock."
SECOND: That pursuant to the resolution of the Board of Directors, a
written consent approving the proposed amendment to the Certificate of
Incorporation was duly signed by a majority of the stockholders of the
Corporation in accordance with Section 228 of the General Corporation Law of the
State of Delaware.
THIRD: That the foregoing amendment has been duly adopted of the
stockholders in accordance with the provisions of Sections 242 of the General
Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by Isaak Karaev, its President, Chief Executive Officer and Chairman of
the Board of Directors.
By: /s/ Isaak Karaev
-------------------------------------
Isaak Karaev
President and Chief Executive Officer
<PAGE>
EXHIBIT 3.6
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
MULTEX SYSTEMS, INC.
Multex Systems, Inc. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of Delaware, does
hereby certify:
1. The name of the Corporation is Multex Systems, Inc.
2. The Amended and Restated Certificate of Incorporation of the
Corporation is hereby amended by striking out Article FIRST thereof and by
substituting in lieu thereof the following:
"ARTICLE FIRST: The name of the Corporation is Multex.com, Inc. (the
"corporation")."
3. The amendment of the Amended and Restated Certificate of
Incorporation herein certified has been duly adopted in accordance with the
provisions of Sections 228 and 242 of the General Corporation Law of the State
of Delaware.
MULTEX SYSTEMS, INC.
By: /s/ Isaak Karaev
------------------------
Name: Isaak Karaev
Office: President
<PAGE>
Exhibit 4.1
Number
MX __________
COMMON STOCK
[Multex.com Logo]
Multex.com, Inc.
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
Shares
__________
CUSIP 625367 10 7
SEE REVERSE FOR CERTAIN DEFINITIONS
This Certifies that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF THE PAR VALUE OF $.01
EACH OF
Multex.com, Inc.
(hereinafter called the "Corporation"), transferable on the books of the
Corporation by the holder hereof in person or by duly authorized attorney, upon
the surrender of this Certificate properly endorsed. This Certificate and the
shares represented hereby are issued and shall be held subject to all of the
provisions of the Certificate of Incorporation of the Corporation to all of
which the holder hereof by acceptance hereof assents.
This certificate is not valid unless countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
______________________________
Secretary
[SEAL]
______________________________
President, Chief Executive Officer and Chairman of the Board of Directors
Countersigned:
American Stock Transfer & Trust Company
(New York, NY)
BY TRANSFER AGENT
AUTHORIZED OFFICER
<PAGE>
The Corporation will furnish to any shareholder upon request and without charge
a full statement of the designation, relative rights, preferences and
limitations of the shares of each class authorized to be issued and the
designation, relative rights, preferences and limitations of each series of
preferred shares which the Company is authorized to issue so far as the same
have been fixed, and the authority of the Board of Directors of the Company to
designate and fix the relative rights, preferences and limitations of other
series.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of survivorship and not as tenants in
common
UNIF GIFT MIN ACT -- __________ Custodian __________
(Cust) (Minor)
under Uniform Gifts to Minors
Act______________
(State)
Additional abbreviations may also be used though not in the above list.
For value received, ____________________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
____________________
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
shares of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint _______________ Attorney to transfer the said
stock on the books of the within named Company with full power of substitution
in the premises.
Dated ________________
________________________________________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THIS CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
<PAGE>
SIGNATURE(S) GUARANTEED:
By ____________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.
<PAGE>
EXHIBIT 10.2
**** CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION, PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
CONFIDENTIAL
INTERACTIVE SERVICES AGREEMENT
------------------------------
This agreement (the "Agreement"), effective as of March 20, 1998 (the
"Effective Date"), is made and entered into by and between America Online, Inc.
("AOL") a Delaware corporation, with its principal offices at 22000 AOL Way,
Dulles, Virginia 20166, and Multex Systems, Inc. ("Interactive Content
Provider" or "ICP") a Delaware corporation, with its principal offices at 33
Maiden Lane, New York, NY 10038 (each a "Party" and collectively the "Parties").
INTRODUCTION
------------
AOL and ICP each desires that AOL provide access to the ICP Internet Site
(as defined below) through the AOL Network (as defined below), subject to the
terms and conditions set forth in this Agreement. Defined terms used but not
defined in the body of this Agreement or in Exhibit C shall be as defined on
Exhibit B attached hereto.
TERMS
-----
1. DISTRIBUTION; PROGRAMMING
-------------------------
1.1 ANCHOR TENANCY. ICP shall receive anchor tenant distribution within
--------------
the Personal Finance Channel (as defined below) (or any specific
successor thereof) offered on the AOL Service, as follows: AOL shall
(a) continuously and prominently place an agreed-upon ICP logo or
banner (the "Anchor Tenant Button") on the Investment Research main
screen (or any specific successor thereof) which logo or banner shall
link to the Welcome Mat, (b) provide ICP with the keyword "Multex",
which shall link to the Welcome Mat, and (c) list the ICP Internet
Site in AOL's "Directory of Services" and "Find" features. Except to
the extent expressly described herein, the exact form, placement and
nature of the Anchor Tenant Button shall be determined by AOL in its
reasonable editorial discretion, however, no ICP Competitor (as
defined in Exhibit B) will receive more prominent placement,
integration and promotion than ICP for the offering of "brokerage
research" content within the Investment Research Area.
1.2 CONTENT. The ICP Internet Site shall consist of the Content described
-------
on Exhibit A hereto. ICP shall not authorize or permit any third
party to distribute any other Content of ICP through the AOL Network
absent AOL's prior written approval, such approval not to be
unreasonably withheld. The inclusion of any additional Content for
distribution through the AOL Network (including, without
<PAGE>
limitation, any features, functionality or technology) not expressly
described on Exhibit A shall be subject to AOL's prior written
approval, such approval not to be unreasonably withheld.
1.3 LICENSE. ICP hereby grants AOL a worldwide license to use, market,
-------
license, store, distribute, display, communicate, perform, transmit,
and promote the ICP Internet Site and Licensed Content contained
therein (or any portion thereof) through the AOL Network as AOL may
determine in its sole discretion, including without limitation the
right to integrate Content from the ICP Internet Site by linking to
specific areas on the ICP Internet Site and by integrating the Content
into any search mechanism AOL may implement, provided that the
presentation of any such Content on the AOL Network shall conform with
the specifications set forth on Exhibit D.
1.3.1 The Licensed Content will always be of at least equal quality
(in terms of breadth, depth, accuracy, timeliness, etc.) to
that which is available through any ICP Interactive Site or
through any other online or interactive distributor for the
consumer market. ICP will offer its consumer research services
in their entirety (e.g. all standard content, features,
services, customer support, etc.) to AOL Members at a price
that is at least the same, if not less than, the price
available through any ICP Interactive Site or through other ICP
partner sites. AOL Members will always receive a price that is
not greater than the lowest price compared to the subscribers
of any other online or Internet access provider, content
aggregator or online financial services provider, (e.g.
[****]).
1.4 MANAGEMENT. ICP shall, design, create, edit, manage, update, and
----------
maintain the ICP Internet Site. Except as specifically provided for
herein, AOL shall have no obligations of any kind with respect to the
ICP Internet Site. ICP shall be responsible for any hosting or
communication costs associated with the ICP Internet Site (including,
without limitation, the costs associated with (i) any agreed-upon
direct connections between the AOL Network and the ICP Internet Site
or (ii) a mirrored version of the ICP Internet Site). AOL Members
shall not be required to go through a registration process (or any
similar process) in order to access and use the ICP Internet Site.
AOL Members may be required to go through a registration process in
order to purchase the content offered on the ICP Internet Site.
1.5 CARRIAGE FEE. In consideration for anchor tenancy, ICP shall pay AOL
------------
a total of $200,000 during the Term according to the following
schedule:
2
<PAGE>
(a) ICP shall pay AOL $100,000 no later than 30 days after the
Launch Date.
(b) ICP shall pay AOL $100,000 no later than 30 days after the
first anniversary of the Launch Date.
2. PROMOTION
---------
2.1 COOPERATION. Each Party shall cooperate with and reasonably assist
-----------
the other Party in supplying material for marketing and promotional
activities.
2.2 INTERACTIVE SITE. During the Term, ICP shall include within each ICP
----------------
Interactive Site (a) a continuous promotional button/link for AOL
appearing "above the fold" on the page that promotes ICP's
distribution partners, or any successor thereto; (b) a prominent "Try
AOL" feature where users can obtain promotional information about AOL
products and services and, at AOL's option, download or order AOL's
then-current version of client software for the America Online@) brand
service or other AOL products, such as AOL's "Instant Messenger(R)";
(c) prominent promotion for the keywords associated with ICP's
Internet Site and a description of the benefits of accessing ICP
through AOL; and (d) links from the ICP Interactive Site to the
relevant topic areas on AOL's primary site on the World Wide Web (and,
to the extent technologically feasible, the relevant topic areas in
the Online Area).
2.3 OTHER MEDIA. ICP shall use commercially reasonable efforts to
-----------
prominently and regularly promote AOL and the ICP Internet Site's
availability through the AOL Service in publications, programs,
features or other forms of media over which ICP exercises at least
partial editorial control.
2.4 KEYWORD. In any instances when ICP makes consumer-targeted (i.e.
-------
non-institutional) promotional reference to an ICP Interactive Site,
including any listings of the applicable "URL(s)" for such web site(s)
(each a "Web Reference"), ICP shall include a listing of the
applicable AOL "keyword" of comparable prominence to the Web
Reference.
2.5 PREFERRED ACCESS PROVIDER.
-------------------------
2.5.1 When promoting AOL to the consumer market (i.e. non-
institutional), ICP shall promote AOL as a preferred access
provider through which a user can access the ICP Internet Site
(and ICP shall not implement or authorize any other promotions
on behalf of any third parties which are inconsistent with the
foregoing).
3
<PAGE>
2.5.2 With respect to any ICP Interactive Site accessible or
operating through any operating system (including without
limitation any Microsoft system) or through a channel or area
delivered through a "push" product such as the Pointcast
Network or interactive environment such as Microsoft's proposed
"Active Desktop" or Netscape's "Netcaster" (each an "Operating
System"), ICP shall (a) include in any such ICP Interactive
Site a prominent "Try AOL" feature that will cause a user of
such site to link directly to AOL access software within the
Operating System, and (b) use or support any AOL provided
software or feature that directs a user of such ICP Interactive
Site who does not have Internet access to the AOL application
setup program within the Operating System (instead of the
Internet Referral Server or any similar service). ICP's
commitments specified above shall be subject to any standard
policies and restrictions generally proscribed by the operator
of the Operating System.
3. REPORTING
---------
3.1 USAGE AND OTHER DATA. AOL shall make available to ICP a monthly
--------------------
report specifying for the prior month aggregate usage and Impressions
with respect to ICP's presence on the AOL Network. ICP will supply AOL
with monthly reports which reflect total impressions by AOL Members to
the ICP Internet Site during the prior month and the number of and
dollar value associated with the transactions involving AOL Members at
the ICP Internet Site during the period in question. ICP shall also
provide AOL with "click-through" data with respect to the promotions
specified in Section 2.
3.2 PROMOTIONAL COMMITMENTS. ICP shall provide to AOL a monthly report
-----------------------
documenting its compliance with any promotional commitments it has
undertaken pursuant to this Agreement in the form attached as Exhibit
E hereto.
3.3 PAYMENT SCHEDULE. Except as otherwise specified herein, each Party
----------------
agrees to pay the other Party all amounts received and owed to such
other Party as described herein on a monthly basis within forty five
(45) days of the end of the month in which such amounts were collected
by such Party.
4. ADVERTISING AND MERCHANDISING
-----------------------------
4.1 ADVERTISING SALES. AOL owns all right, title and interest in and to
-----------------
the advertising and promotional spaces within the AOL Network
(including, without limitation, advertising and promotional spaces on
any AOL forms or pages
4
<PAGE>
preceding or framing the ICP Internet Site). The specific advertising
inventory within any such AOL forms or pages shall be as reasonably
determined by AOL.
4.2 WELCOME MAT ADVERTISEMENTS/REVENUES. With respect to any Welcome Mat,
-----------------------------------
AOL hereby grants ICP the right to license or sell promotions,
advertisements, links, pointers or similar services or rights in or
through the Welcome Mat ("Welcome Mat Advertisements"), subject to (i)
AOL's approval for each Welcome Mat Advertisement and (ii) the
Advertising Minimum. Until ICP receives $300,000 in Advertising
Revenues and Transaction Revenues ("Total Revenues"), ICP shall pay
AOL ten percent (10%) of the Advertising Revenues generated by ICP or
its agents with respect to Welcome Mat Advertisements. Beginning on
the date on which ICP receives $300,000 in Total Revenues, and
continuing through the remainder of the Term, ICP shall pay AOL twenty
five percent (25%) of the Advertising Revenues generated by ICP or its
agents with respect to Welcome Mat Advertisements.
4.4 ADVERTISING POLICIES. Any Welcome Mat Advertisements sold by ICP or
--------------------
its agents shall be subject to AOL's then standard advertising
policies. In connection with the sale by ICP of any Welcome Mat
Advertisement, ICP shall, in each instance, provide AOL with a
completed standard AOL advertising registration form relating to such
Welcome Mat Advertisement. ICP shall take all reasonable steps
necessary to ensure that any Welcome Mat Advertisement sold by ICP
complies with all applicable federal, state and local laws and
regulations. To the extent ICP sells a Welcome Mat Advertisement as
part of an advertising package including multiple placement locations
(e.g., both Welcome Mat and another area or site), ICP shall allocate
the payment for such advertising package between or among such
locations in an equitable fashion, subject to the Advertising Minimum.
4.5 INTERACTIVE COMMERCE/TRANSACTION REVENUES. Any merchandising on the
-----------------------------------------
ICP Internet Site shall be subject to (i) the then-current
requirements of AOL's merchant certification program, (ii) the
Approved Merchandise Category contained in Exhibit A and (iii) ICP
implementing sufficient procedures to protect the security of all
merchandising on the site (i.e., ICP shall as of the Effective Date
use 40-bit SSL technology and, if requested by AOL, 28-bit SSL). Until
ICP receives $300,000 in Total Revenues, ICP shall pay AOL ten percent
(10%) of the Transaction Revenues generated by ICP or its agents with
respect to Interactive Commerce. Beginning on the date on which ICP
receives $300,000 in Total Revenues and continuing through the
remainder of the Term, ICP shall pay AOL twenty five percent (25%)
5
<PAGE>
of the Transaction Revenues generated by ICP or its agents with
respect to Interactive Commerce.
5. CUSTOMIZED LINKED INTERACTIVE SITE
----------------------------------
5.1 PERFORMANCE.
-----------
5.1.1 GENERALLY. ICP shall optimize the ICP Internet Site for
---------
distribution hereunder according to AOL specifications and
guidelines to ensure that (i) the functionality and features
within the ICP Internet Site are optimized for the client
software then in use by a majority of AOL Members and (ii) the
forms used in the ICP Internet Site are designed and populated
in a manner intended to minimize delays when AOL Members
attempt to access such forms. ICP will ensure that the
performance and availability of the ICP Internet Site (a) is
monitored on a continuous, 24/7 basis and (b) remains
competitive in all material respects with the performance and
availability of other similar sites based on similar form
technology.
5.1.2 SPECIFIC.
--------
(a) ICP shall design the ICP Internet Site to support the
Windows version of the Microsoft Internet Explorer 3.0 browser,
and make commercially reasonable efforts to support all other
AOL browsers listed at:
http://webmaster.info.aol.com/BrowTable.html.
(b) ICP shall configure the server from which it serves the ICP
Internet Site to examine the HTTP User-Agent field in order to
identify the AOL User-Agents listed at:
http://webmaster.info.aol.com/Brow2Text.html (the "AOL User-
Agents").
(c) ICP shall design its web site to support HTTP 1.0 or later
protocol as defined in RFC 1945 (available at
http://ds.internic.net/rfc/rfcl945.text) and to adhere to AOL's
parameters for refreshing cached information listed at
http://webmaster.info.aol.com/CacheText.html.
(d) AOL reserves the right to review the ICP Internet Site to
ensure that such site is compatible with AOL's then-available
client and host software and the AOL Network.
5.2 CUSTOMIZATION. ICP shall customize the ICP Internet Site for AOL
-------------
Members as follows:
6
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(a) create a customized, co-branded home page "welcome mat" for AOL
Members for each area on the ICP Internet Site linked to from the AOL
Network on a continuous basis (each a "Welcome Mat"), which Welcome
Mat(s) shall be subject to AOL approval;
(b) ensure that AOL Members linking to the ICP Internet Site do not
receive advertisements, promotions or links for any entity reasonably
construed to be in competition with AOL (e.g. [****]) or otherwise in
violation of AOL's then-standard advertising policies or
exclusivities; and
(c) provide continuous navigational ability for AOL Members to return
to an agreed-upon point on the AOL service (for which AOL shall supply
the proper address) from ICP Internet Site (e.g., the point on the AOL
service from which the ICP Internet Site is linked), which, at AOL's
option, may be satisfied through the use of a hybrid browser format.
5.3 LINKS ON ICP INTERNET SITE. The Parties will work together on
--------------------------
mutually acceptable links (including links back to AOL) within the ICP
Internet Site in order to create a robust and engaging AOL member
experience. ICP shall take reasonable efforts to insure that AOL
traffic is generally either kept within the ICP Internet Site or
channeled back into the AOL Network. To the extent that AOL notifies
ICP in writing that, in AOL's reasonable judgment, links from such
site cause an excessive amount of AOL traffic to be diverted outside
of such site and the AOL Network in a manner that has a detrimental
effect on the traffic flow of the AOL audience, then ICP shall
immediately reduce the number of links out of such site(s). In the
event that ICP cannot or does not so limit diverted traffic from the
ICP Internet Site, AOL reserves the right to terminate the links from
the AOL Network to the ICP Internet Site at issue and ICP shall only
be responsible to pay a pro-rata share of the carriage fees otherwise
owed by ICP hereunder for the period for which the links are in place.
5.4 HOSTING; CAPACITY. ICP will provide all computer servers, routers,
-----------------
switches and associated hardware in an amount reasonably necessary to
meet anticipated traffic demands, adequate power supply (including
generator back-up) and HVAC, adequate insurance, adequate service
contracts and all necessary equipment racks, floor space, network
cabling and power distribution to support the ICP Internet Site.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
7
<PAGE>
6. TERM AND TERMINATION
--------------------
6.1 TERM. Unless earlier terminated as set forth herein, the initial term
----
of this Agreement shall be two (2) years from the Launch Date (the
"Initial Term"). AOL will have the option to renew this Agreement for
an additional one (1) year period at the expiration of the Initial
Term. Upon termination of this Agreement, AOL shall have the option,
for a period equal to the Initial Term, to promote one or more
"pointers" or links from the AOL Network to the ICP Internet Site.
6.2 TERMINATION FOR BREACH. Either Party may terminate this Agreement at
----------------------
any time in the event of a material breach by the other Party which
remains uncured after sixty (60) days written notice thereof.
6.3 TERMINATION FOR BANKRUPTCY/INSOLVENCY. Either Party may terminate
-------------------------------------
this Agreement immediately following written notice to the other Party
if the other Party (i) ceases to do business in the normal course,
(ii) becomes or is declared insolvent or bankrupt, (iii) is the
subject of any proceeding related to its liquidation or insolvency
(whether voluntary or involuntary) which is not dismissed within
ninety (90) calendar days or (iv) makes an assignment for the benefit
of creditors.
7. TERMS AND CONDITIONS. The legal terms and conditions set forth on Exhibit
--------------------
C attached hereto are hereby made a part of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the Effective Date.
AMERICA ONLINE, INC. MULTEX SYSTEMS, INC.
By: /s/ Barry Schuler By: /s/ P. Callaghan
------------------------------------ ------------------------------
Print Name: Barry Schuler Print Name: P. Callaghan
---------------------------- ----------------------
Title: President - AOL Interactive Svcs. Title: CFO
--------------------------------- ---------------------------
Date: 4/13/98 Date: 3/20/98
---------------------------------- ----------------------------
Tax ID/EIN#: 22-3253344
---------------------
8
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EXHIBIT A
The Licensed Content shall consist of the following:
1. Brokerage Research: ICP will be responsible for the editorial and technical
design, development, maintenance and support of a brokerage research area
("Broker Research Area") for the AOL Investment Research area. ICP will be
responsible for the ongoing development, refinement and integration of new
information resources and features into the Broker Research Area. ICP will
use commercially reasonable efforts to supply AOL with special or one time
content requests, but ICP will not be contractually obligated to provide
more than is provided on the ICP Internet site.
2. Data: ICP will, each day, make available to AOL an updated index file of
its research reports which will be formatted according to reasonable
standards determined by AOL. Implementation of the Broker Research Area
will be a two phased approach: Phase 1: A link to the ICP Internet Site.
Phase 2: ICP will provide AOL with an index file of its reports which will
then be hosted on AOL Servers and integrated in the Investment Research
Search. From that index list there will be links back to the appropriate
reports on the ICP Internet site.
3. Free Area: ICP will co-develop with AOL an online area on the AOL service
that contains a sampling of the content and features of the ICP products
(the "Free Area"). The Free Area will act as an advertisement and
acquisition vehicle for ICP products. ICP will make commercially
reasonable efforts but cannot guarantee that the Free Areas will include
sample brokerage reports because of its contractual obligations to brokers.
4. Branding: Upon entrance into the ICP Internet Site, AOL Members will be
shown a welcome screen customized for AOL Members. ICP will provide
continuous AOL co-branding throughout the ICP Internet site, except for
rare instances where, in ICP's reasonable opinion, this is not technically
feasible.
5. Integration: ICP will work with AOL to integrate appropriate AOL Personal
Finance offerings (other than Brokerage Center links) into the site (e.g.
links to the Personal Finance Channel, the AOL Brokerage Center, etc.).
6. Site Performance: ICP will optimize the ICP Internet site for distribution
over the AOL service according to AOL specifications and guidelines
9
<PAGE>
APPROVED MERCHANDISE CATEGORY
ICP may sell products or services related to Brokerage Research (the "Approved
Merchandise Category"). Any other category of merchandise must be approved by
AOL.
10
<PAGE>
EXHIBIT B -- DEFINITIONS
------------------------
DEFINITIONS. The following definitions shall apply to this Agreement:
- -----------
ADVERTISING REVENUES. Aggregate amounts collected plus the fair market value of
- --------------------
any other compensation received (such as barter advertising) by ICP or ICP's
agents, as the case may be, arising from the license or sale of Welcome Mat
Advertisements, less applicable Advertising Sales Commissions; provided that, in
order to ensure that AOL receives fair value in connection with Welcome Mat
Advertisements, ICP shall be deemed to have received no less than the
Advertising Minimum in instances when ICP makes a Welcome Mat Advertisement
available to a third party at a cost below the Advertising Minimum.
ADVERTISING MINIMUM. (i) Thirty dollars ($30) per thousand entries per
- -------------------
month or (ii) such different rate or rates as AOL may establish based upon
market conditions and publish during the Term.
ADVERTISING SALES COMMISSION. In the case of a Welcome Mat Advertisement,
- ----------------------------
actual amounts paid as commission to third party agencies in connection with
sale of the AOL Advertisement.
AOL SERVICE. The narrow-band U.S. version of the America Online(R) brand
- -----------
service, specifically excluding (a) AOL.com or any other AOL Interactive Site,
(b) the international versions of an America Online service (e.g., AOL Japan),
(c) "Driveway," "AOL NetFind," "AOL Instant Messenger" or any similar
independent product or service which may be offered by, through or with the U.S.
versions of the American Online(R) brand service, (d) any programming or content
area offered by or through the U.S. version of the America Online(R) brand
service over which AOL does not exercise complete operational control
(including, without limitation, Content areas controlled by AOL Studios (e.g.,
Digital Cities), Content areas controlled by other information providers and
member-created Content areas), (e) any yellow pages, white pages, classifieds or
other search, directory or review services or Content offered by or through the
U.S. version of the America Online(R) brand service, (f) any property, feature,
product or service which AOL or its affiliates may acquire subsequent to the
Effective Date and (g) any other version of an America Online service which is
materially different from the narrow-band U.S. version of the America Online
brand service, by virtue or its branding, distribution, functionality, Content
and services, including, without limitation, any co-branded version of the
service and any version distributed through any broadband distribution
platform or through any platform or device other than a desktop personal
computer.
AFFILIATE. Any agent, distributor or franchisee of AOL or an entity in which
- ---------
AOL hold at least a nineteen percent (19%) equity interest.
AOL LOOK AND FEEL. The distinctive and particular elements of graphics, design,
- -----------------
organization, presentation, layout, user interface, navigation, trade dress and
stylistic convention (including the digital implementations thereof) within the
AOL Network and the total appearance and impression substantially formed by the
combination, coordination and interaction of these elements.
AOL MEMBER(S). Authorized users of the AOL Network, including any sub-accounts
- -------------
using the AOL Network under an authorized master account.
AOL NETWORK. (i) Thirty dollars ($30) per thousands entries per month The
- -----------
AOL Service, (ii) AOL's Driveway product, (iii) AOL.com, (iv) any international
versions of the America Online service through which AOL or its affiliates elect
to offer the ICP Internet Site and (v) any other product or service owned,
operated, distributed or authorized to be distributed by or through AOL or its
Affiliates worldwide through which such party elects to offer the ICP Internet
Site (which may include, without limitation, Internet sites promoting AOL
products and services and any "offline" information browsing products of AOL or
its Affiliates).
CONFIDENTIAL INFORMATION. Any information relating to or disclosed in the
- ------------------------
course of the Agreement, which is, or should be reasonably understood to be,
confidential or proprietary to the disclosing Party, including, but not limited
to, the material terms of this Agreement, information about AOL Members,
technical processes and formulas, source codes, product designs, sales, cost and
other unpublished financial information, product and business plans, projections
and marketing data. "Confidential Information" shall not include information
(a) already lawfully known to or independently developed by the receiving Party,
(b) disclosed in published materials, (c) generally known to the public, (d)
lawfully obtained from any third party or (e) required or reasonably advised to
be disclosed by law.
CONTENT. Text, images, video, audio (including, without limitation, music used
- -------
in time relation with text, images, or
11
<PAGE>
video), and other data, products, services, advertisements, promotions, links,
pointers, technology and software.
ICP COMPETITORS. First Call, Investext, IBES, Zacks Investment Research,
- ---------------
Nelsons and any others as may be added by ICP from time to time and provided in
writing to AOL.
ICP INTERACTIVE SITE. Any interactive site or area which is managed, maintained
- --------------------
or owned by ICP or its agents or to which ICP provides and/or licenses
information, content or other materials, including, by way of example and
without limitation (i) an ICP site on the World Wide Web portion of the Internet
or (ii) a channel or area delivered through "push" product such as the
Pointcast Network or interactive environment such as Microsoft's proposed
"Active Desktop."
ICP INTERNET SITE. The Internet site and Content, currently located at
- -----------------
URL:http://www.multex.com which are managed, maintained or owned by ICP or its
agents or to which ICP licenses information, content or other materials.
IMPRESSION. User exposure to the page containing the applicable Promotion, as
- ----------
such exposure may be reasonably determined and measured by AOL in accordance
with its standard methodologies and protocols.
LICENSED CONTENT. All Content provided by ICP or its agents through the ICP
- ----------------
Internet Site for distribution pursuant to this Agreement.
NEW MEMBER. Any person or entity (a) who registers for the AOL Network using
- ----------
ICP's special promotion identifier and (b) who remains active who for three
filling cycles for the use of the AOL Network.
PERSONAL FINANCE CHANNEL. The area on the AOL Service which generally provides
- ------------------------
content relating to personal finance.
PRODUCTS. Any product, good or service which ICP offers, sells or licenses to
- --------
AOL Members through (a) the Welcome Mat, (b) the ICP Internet Site, or (c) any
"offline" means (e.g. toll-free number) for receiving orders related to specific
offers within the Welcome Mat or ICP Internet Site requiring purchasers to
reference a specific promotional identifier or tracking code, including, without
limitation, products sold through surcharged downloads (to the extent permitted
hereunder).
TERM. The period beginning on the Launch Date and ending upon the expiration or
- ----
earlier termination of the Agreement.
TRANSACTION REVENUES. Aggregate amounts paid by AOL Members in connection with
- --------------------
the sale, licensing, distribution or provision of any Products, including, in
each case, handling, shipping, service charges, and excluding, in each case, (a)
amounts collected for sales or use taxes or duties and (b) credits and
chargebacks for returned or cancelled goods or services, but not excluding cost
of goods sold or any similar cost.
EXHIBIT C -- STANDARD LEGAL TERMS AND CONDITIONS
------------------------------------------------
12
<PAGE>
I. AOL NETWORK
CONTENT. ICP represents and warrants that all Content contained within the ICP
- -------
Internet Site (i) does and will conform to AOL's applicable Terms of Service,
the terms of this Agreement and any other standard, written AOL policy, (ii)
does not and will not infringe on or violate any copyright, trademark, U.S.
patent or any other third party right, including without limitation, any music
performance or other music related rights, and (iii) does not and will not
contain any Content which violates any applicable law or regulation
(collectively, the "Rules"). In the event that AOL notifies ICP in writing that
any such Content, as reasonably determined by AOL, does not comply or adhere to
the Rules, then ICP shall use its commercially reasonable efforts to block
access by AOL Members to such Content. In the event that ICP cannot, through
its commercially reasonable efforts, block access by AOL Members to such Content
in question, then ICP shall provide AOL prompt written notice of such fact. AOL
may then, at its option, either (i) restrict access from the AOL Network to the
Content in question using technology available to AOL or (ii) in the event
access cannot be restricted, direct ICP to remove any such Content until such
time as the Content in question is no longer displayed. ICP will cooperate with
AOL's reasonable requests to the extent AOL elects to implement any such access
restrictions.
CHANGES TO AOL SERVICE. AOL reserves the right redesign or modify the
- ----------------------
organization, structure, "look and feel," navigation and other elements of the
AOL Service. If AOL implements changes and modification to the screens
specified in Exhibit A in a manner that substantially modifies the nature of the
placements for ICP described in Section 1.1 in an adverse fashion, AOL will work
with ICP in good faith to provide ICP with a comparable package of placements
which are reasonably satisfactory to ICP.
CONTESTS. ICP shall take all steps necessary to ensure that any contest,
- --------
sweepstakes or similar promotion conducted or promoted through the ICP Internet
Site (a "Contest") complies with all applicable federal, state and local laws
and regulations. ICP shall provide AOL with (i) at least thirty (30) days prior
written notice of any Contest and (ii) upon AOL's request, an opinion from ICP's
counsel confirming that the Contest complies with all applicable federal, state
and local laws and regulations.
AOL LOOK AND FEEL. ICP acknowledges and agrees that AOL shall own all right,
- -----------------
title and interest in and to the AOL Look and Feel. In addition, AOL shall
retain editorial control over the portions of the AOL pages and forms which
frame the ICP Internet Site (the "AOL Frames"). AOL may, at its discretion,
incorporate navigational icons, links and pointers or other Content into such
AOL Frames.
OPERATIONS. AOL shall be entitled to require reasonable changes to the ICP
- ----------
Internet Site to the extent such site will, in AOL's good faith judgment,
adversely affect operations of the AOL Network.
CLASSIFIEDS. ICP shall not implement or promote any classifieds listing
- -----------
features through the Welcome Mat(s) without AOL's prior written approval. Such
approval may be conditioned upon, among other things, ICP's conformance with
any then-applicable service-wide technical or other standards related to online
classifieds.
DUTY TO INFORM. ICP shall promptly inform AOL of any information related to the
- --------------
ICP Internet Site which could reasonably lead to a claim, demand or liability of
or against AOL and/or its Affiliates by any third party.
RESPONSE TO QUESTIONS/COMMENTS; CUSTOMER SERVICE. ICP shall respond promptly
- ------------------------------------------------
and professionally to questions, comments, complaints and other reasonable
requests regarding the ICP Internet Site by AOL Members or on request by AOL,
and shall cooperate and assist AOL in promptly answering the same.
STATEMENTS THROUGH AOL NETWORK. ICP shall not make, publish, or otherwise
- ------------------------------
communicate through the AOL Network any deleterious remarks concerning AOL or
its Affiliates, directors, officers, employees, or agents (including, without
limitation, AOL's business projects, business capabilities, performance of
duties and services, or financial position) which remarks are based on the
relationship established by this Agreement or information exchanged hereunder.
This section is not intended to limit good faith editorial statements made by
ICP based upon publicly available information, or information developed by ICP
independent of its relationship with AOL and its employees and agents.
PRODUCTION WORK. In the event that ICP requests any AOL production assistance,
- ---------------
ICP shall work with AOL to develop detailed production plans for the requested
production assistance (the "Production Plan"). Following receipt of the final
Production Plan, AOL shall notify ICP of (i) AOL's availability to perform the
requested production work, (ii) the proposed fee or fee structure for the
requested production and maintenance work and (iii) the estimated development
schedule for such work. To
13
<PAGE>
the extent the Parties reach agreement regarding implementation of agreed-upon
Production Plan, such agreement shall be reflected in a separate work order
signed by the Parties. To the extent ICP elects to retain a third party
provider to perform any such production work, work produced by such third party
provider must generally conform to AOL's production Standards & Practices (a
copy of which will be supplied by AOL to ICP upon request). The specific
production resources which AOL allocates to any production work to be performed
on behalf of ICP shall be as determined by AOL in its sole discretion.
TRAINING AND SUPPORT. AOL shall make available to ICP standard AOL training and
- --------------------
support programs necessary to produce any AOL areas hereunder. ICP can select
its training and support program from the options then offered by AOL. ICP
shall be responsible to pay the fees associated with its chosen training and
support package. In addition, ICP will pay travel and lodging costs associated
with its participation in any AOL training programs (including AOL's travel and
lodging costs when training is conducted at ICP's offices).
LAUNCH DATE. In the event that any terms contained herein relate to or depend
- -----------
on the commercial launch date of the online area or other property contemplated
by this Agreement (the "Launch Date"), then it is the intention of the Parties
to record such Launch Date in a written instrument signed by both Parties
promptly following such Launch Date; provided that, in the absence of such a
written instrument, the Launch Date shall be as reasonably determined by AOL
based on the information available to AOL.
II. TRADEMARKS
TRADEMARK LICENSE. In designing and implementing any marketing, advertising,
- -----------------
press releases or other promotional materials related to this Agreement and/or
referencing the other Party and/or its trade names, trademarks and service marks
(the "Promotional Materials") and subject to the other provisions contained
herein, ICP shall be entitled to use the following trade names, trademarks and
service marks of AOL: the "America Online(R)" brand service, "AOL"
service/software and AOL's triangle logo; and AOL and its Affiliates shall be
entitled to use the trade names, trademarks and service marks of ICP
(collectively, together with the AOL marks listed above, the "Marks"); provided
that each Party: (i) does not create a unitary composite mark involving a Mark
of the other Party without the prior written approval of such other Party and
(ii) displays symbols and notices clearly and sufficiently indicating the
trademark status and ownership of the other Party's Marks in accordance with
applicable trademark law and practice.
RIGHTS. Each Party acknowledges that its utilization of the other Party's Marks
- ------
will not create in it, nor will it represent it has, any right, title or
interest in or to such Marks other than the licenses expressly granted herein.
Each Party agrees not to do anything contesting or impairing the trademark
rights of the other Party.
QUALITY STANDARDS. Each Party agrees that the nature and quality of its
- -----------------
products and services supplied in connection with the other Party's marks shall
conform to quality standards communicated in writing by the other Party for use
of its trademarks. Each Party agrees to supply the other Party, upon request,
with a reasonable number of samples of any Materials publicly disseminated by
such party which utilize the other Party's Marks. Each Party shall comply with
all applicable laws, regulations and customs and obtain any required government
approvals pertaining to use of the other Party's Marks.
PROMOTIONAL MATERIALS/PRESS RELEASES. Each Party will submit to the other
- ------------------------------------
Party, for its prior written approval, which shall not be unreasonably withheld
or delayed, any Promotional Materials; provided, however, that after initial
public announcement of the business relationship between the Parties in
accordance with the approval and other requirements contained herein, either
Party's subsequent factual reference to the existence of a business relationship
between AOL and ICP, including, without limitation, the availability of the
Licensed Content through the AOL Network, or use of screen shots relating to the
distribution under this Agreement (so long as the AOL Network is clearly
identified as the source of such screen shots) for promotional purposes shall
not require the approval of the other Party. Once approved, the Promotional
Materials may be used by a Party and its affiliates for the purpose of promoting
the distribution of the Licensed Content through the AOL Network and reused for
such purpose until such approval is withdrawn with reasonable prior notice. In
the event such approval is withdrawn, existing inventories of Promotional
Materials may be depleted.
INFRINGEMENT PROCEEDINGS. Each Party agrees to promptly notify the other Party
- ------------------------
of any unauthorized use of the other Party's Marks of which it has actual
knowledge. Each Party shall have the sole right and discretion to bring
proceedings alleging infringement of its Marks or unfair competition related
thereto; provided, however, that each Party agrees to provide the other Party,
at such other Party's expense, with its reasonable cooperation and
14
<PAGE>
assistance with respect to any such infringement proceedings.
III. REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants to the other Party that: (i) such Party has
the full corporate right, power and authority to enter into this Agreement, to
grant the licenses granted hereunder and to perform the acts required of it
hereunder; (ii) the execution of this Agreement by such Party, and the
performance by such Party of its obligations and duties hereunder, do not and
will not violate any agreement to which such Party is a party or by which it is
otherwise bound; (iii) when executed and delivered by such Party, this Agreement
will constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms; (iv) such Party's
Promotional Materials will neither infringe on any copyright, U.S. patent or any
other third party right nor violate any applicable law or regulation and (v)
such Party acknowledges that the other Party makes no representations,
warranties or agreements related to the subject matter hereof which are not
expressly provided for in this Agreement.
IV. CONFIDENTIALITY
Each Party acknowledges that Confidential Information may be disclosed to the
other Party during the course of this Agreement. Each party agrees that if will
take reasonable steps, at least substantially equivalent to the steps it takes
to protect its own proprietary information, during the term of this Agreement,
and for a period of three years following expiration or termination of this
Agreement, to prevent the duplication or disclosure of Confidential Information
of the other Party, other than by or to its employees or agents who must have
access to such Confidential Information to perform such Party's obligations
hereunder, who will each agree to comply with this section. Notwithstanding the
foregoing, either Party may issue a press release or other disclosure containing
Confidential Information without the consent of the other Party, to the extent
such disclosure is required by law, rule, regulation or government or court
order. In such event, the disclosing Party will provide at least five (5)
business days prior written notice of such proposed disclosure to the other
Party or lesser notice if reasonable under the circumstances. Further, in the
event such disclosure is required of either Party under the laws, rules or
regulations of the Securities and Exchange Commission or any other applicable
governing body, such Party will (i) redact mutually agreed-upon portions of this
Agreement to the fullest extent permitted under applicable laws, rules and
regulations and (ii) submit a request to such governing body that such portions
and other provisions of this Agreement receive confidential treatment under the
laws, rules and regulations of the Securities and Exchange Commission or
otherwise be held in the strictest confidence to the fullest extent permitted
under the laws, rules or regulations of any other applicable governing body.
V. RELATIONSHIP WITH AOL MEMBERS
SOLICITATION OF SUBSCRIBERS. During the Term and for the two-year period
- ---------------------------
following the expiration or termination of this Agreement, neither ICP nor its
agents will use the AOL Network to (i) solicit or participate in the
solicitation of AOL Members when that solicitation is for the benefit of any
entity (including ICP) which could reasonably be construed to be or become in
competition with AOL or (ii) promote any services which could reasonably be
construed to be in competition with services available through AOL including,
but not limited to, services available through the Internet (e.g., the ICP
Internet Site). ICP may not send any AOL Member unsolicited e-mail
communications on or through the AOL Network without a "Prior Business
Relationship." For purposes of this Agreement, a "Prior Business Relationship"
shall mean that the AOL Member has either (i) purchased Products from ICP
through the AOL Network or (ii) voluntarily provided information to ICP through
a contest, registration, or other communication, which included clear and
conspicuous notice to the AOL Member that the information provided by the AOL
Member could result in an e-mail being sent to the AOL Member by ICP or its
agents. In any commercial e-mail communications to AOL Members which are
otherwise permitted hereunder, ICP shall provide the recipient with a prominent
and easy means to "opt-out" of receiving any future commercial e-mail
communications from ICP.
COLLECTION OF MEMBER INFORMATION. ICP is prohibited from collecting AOL Member
- --------------------------------
screennames from public or private areas of the AOL Network, except as
specifically provided below. ICP shall ensure that any survey, questionnaire or
other means of collecting Member Information including, without limitation,
requests directed to specific AOL Member screennames and automated methods of
collecting screennames (an "Information Request") complies with (i) all
applicable laws and regulations, (ii) AOL's applicable Terms of Service, and
(iii) any privacy policies which have been issued by AOL in writing during the
Term (the "AOL Privacy Policies"). Each Information Request shall clearly and
conspicuously specify to the AOL Members at issue the purpose for which Member
Information collected through the
15
<PAGE>
Information Request shall be used (the "Specified Purpose").
USE OF MEMBER INFORMATION. ICP shall restrict use of the Member Information
- -------------------------
collected through an Information Request to the Specified Purpose. In no event
shall ICP (i) provide AOL Member names, screennames, addresses or other
identifying information ("Member Information") to any third party (except to the
extent specifically (a) permitted under the AOL Privacy Policies or (b)
authorized by the AOL Members in question) or (ii) otherwise use any Member
Information in contravention of the above section regarding "Solicitation of
Members."
VI. TREATMENT OF CLAIMS
LIABILITY. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE TO THE OTHER
- ---------
PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY DAMAGES
(EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES),
ARISING FROM BREACH OF THIS AGREEMENT, THE USE OF OR INABILITY TO USE THE AOL
NETWORK OR ANY OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT LIMITED TO,
LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS (COLLECTIVELY,
"DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY SHALL REMAIN LIABLE TO THE OTHER
PARTY TO THE EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED BY A THIRD PARTY AND ARE
SUBJECT TO INDEMNIFICATION BELOW, EXCEPT AS PROVIDED BELOW IN THE "INDEMNITY"
SECTION, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR MORE THAN THE
AGGREGATE AMOUNTS PAYABLE HEREUNDER IN THE YEAR IN WHICH LIABILITY ACCRUED;
PROVIDED THAT EACH PARTY SHALL REMAIN LIABLE FOR THE AGGREGATE AMOUNT OF ANY
PAYMENT OBLIGATIONS OWED TO THE OTHER PARTY UNDER THE PROVISIONS OF THIS
AGREEMENT.
NO ADDITIONAL WARRANTIES. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
- ------------------------
NEITHER PARTY MAKES, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS, ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE AOL NETWORK, OR
ANY AOL PUBLISHING TOOLS, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES ARISING FROM COURSE OF
DEALING OR COURSE OF PERFORMANCE, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, AOL SPECIFICALLY DISCLAIMS ANY WARRANTY REGARDING THE PROFITABILITY
OF AOL NETWORK OR THE ICP INTERNET SITE.
INDEMNITY. Each Party will defend, indemnify, save and hold harmless the other
- ---------
Party and the officers, directors, agents, affiliates, distributors, franchisees
and employees of the other Party from any and all third party claims, demands,
liabilities, costs or expenses, including reasonable outside and in-house
attorney's fees ("Liabilities"), resulting from the indemnifying Party's
material breach of any obligation, duty, representation or warranty of this
Agreement, except where Liabilities result from the gross negligence or knowing
and willful misconduct of the other Party.
CLAIMS. Each Party agrees to (i) promptly notify the other Party in writing of
- ------
any indemnifiable claim and give the other Party the opportunity to defend or
negotiate a settlement of any such claim at such other Party's expense and (ii)
cooperate fully with the other Party, at that other Party's expense, in
defending or settling such claim. AOL reserves the right to assume the
exclusive defense and control of any matter otherwise subject to indemnification
by ICP hereunder.
ACKNOWLEDGMENT. AOL AND ICP EACH ACKNOWLEDGES THAT THE PROVISIONS OF THIS
- --------------
AGREEMENT WERE NEGOTIATED TO REFLECT AN INFORMED, VOLUNTARY ALLOCATION BETWEEN
THEM OF ALL RISKS (BOTH KNOWN AND UNKNOWN) ASSOCIATED WITH THE TRANSACTIONS
CONTEMPLATED HEREUNDER. THE LIMITATIONS AND DISCLAIMERS RELATED TO WARRANTIES
AND LIABILITY CONTAINED IN THIS AGREEMENT ARE INTENDED TO LIMIT THE
CIRCUMSTANCES AN EXTENT OF LIABILITY. THE PROVISIONS OF THIS SECTION VI SHALL
BE ENFORCEABLE INDEPENDENT OF AND SEVERABLE FROM ANY OTHER ENFORCEABLE OR
UNENFORCEABLE PROVISION OF THIS AGREEMENT.
VII. MISCELLANEOUS
AUDITING RIGHTS. Each Party shall maintain complete, clear and accurate records
- ---------------
of all expenses, revenues, fees, transactions and related documentation
(including agreements) in connection with the performance of this Agreement
("Records"). All such Records shall be maintained for a minimum of five (5)
years following
16
<PAGE>
termination of this Agreement. For the sole purpose of ensuring compliance with
this Agreement, each Party shall have the right, at its expense, to direct an
independent certified public accounting firm subject to strict confidentiality
restrictions to conduct a reasonable and necessary copying and inspection of
portions of the Records of the other Party which are directly related to amounts
payable to the Party requesting the audit pursuant to this Agreement. Any such
audit may be conducted after twenty (20) business days prior written notice,
subject to the following. Such audits shall not be made more frequently than
once every twelve months. No such audit of AOL shall occur during the period
beginning on June 1 and ending October 1. In lieu of providing access to its
Records as described above, a Party shall be entitled to provide the other Party
with a report from an independent certified public accounting firm confirming
the information to be derived from such Records.
EXCUSE. Neither Party shall be liable for, or be considered in breach of or
- ------
default under this Agreement on account of, any delay or failure to perform as
required by this Agreement as a result of any causes or conditions which are
beyond such Party's reasonable control and which such Party is unable to
overcome by the exercise of reasonable diligence.
INDEPENDENT CONTRACTORS. The Parties to this Agreement are independent
- -----------------------
contractors. Neither Party is an agent, representative or partner of the other
Party. Neither Party shall have any right, power or authority to enter into any
agreement for or on behalf of, or incur any obligation or liability of, or to
otherwise bind, the other Party. This Agreement shall not be interpreted or
construed to create an association, agency, joint venture or partnership between
the Parties or to impose any liability attributable to such a relationship upon
either Party.
NOTICE. Any notice, approval, request, authorization, direction or other
- ------
communication under this Agreement will be given in writing and will be deemed
to have been delivered and given for all purposes (i) on the delivery date if
delivered by electronic mail on the AOL Network (to screenname "AOLNotice" in
the case of AOL) or by confirmed facsimile; (ii) on the delivery date if
delivered personally to the Party to whom the same is directed; (iii) one
business day after deposit with a commercial overnight carrier, with written
verification of receipt; or (iv) five business days after the mailing date,
whether or not actually received, if sent by U.S. mail, return receipt
requested, postage and charges prepaid, or any other means of rapid mail
delivery for which a receipt is available. In the case of AOL, such notice will
be provided to both the Senior Vice President for Business Affairs (fax no.
703-265-1206) and the Deputy General Counsel (fax no. 703-265-1105), each at the
address of AOL set forth in the first paragraph of this Agreement. In the case
of ICP, except as otherwise specified herein, the notice address shall be the
address for ICP set forth in the first paragraph of this Agreement, with the
other relevant notice information, including the recipient for notice and, as
applicable, such recipient's fax number or AOL e-mail address, to be as
reasonably identified by AOL.
NO WAIVER. The failure of either Party to insist upon or enforce strict
- ---------
performance by the other Party of any provision of this Agreement or to exercise
any right under this Agreement shall not be construed as a waiver or
relinquishment to any extent of such Party's right to assert or rely upon any
such provision or right in that or any other instance; rather, the same shall be
and remain in full force and effect.
RETURN OF INFORMATION. Upon the expiration or termination of this Agreement,
- ---------------------
each Party shall, upon the written request of the other Party, return or destroy
(at the option of the Party receiving the request) all confidential information,
documents, manuals and other materials specified the other Party.
SURVIVAL. Sections IV, V, VI, and VII of this Exhibit C shall survive the
- --------
completion, expiration, termination or cancellation of this Agreement.
ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and supersedes
- ----------------
any and all prior agreements of the Parties with respect to the transactions set
forth herein. Neither Party shall be bound by, and each Party specifically
objects to, any term, condition or other provision which is different from or in
addition to the provisions of this Agreement (whether or not it would materially
alter this Agreement) and which is proffered by the other Party in any
correspondence or other document, unless that Party to be bound thereby
specifically agrees to such provision in writing.
AMENDMENT. No change, amendment or modification of any provision of this
- ---------
Agreement shall be valid unless set forth in a written instrument signed by the
party subject to enforcement of such amendment.
FURTHER ASSURANCES. Each Party shall take such action (including, but not
- ------------------
limited to, the execution, acknowledgment and delivery of documents) as may
reasonably be requested by any other Party for the
17
<PAGE>
implementation or continuing performance of this Agreement.
CONSTRUCTION; SEVERABILITY. In the event that any provision of this Agreement
- --------------------------
conflicts with the law under which this Agreement is to be construed or if any
such provision is held invalid by a court with jurisdiction over the Parties to
this Agreement, (i) such provision shall be deemed to be restated to reflect as
nearly as possible the original intentions of the Parties in accordance with
applicable law, and (ii) the remaining terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect.
REMEDIES. Except where otherwise specified, the rights and remedies granted to
- --------
a Party under this Agreement are cumulative and in addition to, and not in lieu
of, any other rights or remedies which the Party may possess at law or in
equity.
APPLICABLE LAW; JURISDICTION. This Agreement shall be interpreted, construed
- ----------------------------
and enforced in all respects in accordance with the laws of the Commonwealth of
Virginia except for its conflicts of laws principles. Each Party irrevocably
consents to the exclusive jurisdiction of the courts of the Commonwealth of
Virginia and the federal courts situated in the Commonwealth of Virginia, in
connection with any action to enforce the provisions of this Agreement, to
recover damages or other relief for breach or default under this Agreement, or
otherwise arising under or by reason of this Agreement.
EXPORT CONTROLS. Both parties shall adhere to all applicable laws, regulations
- ---------------
and rules relating to the export of technical data and shall not export or re-
export any technical data, any products received from the other Party or the
direct product of such technical data to any proscribed country listed in such
applicable laws, regulations and rules unless properly authorized.
HEADINGS. The captions and headings used in this Agreement are inserted for
- --------
convenience only and shall not affect the meaning or interpretation of this
Agreement.
COUNTERPARTS. This Agreement may be executed in counterparts, each of which
- ------------
shall be deemed an original and all of which together shall constitute one and
the same document.
18
<PAGE>
EXHIBIT D
---------
FORMAT FOR ICP'S PRESENCE ON THE AOL NETWORK
. Any ICP trademark or logo
. Any headline or picture from ICP content
. Any teaser, icon, link to ICP Internet Site or Welcome Mat
. Any other Content which originates from, describes or promotes ICP or ICP's
Content
19
<PAGE>
EXHIBIT E
---------
CERTIFICATION OF COMPLIANCE WITH COMMITMENTS
REGARDING PROMOTIONS
Pursuant to Section 3 of the Interactive Services Agreement between Multex, Inc.
("ICP") and America Online, Inc. ("AOL") dated as of ______________, 1998 (the
"Agreement"), the following report is delivered to AOL for the month ending
_____________ (the "Month"):
I. PROMOTIONAL COMMITMENTS
ICP hereby certifies to AOL that ICP completed the following promotional
commitments during the Month:
<TABLE>
<CAPTION>
TYPE OF PROMOTION DATE(S) OF PROMOTION DURATION/CIRCULATION RELEVANT
OF PROMOTION CONTRACT
SECTION
<C> <S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
1.
- ----------------------------------------------------------------------------------------
2.
- ----------------------------------------------------------------------------------------
3.
</TABLE>
IN WITNESS WHEREOF, this Certificate has been executed this _____ day of
___________, 199___.
_____________________________________
By: _________________________________
Print Name: _________________________
Title: ______________________________
Date: _______________________________
20
<PAGE>
EXHIBIT 10.3
[MULTEX SYSTEMS, INC. LETTERHEAD]
**** CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURUSANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
BLOOMBERG - MULTEX DISTRIBUTION
AND JOINT SOURCING AGREEMENT
BLOOMBERG L.P.
499 Park Avenue
New York, NY 10022
Telephone: (212) 318-2000
Facsimile: (212) 980-4585
This Agreement (the "Agreement") is dated as of June 4, 1996 by and between
Bloomberg L.P., a Delaware limited partnership) ("BLP"), and Multex Systems,
Inc. ("Multex").
WHEREAS, BLP owns and operates a worldwide electronic network ("THE BLOOMBERG
terminal"*) consisting of software, data and equipment (the "Equipment") for
the electronic delivery of financial market information and analytic services;
WHEREAS, Multex collects data from brokerage firms and third parties
("Contributors") such as analysis, research and commentary, relating to the
financial markets, including, if any, but not limited to, if any, debt, equity,
option, credit, commodities and foreign exchange data, and certain related data
including, but not limited to, if any, earnings estimates, dividend estimates,
buy/sell recommendations, recommended lists, intraday research bulletins, and
the like ("Reports");
WHEREAS, Multex desires to obtain the opportunity to distribute the service
described on Schedule A hereto (the "Service") to only certain users of THE
BLOOMBERG terminal (the "Users") and BLP desires to make the Bloomberg-Multex
Research Service available to such Users, hereinafter described as "the Research
Service" as described in Schedule A.
WHEREAS, BLP and Multex desire to cooperate to develop products for consumer
online services, Internet delivery and "pay-per-view" delivery;
NOW, THEREFORE, in consideration of the mutual promises and agreements contained
herein, it is hereby agreed as follows:
- ---------------------
* BLOOMBERG, THE BLOOMBERG terminal, Bloomberg L.P., and BLOOMBERG FINANCIAL
MARKETS are trademarks, trade names and service marks of BLP.
<PAGE>
1. DISTRIBUTION OF MULTEX SERVICE.
(a) Subject to the terms and conditions of this Agreement, Multex hereby grants
to BLP, and BLP hereby accepts, a nonexclusive, worldwide license to market
and deliver the Service to Users electronically by means of THE BLOOMBERG
terminal. Multex represents that it has all such rights in, and licenses
to, the information contained in the Service as may be required in order to
permit it to grant to BLP the license granted hereby and to transmit to the
Service to BLP and Users.
(b) Multex represents and warrants to BLP the following: (i) the Service to be
delivered by Multex by means of THE BLOOMBERG terminal will include, at a
minimum, all Reports delivered by Multex to its clients by other "third
party" electronic distribution systems under similar conditions and
circumstances and subject to any limitation contained in any agreement
Multex has with its Contributors; (ii) Multex has obtained the right from
its Contributors to the Reports and has full power, right and authority to
obtain, transmit, and distribute the Service to BLP and its Users subject to
the applicable Contributor agreement with Multex, and (iii) when supplied by
Multex to BLP and its Users the Service and the Reports shall be no less
correct or complete and no less current than similar Reports distributed by
Multex to other Third Party Distributors under the same or similar
conditions or circumstances.
(c) Multex agrees to make available the Service to BLP for transmission to Users
by THE BLOOMBERG terminal no later than the time that the Service is made
available to any other "third party" electronic distribution system.
(d) Multex shall use reasonable commercial efforts to (i) keep the Service
current and complete, (ii) notify BLP promptly of any errors or omissions,
and (iii) if the error or omission is the fault of Multex, correct any such
errors or omissions as promptly as possible under the circumstances.
(e) Each User shall pay (i) to BLP the monthly rental charge such User is
required to pay with respect to THE BLOOMBERG terminal and (ii) any fees
imposed by Multex for access to the Service. Multex agrees that the fees
charged to Users for access to the Service via THE BLOOMBERG terminal will
be no greater than the fees charged for the Service on other "third party"
platforms for the same or similar Service under the same or similar
conditions and to parties similarly situated. Multex agrees that the fee
charged per terminal will remain under [****] for the first [****] years of
this Agreement and future increases will be by mutual consent.
(f) Multex agrees to permit BLP to display the Service without charge over all
BLP internal terminals worldwide for marketing, demonstration and data
quality control purposes. Multex also agree to permit BLP to reference the
Service and Reports, and report on the Service and Reports as part of its
print, broadcasting, and multimedia news gathering
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
<PAGE>
operations, subject to Contributor approval. BLP agrees to attribute
information derived from the Service to Multex, as appropriate.
(g) Multex agrees to supply certain data to the Service without charge to BLP or
Users, including, but not limited to; (i) the headlines of its broker-dealer
Contributor reports (ii) earnings estimates and (iii) broker dealer morning
notes, subject to Contributor approval.
(h) Multex agrees to integrate reports, including earnings estimates, morning
notes, and published reports into the "Bloomberg Research" function, subject
to Contributor approval. Subscription based Contributor Reports, where an
additional subscription fee is charged, i.e. Third Parties, will be
displayed on separate Multex menus.
2. CO-MARKETING AND JOINT SOURCING.
(a) BLP agrees to assist Multex in sourcing Strategic Contributors and
Additional Contributors to the Service. Multex agrees to implement
[****] Strategic Contributors selected by BLP and Multex at no charge. BLP
and Multex agree to meet once per quarter to define, establish and review
the target list of Strategic Contributors. Strategic Contributors and
Additional Contributors pay all communications costs to deliver Reports to
Multex.
(b) Strategic Contributors will be issued a letter jointly written by BLP and
Multex on behalf of Multex soliciting their participation in the "Service".
(c) Existing Contributors to Multex will be issued a letter jointly written by
BLP and Multex soliciting their continued participation in the "Service."
BLP agrees to not directly or indirectly solicit any existing Contributors
to Multex, except as provided in 2(k).
(d) Multex agrees to implement and maintain Additional Contributors at its cost,
which will cover hardware, software and monthly service charges. In the
event Multex declines or refuses to incur the cost or to implement and
maintain the Additional Contributors, BLP agrees to undertake these charges,
and in such event, BLP will have the right to restrict the distribution of
the Contributor's information to other third party platforms that are
competitive to BLP (e.g., [****] via Multex. Notwithstanding such
restrictions, Multex has the right to distribute all data to its own
services, i.e., Multex Publisher, MultexNet, without exception. In the event
this Agreement is terminated for any reason, ownership of the equipment
installed at the Additional Contributor's location will revert to BLP.
(e) When applicable, BLP and Multex agree to conduct joint sourcing meetings
with prospective Strategic Contributors and Additional Contributors.
(f) Contributors will not be charged to see their own Reports.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
3
<PAGE>
(g) Multex and BLP may mention this Joint Sourcing agreement in press releases,
customer and prospect correspondence and marketing literature. Multex and
BLP agree to circulate a positioning statement of this Joint Sourcing
Agreement to all internal parties involved within 30 days of execution of
this Agreement.
(h) The Service will be branded the "Bloomberg-Multex Research Service". BLP
acknowledges that Multex is the sole and exclusive owner of the Multex name
and copyright. BLP is hereby licensed to use the Multex name in order to
market the "Bloomberg-Multex Research Service." When Multex distributes
Additional Contributor Reports on other platforms with BLP's permission per
Section 2(d), the Reports will be attributed as coming from the "Bloomberg-
Multex Research Service." Both parties shall not use any of the other
party's trademarks, trade names, or service marks in any manner which
creates the impression that such names and marks belong to or are identified
with the other party, and each acknowledges that it has no ownership rights
in and to any of the names and marks of the other.
(i) BLP will retain exclusive distribution rights to all Earnings Estimate
information, including the right to approve distribution to other third
party platforms that are competitive to BLP (e.g., Reuters, Telerate,
Bridge, ILX, Quotron) via Multex. Where Contributors are transmitting
Morning Notes and Earnings Estimates as well as Published Research, the
Morning Notes and Earnings Estimates will take priority over Published
Research in implementation.
(j) Multex retains the exclusive distribution and redistribution rights to all
Morning Notes and Published Research. BLP cannot provide the Reports either
directly or indirectly to a competitor of Multex.
(k) BLP has the right, at any point in time, to take Contributor Reports
directly from any source that directly communicates with either party that
it wishes to bypass Multex.
(l) BLP may at any time enter into Distribution and Joint Sourcing Agreements
with other entities, including direct competitors to Multex provided however
that for a period of [****] year from the signing date of this Agreement,
BLP may not enter into any type of Agreement with [****], unless [****]
agrees to waive all broker penalties and its exclusive rights to broker
research for all [****] sources, of Morning Notes and Research Direct
Reports.
(m) Notwithstanding anything herein to the contrary set forth in Paragraph 2(d)
and 2(i) Multex shall have the unqualified right to distribute any data
restricted under Paragraph 2(d) and 2(i) via its own services, i.e., Multex
Publisher and MultexNet.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
4
<PAGE>
3. FEES.
(a) Multex agrees to pay BLP within 30 days of collection of Service Fees, a
Distribution Fee based on [****] derived from the distribution of the
Service over THE BLOOMBERG terminal. This percentage is outlined in Schedule
B.
(b) In the event that BLP collects, on Multex's behalf, subscriber fees for the
Service, then the per annum Distribution Fee may be retained by BLP from
such fees and the balance remitted to Multex.
4. COOPERATIVE ADVERTISING CREDITS.
(a) BLP will provide [****] per month in Bloomberg Magazine promoting the
"Bloomberg-Multex Research Service" at no cost to Multex.
(b) Multex shall have the option of applying up to [****] of the Distribution
Fee towards the purchase of advertising in any Bloomberg media, including
Bloomberg Magazine in accordance with BLP's published rates.
(c) Multex shall have the option of applying the first [****] of the per annum
BLP Distribution Fee towards mutually agreed joint marketing activities. Any
unused portion of the aforesaid funds shall be carried over to a subsequent
year, provided however, if the unused amount exceeds [****], the excess over
[****] or any amount not spent shall be remitted to BLP.
5. REPORTS AND RECORDKEEPING.
(a) Within 15 days after the end of each month. BLP shall deliver to Multex an
entitlement and usage report of users of the service and Multex shall
deliver to BLP a monthly statement setting forth the revenues derived from
the distribution of the Service over THE BLOOMBERG terminal and the
calculation of the Distribution Fee, if any.
(b) Once per calendar year, upon written request and BLP's expense, Multex will
allow BLP and/or its authorized representatives access to those Multex's
premises, systems, records and other information solely related to the
service as may be needed for verification of the Distribution Fee
calculation.
(c) Bloomberg acknowledges that Multex will have the exclusive entitlement
rights using The Bloomberg FPV function. No other party will have or
exercise the authority to make any Multex entitlement change without the
expressed written consent of Multex Systems, Inc.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
5
<PAGE>
6. BLOOMBERG TERMINALS.
(a) During the term of this Agreement, BLP will provide Multex with [****] free
Bloomberg terminals, pursuant to Multex signing a Bloomberg Agreement and
Schedule of Services. Multex agrees to pay all line and installation
charges. Multex will pay full market rate for any additional Bloomberg
terminals.
7. OPTION TO INVEST IN MULTEX.
(a) Multex shall grant BLP a 6 month option to purchase 1,666,667 shares of
Multex common stock at $1.50 per share.
(b) After the expiration of the first option, Multex shall grant BLP an
additional 6 month option to purchase 1,666,667 shares of Multex common
stock at $2.00 per share.
8. TERM AND TERMINATION.
(a) This Agreement shall be effective for five years from the date it is
accepted by BLP and shall be automatically renewed for successive five-year
periods unless BLP elects not to renew by giving not less than 180 day's
prior written notice to Multex. Multex may terminate this Agreement if BLP
provides the Reports either directly or indirectly to a competitor of
Multex, or enters a more favorable Joint Sourcing arrangement with
[****], or fails to pay the fees due to Multex.
(b) NOTWITHSTANDING SUBPARAGRAPH (a) ABOVE, BLP SHALL HAVE THE RIGHT AT ANY
TIME, IN ITS SOLE DISCRETION, TO DISCONTINUE DISTRIBUTION OF THE SERVICE TO
USERS BY MEANS OF THE BLOOMBERG TERMINAL IN THE EVENT THE SERVICE CONTAINS
MATERIAL WHICH DOES NOT COMPLY WITH APPLICABLE LAWS, RULES OR REGULATIONS OR
BLP'S REASONABLE POLICIES AND PRACTICES.
(c) Notwithstanding Sections 3(a) and 3(b), BLP may terminate this Agreement
with immediate effect by notice in writing on any of the following events
(i) if Multex enters into a voluntary or involuntary bankruptcy,
receivership or makes an assignment for the benefit its creditors, (ii) if
BLP is in a material breach of this or (iii) if Multex fails to provide the
Service to BLP (except items (ii) and (iii) shall not apply in the case of
force majeure or for reasons beyond the control of either party) and such
breach is not cured within 90 days of written notice thereof (provided,
however, if the failure cannot be reasonably corrected within 90 days and
the defaulting party has commenced performance during such ninety (90) day
period and proceeds to cure the default, the time curing such default shall
be extended for such period as may be necessary to cure
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
6
<PAGE>
the default. Except in the case of monies due, or fees required to be paid
hereunder, the notwithstanding above such monies or fees shall be paid
within thirty (30) days after Notice.
In the event of termination under 3(b) or 3(c), Multex will make available a
license to the Multex technology, software, hardware, Contributor lists and
contacts, 180 days of assistance, and other materials as may be necessary
for BLP to continue operation of the Service directly without Multex's
participation.
9. ASSIGNABILITY.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. Neither the Multex nor
BLP shall assign this Agreement or any right or obligation hereunder without
the prior written consent of the other. Furthermore, this Agreement shall
inure to the benefit of and be binding on any successor to all or
substantially all of the business and or properties of Multex relating to
the subject matter of this Agreement, whether by merger, sale of assets or
other agreements or operations of law.
10. LIMITATIONS OF LIABILITIES AND INDEMNIFICATION.
BLP, its officers, employees, suppliers, and third party agents shall have
no responsibility or liability, contingent or otherwise, for any injury or
damages, whether caused by the negligence of BLP, its employees,
subcontractors, agents, equipment vendors or otherwise, arising in
connections with the use or transmission of Service pursuant to this
Agreement and shall not be liable for any lost profits, punitive, incidental
or consequential damages or any claim against Multex by any other party. BLP
shall not be responsible for or have any liability for any injuries or
damages caused by the Service or delays or interruptions of the Services,
from whatever cause. Multex is solely responsible for the Service and the
resultant output thereof in whatever form. BLP shall have no liability or
responsibility for the security or maintenance of any Service input by
Multex. BLP shall have no liability or responsibility for any errors,
omissions, delays or inaccuracies in the Service, nor for any damages
suffered by Multex or any others resulting from disseminating the Service
through THE BLOOMBERG terminal. Multex shall indemnify BLP and hold it
harmless and at Multex's expense defend BLP against any loss, claim, demand
or expense (including reasonable attorneys fees) arising out of the
negligence of Multex.
BLP acknowledges and agrees that the Research provided by the Multex
Technology shall remain the property of the Contributors and BLP shall not
in any way transfer or encumber any interest in the Research or assert any
rights therein. BLP understands, and agrees that the transmittal of the
Research to BLP may be restricted by applicable securities laws or by the
internal policies and practices of the Contributors.
7
<PAGE>
BLP shall refrain from (i) making any representations or warranties of any
kind concerning the Research; or (ii) modifying, amending, editing, or
otherwise revising, in any manner, the content or format of the Research.
The Research shall be transmitted to clients in its entirety (including all
accompanying disclaimers and proprietary notices) and without revision by
BLP. BLP shall use reasonable efforts to prevent interception, inappropriate
disclosure, or use of the Research by unauthorized persons. Towards that
end, BLP will ensure that its employees abide by the provisions of this
agreement and do not illegally trade on or wrongfully disclose any
information given to BLP by Multex.
To the extent any such Research Agreements provide for the following, it
shall be made a part of this Agreement and apply to that Contributor, BLP
shall defend, indemnify and hold harmless Multex and the Contributor, and
their successors and assigns, against any and all actions, proceedings,
claims, liabilities, demands, costs, damages, losses, and expenses to which
Multex or the Contributors may be subjected by reason of Distributors
distribution and use of the Research. MULTEX shall provide notice to BLP of
any Research Agreement which contains language of this Section 3.9, and will
provide separate rider to be executed by such parties.
11. WARRANTY DISCLAIMER.
BLP MAKES NO EXPRESS OR IMPLIED WARRANTIES RELATING TO THE PRODUCTS OR
SERVICES COVERED BY THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
NEITHER THE CONTRIBUTOR NOR MULTEX MAKE ANY WARRANTIES WHATSOEVER, EXPRESSED
OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OR FITNESS FOR A
PARTICULAR PURPOSE OR MERCHANTABILITY, CONCERNING THIS AGREEMENT, THE
SERVICES OR EQUIPMENT (IF ANY) PROVIDED HEREUNDER, THE BLOOMBERG-MULTEX
RESEARCH SERVICE OR THE REPORTS. THE REPORTS AND THE SERVICES PROVIDED
HEREUNDER ARE PROVIDED "AS IS" WITH NO WARRANTIES WHATSOEVER. NEITHER THE
CONTRIBUTORS NOR MULTEX MAKES ANY REPRESENTATION OR WARRANTY THAT THE
OPERATION OF THE SOFTWARE SHALL BE UNINTERRUPTED OR ERROR FREE NOR GUARANTEE
THE ACCURACY, VALIDITY OR COMPLETENESS OF THE REPORTS. MULTEX AND THE
CONTRIBUTORS HEREBY DISCLAIM ANY LIABILITY FOR, INDIRECT, COMPENSATORY,
CONSEQUENTIAL, SPECIAL, LOST PROFITS, PUNITIVE, OR OTHER DAMAGES, COSTS OR
EXPENSES OF ANY KIND ARISING FROM THIS AGREEMENT, OR BLP'S RECEIPT, USE OF,
OR DELAY IN RECEIVING OR FAILURE TO RECEIVE, THE REPORTS.
8
<PAGE>
Multex's and its Contributors shall not have any obligation or liability to
BLP or any third party relating to, or arising (i) the supplying, furnishing
or the failure to supply or furnish the Reports (including the information
contained therein) or Services, (ii) errors or omissions in connecting,
routing, processing, transmitting, distributing or displaying the Reports,
or (iii) the accuracy of the Reports or securities or commodities
information and prices, and related market and statistical information and
prices displayed, carried or furnished by or through the Services. Multex
and Contributors shall not have any liability for damages, direct or
indirect, special, consequential, compensatory, lost profits, for any
defaults arising out of this Agreement.
Multex maximum liability hereunder for any other cause not exculpated
hereunder, whether in tort or contract, shall not exceed the actual damages.
Multex may discontinue and terminate providing all or a portion of the
Reports upon ten (10) days prior notice (or such shorter notice if the
Contributor so directs) (i) if the Contributor of such Reports notifies and
directs Multex to discontinue or terminate providing the Reports, (ii) BLP
has breached its agreement with the Contributor, (iii) Contributor has
terminated its agreement with BLP, (iv) Contributor discontinues offering
such Reports, (v) Contributor, for whatever reason, directs Multex to
discontinue providing the Reports to BLP, (vi) BLP has not received
authorization from Contributor to receive the Reports, and (vii) Contributor
terminates its agreement with Multex.
BLP recognizes and understands that Multex cannot and does not guarantee in
any way, the content, timeliness, or availability of the Reports or
Services. Accordingly, BLP agrees that Multex shall not have any obligation
or liability to BLP (whether caused directly or indirectly) relating to or
arising out of (i) the interruption, delay or failure in connecting,
transmitting, routing, delivery, or distributing the Services or Reports,
(ii) errors in connecting, transmitting, processing, disseminating,
furnishing, displaying or distributing the Reports or Services, (iii) the
unavailability of Reports or Services, (iv) the accuracy of the Reports
(including the securities, pricing or commodities information contained
therein) or the accuracy of the Reports as may be displayed, furnished or
transmitted by or through the Services, (v) errors in entitling BLP with
Reports that BLP is not entitled to receive or the failure to entitle BLP,
(vi) the acts or omissions of the Contributors, including the termination or
discontinuance of the Reports by Contributors to Multex or BLP. Multex's
sole liability to BLP or any Third Party for claims, notwithstanding the
form of such claims (e.g., contract, negligence or otherwise), arising out
of items (i) through (vi) above, shall be to use reasonable efforts to
resume the Services, make the Services or Reports available to BLP or
correct any errors as promptly as reasonably and feasibly practicable.
12. MAINTENANCE AND CIRCUMSTANCES BEYOND BLP'S CONTROL.
9
<PAGE>
Neither BLP nor Multex will be deemed in default or liable hereunder if, as
a result of any cause or circumstances beyond such party's reasonable
control or any repair work or routine maintenance, there occurs a delay in
or failure or interruption of (1) service to any User, or (2) transmission
of the Service. So long as any such failure continues, the party responsible
for such service or transmission will use its reasonable best efforts to
eliminate such conditions and will keep the other party fully informed at
all times concerning the matters causing such delay or default and the
prospects for their termination.
13. CONFIDENTIALITY.
(a) The following materials and information and all copies thereof of whatever
nature are designated as "confidential" and are the proprietary information
and trade secrets of BLP: (i) the computer software possessed by BLP and
all source documents relating to such computer software; (ii) proprietary
business information of BLP (including, without limitation, the names and
addresses of Users, information providers and suppliers), and business
information that BLP does not generally make available to the public; (iii)
the methods, means, personnel, Equipment and software by and with which BLP
provides THE BLOOMBERG terminal; and (iv) any other information that BLP
reasonably designates, by notice in writing delivered to Multex, as being
confidential or a trade secret.
(b) The following materials and information and all copies thereof of whatever
nature are designated as "confidential" and are the proprietary information
and trade secrets of the Multex: (i) proprietary business information of
the Multex, and business information that the Multex does not generally make
available to the public; and (ii) any other information that the Multex
reasonably designates; by notice in writing delivered to BLP, as being
confidential or a trade secret.
(c) All such proprietary or confidential information of BLP or of Multex shall
be kept secret by the Multex or BLP, as the case may be, to the degree it
keeps secret its own confidential or proprietary information. Such
information belonging to either party shall not be disclosed by the other
party to its employees except on a need-to-know basis or to agents or
contractors of such other party, but may be disclosed by such other party to
state or federal agencies, authorities or courts upon their order or request
provided prompt notice of such order or request is given by such other party
to the party to which such information belongs, if such notice is legally
permitted.
(d) No information that would otherwise be proprietary or confidential for the
purposes of this Agreement pursuant to paragraph (a) or (b) above shall be
subject to the restrictions on disclosure imposed by paragraph (c) hereof in
the event and to the extent that (i) such information is in, or becomes part
of, the public domain otherwise than through the fault of the party to which
such information does not belong, (ii) such information was known
10
<PAGE>
to such party prior to the execution of this Agreement, or (iii) such
information was revealed to such party by a third party; or (iv) is required
to be disclosed pursuant to any law or court.
14. WAIVER.
No waiver by either party of a breach of any provision of this Agreement by
the other party shall operate as a waiver of any subsequent breach.
15. ADVERTISING OR PUBLICITY.
Either party may routinely reference the other in advertising, marketing or
publicity releases; provided, however, that prior approval must be obtained
for claims of substance.
16. COMPLETE AGREEMENT MODIFICATIONS OR WAIVERS.
This Agreement, together with Schedule A and B is the complete and exclusive
statement of the agreements between the parties with respect to the subject
matter hereof and supersedes any oral or written communications or
representations of agreements relating thereto. No changes, modifications or
waivers regarding this Agreement shall be binding unless in writing and
SIGNED BY THE PARTIES HERETO.
17. APPLICABLE LAW.
This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of New York. The parties
hereto, their successors and assigns, consent to the jurisdiction of the
courts of the State of New York with respect to any legal proceedings that
may result from a dispute as to the interpretation or breach of any of the
terms and conditions of this Agreement.
BLOOMBERG L.P.
MULTEX SYSTEMS, INC. Bloomberg, Inc., General Partner
By:/s/ Isaak Karaev By:/s/ Michael Bloomberg
----------------------------- --------------------------------
Name: Isaak Karaev Name: Michael Bloomberg
Title: President & CEO Title: President
Address: 33 Maiden Lane 5th Floor Address: 499 Park Avenue
New York, NY 10038 New York, NY 10022
11
<PAGE>
SCHEDULE A
1. Multex will provide BLP with the Multex Feed, a tagged feed of a) broker-
dealer full-text research reports, morning notes, earnings estimates, and b)
third party commentary and research in ASCII for display over THE BLOOMBERG
terminal, and in a mutually acceptable "desktop publishing" format (i.e.,
Postscript or Adobe Acrobat) for printing. Multex will be responsible for
the document collection and processing. Report summaries in ASCII will be
provided as soon as Multex has completed the computer processing to collect
them.
2. BLP will provide, install and maintain the Multex Server, router modems and
56KB frame relay circuit required to transmit and accept the Multex Feed.
3. Multex may discontinue and terminate providing all or a portion of the Multex
Feed to BLP upon ten (10) days written notice (or such shorter notice if any
Contributor so directs (a) if any Contributor to the Multex Feed notifies and
directs Multex to discontinue or terminate providing its reports to the
Multex Feed or (b) if any Contributor terminates its agreement with Multex.
Upon such discontinuance and termination, Multex shall have no liability
whatsoever.
4. In providing the Multex Feed, Multex uses its own software ("Multex
Publisher") and in certain circumstances third party software ("Third Party
Software"). Multex Publisher and the Third Party Software are referred to
herein as the Software.
5. BLP is granted a limited internal object code license and/or sublicense to
use Multex Publisher solely for the provision of the Multex Feed. This
license is non-exclusive and non-transferable. BLP acknowledges that Multex
Publisher is the sole property of Multex Systems Inc. and may not be copied
without the express written permission of Multex or used in any manner not
authorized by Multex.
6. Multex will make available its PC architected product via the Open Bloomberg
at current market prices for the "Bloomberg-Multex Research Service."
12
<PAGE>
SCHEDULE B
DISTRIBUTION FEE SCHEDULE
BLOOMBERG-MULTEX RESEARCH SERVICE
- ---------------------------------
MONTHLY REVENUES BLP DISTRIBUTION FEE
- ----------------------------------------------------------------
[****] per month [****] (as specified under section
4c)
[****] per month [****]
[****] per month [****]
[****] [****]
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
13
<PAGE>
Exhibit 10.4
REUTERS LOGO
**** CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED
Date: July 15, 1998
__________________________________________________________________
REUTERS LIMITED
AND
MULTEX SYSTEMS, INC.
_________________________________________________
SPECIALIST DATA AGREEMENT
(DIRECT CONNECTIONS)
_________________________________________________
<PAGE>
THIS AGREEMENT IS DATED THE 15th DAY OF JULY 1998
BETWEEN
(1) REUTERS LIMITED whose registered office is at 85 Fleet Street, London EC4P
4AJ (REUTERS)
and
(2) MULTEX SYSTEMS, INC. of 33 Maiden Lane, New York, NY 10038 (the SUPPLIER)
BACKGROUND
(A) Reuters is in the business of developing, marketing and supplying on-line
news and financial information services.
(B) The Supplier has gathered and/or developed or agrees to gather and/or
develop the Specialist Data (as defined below).
(C) The Supplier wishes to provide access to the Specialist Data to Subscribers
by integrating the Specialist Data and the functionality of the Supplier
Server with the generic capabilities of the Network and Reuters is willing
to provide the Supplier with access to the Network in accordance with the
provisions of this Agreement.
1. DEFINITIONS AND INTERPRETATION
1.1 The following definitions apply throughout this Agreement unless the
context otherwise requires:
ACCESS ID means the specific user account/password of each Subscriber
required to access the Specialist Data Service;
Affiliate means, with respect to any Person, any other Person directly or
indirectly Controlling, Controlled by or under common Control with such
Person;
Agreement means this Agreement and all its schedules and attachments as
amended from time to time by the Parties in accordance with Clause 17.6;
AUTHORISED DISTRIBUTOR means any Person authorised by any member of the
Reuters Group to distribute the Special Data Service in one or more
countries that
<PAGE>
form part of the Territory, current countries in which Authorised
Distributors are located as at the Commencement Date are listed in Schedule
7. Reuters acknowledges that Authorised Distributors are utilised in
countries where Reuters Limited or members of the Reuters Group are
required to act through third party companies for governmental or
regulatory reasons;
BUSINESS DAY means a day when New York Stock Exchange is open for business;
COMMENCEMENT DATE means 1 January 1999;
CONTENT means data or information in any form, whether text, visual (still
or moving) audio or any combination of the foregoing;
CONTROL (including with correlative meanings, the terms CONTROLLING,
CONTROLLED BY and UNDER COMMON CONTROL WITH), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by contract
or otherwise;
DAMAGES means any losses, damages, costs (including reasonable attorney's
fees and costs of investigation) and liabilities;
DIRECT CONNECTIONS SERVICE means the integration of Content and
functionality of remote servers with the Network generic capabilities
consisting in whole or in part of the integration of the Specialist Data
and Supplier Server with the Network;
FEES means the sums, if any, to be paid by Reuters to the Supplier in
accordance with Clause 9;
HYPERTEXT LINK means an icon, logo, highlighted or coloured text, figure or
image representing a URL which allows a user to move between pages, servers
or locations within a document;
INTELLECTUAL PROPERTY RIGHTS means patents, trade marks, service marks,
trade and service names, copyrights, mask work rights, topography rights,
database rights and design rights (whether or not any of them are
registered and including applications for registration of any of them),
moral rights, trade secrets, know how and rights of confidence; all rights
of forms of protection of a similar nature or having similar or equivalent
effect to any of them which may subsist anywhere in the world now or in the
future;
MULTEXNET means the browser based, on-line service which the Supplier has
developed and owns. MultexNet includes host servers and related equipment
located at the Supplier's facility in New York City and the databases which
contain the Specialist Data;
<PAGE>
MULTEX RESEARCH ON DEMAND means the web based product developed and owned
by the Distributor which is incorporated into MultexNet and which consists
of pay-per-view access to certain portions of the Specialist Data;
NETWORK means the equipment and telecommunications facilities owned or used
by the Reuters Group from time to time, including the Reuters Web;
PARTIES means Reuters and the Supplier, and PARTY shall be construed
accordingly;
PERSON means an individual, corporation, partnership, company, association,
trust or other entity or organisation;
QUALIFYING REVENUE means the aggregate value of all subscriptions invoiced
by Reuters excluding sales taxes and/or other taxes, and/or tariff duties
directly levied in respect of the supply of the Specialist Data Service;
RELEVANT GROUP MEMBER means the members of the Reuters Group (other than
Reuters) including Authorised Distributors responsible in various areas
within the Territory for the delivery of the Reuters Service;
REUTERS GROUP means collectively Reuters Group PLC (a company incorporated
in England and Wales) (and its successors and assigns) and all Persons it
Controls from time to time including Reuters;
REUTERS SERVER means the computer server or servers from which the Reuters
Service is accessed;
REUTERS SERVICE means the services provided from time to time by Reuters to
Subscribers including the Specialist Data Service and the Direct
Connections Service;
REUTERS WEB means an intranet controlled by Reuters that uses Internet
technology (i.e. web browsers) to retrieve and display data;
SPECIALIST DATA means the Content provided by the Supplier and agreed
between the Parties as described in Schedule 1 as updated, enhanced,
modified, altered or changed in accordance with this Agreement;
SPECIALIST DATA SERVICE means the service known as Reuters Broker Research
consisting of access through the Reuters Web to the Specialist Data
residing on the MultexNet;
SPECIFICATION means the document setting out details in respect of the
Direct Connections Service including technical, security, delivery and
format
<PAGE>
requirements for the inclusion of the Specialist Data as part of the Direct
Connections Service and attached to this Agreement at Schedule 3;
SUBSCRIBER means a subscriber any Reuters Service from time to time;
SUBSCRIPTION AGREEMENT means any subscription agreement pursuant to which
Reuters or Relevant Group Members provide Subscribers with access to the
Reuters Service as may be amended from time to time by Reuters, the current
version used by local Reuters Subscribers in the United States is attached
at Schedule 6 by way of an example. Each of the Parties acknowledges that
the Subscription Agreement used by Reuters may vary from country to country
or geographical region, but that each local or regional Subscription
Agreement will contain substantially similar provisions in respect of the
use of the Specialist Data;
SUPPLIER SERVER means MultexNet or any other computer server or servers
from which the Specialist Data is accessed;
SUPPLIER SITE means the URL from which the Specialist Data may be accessed
by a Subscriber by way of the Supplier Server;
TERRITORY means all countries specified in Schedule 5 or any of them;
TRADE MARKS means the registered and/or unregistered trade and/or service
marks set out in Schedule 2, or any of them;
URL means the Universal Resource Locator designating the location of a
server.
1.2 The following terms are defined in the Clause indicated:
TERM CLAUSE
Relevant Material 3.2
MARKETING PARTY 6.4
NAMED PARTY 6.4
NOTIONAL SUBSCRIPTION 8.1
SUPPLIER REVENUE 9.1.1
REUTERS ROYALTY 9.4
SETOFF 9.4
FACILITY 9.5
ACCOUNTANT 9.9
IP CLAIM 13.1.2
INDEMNIFIED PARTY 13.3
THIRD PARTY CLAIM 13.3
INDEMNIFYING PARTY 13.3
INITIAL TERM 15.1
<PAGE>
TERM 15.1
RECEIVING PARTY 16.1
DISCLOSING PARTY 16.1
RECIPIENT 16.1
CONFIDENTIAL INFORMATION 16.1
2. SUPPLY OF THE DATA
2.1 Subject to the provisions of this Agreement (including the payment
provisions set out in Clause 9), the Supplier will provide to Reuters and
the Relevant Group Members and the Subscribers access to the Specialist
Data. Such supply shall commence on the Commencement Date and shall
continue for the Initial Term and any subsequent Term.
2.2 Where Reuters provides the Specialist Data to Subscribers through an
Authorised Distributor, Reuters shall ensure that such Authorised
Distributor is aware of the provisions of this Agreement, and will use
reasonable endeavours to ensure that such Authorised Distributor comply
with such provisions. Reuters may at any time by notice in writing add to,
delete from or otherwise amend the contents of Schedule 7.
2.3 Subject to Clause 2.4 the Supplier shall be responsible for all expenses
involved in producing, formatting and supplying the Specialist Data to
Reuters in accordance with the Specification unless otherwise agreed in
writing between the Parties including the provision of the Supplier Server
and all associated equipment necessary for connection to the Reuters Web as
part of the Direct Connections Service.
2.4 Where from time to time the Supplier agrees to supply the Specialist Data
(or any substantially similar Content) to any third party for distribution
by such third party in electronic form, the Supplier:
(a) must ensure that the Specialist Data supplied to Reuters pursuant to
this Agreement is of a standard (in terms of quality, quantity and
timeliness) at least as good as the Content supplied to such third
party;
(b) shall notify Reuters of that standard and Reuters will have the option
to receive such Content from the Supplier without any amendment to the
Fees.
3. GRANT OF LICENCES
3.1 The Supplier grants to the Reuters Group and its Authorised Distributors a
non-exclusive, and subject to Clause 15, irrevocable and perpetual licence
in the Territory to:
<PAGE>
3.1.1 to use, copy and adapt the Specialist Data provided that the Content
of the Specialist Data is not altered by such copying or adaptation
and such copying and/or adaptation is for the purpose of providing
access to the Specialist Data;
3.1.2 to provide access to and otherwise market the Specialist Data (alone
or in compilation or collection) and to make it available for
retrieval through the Specialist Data Service in the way, manner or
form, and in accordance with the provisions of the Subscription
Agreement and via the Reuters Web.
3.2 Subject to Clause 6.4, each Party grants the other Party a non-exclusive,
royalty free license to use the name of the other Party and/or the Trade
Marks to identify the Supplier as the source of the Specialist Data in any
Specialist Data Service or Reuters as the distributor of the Specialist
Data as part of the Specialist Data Service or in any announcement,
advertisement, publication or similar promotional material relating to
Specialist Data Service (RELEVANT MATERIAL); provided that the Party
producing the material shall not use the name of the other or any of its
Trade Marks in marketing efforts affirmatively to denigrate that Party and
that each Party shall comply with the guidelines or use of the other
Party's name or Trade Marks as may be notified to such other Party from
time to time.
4. FORMAT AND PROVISION OF THE DATA
4.1 The Specialist Data shall meet in all respects during the Term the
requirements set out in the Specification so as to allow the Specialist
Data to be provided by Reuters to Subscribers as part of the Specialist
Data Service by way of the Direct Connections Service. The Specification
may be amended in writing by the Parties from time to time in accordance
with Clause 17.6. As soon as reasonably practicable after execution of this
Agreement and before the Commencement Date the Parties will write and agree
the Specification. For the avoidance of doubt, the Specification shall be
consistent with the supply of the Specialist Data to Reuters as at the date
of signature of this Agreement by both Parties subject to any changes which
the Parties may agree. Notwithstanding the foregoing, each of the Parties
acknowledges that the Supplier Server shall be operated, maintained and
administered by the Supplier such that the Specialist Data Service will be
available to Subscribers on at least the same level of timeliness, access
uptime and/or performance as MultexNet is available to the Supplier's own
subscribers.
4.2 The Supplier shall document and promptly report to Reuters any material
difficulties, malfunctions or problems in respect of the Direct Connections
Service and/or Specialist Data Service and Reuters shall have the right to
notify Subscribers of the same.
<PAGE>
5. CONTENT AND EDITORIAL CONTROL
5.1 Subject to the provisions of this Agreement, the Supplier is responsible
for the Content of the Specialist Data which is contributed to Supplier by
third parties and for the Content of and editorial control over the
Specialist Data which is contributed directly or under the control of the
Supplier. Reuters acknowledges that nothing in this Agreement shall operate
to prevent the Supplier from including whatever Content it requires in the
Specialist Data provided that the Supplier undertakes not to change the
fundamental nature of the Content. Notwithstanding anything to the contrary
contained in this Agreement, the Parties agree and acknowledge that the
agreements between the Supplier and the contributors of the Content may
contain certain restrictions regarding the entities to whom the Content
contributed thereunder may be distributed, moratoria on distribution of
such Content, the rights of contributors to discontinue providing and/or
distributing the Content and other applicable limitations. Accordingly the
Parties agree that the Supplier shall not be obligated to provide access to
Content from a given contributor to the extent that such contributor ceases
to supply the same or discontinues Supplier's rights to distribute the
Content and Reuters agrees to abide by any reasonable restrictions,
moratoria and other distribution limitations which are either coded into
the Content or as to which Reuters has been notified in advance by the
Supplier.
5.2 The Supplier undertakes that it will not include in any Specialist Data
any:
5.2.1 defamatory or obscene Content;
5.2.2 Content, the dissemination of which is contrary to the law of any
stock or commodity exchange in any country in which the Supplier is
deemed for the purpose of applicable tax legislation to be carrying
on a business, or any banking regulations or any other applicable
market regulations or conventions;
5.2.3 Content which is in breach of any Intellectual Property Rights of
any third party;
5.2.4 Content which is in breach of the data protection laws of any
country in which the Supplier is deemed for the purpose of
applicable tax legislation to be carrying on a business.
5.3 The Supplier agrees that it shall:
5.3.1 except where notified to the contrary by Reuters, obtain and
maintain during the Term all necessary licenses, consents or
approvals for the provision of and use of the Specialist Data in
whole or in part, which may include consents of telecommunication,
exchange or similar information
<PAGE>
providers or other government or regulatory authorities and shall
certify to Reuters in writing receipt of the same;
5.3.2 observe any restrictions which Reuters notifies to the Supplier
regarding the use of the Specialist Data Service including any
restrictions imposed on Reuters by any court of competent authority;
and
5.3.3 ensure that the Reuters navigation bar as described in the
Specification is available, clearly visible and operative on every
page within the Specialist Data Service.
5.4 The Supplier shall ensure that the wording set out in Schedule 4 is
included in a prominent position with the Specialist Data Service.
5.5 Except as may be agreed by Reuters and the Supplier, the Supplier
undertakes not to include any advertising in the Specialist Data other than
advertising relating directly to the Supplier.
6. MARKETING
6.1 Except as expressly provided in this Agreement, the Reuters Group has total
control over the manner in which the Specialist Data may be marketed by the
Reuters Group as part of the Specialist Data Service. Reuters is under no
obligation to market or sell the Specialist Data.
6.2 Reuters may request the Supplier, at times and places agreed between the
Parties, to give the training specified in Schedule 1 free of charge to
sales executives nominated by Reuters on matters concerning the marketing
of the Specialist Data.
6.3 Any advertising or other material (other than internal communications,
subscriber directories, help screens and similar listings) which a Party
(the MARKETING PARTY) wishes to use to promote and market the Specialist
Data Service including the name of the other party (the NAMED PARTY), shall
be approved in advance by the Named Party, such approval not to be
unreasonably withheld or delayed. If the Marketing Party receives no
comments from the Named Party within 30 working days after its submission
to the Named Party, the material is deemed to be approved by the Named
Party. Marketing material which is substantially similar to material
previously approved does not have to be resubmitted for approval.
7. DISTRIBUTION OF THE DATA
7.1 Reuters and Relevant Group Members may deliver the Specialist Data to a
Subscriber for a limited period of time not to exceed [3 months/30 days]
free of charge for the Subscriber to determine if it wishes to subscribe to
the Reuters Service without the Subscriber needing to sign a Subscription
Agreement.
<PAGE>
7.2 Subject to Clause 7.1, Reuters will distribute the Specialist Data only
after a Subscriber has signed a Subscription Agreement. The Supplier
acknowledges that Relevant Subscribers who have entered into a Multi-Centre
Contract, Reuters Global Agreement, Group Global Agreement or Global
Reuters Services Contract with Reuters have the right, in certain
circumstances, to cancel the Specialist Data Service on 90 days' notice in
which event the Subscription payable by the Relevant Subscriber will cease
to be payable, without penalty, at the expiration of the 90 day notice
period.
7.3 Reuters or the Relevant Group Member may terminate any Subscriber's use of
or access to the Specialist Data Service for any reason in Reuters or the
Relevant Group Members sole discretion.
7.4 If the Supplier gives Reuters notice in writing of any matter which might
entitle Reuters or any Relevant Group Member to terminate any Subscribers
access to the Specialist Data Service, Reuters will and will ensure that
the Relevant Group Member will within a reasonable time of having received
the Supplier's notice terminate the Subscribers access to the Direct
Connections Service subject to the provisions of the Subscription Agreement
provided Reuters considers that reasonable grounds for such termination to
exist.
7.5 Reuters may permit Subscribers to redisseminate elements of the Specialist
Data in accordance with the provisions of the Subscription Agreement.
7.6 Reuters shall consider in good faith any comments or suggestions made by
the Supplier in respect of enhancing or modifying the Direct Connections
Service to take into account any specific requirements of Subscribers or
the Direct Connections Service of which the Supplier is or becomes aware
during the Term.
7.7 Each of the Supplier and Reuters agrees to give to the other Party all
reasonable co-operation in the performance of its respective obligations
pursuant to this Agreement.
7.8 The Supplier shall provide to Reuters details of the usage Subscribers have
made of the Specialist Data as reasonably requested by Reuters from time to
time.
8. SUBSCRIPTIONS
8.1 Subject to Clause 8.2, the Supplier shall recommend the notional monthly
subscription (the NOTIONAL SUBSCRIPTION) to be paid by Subscribers for the
Specialist Data Service and shall notify Reuters accordingly. The Notional
Subscription shall recommend the prices in the appropriate currency or
currencies to be charged in the Territory. As at the Commencement Date, the
Notional Subscription recommended by the Supplier is as set out in Schedule
1.
8.2 The Supplier may change the Notional Subscription as it reasonably
considers advisable in view of market conditions by giving Reuters at least
120 days advance written notice.
<PAGE>
8.3 Reuters or the Relevant Group Member may in its sole discretion set the
fees and/or subscription charged to any Subscriber for access to the
Specialist Data Service.
9. PAYMENT AND FEES
9.1 Reuters shall pay to the Supplier in arrears within 45 days of the end of
each calendar month an amount equal to:
9.1.1(i) 50% of the Qualifying Revenue for such Calendar Month in
respect of the first 20,000 Access IDs; and
(ii) 40% of the Qualifying Revenue for such Calendar Month in
respect of all Access IDs in excess of the 20,000, if
applicable,
collectively the SUPPLIER REVENUE, less
9.1.1 the following:
9.1.1.1 in respect of each relevant subscriber invoiced for the first time,
(excluding for the avoidance of doubt any Subscriber who is a Subscriber as at
the Commencement Date) an amount equal to the first month's subscription fee of
the relevant subscriber (determined pro rata as appropriate);
9.1.1.2 allowances or credits which may reasonably be allowed by Reuters and
which are actually granted in respect of the unavailability of the Specialist
Data Service, and/or billing corrections in respect of any Specialist Data
Service; and
9.1.1.3 any other amounts which Reuters may set-off against any amounts due to
the Supplier pursuant to this Agreement or otherwise and as agreed in good faith
between the Parties and in the absence of any agreement within a reasonable
period, the provisions of Sections 9.9, 9.10, 9.11, 9.12 and 9.13 shall apply to
the amount under dispute.
9.2 If the total amount to be deducted pursuant to Section 9.1.2 from the
Supplier Revenue for any calendar month exceeds the Supplier Revenue for
such calendar month, then the balance shall be carried forward during the
term of this Agreement and deducted from Supplier Revenue for subsequent
months. Reuters shall have the right to recover any amount which has not
been set-off in this manner at the end of this Agreement from the Supplier
as a debt.
<PAGE>
9.3 Reuters shall be entitled to assign to personnel authorised by Reuters and
the Reuters Group a reasonable number of Access IDs (to be agreed between
the Parties) to be used for Reuters and the Reuters Group's internal
business purposes including development, administration, monitoring and
demonstration purposes in respect of the Specialist Data Service. Use of
the Specialist Data Services by such Access IDs shall be free of charge.
Reuters agrees to take reasonable measures to monitor the use of and
assignment of such Access IDs to prevent the use of such Access IDs other
than in accordance with the provisions of this Section 9.3.
9.4 On or prior to the 30th day after the end of each calendar month (each, a
PAYMENT DATE), Multex will deliver to Reuters (a) a statement of all
purchases made by Subscribers from Multex Research on Demand during the
preceding calendar month, together with the information necessary for
Reuters to bill its Subscribers for the purchases made, (b) an invoice for
100% of the gross revenues for the purchases made in that month, adjusted
as appropriate to reflect any Setoffs, as defined below, and (c) a
computation of the royalty due to Reuters, based upon 25% of the
adjusted gross revenues (the REUTERS ROYALTY). Reuters shall be solely
responsible for billing, and collecting fees from, its Subscribers for
their purchases of Multex Research on Demand. Reuters shall be entitled to
rely on the statements provided at sub-sections (a) to (c) above in
invoicing Subscribers. Within 45 days after its receipt of a statement,
invoice and Reuters Royalty Computation, Reuters will pay to Multex the
full amount, without setoff of any kind, of the invoice, adjusted to
reflect the Reuters Royalty, and will provide to Multex a statement setting
forth, in reasonable detail, the amount of any allowances or credits which
Reuters has reasonably and actually allowed for billing corrections related
to the purchases represented by such statement and invoice (collectively,
SETOFFS). The parties expressly agree that Setoffs shall not include
amounts which are due and owing but remain uncollected from Subscribers. If
the amount of the Setoffs is equal to or less that 10% of the gross
revenues for the applicable month, then Reuters shall be entitled to
determine in its discretion if the amount should be deducted from the next
invoice delivered pursuant to sub-section (b) above. If the amount of the
Setoffs is greater than 10% of the gross revenues for the applicable month
then the Parties shall agree, in good faith, the amount which Reuters shall
be entitled to deduct from such invoice. In the event of any dispute in
respect of such amount which the Parties cannot resolve by good faith
discussions within a reasonable time of the Setoffs being raised, then the
provisions of Section 9.9, 9.10, 9.11, 9.12 and 9.13 shall apply equally to
that part of the Setoffs which is under dispute.
<PAGE>
9.5 The Supplier agrees that it shall provide to Reuters as soon as is
reasonably practicable after the execution of the Agreement and in any
event within 90 days of the Commencement Date the on-line billing and
administration software (the Facility) which shall enable Reuters to
invoice and monitor a Subscriber's use of Multex Research on Demand.
Reuters and the Supplier shall co-operate to install and to ensure the
satisfactory operation of the Facility. Reuters shall not be required to
make available Multex Research on Demand to a Subscriber unless and until
the Facility has been provided to Reuters and is operating satisfactorily.
The use of this Facility shall be subject to the execution of license terms
which are acceptable to both of the Parties.
9.6 All amounts to be paid by Reuters in accordance with Section 9 shall be in
US Dollars to a bank account specified by the Supplier from time to time.
9.7 Where any subscription fee is invoiced by Reuters in a currency other than
US Dollars, the equivalent amount for the purpose of computing the Supplier
Revenue in the relevant calendar month shall be determined by applying the
appropriate exchange rate published in the Wall Street Journal for the last
business day of such calendar month.
9.8 In accordance with this Section 9, the Supplier, on giving Reuters
reasonable notice in writing, is entitled once during each 12 month period
commencing on the Commencement to audit the records of the Reuters Group
which relate exclusively to the computation of the Supplier Revenue in that
12 month period; Reuters shall as soon as reasonably practicable after
receipt of such notice make those records available to the Supplier for
inspection during normal business hours at the location reasonably
nominated by Reuters, subject to Reuters reasonable security, operational
and/or confidentiality procedures.
9.9 If the Supplier disputes the amount of Qualifying Revenue due to the
Supplier, the Supplier shall notify Reuters in writing, and the amount of
Qualifying Revenue due to the Supplier shall be determined on an expedited
basis by an independent accountant (THE ACCOUNTANT) to be appointed by
agreement between the Parties (and in default of agreement by the
President, Institute of Chartered Accountants of England and Wales).
9.10 Reuters shall make available in confidence all relevant documents which
the Accountant may reasonably require for the purposes of his
determination.
9.11 The decision of the Accountant, who shall act as an expert and not an
arbitrator, is final and binding between the parties except in the presence
of manifest error on the face of the decision.
<PAGE>
9.12 Reuters shall pay the Supplier any additional amounts which the Accountant
determines are due to the Supplier, and the Supplier shall repay any
overpayments by Reuters which the Accountant determines have been made.
9.13 The costs of the Accountant shall be borne by Reuters only if and to the
extent that the Accountant determines that Reuters has underpaid the
Supplier by more than 10% over the period being audited. In all other
cases, the cost shall be borne by the Supplier.
10. SUPPORT
10.1 The Supplier undertakes to:
10.1.1 ensure that the Supplier Server and all associated equipment are
maintained in good operating condition as specified in the
Specification and that the Supplier shall use all reasonable
endeavours to ensure that communications lines are maintained in
good operating condition;
10.1.2 provide SUPPORT : for the purpose of this Clause 10.1.2, Support
means that the Supplier will provide to Reuters personnel support
and maintenance for the connectivity between the Network and the
Supplier Server. The Supplier shall, when it receives the call
from Reuters, escalate the call to the appropriately qualified
personnel to resolve the problem as soon as is reasonably
practicable and as more particularly set out in the Specification.
11. OWNERSHIP OF DATA AND GOODWILL
11.1 As between the Supplier and the Reuters Group, the Supplier retains all
Intellectual Property Rights subsisting in or relating to the Specialist
Data, Supplier Server, Supplier Site, the Facility, Multex Research on
Demand and MultexNet.
11.2 As between the Supplier and the Reuters Group, all goodwill arising as a
result of the use of the Supplier's Trade Marks enures to the benefit of
the Supplier and all goodwill arising as a result of the use of the
Reuters Trade Marks enures to the benefit of Reuters.
11.3 As between the Supplier and the Reuters Group, Intellectual Property
Rights subsisting in or relating to the Reuters Service and all goodwill
arising as a result of the provision of the Reuters Service, whether or
not including the Specialist Data, including goodwill arising as a result
of the use of any words, logos, devices (other than the Supplier's Trade
Marks), enures to the benefit of the Reuters Group.
11.4 Each Party agrees to notify the other Party promptly if it becomes aware
of any unauthorised distribution of the Direct Connections Service or the
Specialist Data, as the case may be and to provide all reasonable co-
operation to the other party to
<PAGE>
prevent the use or distribution of the Direct Connections Service or
Specialist Data, as the case may be, in any manner not expressly
authorised by this Agreement.
11.5 Each of the Parties agrees that the home page of the Suppliers Site or
such other pages as the Parties may agree shall have reference to each of
the Reuters Marks and the Supplier Marks and it will be agreed between the
Parties as to the size given to the Reuters Marks and to the Supplier
Marks and as more particularly described in Schedule 3.
12. WARRANTIES
12.1 Each Party represents and warrants to the other that:
12.1.1 it has requisite legal and corporate power and authority to
execute and deliver this Agreement and to carry out and perform
all of its obligations under this Agreement;
12.1.2 it holds and will continue to hold and is in compliance and will
continue to be in compliance with any applicable permits, licences
and other approvals required to carry out its obligations under
the Agreement;
12.1.3 the execution, delivery and performance by it of its obligations
under the Agreement require no consent, approval or authorisation
of, action by or in respect of, or filing with, any governmental
body, agency, or official;
12.1.4 the execution, delivery and performance by it of the Agreement do
not (i) violate its Certificate of Incorporation (or other
constitutional documents) or By-laws, or (ii) violate any
applicable law, rule, regulation, judgement, injunction, order or
decree, except to the extent that any such violation would not,
individually or in the aggregate, have a material adverse effect
on its ability to perform the terms of the Agreement.
12.2 The Supplier warrants that the Specialist Data:
12.2.1 has been and will continue to be developed with due care and
skill, in a professional manner and will be accurately and
completely transmitted to the Network;
12.2.2 will during the Initial Term or any further Term continue to be
provided at the same or higher quality than as at the Commencement
Date.
12.3 The Supplier warrants and represents to Reuters that from the Commencement
Date there will not be a reduction in any material respect in the ability
of the Specialist Data Service to function as a result of the Specialist
Data Service's and/or the Supplier Server's inability to process date
information accurately
<PAGE>
before, on or after 1 January 2000 (including leap years) to the extent
such reduction is caused by the Specialist Data.
Compliance of the Specialist Data with the foregoing means that the
Specialist Data is MILLENNIUM COMPLIANT and MILLENNIUM COMPLIANCE shall be
construed accordingly.
12.4 The Supplier also agrees:
12.4.1 to cooperate with Reuters in connection with Reuters reasonable
investigations relating to the Millennium Compliance of the
Specialist Data, including, for example:
(a) permitting Reuters to obtain relevant information from
knowledgeable employees, representatives and agents of the
Supplier in response to written and/or oral questions; and
(b) providing Reuters on reasonable notice with access to relevant
information and documentation including the Supplier's data
format specifications and Millennium-related test results;
12.4.2 to provide Reuters with such assistance Reuters reasonably
requires in connection with Millennium Compliance testing by
Reuters relating to the Specialist Data; and.
12.4.3 to give Reuters at least 90 days' notice in writing if the
Supplier intends to change its data format specifications, in
particular as such may relate to the way in which dates are
represented in a datafeed, data file, screen display or hard copy.
13. INDEMNIFICATION
13.1 The Supplier hereby indemnifies Reuters, the Relevant Group Members and
its and their officers, directors, employees and agents against and agrees
to hold them harmless from any and all Damages, incurred or suffered by
the Relevant Group Members arising out of:
13.1.1 any misrepresentation or breach of representation, undertaking, or
warranty or covenant made or to be performed by the Supplier
pursuant to this Agreement; and
13.1.2 all claims or proceedings that possession, use or exploitation of
the Specialist Data in accordance with the provisions of this
Agreement or anything else done or omitted to be done within the
scope of the Licences or any permitted sub-licenses granted by the
Reuters Group infringes the Intellectual Property Rights of any
third party (IP CLAIM) except to the extent that the IP Claim is
based upon or arises out of the Specialist Data
<PAGE>
which has been altered or combined with other data if such IP
Claim would have been avoided has not such alteration or
combination occurred.
13.2 Reuters hereby indemnifies Supplier, its officers, directors, employees
and agents against and agrees to hold them harmless from any and all
Damages incurred or suffered by Supplier arising out of any
misrepresentation or breach of warranty or representation or covenant,
made or to be performed by Reuters pursuant to this Agreement.
13.3 A Party seeking indemnification pursuant to this Clause 13 (an INDEMNIFIED
PARTY) from or against the assertion of any claim by a third Person (a
THIRD PARTY CLAIM) will give prompt notice to the party from whom
indemnification is sought (the INDEMNIFYING PARTY); provided, however,
-------- -------
that failure to give prompt notice will not relieve the Indemnifying Party
of any liability hereunder (except to the extent the Indemnifying Party
has suffered actual material prejudice by such failure).
13.4 Within 10 Business Days of receipt of notice from the Indemnified Party
pursuant to Clause 13.3, the Indemnifying Party will have the right,
exercisable by written notice to the Indemnified Party, to assume the
defense of a Third Party Claim. If the Indemnifying Party assumes such
defense, the Indemnifying Party may select counsel, which counsel will be
reasonably acceptable to the Indemnified Party.
13.5 If the Indemnifying Party:
13.5.1 does not assume the defense of any Third Party Claim in accordance
with Clause 13.4;
13.5.2 having so assumed such defense, unreasonably fails to defend
against such Third Party Claim; or
13.5.3 has been advised by the written opinion of counsel to the
Indemnified Party that the use of the same counsel to represent
both the Indemnifying Party and the Indemnified Party would
present a conflict of interest,
then, upon 5 Business Days' written notice to the Indemnifying Party, the
Indemnified Party may assume the defense of such Third Party Claim, and
the cost of such defense (including reasonable attorney's fees and
expenses) will be paid by the Indemnifying Party.
13.6 The Party controlling the defense of a Third Party Claim will have the
right to consent to the entry of judgement with respect to, or otherwise
settle, such Third Party Claim with the prior written consent of the other
Party, which consent will not be unreasonably withheld or delayed;
provided, however, that such other Party may withhold its consent if any
-------- -------
such judgement or settlement imposes a monetary or continuing non-monetary
obligation on the Indemnified Party, or does not
<PAGE>
include an unconditional release of the Indemnified Party and its
Affiliates from all elements of the Third Party Claim.
13.7 The Indemnifying Party and the Indemnified Party will cooperate, and cause
their respective Affiliates to cooperate, in the defense or prosecution of
any Third Party Claim. The Indemnifying Party or the Indemnified Party, as
the case may be, will have the right to participate, at its own expense,
in the defense or settlement of any Third Person Claim.
14. LIABILITY
14.1 Neither the Reuters Group, Authorised Distributors nor the Supplier shall
be liable for any indirect or consequential loss, damage or expense
including any management time, economic loss or loss of profit or goodwill
incurred or sustained in connection with any claim under this Agreement
except that this shall not apply to any Damages suffered by Reuters
resulting from an IP Claim.
14.2 The maximum liability of either Party under this Agreement (excluding
either Party liability with respect to Third Party Claims which shall be
without limitation) shall be limited to the annualised Qualifying Revenue
based on the monthly Qualifying Revenue at the time the event giving rise
to the claim took place.
15. TERM AND TERMINATION
15.1 Subject to earlier termination in accordance with this Clause 15, this
Agreement shall come into force on Commencement Date and shall continue in
force for 5 years (the INITIAL TERM). This Agreement shall automatically
continue for successive periods of 1 year unless either Party terminates
it by giving to the other twelve (12) months written notice to take effect
at any time but no earlier that the expiry of the Initial Term (the TERM).
15.2 In addition to any other remedy available at law or in equity, either
Party may terminate this Agreement immediately, in whole or in part,
without further obligation to the other party in the event of:
15.2.1 any material breach of this Agreement by the other Party that is
not remedied within twenty-one (21) Business Days of the
defaulting Party being so requested in writing;
15.2.2 any merger or consolidation involving the other Party or any sale,
lease or other transfer of all or substantially all of the assets
of the other Party to any Person, in each case, that is not prior
to the time of such transaction an Affiliate thereof; or
15.2.3 the other Party makes an assignment for the benefit of its
creditors, files a voluntary or involuntary petition under any
bankruptcy insolvency, reorganisation or similar law, seeks or has
appointed a trustee, receiver or
<PAGE>
administrative receiver for any of its property or commences (by
resolution or otherwise) the liquidation or winding up of its
affairs.
15.3 Reuters may terminate this Agreement in whole or in part, without further
obligation to the Supplier:
15.3.1 on the date, if any, that it and any and all of its successors and
assigns have generally ceased to offer the Direct Connections
Service and/or Specialist Data Service;
15.3.2 if there is a change in Control of the Supplier excluding any
initial public offering or a secondary offering of securities of
the Supplier;
15.3.3 if at:
(a) 31 December 1999 there are not at least 1000 Subscribers
receiving the Specialist Data;
(b) 31 December 2000 there are not at least 2500 Subscribers
receiving the Specialist Data;
(c) 31 December 2001 there are not at least 3500 Subscribers
receiving the Specialist Data;
(d) 31 December 2002 there are not at least 4500 Subscribers
receiving the Specialist Data;
(e) 31 December 2003 there are not at least 5000 Subscribers
receiving the Specialist Data;
(f) for each year thereafter at minimum of 5000 Subscribers
receiving the Specialist Data.
<PAGE>
15.4 Upon expiration or termination of this Agreement, Reuters right to access
and to permit Subscribers to access the Specialist Data service shall
immediately cease (except that Reuters shall be entitled to fulfil any of
its rights or obligations pursuant to a Subscription Agreement until
expiration of such Subscription Agreement in accordance with its
provisions without any renewal terms. If Reuters continues to make use of
the Specialist Data Service or make the Specialist Data available to
Subscriber Reuters will pay the Qualifying Revenue to the Supplier).
Reuters shall be under no obligation to erase or delete any Specialist
Data obtained from the Supplier up until the date of termination or
expiration as part of the Reuters Service or databases but except as
provided above, Reuters may not continue to distribute the Specialist Data
to Subscribers.
16. CONFIDENTIALITY
16.1 Each Party (the RECEIVING PARTY) undertakes and agrees with the other (the
DISCLOSING PARTY) not to disclose or permit to be disclosed to any third
party or otherwise make use of or permit to be made use of any trade
secrets or confidential information (CONFIDENTIAL INFORMATION) relating to
the business affairs or finances of the Disclosing Party and, where the
Supplier is the Receiving Party, this includes details of Subscribers and
the business affairs or finances of the Reuters Group, which comes into
the possession of the Receiving Party pursuant to this Agreement.
16.2 The obligations of confidence referred to in Clause 16.1 shall not extend
to any information which:
16.2.1 is or becomes generally available to the public otherwise than by
reason of breach by the Receiving Party of this Clause 16;
16.2.2 is subsequently disclosed to the Receiving Party without
obligations of confidence by a third party owing no such
obligations in respect of it;
16.2.3 is required to be disclosed by law, regulation or court order, but
only to the extent and for the purpose of such disclosure provided
--------
that prior written notice of such disclosure is furnished to the
Disclosing Party as soon as practicable in order to afford the
Disclosing Party an opportunity to seek a protective order or
other appropriate action and in any event to provide its consent
to such disclosure. In the event the Disclosing Party is unable to
obtain or does not seek a protective order and the Receiving Party
is legally compelled to disclose such information, disclosure of
such information may be made without liability, but shall be made
only to the extent and for the purpose of such legally compelled
disclosure and the extent of any such disclosure is agreed between
the Disclosing Party and Receiving Party as necessary in order for
the Disclosing Party to fulfill its legal obligations;
<PAGE>
16.2.4 is developed by the Receiving Party independent of any
Confidential Information it receives from the Disclosing Party.
16.3 This undertaking will be binding for as long as such information retains
commercial value.
16.4 During the term of this Agreement the Receiving Party may disclose
Confidential Information to its directors officers, employees and agents
and those of its affiliates (each a RECIPIENT) to the extent that it is
necessary for the purpose of this Agreement.
16.5 The Receiving Party shall procure that each Recipient is made aware of and
complies with the Receiving Party's obligations of confidentiality under
this Agreement as if the Recipient were a party to this Agreement.
16.6 A breach of this Clause 16 is a material breach of this Agreement.
17. INTERNET DELIVERY
17.1 Subject to the payment by Reuters of additional sums, to be agreed between
the Parties, the Supplier agrees and acknowledges that the Supplier shall
make the Specialist Data available to Reuters and Subscribers by way of
the public Internet, and/or the Supplier service known as Multex Express
on such additional or different terms and conditions as the Parties may
agree from time to time.
18. GENERAL
18.1 Neither Party shall be held liable for any loss or failure to perform an
obligation due to circumstances beyond its reasonable control. In the
event that such circumstances continue for more than 3 months, then either
Party may give notice to the other to terminate this Agreement.
18.2 Subject to Clause 6.4, no public announcement, press release,
communication or circular (other than to the extent required by law or
regulation) concerning this Agreement or the transactions contemplated
hereby will be made or sent by either Party without the prior consent of
the other Party. This consent will not be unreasonably withheld or
delayed.
18.3 Except as otherwise expressly provided in this Agreement, each Party shall
pay its own costs of and incidental to the negotiation, preparation,
execution and implementation by it of this Agreement and of all other
documents referred to in it.
18.4 If either Party delays or fails to exercise any right or remedy under this
Agreement, that Party shall not have waived that right or remedy.
18.5 This Agreement contains each of the Party's entire understanding in
respect of the Specialist Data and Reuters Service. In entering into this
Agreement, each of the party acknowledges that it has not relied on any
warranty or representation (except in the case of fraud) made by either
Party other than as expressly provided
<PAGE>
in this Agreement. This Agreement supersedes any agreement which has
previously been entered into by the Parties in respect of access to and
distribution of the Specialist Data.
18.6 No supplement, modification or discharge of this Agreement is binding
unless executed in writing by authorised officers of the Parties.
18.7 Nothing in this Agreement shall create any partnership, joint venture or
relationship of principal and agent between the Parties, who are
independent contractors.
18.8 Any notice to be given under this Agreement may be delivered by hand
delivery, registered mail (or the equivalent in the country where the
notice is delivered) or facsimile.
18.8.1 Notices given:
(a) by hand delivery will be addressed to the person at the
address; or
(b) by facsimile will be addressed to the person at the number
set out below:
Reuters: 1700 Broadway, New York, NY 10019
fax: (212) 307-9378
marked for the attention of General Counsel
The Supplier: 33 Maiden Lane, New York, NY 10038
fax: (212) 742-9561
marked for the attention of Philip Callaghan
18.8.2 Either Party may change the person, address and facsimile number
notices are to be delivered to, by giving notice to the other
Party in accordance with this Clause 17.8.
18.8.3 Notices will be deemed to have been received:
(a) if hand delivered, on the day delivered;
(b) if sent by registered mail, on the third business day after
being sent; or
(c) if sent by facsimile, on the day sent provided the
transmitting facsimile machine produces a report verifying
successful completion of the transmission
<PAGE>
provided that if any of the events in (a), (b) or (c) above
occur after 5pm the notice will be deemed to have been
received on the next business day.
18.9 This Agreement will be deemed to have been executed in the State of New
York and will be governed by and construed in accordance with laws of the
State of New York, and each of the Parties consents to the jurisdiction
of the courts of the State of New York or the United States District
Court for the Southern District of New York for the purpose of any action
or proceeding brought by either Party in connections with this Agreement.
This Agreement has been executed in the English language and no
translation into any other language shall be used in its interpretation.
18.10 The invalidity or unenforceability for any reason of any part of this
Agreement shall neither prejudice nor affect the validity or
enforceability of the remainder.
18.11 Neither Party shall without the prior written consent of the other (not
to be unreasonably withheld or delayed) assign or transfer or purport to
assign or transfer any of its rights or obligations under this Agreement,
except that Reuters may assign any of its rights or obligations under
this Agreement to any other member of the Reuters Group without the prior
written consent of the Supplier.
18.12 This Agreement may be executed in any number of counterparts each of
which when executed and delivered shall be an original, but all
counterparts together shall constitute one and the same instrument.
18.13 Clauses 3, 5, 11, 12, 13, 14, 15, 16, and 17.9 shall survive the
termination or expiration of this Agreement for any reason.
<PAGE>
18.14 In this Agreement:
18.14.1 unless the context otherwise requires all references to a
particular Clause or Schedule are references to that clause or
schedule in or to this Agreement as they may be amended from
time to time;
18.14.2 the headings are inserted for convenience only and must be
ignored in construing this Agreement;
18.14.3 references to a notice means a written notice;
18.14.4 references to statutes, by-laws, and regulations include any
statute, by-law, or regulation re-enacting or amending them; and
18.14.5 references to DOLLARs or $ are to US Dollars.
REUTERS LIMITED MULTEX SYSTEMS, INC.
Signed /s/ John Parcell Signed /s/ Philip Callaghan
------------------------------ -----------------------------
Name John Parcell Name Philip Callaghan
------------------------------ -----------------------------
Position Executive Director Position CFO
------------------------------ -----------------------------
Date 15 July 1998 Date 15 July 1998
------------------------------ -----------------------------
<PAGE>
SCHEDULE 1
SPECIALIST DATA
The Content consists of the Market Data, Morning Meeting Notes and/or Published
Research Reports, covering the fixed income, equity, foreign and global
financial and other markets, which are contributed by the entities with which
Supplier has agreements for such contribution. The Content shall be no less
than that made available to Supplier's customers for MultexNet, subject to the
entitlement and other restrictions described in Section 5.1 of the Agreement.
TRAINING
To be agreed between the Parties.
NOTIONAL SUBSCRIPTION
As at the Commencement Date, the Notional Subscription recommended by the
Supplier is [****] per Access ID per month.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
<PAGE>
SCHEDULE 2
REUTERS MARKS
REUTERS LOGO
SUPPLIER'S MARKS -
Multex to provide within 7 days of the execution of this Agreement.
NOTE:
Reuters and the Supplier must agree on how the Trade Marks are to be displayed
together/co-branding/look and feel. This should follow guidelines issued by
Reuters from time to time.
<PAGE>
SCHEDULE 3
Specification
See Section 4.1
<PAGE>
SCHEDULE 4
Disclaimer
"Powered by Multex" plus Multex logo
<PAGE>
SCHEDULE 5
Territory
WORLD-WIDE
<PAGE>
SCHEDULE 6
REUTERS AMERICA LOCAL SUBSCRIBER AGREEMENT
REUTERS LOGO
REUTERS SERVICES CONTRACT
FOR REUTERS USE ONLY
CONTRACT NO.
AGREEMENT made by and between REUTERS AMERICA INC. with an office located at
1700 Broadway, New York, New York 10019 ("Reuters"), and
__________________________, with its principal office at _____________________
(the "Subscriber").
1. THE REUTERS SERVICES
Reuters will grant the Subscriber access to the service(s) (hereinafter
collectively referred to as the "Service") listed on the schedule(s) attached
and/or hereafter agreed to (the "Schedule"). The Service will be supplied to the
Subscriber along with, where applicable, such Reuters equipment or subsequent
additions or changes thereto (the "Equipment"), as may be necessary or
appropriate in order to provide access to the Service at the location(s)
specified on the Schedule (the "Premises"). The Subscriber will/will not (circle
one) contribute information to a Reuters service.
2. COMMENCEMENT AND TERM OF AGREEMENT
This Agreement will take effect from the date of signature by Reuters below and
will continue for two (2) years from (a) the first day of the calendar month
following the Installation Date (as hereinafter defined of the first of the
Reuters services which comprise the Service hereunder, or (b)
______________________ (the "Commencement Date"). This Agreement will continue
thereafter for periods of two (2) years each at the end of the initial term
and/or any renewal term hereunder at the then current Subscription Fee (as
hereinafter defined), unless either party terminates this Agreement upon written
notice given at least ninety (90) days in advance of the last day of the initial
term or any renewal term hereunder.
<PAGE>
3. THE CHARGES
The Subscriber will pay Reuters the service charges listed on the Schedule (the
"Subscription Fee"), as well as all Additional Fees described in Section 6 of
the General Conditions of Business annexed hereto.
4. THE GENERAL CONDITIONS OF BUSINESS AND ANY AND ALL SCHEDULES AND ADDENDA
ANNEXED HERETO FORM AN INTEGRAL PART OF THIS AGREEMENT AND SHOULD BE READ BY THE
SUBSCRIBER BEFORE SIGNATURE.
Client name: REUTERS AMERICA INC.:
- ---------------------------------------- -----------------------------------
Authorized Signature Authorized Signature
- ---------------------------------------- -----------------------------------
Name of Signatory Name of Signatory
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Title Date Title Date
<PAGE>
GENERAL CONDITIONS OF BUSINESS
OF
REUTERS AMERICA INC.
1. THE SERVICE
(a) The Subscriber will access the Service only at the Premises and will not
transfer, transmit, recirculate, either outside or within the Premises by
digital or analogue means, republish or resell all or part of the information
contained in the Service, except as otherwise permitted in an Addendum to this
Agreement. Storage of information contained in the Service is permitted at the
Premises except as otherwise specified in an Addendum to this Agreement.
(b) Notwithstanding the provisions of Section 8(c) hereof, this Agreement is,
and at all times will be, subject to applicable federal, state and local laws
and to the rules and regulations of the Federal Communications Commission, the
Securities and Exchange Commission, and the various exchanges, and to the rules
and regulations of any other applicable regulatory authority, now in effect or
hereafter enacted and adopted. Where applicable, the Subscriber will execute
applications to and agreements with the respective exchanges as may be required
and comply with any and all of the aforesaid rules, regulations, approvals,
terms and conditions.
(c) Reuters reserves to itself complete editorial freedom in the form and
content of the Service and may alter the same from time to time.
(d) The Subscriber acknowledges and agrees that other subscribers authorized to
input information into Reuters services ("Contributors") may restrict the
Subscriber from receiving their items of contributed information. No subscriber
or Contributor will have any recourse against Reuters arising out of the supply
of, or failure to supply, contributed information by or to any other subscriber.
(e) Reuters will have the right to monitor the number of Subscriber accesses to
the Service or to Reuters data. The Subscriber will allow Reuters or a Reuters
designee access to the Premises at all reasonable times in order to install,
inspect, maintain, repair, replace or remove all or part of the Service or
Equipment, if any.
(f) The Subscriber acknowledges that certain databases, programs, protocols,
displays and manuals which may form part of the Service (as well as the
selection, arrangement and sequencing of the contents thereof) (the "Proprietary
Information"), are proprietary and unique to Reuters, as to which copyright,
patent or other proprietary rights may be held by Reuters or by third parties
from whom Reuters has licensed or otherwise acquired such rights. The
Subscriber agrees to take or cause to be taken any and all necessary precautions
to maintain the confidentiality of such Proprietary Information, to comply with
all copyright, trademark, trade secret, patent and other laws necessary to
protect all rights in the Proprietary Information, and agrees not to remove,
conceal or obliterate any copyright or other proprietary notice included in the
Service.
2. THE SOFTWARE (if applicable)
(a) The Subscriber further acknowledges that among the Proprietary Information
may be various software elements and related materials, documents or data
(collectively, the "Software"). the Subscriber is granted a non-exclusive, non-
transferable right to use each copy of the Software provided on a single
computer solely in conjunction with the Service. Such use does not include the
right to assign, copy, modify, merge, transfer, decompile or reverse engineer
the Software, or use the same in conjunction with non-approved software. The
Subscriber understands that any such disclosure or copying will cause damage far
greater than the value of any copies made, and that this Agreement may be
terminated by Reuters for the Subscriber's breach of the provisions of this
Section 2.
(b) In the event that the Software is or becomes defective, Reuters sole
liability will be to replace the same after receipt of notice, or, in its
discretion, to refund the portion of the prepaid Subscription Fee applicable to
the portion of the Service no longer accessible, from the date of receipt of
notice. Upgrades to and support of the Software, or any macros, may be provided
at Reuters discretion.
(c) The location of all copies of the Software in the Subscriber's possession
will be reported to Reuters upon request and such copies will be returned to
Reuters upon expiration or termination of this Agreement in the same condition
as delivered to the Subscriber, ordinary wear and tear excepted.
(d) The Subscriber acknowledges and agrees that use (i) of any Equipment or
Software for any purpose other than in connection with the Service, and (ii) of
any equipment or software in connection with the Service which is not expressly
authorized by Reuters, will be at the Subscriber's sole risk and will result in
no liability whatsoever to Reuters. Service calls arising out of the foregoing
will be at the Subscriber's sole expense.
(e) The Subscriber agrees that the provisions of this Section 2 will inure to
the benefit of any Third Party Provider (as hereinafter defined) of Software,
and agrees to indemnify and hold Reuters harmless from and against any loss,
cost or damage (including reasonable attorneys' fees) arising out of the
Subscriber's breach of the provisions of this Section 2. The Subscriber may be
required to execute an additional agreement as a condition to receiving Software
supplied by a Third Party Provider.
3. THE EQUIPMENT (applicable only where Reuters Equipment is provided)
(a) Unless otherwise provided herein to the contrary, the Service may be
accessed only by means of the Equipment and the Software (if any). The
Equipment will be supplied and installed at the Premises, and maintained and
repaired only by Reuters or a Reuters designee. Reuters will, at its cost, take
all reasonable steps to arrange for the maintenance and proper functioning of
the Equipment, except where required as a result of accident, negligence or
misuse not attributable to Reuters, failure of operating environment or other
than ordinary use as permitted hereunder.
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(b) Reuters may, at any time, upon notice, replace the Equipment with other
equipment (which shall then be deemed to form part of the Equipment), or replace
the means of transmission of the Service with another means of transmission.
Reuters will take reasonable steps to ensure that the services provided to the
Subscriber after replacement of the Equipment, or replacement of the means of
the transmission, are substantially similar to the Service. The replacement
notice will indicate any change in charges for the Service as a result of the
replacement, which change in charges will commence upon replacement. In the
event of an increase in charges for the Service or if such replacement service
is substantially different from the existing Service, the Subscriber may cancel
the Service by giving notice of such termination to Reuters not more than sixty
(60) days after the date of Reuters notice of replacement.
(c) Reuters holds title to the Equipment, or has obtained the right from a
third party to make the same available for use by the Subscriber. Such
Equipment will at all times remain the personal property of Reuters or such
third party, as the case may be, regardless of the manner in which it is
installed in or attached at the Premises. The Subscriber will be responsible
for any loss, cost, claim or damage caused to or by the Equipment from any cause
whatsoever including but not limited to mysterious disappearance or theft, or in
connection with its installation, removal, use, maintenance or repair, unless
such loss or damage is due to the negligence or willful misconduct of Reuters.
The Subscriber will indemnify and hold Reuters harmless from and against any
loss, cost, claim or damage (including reasonable attorneys' fees) arising out
of any property damage or personal injury caused to or by the Equipment or in
connection with its installation, removal, use, maintenance or repair, unless
such property damage or personal injury is due to the negligence or willful
misconduct of Reuters.
(d) The Subscriber will not, without Reuters prior written consent, make any
alteration, addition, correction to or interface with the Equipment, or permit
access to the Equipment by any person not authorized by Reuters.
(e) The Subscriber will not move the Equipment from its location as installed
without the prior written consent and supervision of Reuters; nor will the
Subscriber allow the Equipment to become subject to any claims, liens or
encumbrances.
(f) The Subscriber will provide all risk insurance coverage sufficient to
protect the Equipment. The Subscriber will name Reuters as an additional
insured on any policy or policies obtained with respect to the Equipment.
(g) The Subscriber will provide, at its own expense, all consumable items,
suitable environmental conditions and cable pulling services, as applicable,
(each in accordance with applicable Underwriters Laboratories, Inc. standards)
for the Equipment, and will make arrangements to obtain any and all consents,
rights of access, easements, governmental approvals, building permits, zoning
authorizations, or other rights or authorizations necessary for the installation
and use of Equipment on the roof or within other portions of the Premises for
purposes of transmission and receipt of the Service.
4. LIABILITY
(a) Although Reuters makes every effort to ensure the accuracy and reliability
of the Service, the Subscriber acknowledges that Reuters, its employees, agents,
contractors, subcontractors, Contributors and Third Party Providers will not be
held liable for any loss, cost or damage, (including the loss of Subscriber
data) suffered or incurred by the Subscriber or any third party arising out of
any faults, interruptions or delays in the Service or out of any inaccuracies,
errors or omissions in the information contained in the Service as supplied to
or contributed by the Subscriber, however such faults, interruptions, delays,
inaccuracies, errors or omissions arise unless due to Reuters gross negligence
or willful misconduct.
(b) The Subscriber will indemnify and hold Reuters, its employees, agents,
contractors and subcontractors harmless from and against any loss, cost or
damage (including reasonable attorneys' fees) in connection with any claim or
action which may be brought by any third party, accessing all or part of the
Service through or by means of the Subscriber, and arising out of any faults,
interruptions or delays in the Service or any inaccuracies, errors or omissions
in the information contained in the Service as supplied to or contributed by the
Subscriber, unless due to Reuters gross negligence or willful misconduct.
(c) THERE ARE NO WARRANTIES, CONDITIONS, GUARANTIES OR REPRESENTATIONS AS TO
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHER WARRANTIES,
CONDITIONS, GUARANTIES OR REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, IN LAW OR
IN FACT, ORAL OR IN WRITING, EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT. THE
SUBSCRIBER HEREBY ACKNOWLEDGES THAT IT HAS NOT RELIED UPON ANY WARRANTY,
CONDITION, GUARANTY OR REPRESENTATION MADE BY REUTERS.
(d) Reuters will be under no liability for any loss, cost or damage resulting
from any failure by Reuters to perform any obligation hereunder or from any
delay in the performance thereof due to causes beyond Reuters control,
including, without limitation, industrial disputes of whatever nature, acts of
God, public enemy, acts of government, failure of telecommunications, fire or
other casualty.
(e) Under no circumstances will Reuters be liable for any indirect, incidental,
special or consequential damages with respect to provision of the Service, the
Software or the Equipment to the Subscriber, including, without limitation, lost
profits.
(f) Notwithstanding any provision contained herein to the contrary, in no event
will the aggregate liability of Reuters, its affiliates, employees or agents to
the Subscriber or to any other party for damages, direct or otherwise, arising
out of or in connection with this Agreement exceed the total amount of
Subscription Fees actually paid to Reuters during the then current term of this
Agreement, regardless of the cause or form of action, whether claims therefor
are grounded in contract, tort (including negligence) or strict liability.
5. CONTRIBUTED INFORMATION (if applicable)
(a) A Contributor may only contribute information in a format approved in
advance by Reuters. Such information may be used by Reuters and its affiliates
in any of its services with or without attribution.
(b) The Contributor agrees to take all necessary steps to ensure that only
competent and responsible persons have the necessary authority and physical
access to contribute information to the Service.
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(c) The Contributor agrees to regularly update and correct, where necessary,
all information contributed by it. Unless otherwise specified in the
information contributed, prices contributed must be indicative of those at which
the Contributor would be prepared to negotiate.
(d) Contributed Information must not comprise administrative messages,
defamatory or advertising material or any information the dissemination of which
is contrary to the law or stock or commodity exchange or banking regulations, or
any other applicable regulations or market conventions.
(e) The Contributor hereby indemnifies and holds Reuters, its employees,
agents, contractors and subcontractors harmless from and against any loss, cost
or damage (including reasonable attorneys' fees) arising out of an actual or
threatened claim brought by any third party against Reuters due to the use or
possession of the Contributor's contributed information by Reuters, its
employees, agents or subscribers.
6. THE CHARGES
(a) The Subscription Fee is net of all taxes and duties, whether withheld or
directly payable. In all cases the amount of the Subscription Fee will be paid
by the Subscriber to Reuters in full without any right of set-off or deduction.
In addition to the Subscription Fee, the Subscriber will pay the following
additional charges (the "Additional Fees"):
(i) stock and commodity or other applicable exchange fees, if any, (the
"Exchange Fees") (which may be charged on the basis of the number of Subscriber
accesses to the Service);
(ii) all charges, if any, for delivery of the Service by Reuters to the
Subscriber including costs for lines and terminal equipment;
(iii) all costs incurred by Reuters or its designees, where applicable, for
installation, relocation, modification, or removal of the Service and/or
Equipment (including but not limited to, costs due to site surveys, provision of
cable wire, shipment and connection of Equipment, and Subscriber-caused delays);
(iv) (to Reuters or to a taxing authority, as appropriate) any applicable sales,
use, goods and services, value added or similar taxes, payable with respect to
the Subscription Fee, the Additional Fees, or any part thereof and/or the
Service, or otherwise arising with respect to this Agreement (other than taxes
levied or imposed upon Reuters income); and
(v) any applicable fees (the "Third Party Provider Fees") charged by third
parties other than Contributors or exchanges whose information or Software is
supplied by Reuters as part of the Service (a "Third Party Provider").
(b) A further Additional Fee (the "Security Deposit") will be paid by the
Subscriber upon the execution hereof, in an amount equal to the Subscription Fee
payable by the Subscriber during the first three (3) months of the term of this
Agreement. The Security Deposit may be used, applied or retained by Reuters, in
whole or in part, to the extent required for the payment of any Subscription Fee
and/or Additional Fees payable hereunder as to which the Subscriber is in
default, or for any sum which Reuters may expend or may be required to expend by
reason of the Subscriber's default hereunder. The balance of the Security
Deposit, if any, will be returned to the Subscriber upon the termination of this
Agreement after the return of the Equipment to Reuters.
(c) The Subscriber's liability to pay the Subscription Fee and the Additional
Fees (excluding the Security Deposit) arises on the Installation Date. The
Installation Date for each of the one or more Reuters services which comprise
part of the Service will be the earlier of the date on which such service is (i)
installed and operational, and (ii) first accessed by the Subscriber. Unless
specified herein or in any Addendum hereto to the contrary, the Subscription Fee
is due quarterly in advance on the first day of each calendar quarter (the
"Payment Date"). Any payments arising between the Installation Date and the
next Payment Date are due in advance on the Installation Date. Time of payment
will be of the essence of this Agreement. Should there be any additions to the
Service or Equipment hereunder, the additional charges therefor will be listed
on one or more addenda hereto and will be payable for the full remaining term of
this Agreement and any renewal term(s) hereof, and will be deemed to form part
the Subscription Fee and the Additional Fees, as applicable.
(d) In the event of an increase in Additional Fees due to parties other than
Reuters, any and all additional charges therefor will automatically be made a
part of this Agreement and will be payable, pro rata, by the Subscriber for the
full remaining portion of the term of this Agreement and any renewal term(s)
hereof.
(e) Reuters may, at any time, on not less than ninety (90) days written notice,
increase the Subscription Fee payable hereunder for any one or more of its
services. In such event the Subscriber may terminate this Agreement with
respect to such service or services on the date on which the increase(s) would
have become effective, by giving notice of termination to Reuters not less than
sixty (60) days before the effective date of the increase. Reuters will then
refund any portion of the Subscription Fee prepaid for the canceled portion of
the term. The Subscriber will continue to be charged for any service(s) still
being delivered pursuant to this Agreement.
(f) Without limitation of the provisions of Section 6(e) hereof, during each
year of the term and any renewal term of this Agreement, Reuters reserves the
right to increase its Subscription Fee by the yearly percentage increase in the
Consumer Price Index for all urban consumers as issued by the Bureau of Labor
Statistics of the US. Department of Labor in the New York/New Jersey
Metropolitan area ("CPI"), reported each September (as measured by the increase
in the CPI from September of the previous year to August of the present year).
Such percentage increase will become effective as of January 1st of the
following year.
7. TERMINATION
(a) In addition to any other remedy available at law or in equity, Reuters may
terminate this Agreement immediately, in whole or in part, without further
obligation to the Subscriber in the event of:
(i) any breach by the Subscriber of Section 1(a) or 1(f) of these General
Conditions of Business or a breach of the Subscriber's obligation to pay the
Subscription Fee or Additional Fees as specified in this Agreement;
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(ii) any other breach of this Agreement by the Subscriber which cannot be
remedied or is not remedied within thirty (30) days of the Subscriber being
requested to do so;
(iii) any merger, consolidation, acquisition, or the sale, lease or other
transfer of all or substantially all of the assets or shares of stock of the
Subscriber, or any other change in the control or ownership of the Subscriber;
(iv) the Subscriber's making an assignment for the benefit of its creditors, or
the filing by or against the Subscriber of a voluntary or involuntary petition
under any bankruptcy or insolvency law, under the reorganization or arrangement
provisions of the United States Bankruptcy Code, or under the provisions of any
law of like import, or the appointment of a trustee or receiver for the
Subscriber or its property; or
(v) as determined by Reuters sole reasonable discretion, the impracticability of
serving the Premises by, or the inaccessibility of the Premises to, the means of
transmission used for the delivery of the Service, in which case Reuters only
obligation to the Subscriber will be to refund the proportionate part of the
Subscription Fee prepaid for the portion of the Service which would have been
received following the date of termination.
(b) Reuters may, without penalty, interrupt the provision of the Service to the
Subscriber if the Subscriber uses non-Reuters equipment or software which in
Reuters reasonable opinion will cause errors, omissions or delays in the Service
or will interfere with transmission, reception or the operation of the Reuters
system or Equipment. The Service will be restored if, in Reuters reasonable
opinion, it has received satisfactory assurances as to future use of the
Service.
(c) Where the operation or delivery of the Service or any part thereof is
dependent upon an agreement between Reuters and a third party and such agreement
has expired or is terminated or suspended in whole or in part for any reason,
and Reuters is unable to enter into another equivalent agreement upon reasonable
terms, Reuters may immediately terminate this Agreement or the relevant part
thereof, and upon such termination Reuters only obligation to the Subscriber
will be to refund the proportionate part of the Subscription Fee prepaid for the
portion of the Service which would have been received following the date of
termination.
(d) Without limitation of any other remedy available at law or in equity, the
Subscriber and Reuters hereby agree that upon the Subscriber's:
(i) breach of this Agreement and subsequent termination by Reuters, or
(ii) terminating this Agreement (except as permitted hereunder) Reuters will be
entitled to recover from the Subscriber as and for liquidated damages an amount
equal to the total aggregate charges payable for the unexpired portion of the
then current term, discounted at the rate of two (2%) percent of such aggregate
sum for each month of the term during which this Agreement was in effect and
fully paid for, to a minimum of seventy-five (75%) percent of such aggregate
sum. The parties hereto hereby acknowledge and agree that, after giving due
consideration to the expenses Reuters will incur by reason of such breach or
termination, to the possibility that Reuters will not be able to mitigate its
damages, and to the savings that Reuters will obtain by not having to maintain
any installed Equipment, the aforesaid sum constitutes a realistic pre-estimate
of the loss to Reuters in the event of such breach or premature termination of
this Agreement and will not be construed as a penalty.
(e) Reuters will be entitled to remove any Equipment from the Premises
immediately upon termination of this Agreement for any reason.
(f) Reuters may, on six months' written notice, cease providing a Service or
withdraw any Software or Equipment if Reuters withdraws the Service or such
Software or Equipment from the country where the Premises are located.
8. GENERAL
(a) This Agreement and any and all Addenda, Schedules or Exhibits annexed hereto
represent the entire agreement of the parties regarding the subject matter
hereof. There are no other oral or written collateral representations,
agreements, or understandings regarding the subject matter hereof. In the event
that the Subscriber issues a purchase order or other instrument related to the
Service, it is understood and agreed that such document is for the Subscriber's
internal purposes only and will in no way supersede, modify, add to or delete
any of the terms and conditions of this Agreement.
(b) All notices given hereunder will be in writing, delivered personally or
mailed by registered or certified mail, return receipt requested, postage
prepaid, or delivered by overnight mail or by confirmed facsimile; if to the
Subscriber, to the address specified in this Agreement, and if to Reuters, to
the address of its local sales office, unless either party gives notice in
writing of a change of such address in the manner provided herein for giving
notice. All notices will be deemed given when delivered personally, if mailed
by registered or certified mail, five (5) days after the date of mailing, if
delivered by overnight mail 72 hours after mailing, or if by confirmed
facsimile, 24 hours after the time of sending.
(c) This Agreement will be deemed to have been executed and delivered in the
State of New York and it will be governed by and construed in accordance with
the laws of New York. The parties hereby consent to the jurisdiction of the
courts of the State of New York for the purpose of any action or proceeding
brought by either of them on or in connection with this Agreement or any alleged
breach thereof.
(d) This Agreement will be binding upon and inure to the benefit of the parties
hereto, their respective heirs, personal representatives, successors and
assigns. The Subscriber will not assign this Agreement without the prior
written consent of Reuters. "Any attempted assignment in violation of this
Section is void."
(e) This Agreement may not be amended, modified or superseded, nor may any of
its terms or conditions be waived unless expressly agreed to in writing by both
parties. The failure of either party at any time or times to require full
performance of any provision hereof will in no manner affect the right of such
party at a later time to enforce the same.
(f) If any provision or term of this Agreement, not being of a fundamental
nature, is held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remainder of this Agreement will not be affected.
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(g) The provisions of Section 1(a), 1(f) and 2(a) hereof, and any and all
disclaimers and indemnities contained herein or in any addenda annexed hereto
will survive the termination of this Agreement.
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SCHEDULE 7
AUTHORISED DISTRIBUTOR COUNTRIES
Brazil
Indonesia
Malaysia
<PAGE>
Exhibit 10.5
MULTEX.COM, INC.
1999 STOCK OPTION PLAN
----------------------
ARTICLE ONE
GENERAL PROVISIONS
------------------
I. PURPOSE OF THE PLAN
This 1999 Stock Option Plan is intended to promote the interests of
Multex.com, Inc., a Delaware corporation, by providing eligible persons with the
opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
the service of the Corporation.
Capitalized terms shall have the meanings assigned to such terms in
the attached Appendix.
II. STRUCTURE OF THE PLAN
A. The Plan shall be divided into four separate equity programs:
(i) the Discretionary Option Grant Program under which eligible
persons may, at the discretion of the Plan Administrator, be granted options to
purchase shares of Common Stock,
(ii) the Salary Investment Option Grant Program under which
eligible employees may elect to have a portion of their base salary invested
each year in special options,
(iii) the Stock Issuance Program under which eligible persons
may, at the discretion of the Plan Administrator, be issued shares of Common
Stock directly, either through the immediate purchase of such shares or as a
bonus for services rendered the Corporation (or any Parent or Subsidiary), and
(iv) the Automatic Option Grant Program under which eligible
non-employee Board members shall automatically receive options at periodic
intervals to purchase shares of Common Stock.
B. The provisions of Articles One and Six shall apply to all equity
programs under the Plan and shall govern the interests of all persons under the
Plan.
III. ADMINISTRATION OF THE PLAN
A. Prior to the Section 12 Registration Date, the Discretionary
Option Grant and Stock Issuance Programs shall be administered by the Board.
Beginning with the Section 12 Registration Date, the following provisions shall
govern the administration of the Plan:
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(i) The Board shall have the authority to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders but may delegate such authority in whole or in part to the Primary
Committee.
(ii) Administration of the Discretionary Option Grant and Stock
Issuance Programs with respect to all other persons eligible to participate in
those programs may, at the Board's discretion, be vested in the Primary
Committee or a Secondary Committee, or the Board may retain the power to
administer those programs with respect to all such persons.
(iii) The Primary Committee shall have the sole and exclusive
authority to determine which Section 16 Insiders and other highly compensated
Employees shall be eligible for participation in the Salary Investment Option
Grant Program for one or more calendar years. However, all option grants under
the Salary Investment Option Grant Program shall be made in accordance with the
express terms of that program, and the Primary Committee shall not exercise any
discretionary functions with respect to the option grants made under that
program.
(iv) Administration of the Automatic Option Grant Program shall
be self-executing in accordance with the terms of that program.
B. Each Plan Administrator shall, within the scope of its
administrative jurisdiction under the Plan, have full power and authority
subject to the provisions of the Plan:
(i) to establish such rules as it may deem appropriate for
proper administration of the Plan, to make all factual determinations, to
construe and interpret the provisions of the Plan and the awards thereunder and
to resolve any and all ambiguities thereunder;
(ii) to determine, with respect to awards made under the
Discretionary Option Grant and Stock Issuance Programs, which eligible persons
are to receive such awards, the time or times when such awards are to be made,
the number of shares to be covered by each such award, the vesting schedule (if
any) applicable to the award, the status of a granted option as either an
Incentive Option or a Non-Statutory Option and the maximum term for which the
option is to remain outstanding;
(iii) to amend, modify or cancel any outstanding award with the
consent of the holder or accelerate the vesting of such award; and
(iv) to take such other discretionary actions as permitted
pursuant to the terms of the applicable program.
Decisions of each Plan Administrator within the scope of its administrative
functions under the Plan shall be final and binding on all parties.
C. Members of the Primary Committee or any Secondary Committee shall
serve for such period of time as the Board may determine and may be removed by
the Board at any time. The Board may also at any time terminate the functions
of any Secondary Committee and reassume all powers and authority previously
delegated to such committee.
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D. Service on the Primary Committee or the Secondary Committee shall
constitute service as a Board member, and members of each such committee shall
accordingly be entitled to full indemnification and reimbursement as Board
members for their service on such committee. No member of the Primary Committee
or the Secondary Committee shall be liable for any act or omission made in good
faith with respect to the Plan or any options or stock issuances under the Plan.
IV. ELIGIBILITY
A. The persons eligible to participate in the Discretionary Option
Grant and Stock Issuance Programs are as follows:
(i) Employees,
(ii) non-employee members of the Board or the board of directors
of any Parent or Subsidiary, and
(iii) consultants and other independent advisors who provide
services to the Corporation (or any Parent or Subsidiary).
B. Only Employees who are Section 16 Insiders or other highly
compensated individuals shall be eligible to participate in the Salary
Investment Option Grant Program.
C. Only non-employee Board members shall be eligible to participate
in the Automatic Option Grant Program.
V. STOCK SUBJECT TO THE PLAN
A. The stock issuable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares repurchased by the
Corporation on the open market. The maximum number of shares of Common Stock
initially reserved for issuance over the term of the Plan shall not exceed Three
Million Four Hundred Eleven Thousand Three Hundred Seventy-Five (3,411,375)
shares. Such authorized share reserve consists of the number of shares which
remain available for issuance, as of the Plan Effective Date, under the
Predecessor Plan as last approved by the Corporation's stockholders, including
the shares subject to the outstanding options to be incorporated into the Plan
and the additional shares which would otherwise be available for future grant.
B. The number of shares of Common Stock available for issuance under
the Plan shall automatically increase on the first trading day of each calendar
year during the term of the Plan, beginning with the 2000 calendar year, by an
amount equal to three percent (3%) of the shares of Common Stock outstanding on
the last trading day of the immediately preceding calendar year, but in no event
shall any such annual increase exceed Seven Hundred Fifty Thousand (750,000)
shares.
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C. No one person participating in the Plan may receive options,
separately exercisable stock appreciation rights and direct stock issuances for
more than Three Hundred Seventy Five Thousand (375,000) shares of Common Stock
in the aggregate per calendar year, beginning with the 1999 calendar year.
D. Shares of Common Stock subject to outstanding options (including
options incorporated into this Plan from the Predecessor Plan) shall be
available for subsequent issuance under the Plan to the extent those options
expire, terminate or are cancelled for any reason prior to exercise in full.
Unvested shares issued under the Plan and subsequently repurchased by the
Corporation, at the original exercise or issue price paid per share, pursuant to
the Corporation's repurchase rights under the Plan, shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan and shall
accordingly be available for reissuance through one or more subsequent options
or direct stock issuances under the Plan. However, should the exercise price of
an option under the Plan be paid with shares of Common Stock or should shares of
Common Stock otherwise issuable under the Plan be withheld by the Corporation in
satisfaction of the withholding taxes incurred in connection with the exercise
of an option or the vesting of a stock issuance under the Plan, then the number
of shares of Common Stock available for issuance under the Plan shall be reduced
by the gross number of shares for which the option is exercised or which vest
under the stock issuance, and not by the net number of shares of Common Stock
issued to the holder of such option or stock issuance. Shares of Common Stock
underlying one or more stock appreciation rights exercised under the Plan shall
not be available for subsequent issuance.
E. If any change is made to the Common Stock by reason of any stock
split, stock dividend, recapitalization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration, appropriate adjustments shall be
made to (i) the maximum number and/or class of securities issuable under the
Plan, (ii) the number and/or class of securities by which the share reserve is
to increase each calendar year pursuant to the automatic share increase
provisions of the Plan, (iii) the number and/or class of securities for which
any one person may be granted options, separately exercisable stock appreciation
rights and direct stock issuances under the Plan per calendar year, (iv) the
number and/or class of securities for which grants are subsequently to be made
under the Automatic Option Grant Program to new and continuing non-employee
Board members, (v) the number and/or class of securities and the exercise price
per share in effect under each outstanding option under the Plan and (vi) the
number and/or class of securities and price per share in effect under each
outstanding option incorporated into this Plan from the Predecessor Plan. Such
adjustments to the outstanding options are to be effected in a manner which
shall preclude the enlargement or dilution of rights and benefits under such
options. The adjustments determined by the Plan Administrator shall be final,
binding and conclusive.
4
<PAGE>
ARTICLE TWO
DISCRETIONARY OPTION GRANT PROGRAM
----------------------------------
I. OPTION TERMS
Each option shall be evidenced by one or more documents in the form
approved by the Plan Administrator; provided, however, that each such document
shall comply with the terms specified below. Each document evidencing an
Incentive Option shall, in addition, be subject to the provisions of the Plan
applicable to such options.
A. Exercise Price.
--------------
1. The exercise price per share shall be fixed by the Plan
Administrator at the time of the option grant.
2. The exercise price shall become immediately due upon exercise
of the option and shall, subject to the provisions of Section II of Article Six
and the documents evidencing the option, be payable in cash or check made
payable to the Corporation. Should the Common Stock be registered under Section
12 of the 1934 Act at the time the option is exercised, then the exercise price
may also be paid as follows:
(i) shares of Common Stock held for the requisite period
necessary to avoid a charge to the Corporation's earnings for financial
reporting purposes and valued at Fair Market Value on the Exercise Date, or
(ii) to the extent the option is exercised for vested shares,
through a special sale and remittance procedure pursuant to which the
Optionee shall concurrently provide irrevocable instructions to (a) a
Corporation-approved brokerage firm to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be
withheld by the Corporation by reason of such exercise and (b) the
Corporation to deliver the certificates for the purchased shares directly
to such brokerage firm in order to complete the sale.
Except to the extent such sale and remittance procedure is utilized,
payment of the exercise price for the purchased shares must be made on the
Exercise Date.
B. Exercise and Term of Options. Each option shall be exercisable at
----------------------------
such time or times, during such period and for such number of shares as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the option. However, no option shall have a term in excess of ten (10) years
measured from the option grant date.
5
<PAGE>
C. Cessation of Service.
--------------------
1. The following provisions shall govern the exercise of any
options outstanding at the time of the Optionee's cessation of Service or death:
(i) Any option outstanding at the time of the Optionee's
cessation of Service for any reason shall remain exercisable for such
period of time thereafter as shall be determined by the Plan Administrator
and set forth in the documents evidencing the option, but no such option
shall be exercisable after the expiration of the option term.
(ii) Any option exercisable in whole or in part by the
Optionee at the time of death may be subsequently exercised by his or her
Beneficiary.
(iii) During the applicable post-Service exercise period, the
option may not be exercised in the aggregate for more than the number of
vested shares for which the option is exercisable on the date of the
Optionee's cessation of Service. Upon the expiration of the applicable
exercise period or (if earlier) upon the expiration of the option term, the
option shall terminate and cease to be outstanding for any vested shares
for which the option has not been exercised. However, the option shall,
immediately upon the Optionee's cessation of Service, terminate and cease
to be outstanding to the extent the option is not otherwise at that time
exercisable for vested shares.
(iv) Should the Optionee's Service be terminated for
Misconduct or should the Optionee engage in Misconduct while his or her
options are outstanding, then all such options shall terminate immediately
and cease to be outstanding.
2. The Plan Administrator shall have complete discretion,
exercisable either at the time an option is granted or at any time while the
option remains outstanding:
(i) to extend the period of time for which the option is to
remain exercisable following the Optionee's cessation of Service to such
period of time as the Plan Administrator shall deem appropriate, but in no
event beyond the expiration of the option term, and/or
(ii) to permit the option to be exercised, during the
applicable post-Service exercise period, for one or more additional
installments in which the Optionee would have vested had the Optionee
continued in Service.
D. Stockholder Rights. The holder of an option shall have no
------------------
stockholder rights with respect to the shares subject to the option until such
person shall have exercised the option, paid the exercise price and become a
holder of record of the purchased shares.
E. Repurchase Rights. The Plan Administrator shall have the
-----------------
discretion to grant options which are exercisable for unvested shares of Common
Stock. Should the Optionee
6
<PAGE>
cease Service while holding such unvested shares, the Corporation shall have the
right to repurchase, at the exercise price paid per share, any or all of those
unvested shares. The terms upon which such repurchase right shall be exercisable
(including the period and procedure for exercise and the appropriate vesting
schedule for the purchased shares) shall be established by the Plan
Administrator and set forth in the document evidencing such repurchase right.
F. Limited Transferability of Options. During the lifetime of the
----------------------------------
Optionee, Incentive Options shall be exercisable only by the Optionee and shall
not be assignable or transferable other than by will or by the laws of descent
and distribution following the Optionee's death. Non-Statutory Options shall be
subject to the same restrictions, except that a Non-Statutory Option may, to the
extent permitted by the Plan Administrator, be assigned in whole or in part
during the Optionee's lifetime to one or more members of the Optionee's
immediate family or to a trust established exclusively for Optionee and/or one
or more such family members. The terms applicable to the assigned portion shall
be the same as those in effect for the option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee as
the Plan Administrator may deem appropriate.
II. INCENTIVE OPTIONS
The terms specified below shall be applicable to all Incentive
Options. Except as modified by the provisions of this Section II, all the
provisions of Articles One, Two and Six shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall not be subject to the terms of this Section II.
A. Eligibility. Incentive Options may only be granted to Employees.
-----------
B. Exercise Price. The exercise price per share shall not be less
--------------
than one hundred percent (100%) of the Fair Market Value per share of Common
Stock on the option grant date.
C. Dollar Limitation. The aggregate Fair Market Value of the shares
-----------------
of Common Stock (determined as of the respective date or dates of grant) for
which one or more options granted to any Employee under the Plan (or any other
option plan of the Corporation or any Parent or Subsidiary) may for the first
time become exercisable as Incentive Options during any one calendar year shall
not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent
the Employee holds two (2) or more such options which become exercisable for the
first time in the same calendar year, the foregoing limitation on the
exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.
D. 10% Stockholder. If any Employee to whom an Incentive Option is
---------------
granted is a 10% Stockholder, then the exercise price per share shall not be
less than one hundred ten percent (110%) of the Fair Market Value per share of
Common Stock on the option grant date, and the option term shall not exceed five
(5) years measured from the option grant date.
III. CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. Each option outstanding at the time of a Change in Control but not
otherwise fully-vested shall automatically accelerate so that each such option
shall, immediately
7
<PAGE>
prior to the effective date of the Change in Control, become exercisable for all
of the shares of Common Stock at the time subject to that option and may be
exercised for any or all of those shares as fully-vested shares of Common Stock.
However, an outstanding option shall not so accelerate if and to the extent: (i)
such option is, in connection with the Change in Control, assumed or otherwise
continued in full force and effect by the successor corporation (or parent
thereof) pursuant to the terms of the Change in Control, (ii) such option is
replaced with a cash incentive program of the successor corporation which
preserves the spread existing at the time of the Change in Control on the shares
of Common Stock for which the option is not otherwise at that time exercisable
and provides for subsequent payout in accordance with the same vesting schedule
applicable to those option shares or (iii) the acceleration of such option is
subject to other limitations imposed by the Plan Administrator at the time of
the option grant.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Change in Control, except to
the extent: (i) those repurchase rights are assigned to the successor
corporation (or parent thereof) or otherwise continue in full force and effect
pursuant to the terms of the Change in Control or (ii) such accelerated vesting
is precluded by other limitations imposed by the Plan Administrator at the time
the repurchase right is issued.
C. Immediately following the consummation of the Change in Control,
all outstanding options shall terminate and cease to be outstanding, except to
the extent assumed by the successor corporation (or parent thereof) or otherwise
expressly continued in full force and effect pursuant to the terms of the Change
in Control.
D. Each option which is assumed in connection with a Change in
Control shall be appropriately adjusted, immediately after such Change in
Control, to apply to the number and class of securities which would have been
issuable to the Optionee in consummation of such Change in Control had the
option been exercised immediately prior to such Change in Control. Appropriate
adjustments to reflect such Change in Control shall also be made to (i) the
exercise price payable per share under each outstanding option, provided the
aggregate exercise price payable for such securities shall remain the same, (ii)
the maximum number and/or class of securities available for issuance over the
remaining term of the Plan and (iii) the maximum number and/or class of
securities for which any one person may be granted options, separately
exercisable stock appreciation rights and direct stock issuances under the Plan
per calendar year.
E. The Plan Administrator may at any time provide that one or more
options will automatically accelerate in connection with a Change in Control,
whether or not those options are assumed or otherwise continued in full force
and effect pursuant to the terms of the Change in Control. Any such option
shall accordingly become exercisable, immediately prior to the effective date of
such Change in Control, for all of the shares of Common Stock at the time
subject to that option and may be exercised for any or all of those shares as
fully-vested shares of Common Stock. In addition, the Plan Administrator may at
any time provide that one or more of the Corporation's repurchase rights shall
not be assignable in connection with such Change in Control and shall terminate
upon the consummation of such Change in Control.
F. The Plan Administrator may at any time provide that one or more
options will automatically accelerate upon an Involuntary Termination of the
Optionee's Service within a
8
<PAGE>
designated period (not to exceed eighteen (18) months) following the effective
date of any Change in Control in which those options do not otherwise
accelerate. Any options so accelerated shall remain exercisable for fully-vested
shares until the earlier of (i) the expiration of the option term or (ii) the
expiration of the one (1) year period measured from the effective date of the
Involuntary Termination. In addition, the Plan Administrator may at any time
provide that one or more of the Corporation's repurchase rights shall
immediately terminate upon such Involuntary Termination.
G. The Plan Administrator may at any time provide that one or more
options will automatically accelerate in connection with a Hostile Take-Over.
Any such option shall become exercisable, immediately prior to the effective
date of such Hostile Take-Over, for all of the shares of Common Stock at the
time subject to that option and may be exercised for any or all of those shares
as fully-vested shares of Common Stock. In addition, the Plan Administrator may
at any time provide that one or more of the Corporation's repurchase rights
shall terminate automatically upon the consummation of such Hostile Take-Over.
Alternatively, the Plan Administrator may condition such automatic acceleration
and termination upon an Involuntary Termination of the Optionee's Service within
a designated period (not to exceed eighteen (18) months) following the effective
date of such Hostile Take-Over. Each option so accelerated shall remain
exercisable for fully-vested shares until the expiration or sooner termination
of the option term.
H. The portion of any Incentive Option accelerated in connection with
a Change in Control or Hostile Take Over shall remain exercisable as an
Incentive Option only to the extent the applicable One Hundred Thousand Dollar
($100,000) limitation is not exceeded. To the extent such dollar limitation is
exceeded, the accelerated portion of such option shall be exercisable as a Non-
Statutory Option under the Federal tax laws.
IV. STOCK APPRECIATION RIGHTS
The Plan Administrator may, subject to such conditions as it may
determine, grant to selected Optionees stock appreciation rights which will
allow the holders of those rights to elect between the exercise of the
underlying option for shares of Common Stock and the surrender of that option in
exchange for a distribution from the Corporation in an amount equal to the
excess of (a) the Option Surrender Value of the number of shares for which the
option is surrendered over (b) the aggregate exercise price payable for such
shares. The distribution may be made in shares of Common Stock valued at Fair
Market Value on the option surrender date, in cash, or partly in shares and
partly in cash, as the Plan Administrator shall in its sole discretion deem
appropriate.
9
<PAGE>
ARTICLE THREE
SALARY INVESTMENT OPTION GRANT PROGRAM
--------------------------------------
I. OPTION GRANTS
The Primary Committee may implement the Salary Investment Option Grant
Program for one or more calendar years beginning after the Underwriting Date and
select the Section 16 Insiders and other highly compensated Employees eligible
to participate in the Salary Investment Option Grant Program for each such
calendar year. Each selected individual who elects to participate in the Salary
Investment Option Grant Program must, prior to the start of each calendar year
of participation, file with the Plan Administrator (or its designate) an
irrevocable authorization directing the Corporation to reduce his or her base
salary for that calendar year by an amount not less than Ten Thousand Dollars
($10,000.00) nor more than Fifty Thousand Dollars ($50,000.00). The Primary
Committee shall have complete discretion to determine whether to approve the
filed authorization in whole or in part. To the extent the Primary Committee
approves the authorization, the individual who filed that authorization shall be
granted an option under the Salary Investment Grant Program on the first trading
day in January for the calendar year for which the salary reduction is to be in
effect.
II. OPTION TERMS
Each option shall be a Non-Statutory Option evidenced by one or more
documents in the form approved by the Plan Administrator; provided, however,
that each such document shall comply with the terms specified below.
A. Exercise Price.
--------------
1. The exercise price per share shall be thirty-three and one-
third percent (33-1/3%) of the Fair Market Value per share of Common Stock on
the option grant date.
2. The exercise price shall become immediately due upon exercise
of the option and shall be payable in one or more of the alternative forms
authorized under the Discretionary Option Grant Program. Except to the extent
the sale and remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.
B. Number of Option Shares. The number of shares of Common Stock
-----------------------
subject to the option shall be determined pursuant to the following formula
(rounded down to the nearest whole number):
X = A/(B x 66-2/3%), where
X is the number of option shares,
A is the dollar amount of the approved reduction in the
Optionee's base salary for the calendar year, and
10
<PAGE>
B is the Fair Market Value per share of Common Stock on the
option grant date.
C. Exercise and Term of Options. The option shall become exercisable
----------------------------
in a series of twelve (12) successive equal monthly installments upon the
Optionee's completion of each calendar month of Service in the calendar year for
which the salary reduction is in effect. Each option shall have a maximum term
of ten (10) years measured from the option grant date.
D. Cessation of Service. Each option outstanding at the time of the
--------------------
Optionee's cessation of Service shall remain exercisable, for any or all of the
shares for which the option is exercisable at the time of such cessation of
Service, until the earlier of (i) the expiration of the option term or (ii) the
expiration of the three (3)-year period following the Optionee's cessation of
Service. To the extent the option is held by the Optionee at the time of his or
her death, the option may be exercised by his or her Beneficiary. However, the
option shall, immediately upon the Optionee's cessation of Service, terminate
and cease to remain outstanding with respect to any and all shares of Common
Stock for which the option is not otherwise at that time exercisable.
III. CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Change in Control or Hostile Take-Over while
the Optionee remains in Service, each outstanding option shall automatically
accelerate so that each such option shall, immediately prior to the effective
date of the Change in Control or Hostile Take-Over, become fully exercisable
with respect to the total number of shares of Common Stock at the time subject
to such option and may be exercised for any or all of those shares as fully-
vested shares of Common Stock. Each such option accelerated in connection with
a Change in Control shall terminate upon the Change in Control, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
continued in full force and effect pursuant to the terms of the Change in
Control. Each such option accelerated in connection with a Hostile Take-Over
shall remain exercisable until the expiration or sooner termination of the
option term.
B. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each of
his or her outstanding options. The Optionee shall in return be entitled to a
cash distribution from the Corporation in an amount equal to the excess of (i)
the Option Surrender Value of the shares of Common Stock at the time subject to
each surrendered option (whether or not the Optionee is otherwise at the time
vested in those shares) over (ii) the aggregate exercise price payable for such
shares. Such cash distribution shall be paid within five (5) days following the
surrender of the option to the Corporation.
IV. REMAINING TERMS
The remaining terms of each option granted under the Salary Investment
Option Grant Program shall be the same as the terms in effect for options made
under the Discretionary Option Grant Program.
11
<PAGE>
ARTICLE FOUR
STOCK ISSUANCE PROGRAM
----------------------
I. STOCK ISSUANCE TERMS
Shares of Common Stock may be issued under the Stock Issuance Program
through direct and immediate issuances without any intervening options. Shares
of Common Stock may also be issued under the Stock Issuance Program pursuant to
share right awards which entitle the recipients to receive those shares upon the
attainment of designated performance goals or Service requirements. Each such
award shall be evidenced by one or more documents which comply with the terms
specified below.
A. Purchase Price.
--------------
1. The purchase price per share of Common Stock subject to
direct issuance shall be fixed by the Plan Administrator.
2. Subject to the provisions of Section II of Article Six, shares
of Common Stock may be issued under the Stock Issuance Program for any of the
following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:
(i) cash or check made payable to the Corporation, or
(ii) past services rendered to the Corporation (or any Parent
or Subsidiary).
B. Vesting/Issuance Provisions.
---------------------------
1. The Plan Administrator may issue shares of Common Stock which
are fully and immediately vested upon issuance or which are to vest in one or
more installments over the Participant's period of Service or upon attainment of
specified performance objectives. Alternatively, the Plan Administrator may
issue share right awards which shall entitle the recipient to receive a
specified number of vested shares of Common Stock upon the attainment of one or
more performance goals or Service requirements established by the Plan
Administrator.
2. Any new, substituted or additional securities or other property
(including money paid other than as a regular cash dividend) which the
Participant may have the right to receive with respect to his or her unvested
shares of Common Stock by reason of any stock dividend, stock split,
recapitalization, combination of shares, exchange of shares or other change
affecting the outstanding Common Stock as a class without the Corporation's
receipt of consideration shall be issued subject to (i) the same vesting
requirements applicable to the Participant's unvested shares of Common Stock and
(ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
3. The Participant shall have full stockholder rights with respect
to the issued shares of Common Stock, whether or not the Participant's interest
in those shares is
12
<PAGE>
vested. Accordingly, the Participant shall have the right to vote such shares
and to receive any regular cash dividends paid on such shares.
4. Should the Participant cease to remain in Service while holding
one or more unvested shares of Common Stock, or should the performance
objectives not be attained with respect to one or more such unvested shares of
Common Stock, then those shares shall be immediately surrendered to the
Corporation for cancellation, and the Participant shall have no further
stockholder rights with respect to those shares. To the extent the surrendered
shares were previously issued to the Participant for consideration paid in cash
or cash equivalent (including the Participant's purchase-money indebtedness),
the Corporation shall repay to the Participant the cash consideration paid for
the surrendered shares and shall cancel the unpaid principal balance of any
outstanding purchase-money note of the Participant attributable to the
surrendered shares.
5. The Plan Administrator may waive the surrender and cancellation
of one or more unvested shares of Common Stock (or other assets attributable
thereto) which would otherwise occur upon the cessation of the Participant's
Service or the non-attainment of the performance objectives applicable to those
shares. Such waiver shall result in the immediate vesting of the Participant's
interest in the shares of Common Stock as to which the waiver applies. Such
waiver may be effected at any time, whether before or after the Participant's
cessation of Service or the attainment or non-attainment of the applicable
performance objectives.
6. Outstanding share right awards shall automatically terminate,
and no shares of Common Stock shall actually be issued in satisfaction of those
awards, if the performance goals or Service requirements established for such
awards are not attained. The Plan Administrator, however, shall have the
authority to issue shares of Common Stock in satisfaction of one or more
outstanding share right awards as to which the designated performance goals or
Service requirements are not attained.
II. CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. All of the Corporation's outstanding repurchase rights shall
terminate automatically, and all the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event of any Change in
Control, except to the extent (i) those repurchase rights are assigned to the
successor corporation (or parent thereof) or otherwise continue in full force
and effect pursuant to the terms of the Change in Control or (ii) such
accelerated vesting is precluded by other limitations imposed by the Plan
Administrator at the time the repurchase right is issued.
B. The Plan Administrator may at any time provide for the automatic
termination of one or more of those outstanding repurchase rights and the
immediate vesting of the shares of Common Stock subject to those terminated
rights upon (i) a Change in Control or Hostile Take-Over or (ii) an Involuntary
Termination of the Participant's Service within a designated period (not to
exceed eighteen (18) months) following the effective date of any Change in
Control or Hostile Take-Over in which those repurchase rights are assigned to
the successor corporation (or parent thereof) or otherwise continue in full
force and effect.
13
<PAGE>
III. SHARE ESCROW/LEGENDS
Unvested shares may, in the Plan Administrator's discretion, be held
in escrow by the Corporation until the Participant's interest in such shares
vests or may be issued directly to the Participant with restrictive legends on
the certificates evidencing those unvested shares.
14
<PAGE>
ARTICLE FIVE
AUTOMATIC OPTION GRANT PROGRAM
------------------------------
I. OPTION TERMS
A. Grant Dates. Options shall be made on the dates specified below:
-----------
1. Each individual serving as a non-employee Board member on the
Underwriting Date shall automatically be granted at that time a Non-Statutory
Option to purchase Twelve Thousand (12,000) shares of Common Stock, provided
that individual has not previously been in the employ of the Corporation or any
Parent or Subsidiary and is not a 5% Stockholder or Affiliate.
2. Each individual who is first elected or appointed as a non-
employee Board member at any time after the Underwriting Date shall
automatically be granted, on the date of such initial election or appointment, a
Non-Statutory Option to purchase Twelve Thousand (12,000) shares of Common
Stock, provided that individual has not previously been in the employ of the
Corporation or any Parent or Subsidiary and is not a 5% Stockholder or
Affiliate.
3. On the date of each Annual Stockholders Meeting held after the
Underwriting Date, each individual who is to continue to serve as a non-employee
Board member, whether or not that individual is standing for re-election to the
Board, shall automatically be granted a Non-Statutory Option to purchase Three
Thousand Seven Hundred Fifty (3,750) shares of Common Stock, provided such
individual has served as a non-employee Board member for at least six (6) months
and is not a 5% Stockholder or Affiliate.
B. Exercise Price.
1. The exercise price per share shall be equal to one hundred
percent (100%) of the Fair Market Value per share of Common Stock on the option
grant date.
2. The exercise price shall be payable in one or more of the
alternative forms authorized under the Discretionary Option Grant Program.
Except to the extent the sale and remittance procedure specified thereunder is
utilized, payment of the exercise price for the purchased shares must be made on
the Exercise Date.
C. Option Term. Each option shall have a term of ten (10) years
-----------
measured from the option grant date.
D. Exercise and Vesting of Options. Each option shall be immediately
-------------------------------
exercisable for any or all of the option shares. However, any shares purchased
under the option shall be subject to repurchase by the Corporation, at the
exercise price paid per share, upon the Optionee's cessation of Board service
prior to vesting in those shares. Each initial
15
<PAGE>
Twelve Thousand (12,000)-share option shall vest, and the Corporation's
repurchase right shall lapse, in a series of four (4) successive equal annual
installments upon the Optionee's completion of each year of Board service over
the four (4)-year period measured from the grant date. Each annual Three
Thousand Seven Hundred Fifty (3,750)-share option shall vest, and the
Corporation's repurchase right shall lapse, upon the Optionee's completion of
one (1) year of Board service measured from the grant date.
E. Cessation of Board Service. The following provisions shall govern
--------------------------
the exercise of any options outstanding at the time of the Optionee's cessation
of Board service:
(i) Any option outstanding at the time of the Optionee's
cessation of Board service for any reason shall remain exercisable for a
twelve (12)-month period following the date of such cessation of Board
service, but in no event shall such option be exercisable after the
expiration of the option term.
(ii) Any option exercisable in whole or in part by the Optionee
at the time of death may be subsequently exercised by his or her
Beneficiary.
(iii) Following the Optionee's cessation of Board service, the
option may not be exercised in the aggregate for more than the number of
shares in which the Optionee was vested on the date of such cessation of
Board service. Upon the expiration of the applicable exercise period or
(if earlier) upon the expiration of the option term, the option shall
terminate and cease to be outstanding for any vested shares for which the
option has not been exercised. However, the option shall, immediately upon
the Optionee's cessation of Board service, terminate and cease to be
outstanding for any and all shares in which the Optionee is not otherwise
at that time vested.
(iv) However, should the Optionee cease to serve as a Board
member by reason of death or Permanent Disability, then all shares at the
time subject to the option shall immediately vest so that such option may,
during the twelve (12)-month exercise period following such cessation of
Board service, be exercised for all or any portion of those shares as
fully-vested shares of Common Stock.
II. CHANGE IN CONTROL/HOSTILE TAKE-OVER
A. In the event of any Change in Control or Hostile Take-Over, the
shares of Common Stock at the time subject to each outstanding option but not
otherwise vested shall automatically vest in full so that each such option may,
immediately prior to the effective date of such Change in Control the Hostile
Take-Over, be exercised for all or any portion of those shares as fully-vested
shares of Common Stock. Each such option accelerated in connection with a
Change in Control shall terminate upon the Change in Control, except to the
extent assumed by the successor corporation (or parent thereof) or otherwise
continued in full force and effect pursuant to the terms of the Change in
Control. Each such option accelerated in connection with
16
<PAGE>
a Hostile Take-Over shall remain exercisable until the expiration or sooner
termination of the option term.
B. All outstanding repurchase rights shall also terminate
automatically, and the shares of Common Stock subject to those terminated rights
shall immediately vest in full, in the event of any Change in Control or Hostile
Take-Over.
C. Upon the occurrence of a Hostile Take-Over, the Optionee shall
have a thirty (30)-day period in which to surrender to the Corporation each of
his or her outstanding options. The Optionee shall in return be entitled to a
cash distribution from the Corporation in an amount equal to the excess of (i)
the Option Surrender Value of the shares of Common Stock at the time subject to
each surrendered option (whether or not the Optionee is otherwise at the time
vested in those shares) over (ii) the aggregate exercise price payable for such
shares. Such cash distribution shall be paid within five (5) days following the
surrender of the option to the Corporation.
D. Each option which is assumed in connection with a Change in
Control shall be appropriately adjusted to apply to the number and class of
securities which would have been issuable to the Optionee in consummation of
such Change in Control had the option been exercised immediately prior to such
Change in Control. Appropriate adjustments shall also be made to the exercise
price payable per share under each outstanding option, provided the aggregate
exercise price payable for such securities shall remain the same.
III. REMAINING TERMS
The remaining terms of each option granted under the Automatic Option
Grant Program shall be the same as the terms in effect for options made under
the Discretionary Option Grant Program.
17
<PAGE>
ARTICLE SIX
MISCELLANEOUS
-------------
I. NO IMPAIRMENT OF AUTHORITY
Outstanding awards shall in no way affect the right of the Corporation
to adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
II. FINANCING
The Plan Administrator may permit any Optionee or Participant to pay
the option exercise price under the Discretionary Option Grant Program or the
purchase price of shares issued under the Stock Issuance Program by delivering a
full-recourse, interest bearing promissory note payable in one or more
installments. The terms of any such promissory note (including the interest
rate and the terms of repayment) shall be established by the Plan Administrator
in its sole discretion. In no event may the maximum credit available to the
Optionee or Participant exceed the sum of (i) the aggregate option exercise
price or purchase price payable for the purchased shares plus (ii) any Federal,
state and local income and employment tax liability incurred by the Optionee or
the Participant in connection with the option exercise or share purchase.
III. TAX WITHHOLDING
A. The Corporation's obligation to deliver shares of Common Stock
upon the exercise of options or the issuance or vesting of such shares under the
Plan shall be subject to the satisfaction of all applicable Federal, state and
local income and employment tax withholding requirements.
B. The Plan Administrator may, in its discretion, provide any or all
holders of Non-Statutory Options or unvested shares of Common Stock under the
Plan with the right to use shares of Common Stock in satisfaction of all or part
of the Taxes incurred by such holders in connection with the exercise of their
options or the vesting of their shares. Such right may be provided to any such
holder in either or both of the following formats:
C. Stock Withholding: The election to have the Corporation withhold,
-----------------
from the shares of Common Stock otherwise issuable upon the exercise of such
Non-Statutory Option or the vesting of such shares, a portion of those shares
with an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.
D. Stock Delivery: The election to deliver to the Corporation, at
--------------
the time the Non-Statutory Option is exercised or the shares vest, one or more
shares of Common Stock previously acquired by such holder (other than in
connection with the option exercise or share vesting triggering the Taxes) with
an aggregate Fair Market Value equal to the percentage of the Taxes (not to
exceed one hundred percent (100%)) designated by the holder.
18
<PAGE>
IV. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan shall become effective immediately upon the Plan
Effective Date. However, the Salary Investment Option Grant Program shall not
be implemented until such time as the Primary Committee or the Board may deem
appropriate. Options may be granted under the Discretionary Option Grant or
Automatic Option Grant Program at any time on or after the Plan Effective Date.
However, no options granted under the Plan may be exercised, and no shares shall
be issued under the Plan, until the Plan is approved by the Corporation's
stockholders. If such stockholder approval is not obtained within twelve (12)
months after the Plan Effective Date, then all options previously granted under
this Plan shall terminate and cease to be outstanding, and no further options
shall be granted and no shares shall be issued under the Plan.
B. The Plan shall serve as the successor to the Predecessor Plan, and
no further options or direct stock issuances shall be made under the Predecessor
Plan after the Section 12 Registration Date. All options outstanding under the
Predecessor Plan on the Section 12 Registration Date shall be incorporated into
the Plan at that time and shall be treated as outstanding options under the
Plan. However, each outstanding option so incorporated shall continue to be
governed solely by the terms of the documents evidencing such option, and no
provision of the Plan shall be deemed to affect or otherwise modify the rights
or obligations of the holders of such incorporated options with respect to their
acquisition of shares of Common Stock.
C. One or more provisions of the Plan, including (without limitation)
the option/vesting acceleration provisions of Article Two relating to Changes in
Control, may, in the Plan Administrator's discretion, be extended to one or more
options incorporated from the Predecessor Plan which do not otherwise contain
such provisions.
D. The Plan shall terminate upon the earliest of (i) January 27,
2009, (ii) the date on which all shares available for issuance under the Plan
shall have been issued as fully-vested shares or (iii) the termination of all
outstanding options in connection with a Change in Control. Upon such plan
termination, all outstanding options and unvested stock issuances shall
thereafter continue to have force and effect in accordance with the provisions
of the documents evidencing such grants or issuances.
V. AMENDMENT OF THE PLAN
A. The Board shall have complete and exclusive power and authority to
amend or modify the Plan in any or all respects. However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options or unvested stock issuances at the time outstanding under the Plan
unless the Optionee or the Participant consents to such amendment or
modification. In addition, certain amendments may require stockholder approval
pursuant to applicable laws or regulations.
B. Options to purchase shares of Common Stock may be granted under
the Discretionary Option Grant and Salary Investment Option Grant Programs and
shares of Common Stock may be issued under the Stock Issuance Program that are
in each instance in
19
<PAGE>
excess of the number of shares then available for issuance under the Plan,
provided any excess shares actually issued under those programs shall be held in
escrow until there is obtained stockholder approval of an amendment sufficiently
increasing the number of shares of Common Stock available for issuance under the
Plan. If such stockholder approval is not obtained within twelve (12) months
after the date the first such excess issuances are made, then (i) any
unexercised options granted on the basis of such excess shares shall terminate
and cease to be outstanding and (ii) the Corporation shall promptly refund to
the Optionees and the Participants the exercise or purchase price paid for any
excess shares issued under the Plan and held in escrow, together with interest
(at the applicable Short Term Federal Rate) for the period the shares were held
in escrow, and such shares shall thereupon be automatically cancelled and cease
to be outstanding.
VI. USE OF PROCEEDS
Any cash proceeds received by the Corporation from the sale of shares
of Common Stock under the Plan shall be used for general corporate purposes.
VII. REGULATORY APPROVALS
A. The implementation of the Plan, the granting of any stock option
under the Plan and the issuance of any shares of Common Stock (i) upon the
exercise of any granted option or (ii) under the Stock Issuance Program shall be
subject to the Corporation's procurement of all approvals and permits required
by regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.
B. No shares of Common Stock or other assets shall be issued or
delivered under the Plan unless and until there shall have been compliance with
all applicable requirements of Federal and state securities laws, including the
filing and effectiveness of the Form S-8 registration statement for the shares
of Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.
VIII. NO EMPLOYMENT/SERVICE RIGHTS
Nothing in the Plan shall confer upon the Optionee or the Participant
any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation
(or any Parent or Subsidiary employing or retaining such person) or of the
Optionee or the Participant, which rights are hereby expressly reserved by each,
to terminate such person's Service at any time for any reason, with or without
cause.
20
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. Automatic Option Grant Program shall mean the automatic option
------------------------------
grant program in effect under the Plan.
B. Beneficiary shall mean, in the event the Plan Administrator
-----------
implements a beneficiary designation procedure, the person(s) designated by an
Optionee or Participant, pursuant to such procedure, to succeed to such person's
rights under any outstanding awards held by him or her at the time of death. In
the absence of such designation or procedure, the Beneficiary shall be the
personal representative(s) of the estate of the Optionee or Participant or the
person or persons to whom the award is transferred by will or the laws of
descent and distribution.
C. Board shall mean the Corporation's Board of Directors.
-----
D. Change in Control shall mean a change in ownership or control of
-----------------
the Corporation effected through any of the following transactions:
(i) a merger, consolidation or reorganization approved by the
Corporation's stockholders, unless securities representing more than fifty
percent (50%) of the total combined voting power of the voting securities
of the successor corporation are immediately thereafter beneficially owned,
directly or indirectly and in substantially the same proportion, by the
persons who beneficially owned the Corporation's outstanding voting
securities immediately prior to such transaction,
(ii) any stockholder-approved transfer or other disposition of
all or substantially all of the Corporation's assets, or
(iii) the acquisition, directly or indirectly by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation), of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders which the Board recommends such
stockholders accept.
E. Code shall mean the Internal Revenue Code of 1986, as amended.
----
F. Common Stock shall mean the Corporation's common stock.
------------
G. Corporation shall mean Multex.com, Inc., a Delaware corporation,
-----------
and its successors.
A-1
<PAGE>
H. Discretionary Option Grant Program shall mean the discretionary
----------------------------------
option grant program in effect under the Plan.
I. Employee shall mean an individual who is in the employ of the
--------
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
J. Exercise Date shall mean the date on which the Corporation shall
-------------
have received written notice of the option exercise.
K. Fair Market Value per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is
reported on the Nasdaq National Market or any successor system. If there
is no closing selling price for the Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the last
preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for
the Common Stock on the date in question, then the Fair Market Value shall
be the closing selling price on the last preceding date for which such
quotation exists.
(iii) For purposes of any options made on the Underwriting Date,
the Fair Market Value shall be deemed to be equal to the price per share at
which the Common Stock is to be sold in the initial public offering
pursuant to the Underwriting Agreement.
(iv) For purposes of any options made prior to the Underwriting
Date, the Fair Market Value shall be determined by the Plan Administrator,
after taking into account such factors as it deems appropriate.
L. 5% Stockholder or Affiliate shall mean a non-employee Board member
---------------------------
who, directly or indirectly, owns stock (as determined under Code Section
424(d)) possessing at least five percent (5%) of the total combined voting power
of the outstanding securities of the Corporation (or any Parent or Subsidiary)
or is affiliated with or is a representative of such a five percent or greater
stockholder.
A-2
<PAGE>
M. Hostile Take-Over shall mean:
-----------------
(i) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the 1934 Act) of securities possessing more than fifty
percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly
to the Corporation's stockholders which the Board does not recommend such
stockholders to accept, or
(ii) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the
Board members ceases, by reason of one or more contested elections for
Board membership, to be comprised of individuals who either (A) have been
Board members continuously since the beginning of such period or (B) have
been elected or nominated for election as Board members during such period
by at least a majority of the Board members described in clause (A) who
were still in office at the time the Board approved such election or
nomination.
N. Incentive Option shall mean an option which satisfies the
----------------
requirements of Section 422 of the Code.
O. Involuntary Termination shall mean the termination of the Service
-----------------------
of any individual which occurs by reason of:
(i) such individual's involuntary dismissal or discharge by
the Corporation for reasons other than Misconduct, or
(ii) such individual's voluntary resignation following (A) a
change in his or her position with the Corporation or Parent or Subsidiary
employing the individual which materially reduces his or her duties and
responsibilities or the level of management to which he or she reports, (B)
a reduction in his or her level of compensation (including base salary,
fringe benefits and target bonus under any performance based bonus or
incentive programs) by more than fifteen percent (15%) or (C) a relocation
of such individual's place of employment by more than fifty (50) miles,
provided and only if such change, reduction or relocation is effected by
the Corporation without the individual's consent.
P. Misconduct shall mean the commission of any act of fraud,
----------
embezzlement or dishonesty by the Optionee or Participant, any unauthorized use
or disclosure by such person of confidential information or trade secrets of the
Corporation (or any Parent or Subsidiary), or any intentional wrongdoing by such
person, whether by omission or commission, which adversely affects the business
or affairs of the Corporation (or any Parent or Subsidiary) in a material
manner. This shall not limit the grounds for the dismissal or discharge of any
person in the Service of the Corporation (or any Parent or Subsidiary).
A-3
<PAGE>
Q. 1934 Act shall mean the Securities Exchange Act of 1934, as
--------
amended.
R. Non-Statutory Option shall mean an option not intended to satisfy
--------------------
the requirements of Section 422 of the Code.
S. Option Surrender Value shall mean the Fair Market Value per share
----------------------
of Common Stock on the date the option is surrendered to the Corporation or, in
the event of a Hostile Take-Over, effected through a tender offer, the highest
reported price per share of Common Stock paid by the tender offeror in effecting
such Hostile Take-Over, if greater. However, if the surrendered option is an
Incentive Option, the Option Surrender Value shall not exceed the Fair Market
Value per share.
T. Optionee shall mean any person to whom an option is granted under
--------
the Discretionary Option Grant, Salary Investment Option Grant or Automatic
Option Grant Program.
U. Parent shall mean any corporation (other than the Corporation) in
------
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
V. Participant shall mean any person who is issued shares of Common
-----------
Stock under the Stock Issuance Program.
W. Permanent Disability or Permanently Disabled shall mean the
--------------------------------------------
inability of the Optionee or the Participant to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment expected to result in death or to be of continuous duration of twelve
(12) months or more. However, solely for purposes of the Automatic Option Grant
Program, Permanent Disability or Permanently Disabled shall mean the inability
of the non-employee Board member to perform his or her usual duties as a Board
member by reason of any medically determinable physical or mental impairment
expected to result in death or to be of continuous duration of twelve (12)
months or more.
X. Plan shall mean the Corporation's 1999 Stock Option Plan, as set
----
forth in this document.
Y. Plan Administrator shall mean the particular entity, whether the
------------------
Primary Committee, the Board or the Secondary Committee, which is authorized to
administer the Discretionary Option Grant, Salary Investment Option Grant and
Stock Issuance Programs with respect to one or more classes of eligible persons,
to the extent such entity is carrying out its administrative functions under
those programs with respect to the persons under its jurisdiction. However, the
Primary Committee shall have the plenary authority to make all factual
determinations and to construe and interpret any and all ambiguities under the
Plan to the extent such authority is not otherwise expressly delegated to any
other Plan Administrator.
Z. Plan Effective Date shall mean January 27, 1999, the date on which
-------------------
the Plan was adopted by the Board.
A-4
<PAGE>
AA. Predecessor Plan shall mean the Corporation's pre-existing 1993
----------------
Stock Incentive Plan in effect immediately prior to the Plan Effective Date
hereunder.
BB. Primary Committee shall mean the committee of two (2) or more
-----------------
non-employee Board members appointed by the Board to administer the
Discretionary Option Grant and Stock Issuance Programs with respect to Section
16 Insiders and to administer the Salary Investment Option Grant Program with
respect to all eligible individuals.
CC. Salary Investment Option Grant Program shall mean the salary
--------------------------------------
investment grant program in effect under the Plan.
DD. Secondary Committee shall mean a committee of one (1) or more
-------------------
Board members appointed by the Board to administer the Discretionary Option
Grant and Stock Issuance Programs with respect to eligible persons other than
Section 16 Insiders.
EE. Section 12 Registration Date shall mean the date on which the
----------------------------
Common Stock is first registered under Section 12(g) of the 1934 Act.
FF. Section 16 Insider shall mean an officer or director of the
------------------
Corporation subject to the short-swing profit liabilities of Section 16 of the
1934 Act.
GG. Service shall mean the performance of services for the
-------
Corporation (or any Parent or Subsidiary) by a person in the capacity of an
Employee, a non-employee member of the board of directors or a consultant or
independent advisor, except to the extent otherwise specifically provided in the
documents evidencing the option grant or stock issuance.
HH. Stock Exchange shall mean either the American Stock Exchange or
--------------
the New York Stock Exchange.
II. Stock Issuance Program shall mean the stock issuance program in
----------------------
effect under the Plan.
JJ. Subsidiary shall mean any corporation (other than the
----------
Corporation) in an unbroken chain of corporations beginning with the
Corporation, provided each corporation (other than the last corporation) in the
unbroken chain owns, at the time of the determination, stock possessing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
KK. Taxes shall mean the Federal, state and local income and
-----
employment tax liabilities incurred by the holder of Non-Statutory Options or
unvested shares of Common Stock in connection with the exercise of those options
or the vesting of those shares.
LL. 10% Stockholder shall mean the owner of stock (as determined
---------------
under Code Section 424(d)) possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Corporation (or any Parent
or Subsidiary).
A-5
<PAGE>
MM. Underwriting Agreement shall mean the agreement between the
----------------------
Corporation and the underwriter or underwriters managing the Corporation's
initial public offering of its Common Stock.
NN. Underwriting Date shall mean the date on which the Underwriting
-----------------
Agreement is executed in connection with the Corporation's initial public
offering of its Common Stock.
A-6
<PAGE>
Exhibit 10.6
MULTEX.COM, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
---------------------------------
I. PURPOSE OF THE PLAN
This 1999 Employee Stock Purchase Plan is intended to promote the
interests of Multex.com, Inc., a Delaware corporation, by providing eligible
employees with the opportunity to acquire a proprietary interest in the
Corporation through participation in a payroll-deduction based employee stock
purchase plan designed to qualify under Section 423 of the Code.
Capitalized terms herein shall have the meanings assigned to such
terms in the attached Appendix.
II. ADMINISTRATION OF THE PLAN
The Plan Administrator shall have full authority to interpret and
construe any provision of the Plan and to adopt such rules and regulations for
administering the Plan as it may deem necessary in order to comply with the
requirements of Section 423 of the Code. Decisions of the Plan Administrator
shall be final and binding on all parties having an interest in the Plan.
III. STOCK SUBJECT TO PLAN
A. The stock purchasable under the Plan shall be shares of authorized
but unissued or reacquired Common Stock, including shares of Common Stock
purchased on the open market. The maximum number of shares of Common Stock which
may be issued over the term of the Plan shall not exceed Seven Hundred Fifty
Thousand (750,000) shares.
B. Should any change be made to the Common Stock by reason of any
stock split, stock dividend, recapitalization, combination of shares, exchange
of shares or other change affecting the outstanding Common Stock as a class
without the Corporation's receipt of consideration, appropriate adjustments
shall be made to (i) the maximum number and class of securities issuable under
the Plan, (ii) the maximum number and class of securities purchasable per
Participant on any one Purchase Date and (iii) the number and class of
securities and the price per share in effect under each outstanding purchase
right in order to prevent the dilution or enlargement of benefits thereunder.
IV. OFFERING PERIODS
A. Shares of Common Stock shall be offered for purchase under the
Plan through a series of successive offering periods until such time as (i) the
maximum number of shares of Common Stock available for issuance under the Plan
shall have been purchased or (ii) the Plan shall have been sooner terminated.
<PAGE>
B. Each offering period shall be of such duration (not to exceed
twenty-four (24) months) as determined by the Plan Administrator prior to the
start date of such offering period. However, the initial offering period shall
commence at the Effective Time and terminate on the last business day in April
2001. The next offering period shall commence on the first business day in May
2001, and subsequent offering periods shall commence as designated by the Plan
Administrator.
C. Each offering period shall be comprised of a series of one or more
successive Purchase Intervals. Purchase Intervals shall run from the first
business day in May each year to the last business day in October of the same
year and from the first business day in November each year to the last business
day in April of the following year. However, the first Purchase Interval in
effect under the initial offering period shall commence at the Effective Time
and terminate on the last business day in October 1999.
D. Should the Fair Market Value per share of Common Stock on any
Purchase Date within an offering period be less than the Fair Market Value per
share of Common Stock on the start date of that offering period, then that
offering period shall automatically terminate immediately after the purchase of
shares of Common Stock on such Purchase Date, and a new offering period shall
commence on the next business day following such Purchase Date. The new offering
period shall have a duration of twenty (24) months, unless a shorter duration is
established by the Plan Administrator within five (5) business days following
the start date of that offering period.
V. ELIGIBILITY
A. Each individual who is an Eligible Employee on the start date of
an offering period under the Plan may enter that offering period on such start
date or on any subsequent Semi-Annual Entry Date within that offering period,
provided he or she remains an Eligible Employee.
B. Each individual who first becomes an Eligible Employee after the
start date of an offering period may enter that offering period on any
subsequent Semi-Annual Entry Date within that offering period on which he or she
is an Eligible Employee.
C. The date an individual enters an offering period shall be
designated his or her Entry Date for purposes of that offering period.
D. To participate in the Plan for a particular offering period, the
Eligible Employee must complete the enrollment forms prescribed by the Plan
Administrator (including a stock purchase agreement and a payroll deduction
authorization) and file such forms with the Plan Administrator (or its
designate) on or before his or her scheduled Entry Date.
VI. PAYROLL DEDUCTIONS
A. The payroll deduction authorized by the Participant for purposes
of acquiring shares of Common Stock during an offering period may be any
multiple of one percent (1%) of the Cash Earnings paid to the Participant during
each Purchase Interval within that offering period, up to a maximum of ten
percent (10%). The deduction rate so authorized shall
2.
<PAGE>
continue in effect throughout the offering period, except to the extent such
rate is changed in accordance with the following guidelines:
(i) The Participant may, at any time during the offering period,
reduce his or her rate of payroll deduction to become effective as soon as
possible after filing the appropriate form with the Plan Administrator. The
Participant may not, however, effect more than one (1) such reduction per
Purchase Interval.
(ii) The Participant may, prior to the commencement of any new
Purchase Interval within the offering period, increase the rate of his or
her payroll deduction by filing the appropriate form with the Plan
Administrator. The new rate (which may not exceed the ten percent (10%)
maximum) shall become effective on the start date of the first Purchase
Interval following the filing of such form.
B. Payroll deductions shall begin on the first pay day following the
Participant's Entry Date into the offering period and shall (unless sooner
terminated by the Participant) continue through the pay day ending with or
immediately prior to the last day of that offering period. The amounts so
collected shall be credited to the Participant's book account under the Plan,
but no interest shall be paid on the balance from time to time outstanding in
such account. The amounts collected from the Participant shall not be required
to be held in any segregated account or trust fund and may be commingled with
the general assets of the Corporation and used for general corporate purposes.
C. Payroll deductions shall automatically cease upon the termination
of the Participant's purchase right in accordance with the provisions of the
Plan.
D. The Participant's acquisition of Common Stock under the Plan on
any Purchase Date shall neither limit nor require the Participant's acquisition
of Common Stock on any subsequent Purchase Date, whether within the same or a
different offering period.
VII. PURCHASE RIGHTS
A. Grant of Purchase Right. A Participant shall be granted a
-----------------------
separate purchase right for each offering period in which he or she
participates. The purchase right shall be granted on the Participant's Entry
Date into the offering period and shall provide the Participant with the right
to purchase shares of Common Stock, in a series of successive installments over
the remainder of such offering period, upon the terms set forth below. The
Participant shall execute a stock purchase agreement embodying such terms and
such other provisions (not inconsistent with the Plan) as the Plan Administrator
may deem advisable.
Under no circumstances shall purchase rights be granted under the Plan
to any Eligible Employee if such individual would, immediately after the grant,
own (within the meaning of Code Section 424(d)) or hold outstanding options or
other rights to purchase, stock possessing five percent (5%) or more of the
total combined voting power or value of all classes of stock of the Corporation
or any Corporate Affiliate.
3.
<PAGE>
B. Exercise of the Purchase Right. Each purchase right shall be
------------------------------
automatically exercised in installments on each successive Purchase Date within
the offering period, and shares of Common Stock shall accordingly be purchased
on behalf of each Participant (other than Participants whose payroll deductions
have previously been refunded pursuant to the Termination of Purchase Right
provisions below) on each such Purchase Date. The purchase shall be effected by
applying the Participant's payroll deductions for the Purchase Interval ending
on such Purchase Date to the purchase of whole shares of Common Stock at the
purchase price in effect for the Participant for that Purchase Date.
C. Purchase Price. The purchase price per share at which Common
--------------
Stock will be purchased on the Participant's behalf on each Purchase Date within
the offering period shall be equal to eighty-five percent (85%) of the lower of
(i) the Fair Market Value per share of Common Stock on the Participant's Entry
Date into that offering period or (ii) the Fair Market Value per share of Common
Stock on that Purchase Date.
D. Number of Purchasable Shares. The number of shares of Common
----------------------------
Stock purchasable by a Participant on each Purchase Date during the offering
period shall be the number of whole shares obtained by dividing the amount
collected from the Participant through payroll deductions during the Purchase
Interval ending with that Purchase Date by the purchase price in effect for the
Participant for that Purchase Date. However, the maximum number of shares of
Common Stock purchasable per Participant on any one Purchase Date shall not
exceed One Thousand Five Hundred (1,500) shares, subject to periodic adjustments
in the event of certain changes in the Corporation's capitalization. In
addition, the maximum aggregate number of shares of Common Stock purchasable by
all Participants on any one Purchase Date shall not exceed One Hundred Eighty-
seven Thousand Five Hundred (187,500) shares, subject to periodic adjustments in
the event of certain changes in the Corporation's capitalization.
E. Excess Payroll Deductions. Any payroll deductions not applied to
-------------------------
the purchase of shares of Common Stock on any Purchase Date because they are not
sufficient to purchase a whole share of Common Stock shall be held for the
purchase of Common Stock on the next Purchase Date. However, any payroll
deductions not applied to the purchase of Common Stock by reason of the
limitation on the maximum number of shares purchasable on the Purchase Date
shall be promptly refunded.
F. Termination of Purchase Right. The following provisions shall
-----------------------------
govern the termination of outstanding purchase rights:
(i) A Participant may, at any time prior to the next scheduled
Purchase Date in the offering period, terminate his or her outstanding
purchase right by filing the appropriate form with the Plan Administrator
(or its designate), and no further payroll deductions shall be collected
from the Participant with respect to the terminated purchase right. Any
payroll deductions collected during the Purchase Interval in which such
termination occurs shall, at the Participant's election, be immediately
refunded or held for the purchase of shares on the next Purchase Date. If
no such election is made at the time such purchase right is
4.
<PAGE>
terminated, then the payroll deductions collected with respect to the
terminated right shall be refunded as soon as possible.
(ii) The termination of such purchase right shall be irrevocable,
and the Participant may not subsequently rejoin the offering period for
which the terminated purchase right was granted. In order to resume
participation in any subsequent offering period, such individual must re-
enroll in the Plan (by making a timely filing of the prescribed enrollment
forms) on or before his or her scheduled Entry Date into that offering
period.
(iii) Should the Participant cease to remain an Eligible Employee
for any reason (including death, disability or change in status) while his or
her purchase right remains outstanding, then that purchase right shall
immediately terminate, and all of the Participant's payroll deductions for the
Purchase Interval in which the purchase right so terminates shall be immediately
refunded. However, should the Participant cease to remain in active service by
reason of an approved unpaid leave of absence, then the Participant shall have
the right, exercisable up until the last business day of the Purchase Interval
in which such leave commences, to (a) withdraw all the payroll deductions
collected to date on his or her behalf for that Purchase Interval or (b) have
such funds held for the purchase of shares on his or her behalf on the next
scheduled Purchase Date. In no event, however, shall any further payroll
deductions be collected on the Participant's behalf during such leave. Upon the
Participant's return to active service (i) within ninety (90) days following the
commencement of such leave or, (ii) prior to the expiration of any longer period
for which such Participant's right to reemployment with the Corporation is
guaranteed by either statute or contract, his or her payroll deductions under
the Plan shall automatically resume at the rate in effect at the time the leave
began. However, should the Participant's leave of absence exceed ninety (90)
days and his or her re-employment rights not be guaranteed by either statute or
contract, then the Participant's status as an Eligible Employee will be deemed
to terminate on the ninety-first (91st) day of that leave, and such
Participant's purchase right for the offering period in which that leave began
shall thereupon terminate. An individual who returns to active employment
following such a leave shall be treated as a new Employee for purposes of the
Plan and must, in order to resume participation in the Plan, re-enroll in the
Plan (by making a timely filing of the prescribed enrollment forms) on or before
his or her scheduled Entry Date into the offering period.
G. Corporate Transaction. Each outstanding purchase right shall
---------------------
automatically be exercised, immediately prior to the effective date of any
Corporate Transaction, by applying the payroll deductions of each Participant
for the Purchase Interval in which such Corporate Transaction occurs to the
purchase of whole shares of Common Stock at a purchase price per share equal to
eighty-five percent (85%) of the lower of (i) the Fair Market Value per share of
Common Stock on the Participant's Entry Date into the offering period in which
such Corporate Transaction occurs or (ii) the Fair Market Value per share of
Common Stock immediately prior to the effective date of such Corporate
Transaction. However, the applicable
5.
<PAGE>
limitations on the number of shares of Common Stock purchasable per Participant
and in the aggregate shall continue to apply to any such purchase.
The Corporation shall use its best efforts to provide at least ten
(10)-days prior written notice of the occurrence of any Corporate Transaction,
and Participants shall, following the receipt of such notice, have the right to
terminate their outstanding purchase rights prior to the effective date of the
Corporate Transaction.
H. Proration of Purchase Rights. Should the total number of shares
----------------------------
of Common Stock to be purchased pursuant to outstanding purchase rights on any
particular date exceed the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and the payroll
deductions of each Participant, to the extent in excess of the aggregate
purchase price payable for the Common Stock pro-rated to such individual, shall
be refunded.
I. Assignability. The purchase right shall be exercisable only by
-------------
the Participant and shall not be assignable or transferable by the Participant.
J. Stockholder Rights. A Participant shall have no stockholder
------------------
rights with respect to the shares subject to his or her outstanding purchase
right until the shares are purchased on the Participant's behalf in accordance
with the provisions of the Plan and the Participant has become a holder of
record of the purchased shares.
VIII. ACCRUAL LIMITATIONS
A. No Participant shall be entitled to accrue rights to acquire
Common Stock pursuant to any purchase right outstanding under this Plan if and
to the extent such accrual, when aggregated with (i) rights to purchase Common
Stock accrued under any other purchase right granted under this Plan and (ii)
similar rights accrued under other employee stock purchase plans (within the
meaning of Code Section 423) of the Corporation or any Corporate Affiliate,
would otherwise permit such Participant to purchase more than Twenty-Five
Thousand Dollars ($25,000) worth of stock of the Corporation or any Corporate
Affiliate (determined on the basis of the Fair Market Value per share on the
date or dates such rights are granted) for each calendar year such rights are at
any time outstanding.
B. For purposes of applying such accrual limitations to the purchase
rights granted under the Plan, the following provisions shall be in effect:
(i) The right to acquire Common Stock under each outstanding
purchase right shall accrue in a series of installments on each successive
Purchase Date during the offering period on which such right remains
outstanding.
(ii) No right to acquire Common Stock under any outstanding
purchase right shall accrue to the extent the Participant has already
accrued in the same calendar year the right to acquire Common Stock under
one (1) or more other purchase rights at a rate equal to Twenty-Five
Thousand Dollars ($25,000) worth of Common Stock (determined on the basis
of the Fair Market Value per
6.
<PAGE>
share on the date or dates of grant) for each calendar year such rights
were at any time outstanding.
C. If by reason of such accrual limitations, any purchase right of a
Participant does not accrue for a particular Purchase Interval, then the payroll
deductions which the Participant made during that Purchase Interval with respect
to such purchase right shall be promptly refunded.
D. In the event there is any conflict between the provisions of this
Article and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article shall be controlling.
IX. EFFECTIVE DATE AND TERM OF THE PLAN
A. The Plan was adopted by the Board on January 27, 1999 and shall
become effective at the Effective Time, provided no purchase rights granted
under the Plan shall be exercised, and no shares of Common Stock shall be issued
hereunder, until (i) the Plan shall have been approved by the stockholders of
the Corporation and (ii) the Corporation shall have complied with all applicable
requirements of the 1933 Act (including the registration of the shares of Common
Stock issuable under the Plan on a Form S-8 registration statement filed with
the Securities and Exchange Commission), all applicable listing requirements of
any stock exchange (or the Nasdaq National Market, if applicable) on which the
Common Stock is listed for trading and all other applicable requirements
established by law or regulation. In the event such stockholder approval is not
obtained, or such compliance is not effected, within twelve (12) months after
the date on which the Plan is adopted by the Board, the Plan shall terminate and
have no further force or effect, and all sums collected from Participants during
the initial offering period hereunder shall be refunded.
B. Unless sooner terminated by the Board, the Plan shall terminate
upon the earliest of (i) the last business day in April 2009, (ii) the date on
which all shares available for issuance under the Plan shall have been sold
pursuant to purchase rights exercised under the Plan or (iii) the date on which
all purchase rights are exercised in connection with a Corporate Transaction. No
further purchase rights shall be granted or exercised, and no further payroll
deductions shall be collected, under the Plan following such termination.
X. AMENDMENT/TERMINATION OF THE PLAN
A. The Board may alter, amend, suspend or terminate the Plan at any
time to become effective immediately following the close of any Purchase
Interval. However, the Plan may be amended or terminated immediately upon Board
action, if and to the extent necessary to assure that the Corporation will not
recognize, for financial reporting purposes, any compensation expense in
connection with the shares of Common Stock offered for purchase under the Plan,
should the financial accounting rules applicable to the Plan at the Effective
Time be subsequently revised so as to require the recognition of compensation
expense in the absence of such amendment or termination.
B. In no event may the Board effect any of the following amendments
or revisions to the Plan without the approval of the Corporation's stockholders:
(i) increase the
7.
<PAGE>
number of shares of Common Stock issuable under the Plan or the maximum number
of shares purchasable per Participant on any one Purchase Date, except for
permissible adjustments in the event of certain changes in the Corporation's
capitalization, (ii) alter the purchase price formula so as to reduce the
purchase price payable for the shares of Common Stock purchasable under the Plan
or (iii) modify eligibility requirements for participation in the Plan.
XI. GENERAL PROVISIONS
A. Nothing in the Plan shall confer upon the Participant any right to
continue in the employ of the Corporation or any Corporate Affiliate for any
period of specific duration or interfere with or otherwise restrict in any way
the rights of the Corporation (or any Corporate Affiliate employing such person)
or of the Participant, which rights are hereby expressly reserved by each, to
terminate such person's employment at any time for any reason, with or without
cause.
B. All costs and expenses incurred in the administration of the Plan
shall be paid by the Corporation; however, each Plan Participant shall bear all
costs and expenses incurred by such individual in the sale or other disposition
of any shares purchased under the Plan.
C. The provisions of the Plan shall be governed by the laws of the
State of New York without regard to that State's conflict-of-laws rules.
8.
<PAGE>
Schedule A
----------
Corporations Participating in
Employee Stock Purchase Plan
As of the Effective Time
------------------------
Multex.com, Inc.
Multex Data Group, Inc.
Multex Systems International, Inc.
<PAGE>
APPENDIX
--------
The following definitions shall be in effect under the Plan:
A. Board shall mean the Corporation's Board of Directors.
-----
B. Cash Earnings shall mean the (i) base salary payable to a
-------------
Participant by one or more Participating Corporations during such individual's
period of participation in one or more offering periods under the Plan plus (ii)
all overtime payments, bonuses, commissions, current profit-sharing
distributions and other incentive-type payments. Such Cash Earnings shall be
calculated before deduction of (A) any income or employment tax withholdings or
(B) any pre-tax contributions made by the Participant to any Code Section 401(k)
salary deferral plan or any Code Section 125 cafeteria benefit program now or
hereafter established by the Corporation or any Corporate Affiliate. However,
Cash Earnings shall not include any contributions (other than Code Section
401(k) or Code Section 125 contributions) made on the Participant's behalf by
the Corporation or any Corporate Affiliate to any employee benefit or welfare
plan now or hereafter established.
C. Code shall mean the Internal Revenue Code of 1986, as amended.
----
D. Common Stock shall mean the Corporation's common stock.
------------
E. Corporate Affiliate shall mean any parent or subsidiary
-------------------
corporation of the Corporation (as determined in accordance with Code Section
424), whether now existing or subsequently established.
F. Corporate Transaction shall mean either of the following
---------------------
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing more
than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to
such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the assets of the Corporation in complete liquidation
or dissolution of the Corporation.
G. Corporation shall mean Multex.com, Inc., a Delaware corporation,
-----------
and any corporate successor to all or substantially all of the assets or voting
stock of Multex.com, Inc. which shall by appropriate action adopt the Plan.
H. Effective Time shall mean the time at which the Underwriting
--------------
Agreement is executed. Any Corporate Affiliate which becomes a Participating
Corporation after such Effective Time shall designate a subsequent Effective
Time with respect to its employee-Participants.
A-1
<PAGE>
I. Eligible Employee shall mean any person who is employed by a
-----------------
Participating Corporation on a basis under which he or she is regularly expected
to render more than twenty (20) hours of service per week for more than five (5)
months per calendar year for earnings considered wages under Code Section
3401(a).
J. Entry Date shall mean the date an Eligible Employee first
----------
commences participation in the offering period in effect under the Plan. The
earliest Entry Date under the Plan shall be the Effective Time.
K. Fair Market Value per share of Common Stock on any relevant date
-----------------
shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing selling
price per share of Common Stock on the date in question, as such price is
reported by the National Association of Securities Dealers on the Nasdaq
National Market or any successor system. If there is no closing selling
price for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price per
share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no closing selling price for the
Common Stock on the date in question, then the Fair Market Value shall be
the closing selling price on the last preceding date for which such
quotation exists.
(iii) For purposes of the initial offering period which begins at
the Effective Time, the Fair Market Value shall be deemed to be equal to the
price per share at which the Common Stock is sold in the initial public offering
pursuant to the Underwriting Agreement.
L. 1933 Act shall mean the Securities Act of 1933, as amended.
--------
M. Participant shall mean any Eligible Employee of a Participating
-----------
Corporation who is actively participating in the Plan.
N. Participating Corporation shall mean the Corporation and such
-------------------------
Corporate Affiliate or Affiliates as may be authorized from time to time by the
Board to extend the benefits of the Plan to their Eligible Employees. The
Participating Corporations in the Plan are listed in attached Schedule A.
O. Plan shall mean the Corporation's 1999 Employee Stock Purchase
----
Plan, as set forth in this document.
A-2
<PAGE>
P. Plan Administrator shall mean the committee of two (2) or more
------------------
Board members appointed by the Board to administer the Plan.
Q. Purchase Date shall mean the last business day of each Purchase
-------------
Interval. The initial Purchase Date shall be October 29, 1999.
R. Purchase Interval shall mean each successive six (6)-month period
-----------------
within the offering period at the end of which there shall be purchased shares
of Common Stock on behalf of each Participant.
S. Semi-Annual Entry Date shall mean the first business day in
----------------------
February and August each year on which an Eligible Employee may first enter an
offering period.
T. Stock Exchange shall mean either the American Stock Exchange or
--------------
the New York Stock Exchange.
U. Underwriting Agreement shall mean the agreement between the
----------------------
Corporation and the underwriter or underwriters managing the Corporation's
initial public offering of its Common Stock.
A-3
<PAGE>
Exhibit 10.8
**** CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
INTERNAL DISTRIBUTION SERVICES AGREEMENT
Dated as of: April 21, 1997
Between
MULTEX SYSTEMS, INC.
and
ROBERTSON STEPHENS & COMPANY
EXHIBITS
A Fees
B Services
C Third Party Software
D Perpetual Licenses
E Multex or Company Provided Equipment
ATTACHMENTS
A Third Party License Requirements for End Users
<PAGE>
AGREEMENT FOR
INTERNAL ELECTRONIC DISTRIBUTION SERVICES AGREEMENT
THIS AGREEMENT FOR INTERNAL ELECTRONIC DISTRIBUTION SERVICES ("Agreement") is
made and entered into as of April 10, 1997, by and between Robertson, Stephens &
Company LLC, with offices at 555 California Street, San Francisco, CA 94104
(hereinafter referred to as "Company"), and MULTEX SYSTEMS, INC., a Delaware
corporation with offices at 33 Maiden Lane, New York, N.Y. 10038 (hereinafter
referred to as "Multex"). Multex and Company shall be referred to herein as the
"Parties".
RECITALS
A. Company creates, produces and develops various Documents including but not
limited to market data, Morning Meeting Notes and/or Published Research
Reports (Research) or other documents of Company or its independent
branches and subsidiaries and Third Party Research as determined by Company
("the Research and other documents are collectively known as "Documents"),
all in accordance with Company's own access and entitlement policies.
B. Company desires to disseminate and distribute the Documents internally
within the Company.
C. Multex via its proprietary Multex Express software ("Multex Software")
electronically receives the Documents and distributes the Documents to
others (hereinafter collectively the "Services"). (See exhibit B.)
D. Company desires that Multex provide the Services to enable Company to
distribute the Documents within the Company.
In consideration of the mutual promises and covenants hereinafter contained, the
parties hereto agree as follows:
1. Scope of Services.
(a) Company grants to Multex the non-exclusive right to
obtain and distribute the Documents via the Multex Software to
investment professionals and others within the Company or as otherwise
designated by the Company. Multex agrees to provide the Services and
the Services listed on Exhibits A and B hereto (or any additional
related services) to the Company subject to the payment of the fee as
set forth in Exhibit A. As part of the Services Multex grants to
Company a non-exclusive, non-transferable license to use Multex
Software, including software licensed from third parties identified in
Exhibit C ("Third Party Software") in accordance with the provisions
of Attachment A
<PAGE>
(Third Party License Requirements for End Users) which is incorporated
and made a part of this Agreement for the term of this Agreement.
Multex Software and the Third Party Software contained therein is
sometimes referred to as the Software or Multex Software.
(b) Any equipment i.e., computers, servers, etc. ("Equipment") to be
provided by Multex or Company is set forth in Exhibit E.
(c) The Company may use the Services only for internal distribution within
the Company.
(d) Multex will provide maintenance of the Multex Software. Maintenance
will consist of diagnosis and correction of errors in the Multex
Software providing upgrades in the nature of bug fixes and maintenance
updates as characterized by Multex. Multex shall also provide
telephone support on normal business days during normal business hours
solely to support personnel of the Company.
2. Independent Contractor.
Multex (and its employees), in performance of this Agreement, is acting as
an independent contractor. Personnel supplied by Multex hereunder are not
Company's personnel or agents, and Multex assumes full responsibility for
their acts. Multex shall be solely responsible for the payment of
compensation, benefits, insurance and taxes relating to Multex's employees
assigned to perform services hereunder. Notwithstanding the foregoing,
Multex (and its employees) shall abide by Company rules and regulation
while visiting Company premises.
3. Costs.
Company is solely responsible for the costs relating to (i) the development
of the Documents and (ii) the delivery of the Documents to Multex and (iii)
the distribution of the Documents within the Company. Such costs include
the costs of Company's telecommunication lines, telephones, modems,
computers, magnetic tape, magnetic tape delivery and messenger services.
4. Term.
(a) The term of this Agreement shall be for two (2) years beginning on
April 1, 1997 and terminating on March 31, 1999. The Agreement shall
automatically renew for successive one year periods unless either
Multex or Company terminates the Agreement thirty (30) days prior to
the expiration of each renewal period. In addition this Agreement may
be terminated by either Multex or the Company at any time
-2-
<PAGE>
subsequent to March 31, 1999 upon 60 days prior written to the non-
terminating party.
(b) Notwithstanding the term set forth above, in the event either party to
this Agreement shall fail to perform or observe any material term,
covenant, agreement or warranty, the other party may immediately
terminate this Agreement if such failure is not corrected within 30
days after delivery of written notice thereof to the other party
(provided however if the failure cannot reasonably be corrected within
30 days and the defaulting party has commenced performance during such
thirty (30) day period and proceeds to cure the default, the time for
curing such default shall be extended for such period as may be
necessary to cure the default.
(c) If, during the term of this Agreement, either party shall cease doing
business or if a petition in bankruptcy shall be filed (voluntary or
involuntary) with respect to a party, the other party may terminate
this Agreement upon 10 days' written notice to the other party.
(d) In the event the Agreement is not renewed or is terminated, or
canceled pursuant to this Agreement, Company shall return any
Equipment, Software, documentation, or other materials provided to it
by Multex pursuant to this Agreement, except such software identified
in Exhibit C as may be perpetually licensed to Company hereunder.
5. Indemnity.
(a) Multex agrees to defend and/or handle at its own cost and expense any
claim or action against Company, its parent company, and its other
their subsidiaries and/or affiliated companies, for actual or alleged
infringement of any patent, copyright, trademark or other property
right (including, but not limited to, misappropriate of trade secrets)
("Infringement") based on Services, and/or other materials furnished
to Company by Multex pursuant to the terms of this Agreement
including, without limitation, Multex Software and the Third Party
Software included therein. Multex further agrees to indemnify and
hold Company, its parent company, and its or their subsidiaries and/or
affiliated companies, and any of their clients, harmless from and
against any and all liabilities, losses, damages, costs and expenses
(including, but not limited to, attorneys' fees, costs, and
disbursements) associated with any such claim or action resulting from
the Infringement. In the event of an Infringement, Multex may
immediately terminate this Agreement, or substitute non-infringing
equally functional Services or Software.
(b) Company shall indemnify, hold harmless, defend or settle, at its sole
expense, any action or claim brought against Multex based upon or
arising out of any
-3-
<PAGE>
infringement by the Documents of any patent, copyright or proprietary
rights of any third party. Company shall pay and indemnify Multex for
any costs, damages, expenses or liabilities (including reasonable
attorney fees) incurred by Multex as a result of any claim or action
which are attributable to such infringement. Multex agrees to notify
Company promptly in writing after it obtains notice of such claim. In
the event Multex is enjoined or otherwise prohibited from using the
Documents, Company may, at its sole expense, (a) procure for Multex
the right to continue using the Documents, or (b) substitute a non-
infringing version of the Documents in a manner satisfactory to Multex
so that the Documents becomes non-infringing version of the Documents
and still conforms to the technical specifications. In lieu of the
foregoing, Company may terminate the Agreement.
6. Confidential Information.
(a) "Confidential Information" shall mean (i) information which is marked
as confidential.
(b) Each party shall hold the Confidential Information of the other party
in trust and confidence for the other party and shall not reproduce,
disclose to any person, firm or enterprise, or use for its own
benefit, any such Confidential Information (except as specifically
permitted or contemplated by this Agreement).
(c) Without limiting the generality of the foregoing, "Confidential
Information" will not include information that (i) is already
rightfully known to a party at the time it is obtained from the other
party, free from any obligation to keep such information confidential;
(ii) is or becomes publicly known through no wrongful act of either
party; (iii) is rightfully received from a third party without
restriction and without breach of this Agreement; (iv) is
independently acquired or developed by a party without breach of any
obligation hereunder; or (v) is required to be disclosed pursuant to
law, governmental regulation, or court order, provided that the
disclosing party first notifies the other party in order to give such
party a reasonable opportunity to challenge the disclosure.
7. Limitation of Liability.
(a) Multex will use its reasonable best efforts to provide the Services to
the Company. However, Company understands that Multex cannot and does
not guarantee the content, accuracy, timeliness or availability of the
Documents or the accuracy, timeliness and availability of the
Services. Accordingly, Company agrees Multex shall not have any
liability or obligation to Company (whether caused directly or
indirectly) relating to the (i) interruption, delay or failure in the
transmission, delivery or distribution of the Services or
-4-
<PAGE>
Documents or (ii) the unavailability of Multex Software or the
Services or (iii) the accuracy of the Documents or (iv) the acts or
omissions of the Company; unless however any of the foregoing result
from the gross negligence, fraud or willful misconduct of Multex.
Multex's sole liability to Company for claims, notwithstanding the
form of such claims (e.g., contract, negligence or otherwise), arising
out of items (i) through (iv) above, shall be to use reasonable best
efforts to resume the Services and/or to make Multex Software
available to Company as promptly as reasonably practicable.
(b) Multex shall not have any obligation or liability to Company or any
third party (i) relating to, or arising out of the displaying or
furnishing of the Documents, including the information contained
therein, (ii) for errors or omissions in connecting, transmitting,
processing, disseminating, displaying or distributing the Documents,
or (iii) for the accuracy of the Documents or securities or
commodities information and prices displayed, carried or furnished by
or through the Services (iv) for the accuracy or display of Company's
data and information.
(c) Except for Multex's liability under Paragraph 6, Multex's maximum
liability hereunder for any other cause, not exculpated hereunder,
whether in tort or contract, shall not exceed the lesser of (i) actual
damages or (ii) one month's charges paid by the Company for the
services.
(d) As used in this paragraph, the term "Multex" or Multex Software shall
include each third party who provides Multex with any portion of the
Services. Such third party shall not have any direct or indirect
liability to Company for monetary damage on account of the Services
provided, or to be provided by Multex hereunder.
8. Ownership Rights.
(a) The Documents shall remain the sole property of the Company and Multex
shall not acquire any rights in the Documents.
(b) Multex Software shall remain the property of Multex. Company may use
the Software only in conjunction with the Services. Company shall use
the Software on no more than the number of concurrent users as may be
agreed to between Company and Multex. Company shall not copy, in
whole or in part, the Software or related documentation, whether in
the form of computer media, printed or in any other form.
(c) The license granted herein is for the limited purpose of enabling
Company to distribute the Documents within the Company.
-5-
<PAGE>
(d) COMPANY SHALL NOT MAKE ANY ALTERATION, CHANGE OR MODIFICATION TO THE
SOFTWARE. COMPANY MAY NOT RECOMPILE, DECOMPILE, DISASSEMBLE, OR
REVERSE ENGINEER THE SOFTWARE OR, MAKE OR DISTRIBUTE ANY OTHER FORM OF
THE SOFTWARE.
9. Warranties.
(a) Multex hereby represents and warrants to Company as follows:
(i) Multex is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York with full
authority to enter into this Agreement;
(ii) Multex Software and the Services provided to Company shall not
infringe upon the proprietary rights of any third party.
(iii) Multex has the legal right and authority to license Multex
Software (including, without limitation, the Third Party
Software included therein) to Company.
(iv) The medium on which Multex Software is furnished is warranted
to be free of defects in materials and workmanship under normal
use for a period of sixty (60) days from the date of delivery
of Multex Software.
(b) Company represents and warrants to Multex that:
(i) Company is the owner of and has the right to distribute the
Documents.
(ii) Company will comply with all laws and regulations applicable to
the use of the Services;
10. Limitation of Warranties.
COMPANY ACKNOWLEDGES AND AGREES THAT EXCEPT FOR THE WARRANTIES SPECIFIED IN
PARAGRAPH 9, MULTEX MAKES NO WARRANTIES WHATSOEVER, AND ARE IN LIEU OF ALL
OTHER WARRANTIES WRITTEN OR ORAL, EXPRESS OR IMPLIED OR STATUTORY,
INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF FITNESS FOR A PARTICULAR
PURPOSE OR MERCHANTABILITY, CONCERNING THIS AGREEMENT, THE SERVICES OR
EQUIPMENT (IF ANY) PROVIDED HEREUNDER, MULTEX SOFTWARE OR THE DOCUMENTS.
THE SERVICES PROVIDED HEREUNDER ARE PROVIDED "AS IS" WITH NO WARRANTIES
WHATSOEVER. MULTEX DOES NOT GUARANTEE THE ACCURACY,
-6-
<PAGE>
VALIDITY OR COMPLETENESS OF THE DOCUMENTS. MULTEX HEREBY DISCLAIMS ANY
LIABILITY FOR, AND UNDER NO CIRCUMSTANCES SHALL IT HAVE ANY LIABILITY FOR,
DIRECT, INDIRECT, COMPENSATORY, CONSEQUENTIAL, SPECIAL, LOST PROFITS
PUNITIVE, OR OTHER DAMAGES, COSTS OR EXPENSES OF ANY KIND ARISING FROM THIS
AGREEMENT EXCEPT AS SPECIFIED HEREIN. MULTEX AND ITS THIRD PARTY LICENSORS
DO NOT AND CANNOT WARRANT THE PERFORMANCE OR RESULTS COMPANY MAY OBTAIN BY
THE USE OF THE SOFTWARE OR SERVICES.
11. Insurance.
Multex shall procure and maintain for itself and its employees all
insurance coverages as required by Federal or State law, including workers'
compensation insurance. Multex shall procure and maintain for itself: (i)
Employers' Liability Insurance coverage including bodily injury coverage,
with a minimum of $100,000 for each employee; (ii) general liability
coverage of at least $1,000,000. Upon request, Multex shall provide
Company with a certificate of insurance evidencing such coverage. The
parties shall each insure their own property and neither party shall have
any liability to the other for any damage to the property of the other
unless such damage results from the fraud or willful misconduct.
12. Unlawful Use.
Company shall not use or permit anyone to use the Services or the Documents
for any unlawful purpose.
13. Reuse of Software.
Company is not authorized or permitted to furnish the Services to any
person or firm for re-use, redistribution or retransmission unless
otherwise provided in this Agreement without the prior approval of Multex.
14. Inaccuracy.
Company shall immediately notify Multex of any suspected inaccuracies in
the Documents or the Services.
15. Disposition of Software.
Promptly after the termination or expiration of this Agreement, the
Software (including the magnetic or other physical media on which it was
originally or subsequently recorded or fixed) and all related documentation
and all hardware and equipment owned by Multex or which is not paid for by
Company shall be returned
-7-
<PAGE>
by Company to Multex in good condition, reasonable wear and tear and damage
by the elements excepted. At the direction of Multex, the Software may be
completely deleted, erased or otherwise destroyed by Company.
16. Compliance with Law (Company)
(a) Company shall be responsible (i) for compliance with all laws and
governmental regulations affecting its business and (ii) for any use
it may make the Services or the Documents to assist it in complying
with such laws and governmental regulations, and Multex shall not have
any responsibility relating thereto (including, without limitation,
advising Company of Company's responsibilities in complying with any
laws or governmental regulations affecting Company's business). While
Multex shall not have any responsibility for Company's compliance with
the laws and regulations referred to above, Multex agrees to use
reasonable efforts to cause the applicable Services to be designed in
such a manner that they will be able to assist Company in complying
with its applicable legal and regulatory responsibilities, in no event
shall Company rely solely on its use of the Services in complying with
any laws and governmental regulations.
(b) If after the date hereof any modifications to the Services shall be
legally required, Multex shall, except to the extent such changes may
be beyond the capability of Multex to implement, modify the Services
appropriately. If providing any of the Services to Company hereunder
violates, or in Multex's opinion is likely to violate, any laws or
governmental regulations, Multex may, upon written notice to Company,
immediately cease providing the affected Services to Company.
17. Advertising.
Neither party shall use the name or marks of the other or its parent
company or any subsidiary or affiliated company in any publicity release,
advertising, or publicly displayed or distributed materials without
securing the prior written consent of the party whose name is to be used,
which consent shall not be unreasonably withheld or delayed.
Notwithstanding the foregoing, Multex may disclose the fact of this
Agreement.
18. Successors and Assigns.
Neither party may assign its rights or obligations hereunder without the
prior written approval of the other party. This Agreement shall be binding
upon the parties' respective successors and permitted assigns.
-8-
<PAGE>
19. Governing Law.
The validity of this Agreement, the construction and enforcement of its
terms, and the interpretation of the rights and duties of the parties shall
be governed by the laws of the State of California.
20. Modifications.
No modifications, amendment, supplement to or waiver of this Agreement or
any Schedule or Exhibit hereunder, or any of their provisions shall be
binding upon the parties hereto unless made in writing and duly signed by
both parties.
21. Waiver.
A failure or delay of either party to this Agreement to enforce at any time
any of the provisions hereof, or to exercise any option which is herein
provided, or to require at any time performance of any of the provisions
hereto shall in no way be construed to be a waiver of such provisions of
this Agreement.
22. Exhibits.
The terms and conditions of any all Exhibits and Schedules to this
Agreement are incorporated herein by this reference and shall constitute
part of this Agreement as if fully set forth herein.
23. Compliance with Law.
Multex shall comply with all applicable U.S., state and local laws and
regulations in its performance of its obligations hereunder and that the
Services will comply with applicable laws.
24. Headings.
The headings herein are for convenience of reference only and shall not
impact the meaning of this Agreement.
25. Entire Agreement.
This Agreement constitutes the entire Agreement between the parties
concerning and the subject matter hereof and shall supersede all prior
agreements or understandings concerning such subject matter.
-9-
<PAGE>
26. Survival.
Notwithstanding any termination of this Agreement, the provisions of
Section 5, 6, 7, 8, 9, 10, 11 and 22 shall survive termination.
27. Passwords.
Multex agrees that the Company clients for which a password has been issued
are proprietary to Company and Multex will not, without the approval of
Company, solicit Company's clients ("Clients") unless such Clients are
clients or prospective clients of Multex or clients of other companies with
whom Multex has or will develop a business relationship.
28. Escrow.
Multex covenants and agrees that as promptly as practicable following
execution and delivery hereof, it will deposit a copy of the Multex
Software in escrow with Data Securities International, Inc. (the "Escrow
Agent") pursuant to an escrow agreement among Multex, Company and the
Escrow Agent. In the event that Multex ceases to carry on its business
(except in connection with a merger, business combination or disposition of
assets with, to or in favor of a Person who agrees in writing to be bound
by Multex's obligations hereunder) or while in bankruptcy, liquidation,
reorganization, winding-up, administration, trusteeship, receivership or
similar proceedings, Company shall have the right to acquire a copy of the
Multex Software Source Code for purposes of continuing the use and
enjoyment of the Multex Software in accordance with the rights and licenses
granted under this Agreement. Company shall be responsible for the
expenses of the Escrow Agent which is not expected to exceed $2,500.00 a
year.
29. Access.
Company shall provide Multex with reasonable access to its premises to
perform the obligations set forth herein. Multex shall abide by the site
regulations and security procedures applicable to each site.
30. Confidentiality.
The prices and terms contained herein are confidential information and are
not to be disclosed to any third party (other than by court order or
government requirement) including without limitation any firm, corporation,
or partnership outside the Company, nor to any employee of the Company
except those who require the information to administer this Agreement.
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, each acting under due and proper
authority, have executed this Agreement as of the date first above written.
ROBERTSON, STEPHENS MULTEX SYSTEMS, INC.
& COMPANY LLC
By: /s/ Dante DeWitt By: /s/ Morton Zeidman
---------------- ------------------
Name: Dante DeWitt Name: Morton Zeidman
Title: Vice President - Director IT Title: Vice President
-11-
<PAGE>
EXHIBIT A
---------
(Revised 4/22/97)
Fees for the Services
The Company shall pay the following fees for the services.
1. Employees of the Company: [****] for user passwords for all of Company's
employees not exceeding [****] user passwords. This fee must be paid and is
not included in the fees charged for item 2.
2. Clients of the Company: The Company has the following three alternatives.
A. Up to [****] user passwords to clients of the Company at [****] per
passwords per year.
B. [****] user passwords to clients of the Company at [****] per password
per year.
C. [****] user password to clients of the Company at [****] per password
per year.
The Company must preselect either alternative A, B, or C and the fees charged
are based on that selection whether or not Company actually uses the amount of
passwords associate with that section.
3. Company shall pay for all taxes applicable to the Services. Company shall
pay for telecommunication costs between Multex and Company, local server,
third party software licenses, support and maintenance of Company's
equipment at Company's location.
4. Multex shall provide free of charge, maintenance updates and revisions
("Updates") to Multex Software as commercially released by Multex. Any
enhancements or modifications made specifically for Company shall be paid
for by Company on a time and material basis.
5. Users Accessing the Company's Research from other websites: Access to
Company's Research on websites other than Company's ("Third Party
Websites") will be subject to mutual approval by Multex and Company which
approval shall not be unreasonably withheld by Multex. Multex's charges
for such Third Party Website access is as follows:
1) Fixed Costs. Actual cost of additional hardware, software, or other
equipment purchased by Multex in support of the Third Party Website
shall not exceed [****] for the first [****]
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
<PAGE>
users who are capable of accessing Company's research on the Third
Party Website, and thereafter not to exceed an additional [****] for
each additional [****] users or a fraction thereof.
2) Annual Costs. [****] per log-in/password per year based upon a minimum
of [****] log-ins/passwords. Fewer than [****] passwords will be
charged at [****] per log-in/password per year with a minimum of
[****] passwords.
6. Payment for Item 1. above shall be paid as follows: one half upon the
execution of this agreement and the balance upon Multex providing at least
[****] user passwords to Company.
Payment for Item 2, above shall be paid upon Multex providing on [****] of
the passwords as selected by the Company. The provisioning of the passwords
by Multex to the Company shall not depend on whether the Company has at the
time the actual users for such passwords.
Payment to be made within 15 days after invoice.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
<PAGE>
EXHIBIT B
---------
Services
Multexnet is an Intranet application accessible via a Netscape 2.0 or higher or
Microsoft Explorer 3.0 or higher browser.
The service consists of proprietary and third party software.
The service includes:
1. User passwords for all of the company's employees not to exceed a
combination of [****] users and/or passwords.
2. User passwords to the retail clients of the Company not to exceed
[****] user passwords.
3. User passwords for users accessing the Company's Research from third party
websites.
4. The fee for the services is set forth in exhibit A.
5. (a) Multex will provide and Company will receive the number of user
passwords selected by the Company as provided in this Agreement. The
Company has the responsibility of distributing the passwords to qualified
users to be used in accordance with this Agreement. Multex represents that
only those passwords that have been issued to the Company will be able to
access the services. Multex will use reasonable efforts to verify that its
entitlement procedures as specified in this paragraph 5(a) is provided to
and maintained on behalf of the Company.
(b) The Services provide security and control for the Company's documents.
Before a User can access and view the Company's Documents the User must
provide a user ID and password. The ID and password is verified as one of
those issued to the Company and the User is permitted to access the system.
The ID is then passed to the entitlement filter. The entitlement filter
gives the Company control over which group or groups of Documents a User is
permitted to view.
6. MULTEXNET as an Internet/Intranet solution, in which the Company will have
a connection via a dedicated link (approximately six weeks to install and
test) to Multex in New York. This link will provide a private connection
to the MULTEXNET server/database infrastructure.
7. Pending the installation of a dedicated link to Company, a URL link will be
provided
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
<PAGE>
so that Company's web server may access the Multex database via Multex's
own web server. This will enable a virtual immediate start-up and test of
Company's web server using Multex research. Customization of this access
(logo, banner, etc.), is available, and has been completed. The dedicated
link will be used for predictable and higher bandwidth access.
8. All workstations will connect to Company's own web server over Company's
own WAN or the Internet, which in turn will redirect any inquiries for
research to Multex's web server. These connections are via a browser
(HTTP) of Company's choice (Netscape, Explorer, etc.) and over secure (port
443) or unsecured (port 80), as you wish. All requests issued will be
resolved at Multex's central site and all matching headlines returned to
the workstation as a linked HTML page.
9. The Multex Internet servers are shared among several clients, with
dedicated hardware available for an additional fee. When a document is
queried, it is copied from Multex's central site to the workstation. Thus
the file copy is exposed to the speed of the slowest link between Multex
and the desktop. (E.G. private connection, Company's WAN, desktop LAN
speed, etc.). Centralized file caching is available on Company's site with
additional hardware.
10. A search engine which combines keyword search capabilities with fixed field
searches like ticker symbol or industry.
11. Administrative Requirements: Multex shall provide a single User Name and
Password, allowing Company employees to gain access to the Company intranet
site, without each individual end user having to key in a user name and
password. Multex shall provide specific User Names and Passwords for up to
[****] Company employees, as designated by Company, allowing this user
group to gain access to the Company intranet site, via a newly created,
specified URL.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
<PAGE>
EXHIBIT C
---------
THIRD PARTY SOFTWARE
--------------------
1. Fulcrum Technologies Searchtool
2. Adobe Systems Acrobat Reader, Exchange and Distiller
EXHIBIT D
---------
PERPETUAL LICENSES
------------------
None.
- -----
<PAGE>
EXHIBIT E
---------
1. MULTEX PROVIDED EQUIPMENT: None.
2. COMPANY PROVIDED EQUIPMENT:
A. HARDWARE
1 HP laserjet 4M or better printer or equivalent (for non-postscript printers 8
Meg of memory is required.
COMPANY network
Communications (between COMPANY AND Multex central site) (based on Company's
network design and access requirements a minimum of 1 Wiltel dedicated 56kb line
including routers, modems,
B. SOFTWARE
All required Netscape (2.0 or above) or Internet explorer (3.09 or above)
Browsers.
TCP/IP
Desktop operating system (Windows NT or 95)
OPTIONAL - Based on the Company's network design, the addition of proxy servers
could optimize the usage of Company's internal WAN and reduce the traffic across
the line between the Company and Multex.
At the option of the Company Multex will purchase and supply the above equipment
and Company will Reimburse Multex for the cost of the equipment.
Upon the expiration of the term of this Agreement, Multex upon the written
request of the Company shall return to Company at Company's sole cost and
expense all of Company's equipment in Multex's possession. The cost may include
without limitation all costs associated with preparing, disconnecting, and
shipping the equipment.
<PAGE>
ATTACHMENT A
THIRD PARTY LICENSE REQUIREMENTS FOR END USERS
The Software developed by Multex incorporates or may incorporate or utilize
software licensed from third parties including Adobe Systems Incorporated
("Adobe") and Fulcrum Technologies Inc. ("Fulcrum") ("Licensors"). (Multex
Software, the Adobe Software, and the Fulcrum Software and related documentation
are collectively called the "Software"; the Fulcrum Software is referred to as
the "Fulcrum Software". The Adobe Software (which consists of Adobe/TM/
Acrobat/TM/ Exchange, Acrobat Reader and Acrobat Distiller/TM/) is referred to
as the "Adobe Software". Multex, its Licensors and its suppliers retain title to
and exclusive ownership of the Software (including reproductions thereof) and
any patent, trademark or copyrights associated with the Software and its related
documentation.
Pursuant to the Software license agreement between Multex, Fulcrum and Adobe,
Multex is required by such agreement to incorporate certain terms and conditions
in each end user agreement.
The following terms and conditions shall apply to the Software:
1) Pursuant to the terms and conditions of this Agreement, MULTEX grants to
Licensee a non-exclusive, non-transferable, limited license to use the
Software (generally in the form of packaged computer software programs in
object code and its related documentation for the period set forth in the
Agreement).
2) Each copy of the Software is licensed for use only in the manner and for
the number of enabled users as provided in the Agreement. For the purposes
of this Agreement, "enabled user license" means the number of individual,
non-concurrent users licensed to use the Software.
3) MULTEX warrants that the Software and its Related Documentation are
property of, or are under license of MULTEX. THE WARRANTIES AND
LIMITATIONS SET FORTH IN THE PARAGRAPH 3 CONSTITUTE THE ONLY WARRANTIES OF
MULTEX AND LICENSORS WITH RESPECT TO THE SOFTWARE.
4) THE WARRANTIES SET FORTH HEREIN ARE IN LIEU OF ALL OTHER WARRANTIES,
WRITTEN OR ORAL, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED
TO THOSE OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-
INFRINGEMENT OF THIRD PARTY RIGHTS. THIS WARRANTY IS MADE IN LIEU OF ALL
OTHER WARRANTIES, STATUTORY OR OTHERWISE. MULTEX AND ITS LICENSORS DO NOT
AND CANNOT WARRANT THE PERFORMANCE OR RESULTS LICENSEE MAY OBTAIN BY USE OF
THE SOFTWARE OR DOCUMENTATION.
<PAGE>
LIMITATION OF LIABILITY: THE REMEDIES OF LICENSEE SHALL BE LIMITED TO THOSE
PROVIDED IN THE AGREEMENT TO THE EXCLUSION OF ANY AND ALL OTHER REMEDIES.
IN NO EVENT SHALL MULTEX OR ITS LICENSORS BE LIABLE TO CUSTOMER FOR LOSS OF
PROFITS OR SPECIAL, INDIRECT, CONSEQUENTIAL, OR EXEMPLARY DAMAGES,
INCLUDING LEGAL FEES AND LITIGATION COSTS ARISING IN CONNECTION WITH THE
SUPPLY, USE, OR PERFORMANCE OF THE SOFTWARE OR ANY WORK OR SERVICE
PERFORMED BY MULTEX, ITS LICENSORS, OR THEIR EMPLOYEES EVEN IF THE
REPRESENTATIVES OF ANY SUCH THIRD PARTY HAVE BEEN RELIEVED OF THE
POSSIBILITY OF SUCH DAMAGES. NO AGREEMENTS VARYING OR EXTENDING THE
WARRANTIES, REMEDIES OR LIMITATIONS CONTAINED IN THIS PARAGRAPH WILL BE
BINDING UNLESS IN WRITING AND AGREED TO BY MULTEX.
5) INDEMNIFICATION: MULTEX will defend any action brought against Licensee to
the extent that it is based upon a claim that the Software and Related
Documentation used within the scope of this Agreement infringes upon a
copyright, patent, or third-party right, and MULTEX will pay any reasonable
costs, attorney fees and damages attributable to such claim which are
awarded against Licensee (or which MULTEX agrees to pay in any settlement)
provided that Licensee promptly notifies MULTEX in writing of the claim and
that MULTEX has complete control of the defense and/or settlement of such
claim. In lieu of any such indemnification either party may cancel the
agreement in the event LICENSEE receives a notice of infringement (optional
if Licensee requests indemnification).
6) This agreement and/or license does not grant licensee any right (whether by
license, ownership or otherwise) in or to intellectual property with
respect to the Software.
7) Trademarks, if used by Licensee shall be used in accordance with accepted
trademark practice, including identification of the trademarks owner's name
. Trademarks can only be used to identify printed output produced by the
Software. The use of any trademark as herein authorized does not give
Licensee rights of ownership in that trademark.
8) Licensee agrees that it will not:
a) copy the Software or related documentation for any reason other than
for duly licensed reproduction or for archival or emergency restart
purposes or program error verification. Any copy of the Software
shall contain the copyright and other proprietary notice which appears
on and in the Software. Should the Software become inoperable,
Licensee may use the Software on a backup system for a period not to
exceed thirty (30) days. Licensee shall notify Multex of any such use
within five (5) days. Should there be a requirement to
<PAGE>
permanently transfer the Software from the licensed configuration to
an alternate configuration, Licensee shall first obtain the written
consent of Multex, which shall not be unreasonably withheld;
b) permit more users to use or install the Software other than as
provided in this Agreement;
c) offer the Software for loan, rent, lease, sub license, or for other
forms of exchange;
d) modify, adapt, translate, decompile or reverse engineer, dissemble or
otherwise attempt to discover the source code of the Software; and
e) assign any rights under this Agreement without the prior written
consent of Multex;
f) Licensee will not export or re-export the Software without the
appropriate United States or foreign government licenses, and only
with the consent of Multex;
g) install a backup copy on any machine if Licensee's primary copy is
installed.
Applicable to the Fulcrum Software:
9) Licensee acknowledges that
a) title and ownership of the Fulcrum Software and all rights related
thereto, including patent, trademark and copyright related thereto are
the exclusive property of Fulcrum Technologies, Inc. or its Licensees;
b) Licensee shall only acquire the right to use the Software in
accordance with this Agreement; and
c) Licensee shall take necessary steps to ensure that all intellectual
property underlying the binary version of the Software remain
confidential.
Applicable to the Abode Software:
10) Multiple Environment Software. If this package contains two or more
versions of the Adobe Software (e.g., DOS, Macintosh(R) and Windows/TM/),
the total number of copies of all versions of the Adobe Software with
Licensee may make may not exceed the number of permitted computers except
that Licensee may also possess one back-up copy, in accordance with the
terms of this Agreement, for each version of the Software it uses.
<PAGE>
11) Notice to Government End Users: If this product is acquired under the terms
of a: GSA Contract: Use, reproduction or disclosure is subject to the
restrictions set forth in the applicable ADP Schedule contract. DoD
contract: Use, duplication or disclosure by the Government is subject to
restrictions as set forth in subparagraph (c)(1)(ii) of 252.227-7013.
Civilian agency contract: Use, reproduction, or disclosure is subject to
52.227-19(a) through (d) and restrictive set forth in the accompanying end
user agreement. Unpublished-rights reserved under the copyright laws of
United States.
12) Licensee is hereby notified that Adobe Systems Incorporated, a California
corporation located at 1585 Charleston Road, Mountain View, California
94039-7900 ("Adobe") is a third-party beneficiary to this Agreement to the
extent that this Agreement contains provisions which relate to Licensee's
use of the Adobe Software, the Documentation and the trademarks licensed
hereby. Such provisions are made expressly for the benefit of Adobe and
are enforceable by Abode in addition to Licensor.
13) Adobe is a trademark of Adobe Systems Incorporated which may be registered
in certain jurisdictions. Macintosh is a registered trademark of Apple
Computer, Inc. Windows is trademark of Microsoft Corporation.
14) Title to and ownership of the Adobe Software and Documentation and any
reproduction thereof shall remain with Adobe and its suppliers; the
structure, organization and code are the valuable trade secrets of Adobe
and its suppliers.
<PAGE>
Exhibit 10.9
*** CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
AMENDMENT NO. 1 TO THE AGREEMENT
THIS AMENDMENT NO. 1 dated as of March 9, 1998 to the Agreement for
Internal Electronic Distribution Services dated April 10, 1997 (the
"Agreement"), by and between BANCAMERICA ROBERTSON STEPHENS (formerly known as
Robertson, Stephens & Company LLC), a Delaware corporation with offices at 555
California St., 26th Floor, San Francisco CA 94104 (hereinafter referred to as
"Company"), and MULTEX SYSTEMS, INC., a Delaware corporation with offices at 33
Maiden Lane, New York, New York 10038 (hereinafter referred to as "Multex").
Multex and Company shall be referred to herein sometimes as the "Parties."
Unless otherwise defined herein, the terms defined in the Agreement
shall be used herein as therein defined.
SECTION 1. Amendments to the Agreement.
Pursuant to Section 20 of the Agreement, it is hereby agreed by the Parties as
follows:
1. A. The Agreement is hereby amended by including a new section 1A
thereto that shall read as follows:
"1A. Company Research Sales.
(a) Company will deliver Research (as defined below) to Multex in soft
copy.
(b) Multex shall have the right to resell and make available Research
only to customers located in the United States.
(c) Following a period of 15 days after the release of Research by
Company to its own clients (the "Delay Period"), Multex shall have the right to
resell and make available Research only to institutional investors, consulting
firms and other entities that are not classified as "retail investors." Multex
has the ability to screen potential clients and will not allow retail investors
to access Research on Multex's Research-On-Demand (as defined below).
(d) Multex may sell and make available the Research with the research
of other research contributors, and may be provided to third parties either
directly by Multex or through a Third Party Data Provider, such as Telerate,
Reuters, Quotron, Bloomberg and ADP.
<PAGE>
(e) Notwithstanding anything herein to the contrary, Company may, at
its sole discretion, elect not to provide certain Research documents to Multex
for sale or distribution by Multex under this Agreement ("Excluded Documents");
provided that Company will not provide for sale or distribution such Excluded
Documents to any other vendor or third party distributor, including, without
limitation, any other research or document distributor.
(f) Multex shall pay to Company the following royalties (the
"Royalties") with respect to the sale or distribution of Research:
[****] of the Net Fees (as defined below) received by Multex for the
Research.
Notwithstanding the foregoing, the Company shall in no event receive a royalty
percentage that is less than the royalty percentage received by similar
brokerage firm providers to Multex for Multex Research-On-Demand in terms of
reports and notes generated, including, for example, [****]. The term "Net Fees"
shall be defined to mean the gross revenues received by Multex for the Research,
less any discounts, allowances, adjustments, distribution of pass through fees,
taxes or other charges paid or incurred by Multex in connection with the sale of
the Research.
(g) Multex will determine the price to be paid by its customers for
Research; provided that Multex will price the Research as the same price as
other comparable research that is sold by Multex. Multex shall be entitled to
provide the Research without a fee for a period of time (such period of time not
to exceed 60 days) as a concession or promotion.
(h) Multex shall pay to Company the Royalties with respect to each
calendar month in arrears, within 45 days after the end of such calendar month.
Multex shall provide to Company with the Royalty payment a report showing
Multex's sales of Research and/or third-party usage of the Research during the
relevant month.
(i) Multex shall be responsible for the conversion of the Research to
a format that is suitable for Multex's distribution of the Research. Except as
provided in the preceding sentence, Multex shall have no right to modify, alter
or excerpt the content of any Research document.
(j) Notwithstanding anything to the contrary in this Agreement, (i) if
Multex is in material breach of this Agreement or (ii) Company determines to
cease distribution and availability of any Research to its own customers, Multex
will, as soon as practicable after notice from Company, withdraw any Research
from availability to Multex's customers.
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
-2-
<PAGE>
(k) The Parties agree that it is not intended that Company will become
an investment advisor with respect to Multex's customers. Multex represents and
warrants that it has notified its current customers, and will notify its future
customers, that the use of Research purchased by such customers is at such
customers' sole risk.
(l) Multex will determine whether it is required to register as an
investment advisor with respect to its customers that receive Research and, if
so required, will take all necessary action to register as an Investment advisor
prior to disseminating Research pursuant to this Agreement.
(m) The Research shall remain the exclusive property of Company, and
Multex shall not acquire any rights in the Research. The Research (and whatever
medium that Multex uses to sell or distribute the Research) shall contain such
disclaimers as are determined by Company. Multex represents and warrants that
it has notified its current customers, and will notify its future customers,
that such customers are customers of Multex, and not of Company.
(n) For purposes of this Agreement, Research shall mean equity
research prepared by the Robertson Stephens division of Company consisting (i)
First Calls with Financial Models, (ii) Company Reports, (iii) Industry Reports,
(iv) First Fax: AM and PM editions, and (v) Companies Under Coverage. Research
shall not include (i) debt research or (ii) research by BankAmerica Corporation
and its affiliates, other than the Robertson Stephens division of the Company."
B. The Agreement is hereby further amended by including a new section 1B
thereto that shall read as follows:
"1B. Multex Research-On-Demand
(a) Commencing the date hereof, Multex shall make available to Company
for internal distribution exclusively for Company employees selected historical
investment research, business, economic and financial news and related
information contained in the Multex Research-On-Demand database ("Multex
Research-On-Demand"). Multex shall make Multex Research-On-Demand available to
Company via a customized website that has previously been furnished and accepted
by Company (the "Website"). The Website may currently be accessed by 10 end-
users, which number may be increased by mutual agreement between the Parties.
Multex represents and warrants to Company that Multex has full legal right and
authority to provide Company access to Multex Research-On-Demand and doing so
will not result in a breach by Multex of any copyright, license or other
obligation of Multex.
(b) A detailed description of the additional services that are to be
provided by Multex with regard to providing Multex Research-On-Demand to Company
are set forth in Exhibit A to this Agreement.
-3-
<PAGE>
(c) Multex Research-On-Demand shall be subject to all of Multex's
restrictions, moratoria and/or limitations on availability regarding the
research or documents included therein which are now, or may in the future be,
imposed by Multex's contributors of such research or documents.
(d) The right to access Multex Research-On-Demand shall be personal to
Company and belong solely to Company for internal distribution to internal
users. Company may not sell or redistribute to any third party the Multex
Research-On-Demand (including any of the Services connected therewith or any
content or research or documents therein) in any manner (including for
promotional purposes, marketing with third parties or the creation or marketing
with third parties or co-branded or private branded websites). Company agrees
that it shall not sublicense or authorize any non-Company employee or any entity
to use the Multex Research-On-Demand without the prior written consent of
Multex.
(e) Company shall pay to Multex the following fees with respect to
Company's utilization of Multex Research-On-Demand:
i) Company shall pay for Multex Research-On-Demand on a per
report basis as set forth in Exhibit B hereto, which exhibit is
incorporated herein by reference. It is understood by the Parties
that Exhibit B may be modified or amended from time to time; provided
that the prices set forth in Exhibit B may not be increased during the
Trial Period or the First Year (as such terms are defined below). All
references to usage of Multex Research-On-Demand shall be calculated
on a per report basis.
ii) For the period beginning the date hereof and ending
May 31, 1998 (the "Trial Period"), Company shall not be required to
pay any fee for its usage of Multex Research-On-Demand; provided that
Company's usage during the Trial Period does not exceed $50,000 in
which case Company shall pay to Multex for its usage of Multex
Research-On-Demand in excess of $50,000.
iii) For the period beginning June 1, 1998 and ending May 31,
1999 (the "First Year"), Company shall pay a minimum fee of [****] per
month (each a "Monthly Minimum Fee") on or before the first day of
each month during the First Year. The total of the Monthly Minimum
Fees to be paid during the First Year shall be [****].
iv) [****]
v) [****]
(f) In the event of any termination of this Agreement, Company shall
have
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
-4-
<PAGE>
the right to keep and use all research and other materials obtained from Multex
Research-On-Demand for which the Company has paid, or does pay.
C. The Agreement is hereby further amended by deleting Section 4(a)
thereto in its entirety and replacing it with a new Section 4(a) that shall read
as follows:
"(a) The term of this Agreement shall run until May 31, 2001.
Thereafter, this Agreement shall automatically renew for successive
one-year periods unless either Multex or Company terminates the Agreement
thirty (30) days prior to the commencement of the renewal period. In
addition, this Agreement may be terminated in its entirety (or Sections 1,
1A and/or 1B may be terminated individually) by either Multex or Company at
any time subsequent to May 31, 1999 upon 60 days prior written notice to
the non-terminating party; provided that in the event that Multex
terminates this Agreement in its entirety (or Section 1B individually) for
any reason other than for Company's failure to pay to Multex any fees or
charges owed to Multex under this Agreement within 15 days following notice
by Multex of such non-payment, Multex shall be obligated to pay to Company
any Credit owed to Company under Section 1B hereto. In addition, Company
may, at its sole discretion, terminate Sections 1A and/or 1B of this
Agreement at any time during the Trial Period."
D. The Agreement is hereby further amended inserting a new Section 4(d)
thereto that shall read as follows:
"(d) This Agreement may be suspended for a 45-day period by either
Party without prior notice in the event that such Party, upon the advice of
outside legal counsel, reasonably believes that the other Party is in
violation of a law, order, rule, regulation, writ, injunction, judgment or
decree of any court, government or governmental agency or body, domestic or
foreign, having jurisdiction over such Party or its properties and such
violation is material to the business or operations of the such Party or
there is pending or threatened a material action, suit, claim or proceeding
against the other Party or any of its officers or any of its properties,
assets or rights before any court, government or governmental agency or
body, domestic or foreign, having jurisdiction over such Party or any of
its officers or properties; provided that if the condition giving rise to
the suspension under this Section 4(d) is not removed or cured within the
45-day period, this Agreement may be terminated."
E. The Agreement is hereby further amended inserting a new Section 31
thereto that shall read as follows:
"31. Due Diligence; Audit Rights.
(a) Multex shall make available to Company and its representatives
such
-5-
<PAGE>
documents and information and access to such persons as Company shall reasonably
deem necessary to insure compliance by Company with all applicable securities
laws, including, without limitation, issues relating to suitability of customers
receiving Research.
(b) Company will have the right, not more than two times in any
calendar year (and one time within four months following termination of this
Agreement), to have an independent public accountant, reasonably acceptable to
Multex, examine Multex's relevant books, records and accounts for the purpose of
verifying the accuracy of payments made to Company as required under this
Agreement. Company acknowledges and agrees that such accountant shall have
access to the names of Multex's customers solely on the condition that the
accountant not disclose such identities to Company. Each audit will be
conducted at Multex's place of business, or other place mutually agreed to by
Company and Multex, during Multex's normal business hours and with at least five
days prior written notice to Multex. Company will pay all fees and expenses of
the accountant for the examination."
F. The Agreement is hereby further amended inserting a new Section 32
thereto that shall read as follows:
"32. Notice. All notices hereunder shall be in writing, and
If sent to Company:
Stuart Brogan
BancAmerica Robertson Stephens
555 California Street
San Francisco, CA 94104
Tel: (415) 676 2505
Fax: (415) 676 2578
If sent to Multex:
Office of the President
(copy to General Counsel)
Multex Systems, Inc.
33 Maiden Lane
5th Floor
New York, NY 10038
Tel: (212) 859 9826
Tel: (212) 859 9810"
G. The Agreement is hereby further amended by amending the definition of
"Services" contained in Exhibit B to the Agreement to include Multex Research-
On-Demand.
-6-
<PAGE>
SECTION 2. Reference to and Effect on the Agreement. On and after the
effective date of this Amendment No. 1, each reference to "this Agreement",
"hereunder", "hereof" or words of like import referring to the Agreement shall
mean and be a reference to the Agreement as amended by this Amendment No. 1.
The Agreement, as amended by this Amendment No. 1, is and shall continue to be
in full force and effect and is hereby is all respects ratified and confirmed.
SECTION 3. Execution in Counterparts. This Amendment No. 1 may be
executed in any number of counterparts, each of which counterparts shall be an
original and all of which taken together shall constitute one and the same
Amendment No. 1.
SECTION 4. Governing Law. This Amendment No. 1 shall be governed by,
and construed in accordance with, the laws of the State of California, without
giving effect to such state's principles of conflict of law.
IN WITNESS WHEREOF, the Parties have executed this Amendment No. 1 as
of the day and year first above written.
BANCAMERICA ROBERTSON MULTEX SYSTEMS, INC.
STEPHENS
By: /s/ John P. Rohal By: /s/ Philip Callaghan
------------------------------ -------------------------
Name: John P. Rohal Name: Philip Callaghan
Title: Managing Director, Research Title: Chief Financial Officer
-7-
<PAGE>
EXHIBIT A
---------
SERVICES
Service(s) Description
The Multex Research On-Demand database presently consists of at least 150,000
historical research reports from brokerage firms and third parties, which are
made available for purchase and which may be subject to certain embargo periods
prior to release and sale as determined solely by Multex and its contributors.
Service Update
Multex shall continue to update the Services with additional reports on a
periodic basis as new reports are provided by Multex's contributing sources
(e.g., brokerage firms). Multex shall provide to Company on a periodic basis a
revised indexed listing of reports available as part of Multex Research-on-
Demand; such listing shall be revised to reflect new and/or deleted reports from
Multex Research-on-Demand.
Service Format
Multex shall make the reports available in Adobe Acrobat format and any such
additional format that Multex may later choose to support as part of its
Services.
-8-
<PAGE>
EXHIBIT B
SUGGESTED LIST PRICES AND TERMS FOR SERVICES
--------------------------------------------
Multex's Suggested List Price for retrieval of Document by Company.
Multex Research on Demand:
-------------------------
Report Size Suggested Retail Price
----------- ----------------------
1-5 pages [****] per report
6-12 pages [****] per report
13-20 pages [****] per report
21-40 pages [****] per report
41-60 pages [****] per report
61+ pages [****] per report
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
-9-
<PAGE>
EXHIBIT 10.11
**** CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES EXCHANGE ACT OF 1933, AS
AMENDED
AMENDMENT NO. 3 TO THE AGREEMENT
THIS AMENDMENT No. 3 dated as of September 10, 1998 to the Agreement
for Internal Electronic Distribution Services dated April 10, 1997 as amended by
Amendment No. 1 dated March 9, 1998 and Amendment No. 2 dated July 29, 1998 (the
"Agreement"), by and between BANCBOSTON ROBERTSON STEPHENS INC. (formerly known
as BancBoston Robertson Stephens, and prior to that as Robertson Stephens &
Company LLC), a Massachusetts corporation with offices at 555 California Street,
26th Floor, San Francisco, CA 94104 (hereinafter referred to as "Company"), and
MULTEX SYSTEMS, INC., a Delaware corporation with offices at 33 Maiden Lane, 5th
Floor, New York, New York 10038 (hereinafter referred to as "Multex"). Multex
and Company shall be referred to herein sometimes as the "Parties".
Unless otherwise defined herein, the terms defined in the Agreement
shall be used herein as therein defined.
WHEREAS, Company has developed a public website currently in operation
known as "internetstocks.com" (the "internetstocks Website");
WHEREAS, Multex is in the business of reselling and making available
research prepared by third parties, including First Calls with Financial Models,
Company Reports, Industry Reports, First Fax and Companies Under Coverage;
WHEREAS, Multex seeks to resell and otherwise make available (i)
Research (as defined in the Agreement) and (ii) Additional research (as defined
below), in each case through access to the internetstocks Website; and
WHEREAS, the Parties have agreed to do so on the terms and conditions
set forth herein.
NOW, THEREFORE, it is agreed as follows:
SECTION 1. Amendments to the Agreement.
Pursuant to Section 20 of the Agreement, it is hereby agreed by the
Parties as follows:
<PAGE>
A. The Agreement is hereby amended by deleting Section 1A(n) thereto in its
entirety and replacing it with a new Section 1A(n) that shall read as follows:
"(n) For purposes of this Agreement, Research shall mean equity or
debt research prepared by Company, BancBoston Robertson Stephens
International Ltd. or the Emerging Markets activities of BankBoston
Corporation consisting of (i) First Calls with Financial Models, (ii)
Company Reports, (iii) Industry Reports; (iv) First Fax: AM and PM
editions; and (v) Companies Under Coverage."
B. The Agreement is hereby further amended by including a new section 1C
thereto that shall read as follows:
"1C. Resales through internetstocks Website
--------------------------------------
(a) Company shall provide to Multex access to the internetstocks
Website for the purpose of reselling and otherwise making available (i)
Research and (ii) Additional Research, and Multex shall use its access to
the internetstocks Website solely for such purpose. Such access shall take
the form of allowing Multex to establish a [sub-website] within the
interenetstocks Website (the "Multex Sub-Website").
(b) Multex shall be responsible for developing the Multex Sub-Website
and the Multex Sub-Website shall be solely the responsibility of Multex,
provided that Company may require Multex to include, and Multex agrees to
include, such disclaimers or legends as Company may reasonably request,
including, but not limited to, disclaimers and legends clearly marking that
the Multex Sub-Website is a Multex product/service and is not a
service/product of the Company. In consideration for Multex developing the
Multex Sub-Website, Company agrees to pay Multex a one-time fee of [****]
within 15 days of the Multex Sub-Website going live. Company is currently
considering establishing sister websites to the internetstocks Website,
each with a high technology subject matter (each a "Sister Website"),
including a software stocks website and a semiconductor stocks website.
Company agrees to allow Multex to establish a Multex Sub-Website on each
Sister Website. In consideration for Multex developing the Multex Sub-
Website for such Sister Websites, Company agrees to pay Multex a one-time
fee of [****] within 15 days of each such additional Multex Sub-Website
going live.
- -------------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
2
<PAGE>
(c) [Include description of Multex labeling within the internetstocks
Website and presentation of Multex Sub-Website.]
(d) In consideration for allowing Multex to establish the Multex Sub-
Website, Multex agrees to pay to Company the following fees:
(i) For resales of Research through the Multex Sub-Website, the fee
(the "Research Resale Fee") shall be [****] of Gross Revenues
(as defined below) received by Multex from such resales; and
(ii) For resales of Additional Research through the Multex Sub-
Website, the fee (the "Additional Research Fee") shall be [****]
of the Gross Revenues received by Multex from such resales.
The Research Resale Fee and the Additional Research Fee shall be paid to Company
within 60 days of receipt by Multex of the corresponding Gross Revenues.
(e) Multex's ability to resell and make available Research pursuant to
this Section 1C shall be subject to the terms and conditions of Section 1A
except as follows: (i) resales of Research through the Multex Sub-Website
shall be subject to the Research Resale Fee and shall not be subject to the
Royalties; (ii) resales of Research through the Multex Sub-Website may be
made to "retail investors."
(f) For purposes of this Agreement, Additional Research shall mean the
following third-party research products: (i) Investment Review; (ii) Stock
Snapshot; (iii) ACE Report; (iv) ACE Pro Report; and (v) Standard & Poors'
research reports.
(g) For purposes of this Agreement, Gross Revenues shall mean the
amounts received by Multex from the resales of Research and Additional
Research.
C. This Agreement is hereby further amended by deleting Section 4(a) thereto in
its entirety and replacing it with a new Section 4(a) that shall read as
follows:
"(a) The term of this Agreement shall run until May 31, 2001.
Thereafter, this Agreement shall automatically renew for successive one-
year periods unless either Multex or Company terminates the Agreement
thirty (30) days prior to the commencement of the renewal period. In
addition, this
- ----------------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND FILED SEPARATELY
WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO
RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
3
<PAGE>
EXHIBIT 10.13
**** CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT UNDER TO RULE 406 UNDER THE SECURITIES EXCHANGE ACT OF
1933, AS AMENDED
MASTER SERVICES AGREEMENT
Dated as of November 23, 1998
Between
MULTEX SYSTEMS, INC.
and
DAIN RAUSCHER INCORPORATED
EXHIBITS
A Third Party Software; Third Party License Requirements
for End Users page 9
SCHEDULES (check all that apply)
x Electronic Contribution and Distribution Schedule of
___ Services (Broker Dealer) page 10
Electronic Contribution and Distribution Schedule of
___ Services (Data Provider)
x Royalty Schedule (Broker Dealer) page 12
___
Royalty Schedule (Data Provider) page 12
___
x Multex Express Schedule of Services page 13
___
<PAGE>
MASTER SERVICES AGREEMENT ("Agreement'') dated as of November, 23, 1998, DAIN
RAUSCHER INCORPORATED with offices at 60 South Sixth St. Minneapolis, MN 55402-
4422, (hereinafter referred to as the "Company"), and MULTEX SYSTEMS, INC., a
Delaware Corporation with offices at 33 Maiden Lane, New York, NY 10038
(hereinafter referred to as "Multex").
The parties hereby agree as follows:
1. Definitions. As used herein, the following terms shall have the meanings
-----------
set forth below:
(a) Data Providers shall mean third party research providers who are in the
--------------
business of producing or procuring research reports, market data and other
financial documents for sale or resale to the financial and corporate
markets.
(b) Documents shall mean any digitized or electronically transmitted document
---------
which is transmitted to Multex by the Company and/or distributed by Multex
to the Company and Users as part of the Services. The particular formats,
types and contents of the Documents covered by this Agreement shall be as
set forth in the Schedules.
(c) Equipment shall mean the hardware and software (e.g., workstations,
---------
servers, operating software) required in order for the Company to access
the Services, as more fully described in the Schedule.
(d) External Users shall mean persons or entities other than employees of the
--------------
Company to whom the Documents are provided by means of the Services.
(e) Internal Users shall mean the investment professionals and other employees
--------------
of the Company to whom the Documents are provided by means of the Services.
(f) Multex Software shall mean Multex's proprietary software which is used to
---------------
receive and distribute Documents and otherwise to provide the Software, and
which includes certain software licensed from third parties (the "Third
Party Software"). The Multex Software and the Third Party Software are
sometimes hereinafter referred to as the "Software".
(g) Schedule or Schedules shall mean one or more Schedules attached to this
---------------------
Agreement and made a part hereof which set forth the Services to be
provided by Multex to the Company, and any of the terms and conditions
related to such Services
(h) Services shall have the meaning ascribed thereto in Section 2(a) below.
--------
(i) Users shall mean either the Internal Users or External Users.
-----
2. Scope of Services; Company Obligations; Equipment.
-------------------------------------------------
(a) Multex agrees to provide to the Company and the Company agrees to receive
from Multex in accordance with the terms and conditions of this Agreement
and the Schedules hereto ( the document distribution and related services
described in the Schedule(s) entered into by the parties and attached
hereto and made a part hereof; and (ii) the licenses granted herein or
<PAGE>
in the Schedules (collectively the "Services"). The Services are subject to
the Company performing its obligations as set forth herein and in the
Schedules.
(b) Multex grants to the Company a non-exclusive, non-transferable license to
use the Multex Software. Company agrees to abide by the Third Party
License Requirements for End Users relating to the Third Part Software, as
set forth in Exhibit A attached hereto and incorporated herein.
(c) The Company agrees to provide to Multex and grants to Multex the non-
exclusive right to obtain from the Company the Documents described in the
Schedules in accordance with the terms set forth herein and in the
Schedules, including any terms relating to the timeliness of the Company's
delivery of the Documents to Multex.
(d) The Company agrees to install the recommended Equipment configuration
described in the Schedule.
(e) Multex shall provide to the Company free of charge, maintenance updates and
revisions ("Updates") to Multex Software as commercially released by
Multex. Any enhancements, modifications, software development, operation
and technical support, customization or integration not included in the
Services or the Updates, or which are made specifically for or at the
Request of the Company shall be paid for by Company on a time and material
basis. Multex's time and materials rates are from U.S. $150.00 to U.S.
$200.00 per hour, per person depending on the skill and level of such
person.
3. Fees; Costs.
-----------
(a) The Fees for the Services, if any, are set forth in the Schedules. All
overdue amounts shall be subject to interest at the rate of 1.5% per month,
or the highest amount permitted by law.
(b) The Company shall be solely responsible for the all costs relating to the
preparation and development of the Documents, the delivery of the Documents
to Multex, and any other costs specified in the Schedules. Such costs
include, but are not limited to, costs for telecommunication lines,
telephones, modems, computers, magnetic tape, magnetic tape delivery and
messenger services.
4. Term; Termination.
(a) The term of this Agreement shall commence on the date of this Agreement and
shall continue until all Schedules have expired, unless this Agreement and
the Schedules are sooner terminated as provided herein. The term of each
Schedule shall be as set forth therein.
- -----------------
3
<PAGE>
(b) Either party, by written notice to the other party, may terminate this
Agreement and the Schedules prior to the expiration of the term of this
Agreement or the Schedules upon the occurrence of an "Event of Default" by
the other party. An "Event of Default" shall mean:
(i) the failure by a party to perform or observe any material term,
covenant, agreement or warranty contained in this Agreement ("Material
Default"), which is not cured within 30 days after written notice thereof;
provided, that if the Material Default cannot reasonably be cured within 30
days and the defaulting party has commenced performance during such thirty
(30) day period and diligently pursues curing such default, the time for
curing such default shall be extended for such period as may be necessary
to cure the default;
(ii) either party ceasing to do business or the filing of a petition in
bankruptcy (voluntary or involuntary) with respect to a party, which in the
case of an involuntary petition, is not vacated within 60 days, or
(iii) the failure by the Company to pay any amount due hereunder, which
is not cured within 30 days after written notice thereof.
(c) In addition to Multex's right to terminate this Agreement and the Schedules
as provided in subsection (b) above, if an Event of Default by the Company
occurs, then Multex may at its option, (i) declare all amounts due and to
become due under this Agreement to be immediately due and payable, (ii)
whether or not this Agreement is terminated, take immediate possession of
any or all of the items of Equipment owned by Multex not fully paid for,
wherever situated and for such purpose enter upon any premises without
liability for so doing, (iii) without prejudice to its right to terminate
this Agreement, suspend performance of any of its obligations under this
Agreement and the Schedules until such failure is remedied; and/or (iv)
sell, dispose of, hold, use or lease any items of Equipment not fully paid
for, as Multex, in its sole discretion, may decide. Company agrees to
reimburse Multex for any and all expenses Multex may incur, including
reasonable attorney fees, in taking any of the foregoing actions.
(d) If the parties have entered into an Electronic Contribution and
Distribution Schedule of Services as a part of this Agreement, then the
parties acknowledge and agree hat the Research (as such term is defined in
such Schedule) is unique to the Company, and that if the Company fails to
provide the Research in the manner as described in such Schedule, Multex
would suffer irreparable harm for which the remedies at law would be
inadequate and/or would suffer damages the amount of which would be
difficult or impossible to determine. Accordingly, if the Company fails to
contribute the Research in a timely manner, then, in addition to Multex's
right to terminate this Agreement and the Schedules as provided in this
Section 4, Multex shall be entitled to injunctive relief, without posting a
bond or other security.
(e) The remedies contained in this Paragraph 4 are cumulative and are in
addition to all other rights and remedies available to either party under
this Agreement and the Schedules, by operation of law or otherwise.
(f) Promptly after the termination or expiration of this Agreement, the
Software (including the magnetic or other physical media on which it was
originally or subsequently
4
<PAGE>
recorded or fixed) and all related documentation and all Equipment owned by
Multex or which has not been paid for by the Company shall be returned by
Company to Multex in good condition, reasonable wear and tear excepted. At
the direction of Multex, the Software may be completely deleted, erased or
otherwise destroyed by Company.
5. Indemnity.
---------
(a) Multex shall indemnify and hold the Company harmless from and against any
costs, damages, expenses or liabilities (including reasonable attorney
fees) incurred by the Company as a result of any claim or action brought
against the Company based upon or arising out of the infringement by the
Software as used in accordance with this Agreement of any patent, copyright
or proprietary right of any third party, and Multex shall defend or settle,
at its sole expense, any claim attributable to such infringement; provided
that (i) the Company shall have promptly notified Multex in writing of such
claim; (ii) Multex shall have sole control of the defense and settlement of
such claim; and (iii) the Company shall cooperate fully with Multex in the
defense of such claim. In the event that the Company is enjoined or
otherwise prohibited from using the Software, Multex shall, at its option,
substitute non-infringing, equally functional Software, procure for the
Company the right to continue using the Software, or terminate this
Agreement.
(b) The Company shall indemnify and hold Multex harmless from and against any
costs, damages, expenses or liabilities (including reasonable attorney
fees) incurred by Multex as a result of any claim or action brought against
Multex based upon or arising out of (a) the infringement by any of the
Documents of any patent, copyright or proprietary right of any third party;
(b) any libelous or slanderous statements contained in the Documents; or
(c) a violation of any of the securities laws of the United States (or any
other jurisdiction in which the Services are provided) arising out of the
Documents or the furnishing thereof to any party, and Company shall defend
or settle, at its sole expense, any such claim or action; provided that (i)
the Company shall have sole control of the defense and settlement of any
action: and (ii) Multex shall cooperate fully with the Company in the
defense of such action. In the event Multex is enjoined or otherwise
prohibited from using any Document. Company shall, at its sole expense,
procure for Multex the right to continue using such Document or substitute
a non-infringing or nonviolating version of such Document.
6. Confidential I information.
--------------------------
(a) "Confidential Information" shall mean the Multex Software, the Third Party
Software, any other software, hardware, systems or data bases used by
Multex in the conduct of its business (including the configurations
thereof), and any other information concerning Multex or the Company which
is marked as confidential or which, under the circumstances, should be
treated as confidential.
(b) Each party shall hold the Confidential Information of the other party in
trust and confidence and shall not reproduce, disclose to any person, firm
or enterprise, or use for its own benefit, any such Confidential
Information (except as specifically permitted or contemplated by this
Agreement). Each party shall ensure that its employees and agents are
aware of this clause,
5
<PAGE>
and shall by instruction, agreement or otherwise cause such employees and
agents to abide by the terms of this clause.
(c) "Confidential Information" will include any information that (i) is already
rightfully known to a party at the time it is obtained from the other
party, free from any obligation to keep such information confidential; (ii)
is or becomes publicly known through no wrongful act of either party; (iii)
is rightfully received from a third party without restriction and without
breach of this Agreement; (iv) is independently acquired or developed by a
party without breach of any obligation hereunder; (v) is required to be
disclosed pursuant to law, governmental regulation, or court order; or (vi)
is in the public domain.
7. Limitation of Liability.
-----------------------
(a) MULTEX WILL MAKE EVERY REASONABLE EFFORT TO PROVIDE THE SERVICES TO THE
COMPANY, IT BEING ACKNOWLEDGED AND AGREED THAT MULTEX CANNOT AND DOES NOT
GUARANTEE THE CONTENT, ACCURACY, TIMELINESS OR AVAILABILITY OF THE SERVICES
OR THE DOCUMENTS AS DISPLAYED OR PROVIDED THROUGH THE SERVICES.
ACCORDINGLY, EXCEPT FOR MULTEX'S FRAUD, WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE, THE COMPANY AGREES THAT MULTEX SHALL NOT HAVE ANY LIABILITY OR
OBLIGATION TO THE COMPANY OR ANY THIRD PARTY (WHETHER CAUSED DIRECTLY OR
INDIRECTLY) RELATING TO OR ARISING OUT OF (i) THE INTERRUPTION, DELAY OR
FAILURE IN THE TRANSMISSION, DELIVERY OR DISTRIBUTION OF THE SERVICES OR
DOCUMENTS; (ii) THE UNAVAILABILITY OF MULTEX SOFTWARE OR THE SERVICES;
(iii) THE ACCURACY OF THE DOCUMENTS OR SECURITIES OR COMMODITIES
INFORMATION AND PRICES AS DISPLAYED, CARRIED OR FURNISHED BY OR THROUGH THE
SERVICES; (iv) ERRORS OR OMISSIONS IN CONNECTING, TRANSMITTING, PROCESSING,
DISSEMINATING, DISPLAYING OR DISTRIBUTING THE DOCUMENTS OR THE INFORMATION
CONTAINED THEREIN; OR (v) THE DISPLAYING OR FURNISHING OF THE DOCUMENTS,
INCLUDING THE INFORMATION CONTAINED THEREIN. MULTEX'S SOLE LIABILITY TO
COMPANY FOR ANY CLAIMS, NOTWITHSTANDING THE FORM OF SUCH CLAIMS (E.G.,
CONTRACT, NEGLIGENCE OR OTHERWISE), ARISING OUT OF ITEMS (i) THROUGH (iv)
ABOVE, SHALL BE TO USE REASONABLE EFFORTS TO RESUME THE SERVICES AND/OR TO
MAKE THE MULTEX SOFTWARE AVAILABLE TO COMPANY AS PROMPTLY AS REASONABLY
PRACTICABLE.
(b) IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY FOR LOST PROFITS,
INDIRECT, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES, OF ANY KIND ARISING
OUT OF OR ATTRIBUTABLE TO THIS AGREEMENT, EVEN IF ADVISED OF THE
POSSIBILITY OF THE SAME.
(c) The content, accuracy and completeness of the Documents is the sole
responsibility of the Company. Multex conducts no review whatsoever and
exercised no editorial control over the Documents, and accordingly, Multex
shall have no liability whatsoever (whether in contract or tort) for the
content, completeness or accuracy of the Documents
6
<PAGE>
(including, without limitation, any security or commodity price information
contained in the Documents.)
(d) Except for Multex's liability under Paragraph 5, Multex's maximum liability
hereunder for any other cause, not exculpated hereunder, whether in tort or
contract, shall not exceed the lesser of (i) actual damages or (ii) one
month's Fees paid by the Company for the Services (or, if no Fees are
payable under the Schedule for such Services, US$5,000).
(e) As used in this paragraph, the term "Multex" or Multex Software shall
include each third party who provides Multex with any portion of the
Services. Such third party shall not have any direct or indirect liability
to Company for monetary damage on account of the Services provided or to be
provided by Multex hereunder.
(f) The Company shall immediately notify Multex of any suspected inaccuracies
in the Documents or the Services.
(g) The parties acknowledge and agree that the limitations of liability set
forth in this Section 7 are a condition of this Agreement, and that the
Fees reflect the allocations of risk set forth in this Section 7.
8. Ownership Rights.
----------------
(a) The Documents shall remain the sole property of the company and Multex
shall not acquire any rights in the Documents, other than the right to
distribute the Documents as set forth herein.
(b) The Software shall remain the sole property of Multex or its licensers.
The Company may use the Software only in conjunction with the Services.
The Company may permit the Software to be used or accessed by no more than
the number of concurrent users set forth in the Schedule, or as may be
agreed to by the Company and Multex. The Company shall not copy, in whole
or in part, the Software or related documentation, whether in the form of
computer media, printed or in any other form; provided, however, that
Company may make one (1) of copy of the Software for back-up purposes only.
Any copy of the Software shall contain the copyright and other proprietary
notice which appears on and in the Software. Should the Software become
inoperable, the Company may use the Software on a backup system for a
period not to exceed thirty (30) days. The Company shall notify Multex of
any such use within five (5) days. Should there be a requirement to
permanently transfer the Software from the licensed configuration to an
alternate configuration, the Company shall first obtain the written consent
of Multex, which shall not be unreasonably withheld.
(c) The license granted herein is for the limited purposes of enabling the
Company to contribute the Documents to Multex and to receive and access the
Services. The Company is not authorized or permitted to furnish the
Software or the Services to any person or firm for re-use, redistribution
or retransmission without the prior written approval of Multex.
(d) THE COMPANY SHALL NOT MAKE ANY ALTERATION, CHANGE OR MODIFICATION TO THE
SOFTWARE. COMPANY MAY NOT RECOMPILE, DECOMPILE, DISASSEMBLE, OR
REVERSE ENGINEER THE SOFTWARE, OR
7
<PAGE>
OTHERWISE CREATE OR DERIVE SOURCE CODE FROM THE SOFTWARE, OR MAKE OR
DISTRIBUTE ANY OTHER FORM OF THE SOFTWARE.
(e) The Company may use the trademarks of Multex or its licensers, if at all,
only to identify printed output produced by the Software and only in
accordance with accepted trademark practice, including identification of
the relevant trademark owner's name. The use of any trademark as
authorized herein does not give the Company any rights of ownership or
other rights relating to the trademark, and all goodwill resulting from any
such use shall inure to the benefit of the relevant trademark owner.
(f) The Company will not export or re-export the Software without the
appropriate United States or foreign government licenses, and the consent
of Multex.
9. Warranties.
----------
(a) Multex hereby represents and warrants to Company as follows: (i) Multex is
a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware with full authority to enter into this
Agreement; (ii) the Multex Software and the Services do not infringe the
proprietary rights of any third party; (iii) Multex has the legal right and
authority to license the Multex Software and the Third Party Software to
Company; (iv) the medium on which the Software shall be free of defects in
materials and workmanship under normal use for a period of thirty (30) days
from the date of delivery; and (v) the Multex Software will, under normal
use and service, record, store, process and present calendar dates falling
on or after January 1, 2000, in the same manner, and with the same
functionality, data integrity and performance, as the Multex Software
records stores, processes and presents calendar dates on or before December
31, 1999, will lose no functionality with respect to the introduction of
records containing dates falling on or after January 1, 2000, and will be
interoperable with other software used by the Company which may deliver
records to, or interact with, the Multex Software including but not limited
to back-up and archived data.
(b) The Company represents and warrants to Multex that: (i) the Company is the
owner of and has the right to provide the Documents to Multex for
distribution as provided herein; (ii) the Documents do not contain any
libelous or slanderous statements, and do not infringe the proprietary
rights of any third party; and (iii) the Company will comply with all laws
and regulations applicable to the creation and distribution of the
Documents and its use of the Services, including without limitation all
securities law of the United States and any other jurisdiction in or into
which the Services are to be provided..
10. Limitation of Warranties.
------------------------
THE COMPANY ACKNOWLEDGES AND AGREES THAT EXCEPT FOR THE WARRANTIES
SPECIFIED IN PARAGRAPH 9, MULTEX MAKES NO OTHER WARRANTIES WHATSOEVER, WRITTEN
OR ORAL, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION, ANY
WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY CONCERNING
THIS AGREEMENT, THE SERVICES OR EQUIPMENT, THE MULTEX SOFTWARE, THE THIRD PARTY
SOFTWARE OR THE DOCUMENTATION. MULTEX DOES NOT
8
<PAGE>
GUARANTEE THE ACCURACY, VALIDITY OR COMPLETENESS OF THE DOCUMENTS AS DlSPLAYED
OR PROVIDED THROUGH THE SERVICES. MULTEX AND ITS THIRD PARTY LICENSORS DO NOT
AND CANNOT WARRANT THE PERFORMANCE OR RESULTS THE COMPANY MAY OBTAIN BY THE USE
OF THE SOFTWARE OR SERVICES.
11. Compliance with Law.
-------------------
(a) The Company shall be responsible (i) for compliance with all laws and
governmental regulations affecting its business and (ii) for any use it may
make of the Services or the Documents to assist it in complying with such
laws and governmental regulations, and Multex shall not have any
responsibility relating thereto (including, without limitation, advising
the Company of its responsibilities in complying with any laws or
governmental regulations affecting the Company's business). The Company
shall not use or permit anyone to use the Services, the Software or the
Documents for any unlawful purpose.
(b) Multex shall comply with all applicable U.S., state and local laws and
regulations in its performance of its obligations hereunder.
(c) If after the date hereof any modifications to the Services shall be legally
required, Multex shall, except to the extent such changes may the beyond
the capability of Multex to implement, modify the Services appropriately.
If providing any of the Services to the Company hereunder violates, or in
Multex's opinion is likely to violate, any laws or governmental
regulations, Multex may, upon written notice to Company, immediately cease
providing the affected Services to the Company.
12. Advertising.
-----------
Neither party shall use the name or marks of the other or its parent
company or any subsidiary or affiliated company in any publicity release,
advertising, or publicly displayed or distributed materials without securing the
prior written consent of the party whose name is to be used, whose consent shall
not be unreasonably withheld or delayed. Notwithstanding the foregoing, Multex
may disclose the fact of this Agreement as part of an information list of
clients and a tombstone representation, both substantially in forms as attached.
13. Independent Contractors.
-----------------------
Multex and the Company are independent contractors. Personnel supplied by
Multex hereunder, if any, are not Company's personnel or agents, and Multex
assumes full responsibility for their acts. Multex shall be solely responsible
for the payment of compensation, benefits, insurance and taxes relating to
Multex's employees assigned to perform services hereunder. Notwithstanding the
foregoing, Multex (and its employees) shall abide by Company rules and
regulation while visiting Company's premises.
14. General.
-------
(a) This Agreement shall be binding upon the parties' respective successors and
permitted assigns.
9
<PAGE>
(b) The validity of this Agreement, the construction and enforcement of its
terms, and the interpretation of the rights and duties of the parties shall
be governed by the laws of the State of New York.
(c) No modification, amendment supplement to or waiver of this Agreement or any
Schedule or Exhibit hereunder, or any of their provisions shall be binding
upon the parties hereto unless made in writing and duly signed by both
parties.
(d) A failure or delay of either party to this Agreement to enforce at any time
any of the provisions hereof, or to exercise any option which is herein
provided, or to require at any time performance of any of the provisions
hereto shall in no way be construed to be a waiver of such provisions of
this Agreement.
(e) The terms and conditions of any and all Exhibits and Schedule to this
Agreement are incorporated herein by this reference and shall constitute
part of this Agreement as if fully set forth herein.
(f) The headings herein are for convenience of reference only and shall not
impact the meaning of this Agreement.
(g) The provisions of Sections 5, 6, 7, 8, 9 and 10 shall survive termination
or expiration of this Agreement.
(h) Company shall provide Multex with reasonable access to its premises to
perform the obligations set forth herein. Multex shall abide by the site
regulations and security procedures applicable to each site.
(i) This Agreement constitutes the entire Agreement between the parties
concerning and the subject matter hereof and shall supersede all prior
agreements or understandings concerning such subject matter.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto, each acting under due and proper
authority, have executed this Agreement as of the date first above written.
<TABLE>
<CAPTION>
MULTEX SYSTEMS INC.
<S> <C>
Name: P. Callaghan Name: Mary Zimmer
--------------------------- -------------------------------
Title: CFO Title: Director, DRW Finance & Admin.
--------------------------- -------------------------------
Signature: /s/ Philip Callaghan Signature: /s/ Mary Zimmer
--------------------------- -------------------------------
Date: 11/30/98 Date: 11/23/98
--------------------------- -------------------------------
Name: Marcia L. Hanson
-------------------------------
Title: Vice President
-------------------------------
Signature: /s/ Marcia L. Hanson
-------------------------------
Date: 11/24/98
-------------------------------
</TABLE>
11
<PAGE>
EXHIBIT A
THIRD PARTY SOFTWARE
THIRD PARTY LICENSE REQUIREMENTS FOR END USERS
Third Party Software
- --------------------
Fulcrum Technologies Search tool (the "Fulcrum Software")
Third Party Software License Requirements for End Users
- -------------------------------------------------------
The Company acknowledges and agrees that: (a) title to and ownership of the
Fulcrum Software and all rights related thereto, including patent, trademark and
copyright related thereto are and shall remain the exclusive property of Fulcrum
Technologies, Inc. or its licensees; (b) Customer shall only acquire the right
to use the Fulcrum Software in accordance with this Agreement; and (c) Customer
shall take all necessary steps to ensure that all intellectual property
underlying the binary version of the Fulcrum Software remains confidential.
12
<PAGE>
ELECTRONIC CONTRIBUTION AND DISTRIBUTION
SCHEDULE OF SERVICES
to
MASTER SERVICES AGREEMENT DATED November 23,1998
THIS ELECTRONIC CONTRIBUTION AND DISTRIBUTION SCHEDULE OF SERVICES dated
November 23, 1998 between Multex Systems, Inc. ("Multex") (the "Company") is a
Schedule to and a part of the Master Services Agreement dated November 23, 1998
(the Master Agreement") between Multex and the Company. All terms used herein
and not defined shall have the meanings set forth in the Master Agreement. In
the event of a conflict or inconsistency between the terms of the Master
Agreement and the terms of this Schedule the terms of this Schedule shall
control.
Multex and the Company agree as follows:
1. Services: The Services to be provided under this Schedule consist of
--------
the collection and distribution of the Documents identified below to
Subscribers, Data Providers and Data Provider Clients, as more particularly
described in this Schedule
IT IS SPECIFICALLY UNDERSTOOD THAT THIS SCHEDULE SETS FORTH ALL OF THE SERVICES
TO BE PROVIDED BY MULTEX UNDER THIS SCHEDULE, AND THAT NO OTHER SERVICES,
SOFTWARE DEVELOPMENT, ENHANCEMENTS, MODIFICATIONS, SUPPORT CUSTOMIZATION OR
INTEGRATION ARE INCLUDED IN THE SERVICES COVERED BY THIS SCHEDULE.
2. Documents: The Documents covered by this Schedule are as follows:
---------
____ Research: financial documents, including but not limited to Market
Data, Earnings Estimates, Morning Meeting Notes and/or Published
Research Reports produced by the equity division of Company. Company
may at its sole discretion elect not to contribute certain Research
Documents to Multex for distribution pursuant to this Schedule
("Excluded Documents"), provided, however, that the Company will not
contribute for electronic distribution such Excluded Documents to any
other vendor, including without limitation, any other research or
document distributor.
____ Other Documents (specify:)_____________________________________
3. Term: The initial term ("Initial Term) of this Schedule and the
----
Services shall commence on the date of this Schedule and continue for a period
of three (3) years from the date that the Services are first provided to the
Company (the "Commencement Date"). Thereafter, this Schedule shall renew for
successive one-year periods, unless terminated by either party by written notice
delivered at least 60 days prior to the expiration of the Initial Term or any
renewal period.
13
<PAGE>
4. Fees: Company shall pay Multex a fee of [****] per annum for the
----
services set forth herein which fee shall be paid quarterly in advance. If
Company elects the Royalty Schedule and provided said Schedule remains in full
force and effect with Company in compliance therewith, this fee shall be reduced
to [****] per annum to be paid quarterly in advance. If Company executes the
Express Schedule of Services, Multex shall waive the aforesaid fee in its
entirety.
5. Terms and Conditions.
--------------------
(a) Contribution of Research. The Company agrees to provide and contribute to
Multex all of the Company's Research concurrently with the first publication or
distribution by the Company of such Research in any medium including its
distribution of such Research to its own clients or to any other third party,
including another Data Provider (as defined below). The Company grants to Multex
the nonexclusive, royalty free worldwide right to receive, obtain, store, market
and distribute the Research to (i) any entity, except as provided in Section
3(c), which has subscribed to and is receiving research distribution services
from Multex (collectively, the "Subscribers") and/or (ii) Data Providers for the
purpose of redistributing the Research to the clients of such Data Providers
("Data Provider Clients")
(b) Distribution of Research. Multex agrees to receive the Research from the
Company and to distribute the Research to its Subscribers, the Data Providers
and the Data Provider Clients.
(c) Entitlements. The Company may from time to time, but not more often than
once in any calendar month, request in writing a list of the current Subscribers
and Data Provider Clients and Multex will provide such list within 10 days after
its receipt of the Company's written request. The Company may upon at least 7
days prior written notice request that a Subscriber or Data Provider be de-
entitled from access to its Research, and may upon at least 30 days prior
written notice request that an entity be entitled, either as a Subscriber of
Multex or as a Data Provider Client. for purposes of receiving the Company's
Research. The Company may not request that a Subscriber be de-entitled unless
such Subscriber is also de-entitled from receiving the Research from all other
Data Providers or other third party research distribution vendors to which the
Company provides its Research. Multex shall use its best efforts to effect such
entitlements or de-entitlements within the applicable time frames, provided that
Multex shall not be obligated to provide the Services to any entity that refuses
to execute, or which is in breach of, a Multex Customer Agreement or similar
agreement with a Data Provider.
(d) Other Documents. If Documents other than Research are covered by this
Schedule, then the Company will provide for the timely contribution and delivery
to Multex of all such Documents, and Multex will receive and distribute such
Documents to Subscribers, Data Providers and Data Provider Clients.
- ----------------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
14
<PAGE>
MULTEX SYSTEMS INC.
Name: P. Callaghan Name: Mary Zimmer
--------------------------- -------------------------------
Title: CFO Title: Director, DRW Finance & Admin.
--------------------------- -------------------------------
Signature: /s/ Philip Callaghan Signature: /s/ Mary Zimmer
--------------------------- -------------------------------
Date: 11/30/98 Date: 11/23/98
--------------------------- -------------------------------
15
<PAGE>
ROYALTY SCHEDULE(BROKER DEALER)to
MASTER SERVICES AGREEMENT DATED November 23, 1998
THIS ROYALTY SCHEDULE dated November 23, 1998 between Multex Systems, Inc.
("Multex") and DAIN RAUSCHER INCORPORATED ("Company") is a Schedule to and a
part of the Master Services Agreement dated November 17, 1998 (the "Master
Agreement") between Multex and Company. All defined terms used herein and not
otherwise defined shall have the meanings set forth in the Master Agreement or
in the Electronic Contribution and Distribution Schedule of Services (the
Contribution Schedule ) between Company and Multex. In the event of a conflict
or inconsistency between the terms of the Master Agreement and the terms of this
Schedule, the terms of this Schedule shall control.
Multex and Company hereby agree as follows:
1) Company agrees that commencing 48 hours after the "Morning Notes" and 90 days
after the Industry Reports, and 7 days after all other Research was first
published or distributed in any medium by the Company (the "Embargo Period"),
Multex may market, license and sell the Research ("Embargoed Research") to
any third party including, but not limited to, retail customers which would
be individual consumers, and the Embargoed Research shall not be subject to
the entitlement provisions of Paragraph 3(c) of the Contribution Schedule.
The Embargoed Research may be sold alone or aggregated with the research of
other research contributors, and may be provided to third parties either
directly by Multex or through a Data Provider. Notwithstanding anything
herein to the contrary. Company may at its sole discretion elect not to
contribute certain Research documents to Multex for distribution by Multex
under this Addendum ("Excluded Documents"), provided, however, that the
Company will not contribute for electronic distribution such Excluded
Documents to any other vendor, including without limitation, any other
research or document distributor. The Embargoed Research shall be the same
Research contributed by Company under the Electronic Contribution and
Distribution Schedule executed contemporaneously herewith excluding industry
wide Reports.
2) Multex shall pay to Company the following royalties (the "Royalties"):
[****] of the Net Fees (as defined below) received by Multex in respect of
the sale or usage of the Company's Embargoed Research, whether such Embargoed
Research is sold separately by Multex or as part of an aggregated product
sold through a Data Provider.
"Net Fees" shall mean the gross revenues received by Multex for Embargoed
Research, less any discounts, allowances adjustments, distribution or pass
through fees, taxes or other charges paid or incurred by Multex in connection
with the Embargoed Research.
3) To the extent any third party is provided the Embargoed Research without a
fee for a period of time (not to exceed 60 days) ("Concession Period") as a
concession or promotion, then
-----------------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND FILED SEPARATELY WITH
THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE
406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
16
<PAGE>
Multex shall not be obligated to pay any Royalties during such Concession
Period and Royalties shall commence after the Concession Period has
terminated.
4) Royalties shall be paid quarterly in arrears, within 45 days after the end
of each quarter of each year of the Term (Initial Term plus any renewals of
this Schedule). Company shall receive a report with the Royalty payment
showing Multex's sales of Company's Embargoed Research and/or bird party
usage during the previous quarter.
5) During the Term of this Addendum and for a period of four (4) months
thereafter, Multex shall, upon reasonable notice from Company, make
available for inspection by Company's independent auditors ("Auditor") at
Multex's offices, Multex's bodies and records relating to Royalty payments
by Multex to Company, provided however, that Multex shall not be required to
submit to such audit more than once in any calendar year. During any such
audit, Multex shall dispose the identities of the Clients to the Auditors
solely on the condition that the Auditor not disclose such identifies to
Company.
MULTEX SYSTEMS INC.
Name: P. Callaghan Name: Mary Zimmer
---------------------------- ----------------------------
Title: CFO Title: Director DRW Finance
---------------------------- ----------------------------
and Administration
---------------------------- ----------------------------
Signature: /s/ P. Callaghan Signature: /s/ Mary Zimmer
---------------------------- ----------------------------
Date: 11/30/98 Date: 11/23/98
---------------------------- ----------------------------
17
<PAGE>
MULTEX EXPRESS SCHEDULE OF SERVICES
to
MASTER SERVICES AGREEMENT DATED November 23, 1998
THIS MULTEX EXPRESS SCHEDULE OF SERVICES dated November 23, 1998 between Multex
Systems, Inc. ("Multex") and DAIN RAUSCHER INCORPORATED (the "Company") is a
Schedule to and a part of the Master Services Agreement dated November 17, 1998
(the "Master Agreement") between Multex and the Company. All terms used herein
and not defined shall have the meanings set forth in the Master Agreement. In
the event of a conflict or inconsistency between the terms of the Master
Agreement and the terms of this Schedule, the terms of this Schedule shall
control.
Multex and the Company agree as follows:
1. Services: The Services to be provided under this Schedule consist of
--------
the design and development of a private label Company research and document web
site, both Internet and intranet, (the "Company Web Site(s)") and the electronic
distribution of the Documents to Users via the Company Web Site, as more
particularly described in this Schedule and the Fee Exhibit attached hereto.
The Company Web Site(s) will be co-branded with Multex's logo and will be
substantially similar in look, feel, navigation and function to Multex's
MultexNET research web site.
IT IS SPECIFICALLY UNDERSTOOD THAT THIS SCHEDULE SETS FORTH ALL OF THE SERVICES
TO BE PROVIDED BY MULTEX UNDER THIS SCHEDULE, AND THAT NO OTHER SERVICES,
SOFTWARE DEVELOPMENT, ENHANCEMENTS, MODIFICATIONS, SUPPORT CUSTOMIZATION OR
INTEGRATION ARE INCLUDED IN THE SERVICES COVERED BY THIS SCHEDULE.
2. Documents: The Documents covered by this Schedule are as follows:
---------
____ Internal Documents: The same Research contributed under the Electronic
Contribution and Distribution Schedule executed contemporaneously
herewith plus research contributed by Company's Private Client Group.
____ Sell Side Research: research reports and other documents received by the
Company from "Sell Side" brokers, excluding the research products or
other financial documents of Data Providers.
____ Third Party Documents: Research reports and other financial documents
received by the Company from Data Providers.
____ General Business/Marketing Materials: Any business documents such as
forms, marketing brochures or broadcast memos subject to Company's sole
discretion.
____ Other Documents (specify):
3. Term: The initial term ("Initial Term") of this Schedule and the
----
Services shall commence on the date of this Schedule and continue for a period
of three (3) years from the date
18
<PAGE>
that the Services are first provided to the Company (the "Commencement Date").
Thereafter this Schedule shall renew for successive one-year periods, unless
terminated by either party by written notice delivered at least 60 days prior to
the expiration of the Initial Term or any renewal period.
After the first year provided Company is not in default in payment of any Fees
and further provided Company pays Multex the discounts as set forth in the Fee
Exhibit attached hereto that Company was granted as a consideration of entering
into a three (3) year Term. Company may cancel this Schedule on at least thirty
(30) days prior written notice to Multex and neither party shall have any
further liability to the other under this Schedule.
4. Software/Hardware Requirements for the Services.
-----------------------------------------------
(a) Configuration. In order to access the Services, the Company must have the
following minimum configuration:
Hardware: 1 HP laserjet 4M or better printer or equivalent (for non-
--------
postscript printers 8 Meg of memory) is required.
Software: Netscape Navigator (3.0 or higher) or Microsoft Internet Explorer
--------
(3.02 or above) browser; TCP/IP; Windows NT or Windows 95 operating system.
For those stations using the Multex Contribution software, the operating
system must be Windows NT (4.0 or higher) or Windows 95.
Optional Equipment/Software: Based on the Company's network design, the
---------------------------
addition of proxy servers could optimize the usage of Company's internal
WAN and reduce the traffic across the line between the Company and Multex.
(b) Costs. All equipment, software and data communications facilities set
-----
forth above shall be provided by the Company at its sole expense. However,
in order to ensure compatibility and efficient installation, Multex after
receiving the approval of Company to any such expenditure will purchase and
supply the equipment and software required for the Services, and will
invoice the Company for all costs associated therewith. Company agrees to
pay such invoices within 30 days after receipt thereof.
5. Terms and Conditions.
--------------------
(a) Rights to Obtain Documents. The Company agrees to provide to Multex and
grants to Multex the non-exclusive right to obtain from the Company the
Internal Documents and the Sell Side Research. The Company further grants
to Multex the right to distribute the Documents to Internal Users and/or
External Users, all as more particularly described herein. The
distribution of Documents to Internal Users is hereinafter referred to as
"Internal Distribution", and the distribution to External Users, if
applicable, is hereinafter referred to as "External Distribution".
(b) Timely Contribution The Company will maintain, monitor, and provide for
the timely contribution of all Documents contributed by Company to Multex.
19
<PAGE>
(c) Costs. The Company shall be responsible for all costs associated with
distribution of the Documents within the Company. In addition, if the Sell
Side Research is not as of the date hereof being contributed to Multex for
Internal and/or External Distribution, then the Company will be responsible
for obtaining permission from and arranging for the contribution of the
Sell Side Research to Multex.
(d) Users. The Company will provide to Multex, in writing, the name, address,
fax and e-mail address of each User, with instructions regarding which
Document groups to entitle for each User. The Company shall designate
specific contacts for the purpose of providing entitlement information to
Multex. The Company shall be solely responsible for determining which
Users are to be entitled for the Services and for individual Documents
groups. In consideration of the User ID Administration Fee paid by Company
to Multex as set forth in the Fee Exhibit. Multex shall be responsible for
the administration of the entitlement system subject to the Company's
obligations as heretofore set forth. Multex's responsibilities shall be as
followers:
(i) to issue all User ID's for the Company in accordance with the
Company instructions issued by the Company designated persons;
(ii) to reset User ID's on request;
(iii) to generate reports to Company on a quarterly basis to be
mutually determined by Company and Multex showing User ID's used as well
as by individual broker, by branch, by ticker symbol and by viewing
source;
(iv) to provide training in User ID administration to designated Company
trainers.
(e) User Fees. The Company shall be responsible for invoicing and collecting
any fee which the Company charges Users for access to the Company Web Site.
(f) User IDs. Multex will create User ID's and associated passwords
(collectively, "User IDs") to be issued by the Company to Users. Multex
will provide the number of User ID's requested by the Company. If the
Services include External Distribution, then External User IDs may not be
issued to Internal Users or for Internal Distribution. User ID's will be
generated in a customized format as mutually agreed to by Multex and
Company at no extra charge. Each User ID shall be in effect for the entire
month in which it is issued; there shall be no prorating with regard to
User ID's.
(g) Sell Side Research. If the Documents include Sell Side Research, then
Multex will as part of the Service distribute the Sell Side Research to
Company, subject to the consent and approval of the brokers and any
restrictions or limitations imposed by the broker. The Company is
responsible for obtaining the approval of each broker for the Company to
(i) contribute the Sell Side Research to Multex and (ii) permit Multex to
distribute the Sell Side Research to Users. Once the approval referred to
in subsection (i) has been obtained Multex will cooperate with the Company
to set up and install the broker for contribution of its Sell Side research
to Multex.
20
<PAGE>
(h) Records/Audit. The Company will keep accurate books and records relating
to Users, Passwords and its use of the Services. During the term of this
Agreement and for a period of one (1) year thereafter, Company shall, upon
reasonable notice from Multex, but not more often than twice in any 12-
month period, make the Company's books and records or other materials
relating to the number of Passwords issued by the Company available for
inspection by Multex. In the event such audit reveals that additional fees
are due Multex, Company shall pay such fees within 10 days after notice.
(i) Co-Mingled Research. If the Documents include co-mingled broker or third
party research, then the Company may provide access to such co-mingled
research only to Internal Users.
6. Fees; Payments; Taxes.
---------------------
(a) Fees. The Fees for the Services are set forth in the Fee Exhibit attached
hereto.
(b) Payments. Except for the Fee set forth in 1 of the Fee Exhibit attached,
Multex shall invoice the Company for the Fees quarterly in advance and the
Company agrees a pay all invoices within 30 days after receipt by the
Company.
(c) Taxes. Company shall be responsible for and pay all taxes applicable to
the Services.
7. Service Guaranty.
-----------------
If Multex fails to provide the Services for more than two (2) consecutive hours
during any business day during the hours of 7 a.m. to 7 p.m. then for each hour
over said two hours during said day that such failure occurs, Company shall be
entitled to a credit against the next Fees due and owing equal to the total
monthly Fees multiplied by a fraction, the numerator of which is the number of
hours after the initial two hours and the denominator is 264 (Computed on the
basis of 22 business days a month with a 12 hour business day from 7 a.m. to 7
p.m.). Company may request a Service up-time report based on Company's or
Multex's knowledge of service down time.
MULTEX SYSTEMS INC.
Name: P. Callaghan Name: Marcia L. Hanson
--------------------------- ----------------------------
Title: CFO Title: Vice President
--------------------------- ----------------------------
Signature: /s/ Philip Callaghan Signature: /s/ Marcia L. Hanson
--------------------------- ----------------------------
Date: 11/30/98 Date: 11/24/98
--------------------------- ----------------------------
21
<PAGE>
Fee Exhibit
Services Cost
1. Initial site development setup fee (one time charge) [****]
This one time charge to be payable as follows: within 30 days of
invoice after commencement of production of the Company Web Site (s),
which includes the following:
(a) development of production website including necessary testing
and of Company feedback regarding the design and feel of website
to Company's satisfaction
(b) creation of Document groups and User groups as required
(c) entitlement of User groups to appropriate Document group(s)
(d) contributing of Company Research documents and other content to
Document groups
2. Unlimited User I.D.'s is subject to B and C below [****]
3. Annual Site License and Support Fee [****]
4. Annual Web Hosting Fee [****]
5. User ID Administration Fee [****]
6. Multex waives the Fees as set forth in paragraph 4 of the
Electronic Contribution and Distribution Schedule.
Total Fees for first year (excluding [****]) [****]
Recurring Annual Fees (excluding [****]) [****]
[****] on recurring web hosting [****]
[****] on recurring Annual Fees [****]
One Time Fee [****]
Total Yearly Recurring Fees (including [****]) [****]
A. The web hosting [****] and [****] as set forth above are granted with the
understanding that the Express Schedule shall be in effect for 3 years. If
the Express Schedule is terminated
- ------------------------------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND FILED SEPARATELY WITH THE
COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 406
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
22
<PAGE>
prior to expiration of the Initial Term for any reason other than Multex's
default, then Multex shall be entitled to repayment of the total discounts as
part of its damages.
B. User ID's are limited to clients and employees of the Company as the Company
is currently constituted. In the event of a merger or acquisition in which
the client base or employee base of the Company is materially increased, then
Multex reserves the right to renegotiate a new annual Fee for 2 above which
shall be mutually agreeable to both parties.
C. In the event that the total number of User ID's reach a level where the
aggregate use of Multex's system resources results in a measurable decrease
in performance which is significant to Multex or the Company, then Company
shall be responsible for the purchase of additional hardware, software and/or
telecommunications line capacity in order to restore performance of the
Services to levels which are mutually satisfactory. Such additional
purchases shall be subject to the Company approving the invoices in advance
and said invoices shall reflect the actual cost to Multex of the purchases
plus a 10% administrative charge.
23
<PAGE>
EXHIBIT 10.14
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION, PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
AGREEMENT FOR ELECTRONIC DISTRIBUTION SERVICES
THIS AGREEMENT FOR ELECTRONIC DISTRIBUTION SERVICES ("Agreement"), dated as of
February 17, 1998, is between CIBC Oppenheimer Corp. a Delaware Corporation,
with offices at 1 World Financial Center, New York, New York, 10281 (hereinafter
referred to as the "Company"), and MULTEX SYSTEMS, INC.. a Delaware Corporation
with offices at 33 Maiden Lane, New York, N.Y. 10038 (hereinafter referred to as
"Multex").
WHEREAS, The Company and/or its subsidiaries, create, produce and develop
various documents including but not limited to Market Data, Morning Meeting
Notes and/or Published Research Reports and other financial documents.
WHEREAS, The Company desires that its financial documents be distributed and
made available to third parties such as institutional investors, funds and other
"buy side" entities;
WHEREAS, Multex provides research distribution services to institutional
investors, funds, and other "buy" side entities using its proprietary software;
and
WHEREAS, The Company desires that Multex provide research distribution
services, as more fully described in this Agreement, in order to enable the
Company to distribute the Research as described above and defined below..
NOW THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, the parties hereto agree as follows:
1. Scope of Services.
- -- -----------------
(a) The Company and/or its subsidiaries create, produce and develop various
financial data, analysis and documents including but not limited to Market Data,
Earnings Estimates, Morning Meeting Notes and/or Published Research Reports and
other financial documents covering, among others, the fixed Income, equity,
foreign and global financial markets (all such information and/or documents
being hereinafter collectively referred to as "Research"). The Company agrees to
provide and contribute to Multex all of the Company's Research concurrently with
the first publication or distribution by the Company of such Research in any
medium, including its distribution of such Research to its own clients or to any
other third party, including another Data Provider (as defined below). The
Company grants to Multex the nonexclusive royalty free, worldwide right to
receive, obtain, store, market and distribute the Research to (i) any entity as
entitled by Company, as provided in Section 1 (c), hereinafter called "Entitled
Entitles" which has subscribed to and is receiving research distribution
services from Multex (collectively, the "Subscribers") and/or (ii) third party
data providers ("Data Providers") for the purpose of redistributing the Research
to the clients of such Data Providers which are Entitled Entities as provided in
Section 1(c). The Data Providers may include, but are not limited to, ADP,
Bloomberg, Bridge, Disclosure, Dow Jones and Reuters. Multex shall not
distribute the Research to any client of a Data Provider or Subscriber unless
entitled by Company and thereafter an Entitled Entities and there is no royalty
payments with regard to the distribution of the Research to the Entitled
Entities as provided in this Agreement.
<PAGE>
(b) Multex agrees to receive the Research from the Company and to
distribute the Research to the Data Providers and the Entitled Entities
(collectively, the "Services"). As part of the Services, Multex grants to the
Company a nonexclusive, non-transferable license to use Multex's proprietary
software (the "Multex Software") solely for the purpose of contributing the
Research as provided in Section 1(a) above.
(c) The Company may from time to time, but not more often than once in any
calendar month, request in writing a list of the current Entitled Entities and
Multex will provide such list within 10 days after its receipt of the Company's
written request. (Such a list of the Subscribers and clients d the Data
Providers shall be provided upon execution of this Agreement and Company shall
have 15 days to give Multex written notice of objection to entitlement of such
Subscribers of clients of the Data Providers. Failure to so notify shall be
deemed entitlement and they shall be deemed Entitled Entities.) The Company may
upon at least 7 days prior written notice request that an Entitled Entity be de-
entitled from access to its Research, and may upon at least 30 days prior
written notice request that an entity be entitled, either as a Subscriber of
Multex or as a client of the Data Provider, (once entitled, an Entitled Entity),
for purposes of receiving the Company's Research. The Company may not' request
that an Entitled Entity be de-entitled unless such Entitled Entity is also de-
entitled from receiving the Research born all other Data Providers or other
third party research distribution vendors to which the Company provides its
Research. Multex shall use its best efforts to effect such entitlements or de-
entitlements within the applicable time frames, provided that Multex shall not
be obligated to provide the Services to any entity that refuses to execute, or
which is in breach of, a Multex Customer Agreement or similar agreement with a
Data Provider.
(d) The Services provide the Company with the ability to transmit the
Research to specific menu categories on the Company's home page on Bloomberg.
Multex will transmit the Research in the appropriate format to the Company's
home page on Bloomberg. It shall be the sole responsibility of the Company to
ensure that the necessary programming changes have been made by Bloomberg in
order for Bloomberg to be capable of (i) receiving the Research and distributing
it to the appropriate specific menu categories and (ii) permitting either Multex
or the Company to properly entitle Subscribers.
2. Fees; Costs.
- -- -----------
(a) The Company shall be solely responsible for the all costs relating to
(i) the preparation and development of the Research and (ii) the contribution
and delivery of the Research to Multex. Such costs include, but are not limited
to, costs for telecommunication lines, telephones, moderns, computers, magnetic
tape, magnetic tape delivery and messenger services.
(b) Multex shall be solely responsible for all costs associated with Multex
Software and providing the Services.
3. Term; Termination; Remedies upon Default.
- -- ----------------------------------------
(a) The initial term ("Initial Term") of this Agreement shall commence on
the date of this Agreement and continue for a period of thirty-six (36) months
from the date that the Services
2
<PAGE>
are first provided under this Agreement (the `Commencement Date"). Thereafter,
this Agreement shall renew for successive one-year periods, unless terminated by
either party by written notice delivered at least thirty (30) days prior to the
expiration of the Initial Term or any renewal period.
(b) Either party, by written notice to the other party, may terminate this
Agreement prior to the expiration of the Initial Term or any renewal term upon
the occurrence of an `Event of Default" by the other party. An "Event of
Default" shall mean: (i) the failure by a party to perform or observe any
material term, covenant, agreement or warranty contained in this Agreement
("Material Default"), which is not cured within 30 days after written notice
thereof; provided, that if the Material Default cannot reasonably be cured
within 30 days and the defaulting party has commenced performance during such
thirty (30) day period and diligently pursues curing such default, the time for
curing such default shall be extended for such period as may be necessary to
cure the default; or (ii) either party ceasing to do business or the filing of a
petition in bankruptcy (voluntary or involuntary) with respect to a party, which
in the case of an involuntary petition, is not vacated within 30 days,
(c) The parties acknowledge and agree that the Research is unique to the
Company, and that if the Company fails to provide the Research in a timely
manner as described in Section 1(a) Multex may suffer irreparable harm for which
the remedies at law may be inadequate, and/or may suffer damages the amount of
which would be difficult or impossible to determine. Accordingly, in addition to
Multex's right to terminate as provided in subsection (b) above, if the Company
intentionally fails to contribute the Research in a timely manner as described
in this Agreement, then Multex shall be entitled to seek injunctive relief.
(d) The remedies contained in this Paragraph 3 are cumulative and are in
addition to all other rights and remedies available to either party under this
Agreement and the Exhibits hereto, by operation of law or otherwise.
4. Indemnity.
- -- ---------
(a) Multex shall indemnify and hold the Company harmless from and against
any costs, damages, expenses or liabilities (including reasonable attorney fees)
incurred by the Company as a result of any claim or action brought against the
Company based upon or arising out of the infringement by the Software as used in
accordance with this Agreement of any patent, copyright or proprietary right of
any third party, and Multex shall defend or settle, at its sole expense, any
claim attributable to such infringement; provided that (i) the Company shall
have promptly notified Multex in writing of such claim; (ii) Multex shall have
sole control of the defense and settlement of such claim; and (iii) the Company
shall cooperate fully with Multex in the defense of such claim, the cost of
cooperation to be borne by Multex. In the event that the Company is enjoined or
otherwise prohibited from using the Software, Multex shall, at its option,
substitute non-infringing, equally functional Software, procure for the Company
the right to continue using the Software, or terminate this Agreement.
(b) The Company shall indemnify and hold Multex harmless from and against
any costs, damages, expenses or liabilities (including reasonable attorney fees)
incurred by Multex as a result of any claim or action brought against Multex
based upon or arising our of (a) the
3
<PAGE>
infringement by the Research of any patent, copyright or proprietary right of
any third party; (b) any libelous or slanderous statements contained in the
Research; or (c) a violation of any the securities laws of the United States (or
any other jurisdiction in which the Services are provided) arising out of the
Research or the furnishing thereof to any party, and Company shall defend or
settle, at its sole expense, any such claim or action; provided that (i) the
Company shall have sole control of the defense and settlement of any action; and
(ii) Multex shall cooperate fully with the Company in the defense of such
action, the cost of cooperation to be home by Company. In the event Multex is
enjoined or otherwise prohibited from using any Research document, Company
shall, at its sole expense, procure for Multex the right to continue using such
document or substitute a non-infringing or non-violating version of such
document.
5. Confidential Information.
- -- ------------------------
(a) "Confidential Information" shall mean the Multex Software and any other
information concerning Multex or the Company which is marked as confidential or
which, under the circumstances, should be treated as confidential.
(b) Each party shall hold the Confidential Information of the other parry
in trust and confidence and shall not reproduce, disclose to any person, firm or
enterprise, or use for its own benefit, any such Confidential Information
(except as specifically permitted or contemplated by this Agreement). Each party
shall ensure that its employees and agents are aware at this clause, and shall
by instruction, agreement or otherwise cause such employees and agents to abide
by the terms of this clause.
(c) "Confidential Information" will not include any information that (i) is
already rightfully known to a party at the time it is obtained from the other
party, free from any obligation to keep such information confidential, (ii) is
or becomes publicly known through no wrongful act of either party; (iii) is
rightfully received from a third parry without restriction and without breach of
this Agreement; (iv) is independently acquired or developed by a party without
breach of any obligation hereunder; (v) is required to be disclosed pursuant to
law, governmental regulation, or court order; or (vi) is in the public domain
6. Limitation of Liability.
- -- -----------------------
(a) MULTEX WILL MAKE EVERY REASONABLE EFFORT TO PROVIDE THE SERVICES TO THE
COMPANY, IT BEING ACKNOWLEDGED AND AGREED THAT MULTEX CANNOT AND DOES NOT
GUARANTEE THE CONTENT, ACCURACY, TIMELINESS OR AVAILABILITY OF THE SERVICES OR
THE RESEARCH AS DISPLAYED OR PROVIDED THROUGH THE SERVICES. ACCORDINGLY, EXCEPT
FOR MULTEX'S FRAUD, WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, THE COMPANY AGREES
THAT MULTEX SHALL NOT HAVE ANY LIABILITY OR OBLIGATION TO THE COMPANY OR ANY
THIRD PARTY (WHETHER CAUSED DIRECTLY OR INDIRECTLY) RELATING TO OR ARISING OUT
OF (i) THE INTERRUPTION, DELAY OR FAILURE IN THE TRANSMISSION, DELIVERY OR
DISTRIBUTION OF THE SERVICES OR RESEARCH; (ii) THE UNAVAILABILITY OF MULTEX
SOFTWARE OR THE SERVICES; (iii) THE ACCURACY OF THE RESEARCH OR SECURITIES OR
COMMODITIES INFORMATION AND PRICES AS DISPLAYED,
4
<PAGE>
CARRIED OR FURNISHED BY OR THROUGH THE SERVICES; (iv) ERRORS OR OMISSIONS IN
CONNECTING, TRANSMITTING, PROCESSING, DISSEMINATING, DISPLAYING OR DISTRIBUTING
THE RESEARCH OR THE INFORMATION CONTAINED THEREIN; OR (v) THE DISPLAYING OR
FURNISHING OF THE RESEARCH, INCLUDING THE INFORMATION CONTAINED THEREIN.
MULTEX'S SOLE LIABILITY TO COMPANY FOR ANY CLAIMS, NOTWITHSTANDING THE FORM OF
SUCH CLAIMS (E.G., CONTRACT, NEGLIGENCE OR OTHERWISE), ARISING OUT OF ITEMS (i)
THROUGH (v) ABOVE, SHALL BE TO USE REASONABLE EFFORTS TO RESUME THE SERVICES
AND/OR TO MAKE THE MULTEX SOFTWARE AVAILABLE TO COMPANY AS PROMPTLY AS
REASONABLY PRACTICABLE.
(b) IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY FOR LOST PROFITS,
INDIRECT, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, OF ANY KIND ARISING OUT
OF OR ATTRIBUTABLE TO THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF THE
SAME EXCEPT TO THE EXTENT SUCH LOSS IS CAUSED BY THE OTHER PARTY'S FRAUD, GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.
(c) The content, accuracy and completeness of the Research is the sole
responsibility of the Company. Multex conducts no review whatsoever and
exercises no editorial control over the Research and accordingly, Multex shall
have no liability whatsoever (whether in contract or tort) for the content,
completeness or accuracy of the Research (including, without limitation, any
security or commodity price information contained in the Research).
(d) Except for Multex's liability under Paragraph 4 or due to Multex's
fraud gross negligence or willful misconduct (including but not limited to the
changing or alteration of the Research by Multex as a result of its gross
negligence or willful misconduct), Multex's maximum liability hereunder for any
other cause, not exculpated hereunder, whether in tort or contract, shall not
exceed the lesser of (i) actual damages or (ii) $5,000.
(e) As used in this paragraph, the term "Multex" or Multex Software shall
include each third party who provides Multex with any portion of the Services.
Such third party shall not have any direct or indirect liability to Company for
monetary damage on account of the Services provided or to be provided by Multex
hereunder.
(f) The parties acknowledge and agree that the limitations of liability set
forth in this Section 6 are a condition of this Agreement, and that the
consideration for the Services reflects the allocations of risk set forth in
this Section 6.
7. Ownership Rights.
- -- ----------------
(a) The Research is unique to the Company and shall remain the sole
property of the Company and Multex shall not acquire any rights in the Research,
other than the right to distribute the Research as set forth herein. Multex
shall not change or alter the Research except with the Company's prior written
approval.
(b) The Software shall remain the sole property of Multex or its licensors.
The Company may use the Software only in conjunction with the Services. The
Company may
5
<PAGE>
permit the software to be used or accessed by no more than the number of
concurrent users as may be agreed to in writing by the Company and Multex. The
Company shall not copy, in whole or in part, the Software or related
documentation, whether in the form of computer media, printed or in any other
form; provided, however that Company may make one (1) of copy of the Software
for back-up purposes only. Any copy of the Software shall contain the copyright
and other proprietary notice which appears on and in the Software. Should The
Software become inoperable, the Company may use the Software on a backup system
for a period not to exceed thirty (30) days. The Company shall notify Multex of
any such use within five (5) days. Should there be a requirement to permanently
transfer the Software from the licensed configuration to alternate
configuration, the Company shall first obtain the written consent of Multex,
which shall not be unreasonably withheld.
(c) The Company is not authorized or permitted to furnish the Services to
any person or firm for re-use, redistribution or retransmission without the
prior written approval of Multex.
(d) THE COMPANY SHALL NOT MAKE ANY ALTERATION, CHANGE OR MODIFICATION TO
THE SOFTWARE. COMPANY MAY NOT RECOMPILE, DECOMPILE, DISASSEMBLE, OR REVERSE
ENGINEER THE SOFTWARE, OR OTHERWISE CREATE OR DERIVE SOURCE CODE FROM THE
SOFTWARE, OR MAKE OR DISTRIBUTE ANY OTHER FORM OF THE SOFTWARE.
(e) The Company may use the trademarks of Multex or its licensors, if at
all, only to identify printed output produced by the Software and only in
accordance with accepted trademark practice, including identification of the
relevant trademark owner's name. The use of any trademark as authorized herein
does not give the Company any rights of ownership or other rights relating to
the trademark, and all goodwill resulting from any such use shall inure to the
benefit of the relevant trademark owner.
(f) The Company will not export or re-export the Software without the
appropriate United States or foreign government licenses, and the consent of
Multex.
8. Warranties.
- -- ----------
(a) Multex hereby represents and warrants to Company as follows: (i) Multex
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware with full authority to enter into this Agreement;
(ii) the Multex Software and the Services do not infringe the proprietary rights
of any third party; (iii) Multex has the legal right and authority to license
the Multex Software to Company; (iv) the medium on which the Software is
delivered shall be free of defects in materials and workmanship under normal use
for a period of thirty (30) days from the date of delivery and (v) the Multex
Software will, under normal use and service, record, store, process and present
calendar dates falling on or after January 1, 2000, in the same manner, and with
the same functionality, date, integrity and performance, as the Multex Software
records, stores, processes and presents calendar dates on or before December 31,
1999; will lose no functionality with respect to the introduction of records
containing dates falling on or after January 1,2000, and will be interoperable
with other software used by the Company which may deliver records to, or
interact with, the Multex Software, including but not limited to back-up and
archived data.
6
<PAGE>
(b) The Company represents and warrants to Multex that: (i) the Company is
the owner of and has the right to provide the Research to Multex for
distribution as provided herein; (ii) the Research does not contain any libelous
or slanderous statements, and does not infringe the proprietary rights of any
third party; and (iii) the Company will comply with all laws and regulations
applicable to the creation and distribution of the Research and its use of the
Services, including without limitation all securities law of the United States
and any other jurisdiction (limited to those jurisdictions in which the entities
as entitled to receive the Research by the Company are doing business) in or
into which the Services are to be provided.
9. Limitation of Warranties.
- -- ------------------------
THE COMPANY ACKNOWLEDGES AND AGREES THAT EXCEPT FOR THE WARRANTIES SPECIFIED
IN PARAGRAPH 8, MULTEX MAKES NO OTHER WARRANTIES WHATSOEVER, WRITTEN OR ORAL,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES OF
FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, CONCERNING THIS AGREEMENT,
THE SERVICES OR EQUIPMENT, THE MULTEX SOFTWARE, THE THIRD PARTY SOFTWARE OR THE
DOCUMENTATION. MULTEX DOES NOT GUARANTEE THE ACCURACY, VALIDITY OR COMPLETENESS
OF THE RESEARCH AS DISPLAYED OR PROVIDED THROUGH THE SERVICES. MULTEX AND ITS
THIRD PARTY LICENSORS DO NOT AND CANNOT WARRANT THE PERFORMANCE OR RESULTS THE
COMPANY MAY OBTAIN BY THE USE OF THE SOFTWARE OR SERVICES.
10. Inaccuracy.
- --- ----------
The Company shall immediately notify Multex of any suspected inaccuracies
in the Research or the Services.
11. Compliance with Law.
- --- -------------------
(a) The Company shall be responsible (i) for compliance with all laws and
governmental regulations affecting its business and (ii) for any use it may make
of the Services or the Research to assist it in complying with such laws and
governmental regulations, and Multex shall not hew any responsibility relating
thereto (including, without limitation, advising the Company of its
responsibilities in complying with any laws or governmental regulations
affecting the Company's business). The Company shall not use or permit anyone to
use the Services, the Software or the Research for any unlawful purpose
(b) Multex shall a comply with all applicable U.S. States and local laws
and regulations in its performance of its obligations hereunder
(c) If after the date hereof any modifications to the Services shall be
legally required. Multex shall, except to the extent such changes may be beyond
(the capability of Multex to implement, modify the Services appropriately. If
providing any of the Services to the Company hereunder violates, or in Multex's
opinion is likely to violate, any laws or governmental regulations, Multex may,
upon written notice to Company, immediately cease providing the affected
Services to the Company.
7
<PAGE>
12. Advertising.
- --- -----------
Neither party shall use the name or marks of the other or its parent
company or any subsidiary or affiliated company in any publicity release,
advertising, or publicly displayed or distributed materials without securing the
prior written consent of the party whose name is to be used, which consent shall
not be unreasonably withheld or delayed. Notwithstanding the foregoing. Multex
may disclose the fact of this Agreement.
13. Independent Contractors.
- --- -----------------------
Multex and the Company are independent contractors. Personnel supplied by
Multex hereunder, it any, are not Company's personnel or agents, and Multex
assumes full responsibility for their acts. Multex shall be solely responsible
for the payment of compensation, benefits, insurance and taxes relating to
Multex's employees assigned to perform services hereunder. Notwithstanding the
foregoing, Multex (and its employees) shall abide by Company rules and
regulation while visiting Company's premises.
14. General.
- --- -------
(a) This Agreement shall be binding upon the parties' respective
successors and permitted assigns.
(b) The validity of this Agreement, the construction and enforcement of
its terms, and the interpretation of the rights and duties of the parties shall
be governed by the laws of the State of New York.
(c) No modification, amendment, supplement to or waiver of this Agreement
or any Schedule or Exhibit hereunder, or any of their provisions shall be
binding upon the parties hereto unless made in writing and duly signed by both
parties.
(d) A failure or delay of either patty to this Agreement to enforce at any
time any of the provisions hereof, or to exercise any option which is herein
provided, or to require at any time performance of any of the provisions hereto
shall in no way be construed to be a waiver of such provisions of this
Agreement.
(e) The terms and conditions of any and all Exhibits and Schedule to this
Agreement are incorporated herein by this reference and shall constitute part of
this Agreement as if fully set forth herein.
(f) The headings herein are for convenience of reference only and shall
not impact the meaning of this Agreement.
(g) The provisions of Sections 4, 5, 6, 7, 8 and 9 shall survive
termination or expiration of this Agreement.
(h) Company shall provide Multex with reasonable access to its premises to
perform the obligations set forth herein. Multex shall abide by the site
regulations and security procedures applicable to reach site.
8
<PAGE>
(i) This Agreement constitutes the entire Agreement between the parties
concerning and the subject matter hereof and shall supersede all prior
agreements or understandings concerning such subject matter
IN WITNESS WHEREOF, the parties hereto, each acting under due and proper
authority, have executed this Agreement as of the date first above written.
MULTEX SYSTEMS, INC. CIBC OPPENHEIMER CORP.
The Company
By: /s/ Philip Callaghan By: /s/ Christopher Kotowski
------------------------ ---------------------------
Name: Philip Callaghan Name: Christopher Kotowski
----------------------- --------------------------
Title: CFO/ Secretary Title: Managing Director
---------------------- -------------------------
Date: 2/17/98 Date: 3/3/98
----------------------- --------------------------
9
<PAGE>
ADDENDUM NO. 1
This Addendum between Multex Systems, Inc. ("Multex") and CIBC Oppenheimer
Corp. ("Company") hereby amends the Agreement for Electronic Distribution
Services dated as of February 17, 1998 (the "Distribution Agreement") between
Multex and Company. All defined terms used herein and not otherwise defined
shall have the meanings set forth in the Distribution Agreement. In the event
of a conflict or inconsistency between the terms of the Distribution Agreement
and the terms of this Addendum, the terms of this Addendum shall control.
Multex and Company hereby agree as follows:
1) Company agrees that commencing 15 days after the date the Research was first
published or distributed in any medium by the Company (the "Embargo
Period"), Multex may market, license and sell the Research ("Embargoed
Research") to any third party and the Embargoed Research shall not be
subject to the entitlement provisions of Paragraph 1(c) of the Distribution
Agreement. The Embargoed Research may be sold alone or aggregated with the
research of other research contributors, and may be provided to third
parties either directly by Multex or through a Data Provider.
2) Multex shall pay to Company the following royalties (the "Royalties"):
[****] of the Net Fees (as defined below) received by Multex in respect of
the sale or usage of the Company's Embargoed Research, whether such
Embargoed Research is sold separately or as part of an aggregated product
sold by Multex or through a Data Provider.
"Net Fees" shall mean the gross revenues received by Multex for Embargoed
Research, less any discounts, allowances, adjustments, distribution or pass
through fees, taxes or other charges paid or incurred by Multex in
connection with the Embargoed Research Multex may not distribute the
Embargoed Research by credit card purchase on the MultexNET web site.
3) To the extent any third party is provided the Embargoed Research without a
fee for a period of time (not to exceed 60 days) ("Concession Period') as a
concession or promotion, then Multex shall not be obligated to pay any
Royalties during such Concession Period and Royalties shall commence after
the Concession Period has terminated.
4) Royalties shall be paid quarterly in arrears, within 45 days after the end
of each 3 month period of this Agreement. Company shall receive a report
with the Royalty payment showing Multex's sales of Company's Embargoed
Research and/or third party usage during the previous 3 months Multex fully
expects that Company shall earn the following minimum Royalties during the
Initial Term: [****] for the first 12 months: [****] for the second twelve
months; [****] for the final twelve months of the Initial Term. If in any of
the foregoing 12 month periods, Company has not earned as a minimum the
applicable Royalty, then in such event Multex may exercise either of the
following options on or before the end of the respective 12 month period:
(a) pay the shortfall between the actual earned Royalty and the expected
minimum Royalty for the 12 month period or (b) terminate this Addendum in
which case except for Multex's obligation to
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
<PAGE>
pay all Royalties earned to date. and Company's obligation to pay all
outstanding sums due for Multex Research-On-Demand as set forth below,
neither party shall have any further obligation under this Addendum
5) During the Initial Term of this Addendum and for a period of four (4) months
thereafter, Multex shall, upon reasonable notice from Company, make
available for inspection by Company's independent auditors ("Auditor") at
Multex's offices, Multex's books and records relating to Royalty payments by
Multex to Company, provided however, that Multex shall not be required to
submit to such audit more than once in any calendar year. During any such
audit, Multex shall disclose the identities of the Clients to the Auditor
solely on the condition that the Auditor not disclose such identities to
Company.
6) Multex shall make available to Company for Internal Distribution, as defined
below, to Internal Users, as defined below, only selected historical
investment research, business, economic and financial news and related
information contained in the Multex database ("Multex Research-On-Demand").
The Services provided as Multex Research-On-Demand are described in Exhibit
A annexed hereto and made a part hereof. Multex Research-On-Demand shall be
subject to all of Multex's restrictions, moratoria, and/or limitations on
availability regarding the research or documents included therein which are
now or may in the future be imposed by Multex's contributors to the research
or documents. The right to access Multex Research-On-Demand shall be
personal to Company and belong solely to Company for Internal Distribution
to Internal Users. Company may not sell or redistribute the Multex Research-
On-Demand to any third party including any of the Services connected
therewith or any content or research or documents therein, in any manner
including for promotional purposes, marketing with third parties or the
creation or marketing with third panics of branded or private branded Web
sites. Company agrees that it shall not sublicense or authorize any person
or entity to use the Multex Research-On-Demand without the prior written
consent of Multex. Company shall pay for its retrieval of documents or
research of Multex Research-On-Demand in accordance with Multex's then
current Suggested List Prices as annexed hereto as Exhibit B as changed or
substituted by Multex from time to time subject to the discount as
hereinafter provided. In consideration for Company granting Multex the right
to distribute its Embargoed Research as set forth above, Company is granted
the following discount for Multex Research-On-Demand: [****] off Multex's
then current Suggested List Prices as changed or substituted by Multex from
time to time subject to a maximum discount of [****] for each 12 month
period and no more than [****] over the Initial Term. Company shall pay for
its retrieval of documents or research within 30 days after receipt of
invoice from Multex.
7) The Company further grants to Multex the right to distribute its Research
via MultexExpress (i) to the investment professionals and other employees of
the Company ("Internal Users") and/or (ii) to third panics such as the
customers or clients of the Company ("External Users"), all in accordance
with the Additional Services provided by Multex as set forth on Exhibit C
annexed hereto and made a part hereof. The distribution of Research to
Internal Users is herein after referred to as "Internal Distribution", and
the distribution to External Users is hereinafter referred to as "External
Distribution". As part of the Additional Services, Multex grants to the
Company a nonexclusive, non-
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
2
<PAGE>
transferable license to use its proprietary software (the "Multex Software')
including certain software licensed from third parties as identified in
Exhibit D annexed hereto (the "Third Party Software"). The Company agrees to
abide by the Third Party License Requirements for End Users relating to the
Third Party Software, as set forth in Exhibit D, which is incorporated
herein. The Multex Software and the Third Party Software are sometimes
hereinafter referred to as the Software. In further consideration of Company
granting Multex the right to distribute its Embargoed Research as set forth
above, there shall be no fee charged Company by Multex for these Additional
Services for up to a combined total of [****] Users (both Internal Users and
External Users), a savings based upon current fees of up to [****] per
annum. For all Users over [****], Company shall be charged the then current
standard fees that Multex charges for Internal and External Users as may be
changed from time to time. All such fees shall be paid quarterly in advance
within 15 days of invoice. Company shall be responsible for and pay all
taxes applicable to the Additional Services. Multex shall provide to the
Company free of charge, maintenance updates and revisions ("Updates') to
Multex Software as commercially released by Multex. Any enhancements,
modifications, software development, operation and technical support,
customization or integration not included in the Additional Services or the
Updates, or which are made specifically for or at the request of the Company
shall be paid for by Company on a time and material basis at Multex's then
current time and material rates. Multex's current time and material rates
are from $150.00 to $200.00 per hour, per person depending on the skill and
level of such person.
8) It is acknowledged that Multex as further and additional consideration for
Company granting Multex the right to distribute its Embargoed Research as
set forth above has waived the distribution fees of $50,000 per annum for
distribution of the Company Research in accordance with the Distribution
Agreement.
9) It Company wishes to terminate Multex's right to distribute the Embargoed
Research as set forth above, it may do so by terminating this Addendum and
all rights pursuant thereto on 30 days prior written notice to Multex.
10) Termination of this Addendum by either party shall not effect the
Distribution Agreement which shall survive such termination.
MULTEX SYSTEMS, INC. CIBC OPPENHEIMER CORP.
The Company
By: /s/ Philip Callaghan By: /s/ Christopher Kotowski
------------------------ -------------------------
Name: Philip Callaghan Name: Christopher Kotowski
----------------------- ------------------------
Title: CFO/Secretary Title: Managing Director
---------------------- -----------------------
Date: 2-17-98 Date: 3-3-98
----------------------- ------------------------
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment under Rule 406 of
the Securities Act of 1933, as amended.
3
<PAGE>
EXHIBIT A
Services
Service(s) Description
The Multex Research-On-Demand database presently consists of at least 150,000
historical research reports from brokerage firms and third parries, which are
made available for purchase and which may be subject to certain embargo periods
prior to release and sale as determined solely by Multex and its contributors.
Service Format
Multex shall make the reports available in Adobe Acrobat format and any such
additional format that Multex may later choose to support as part of its
Services.
<PAGE>
EXHIBIT B
---------
SUGGESTED LIST PRICES AND TERMS
FOR SERVICES
------------
Multex's Suggested List Prices for retrieval of documents by the Company.
Multex Research on Demand:
--------------------------
Report Size Suggested Retail Price
----------- ----------------------
1-5 pages [****] per report
6- 12 pages [****] per report
13 - 20 pages [****] per report
21 - 40 pages [****] per report
40 - 60 pages [****] per report
61- plus pages [****] per report
**** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule 406
under the Securities Act of 1933, as amended.
<PAGE>
EXHIBIT C
THE ADDITIONAL SERVICES
A. Description of the Additional Services:
Multex will provide the following Additional Services constituting MultexExpress
to the Company
1. Multex will develop a private label Company research and document web site
(`he "Company Web Site"), co-branded with Multex's logo and substantially
similar in look, feel, navigation and function to Multex's MultexNET
research web site. The Company Web Site will be hosted and maintained by
Multex Systems, Inc. and will reside at Multex Systems, Inc.'s central site
at 33 Maiden Lane 5th floor New York, New York 10038. The Company Web Site
may be accessed by the Users via the World Wide Web ("WWW"), by logging onto
the Company's home page and clicking an icon or other prompt indicating
"Research". This prompt will seamlessly link to the Company Web Site and
will ask the User for a user Name and Password before allowing the User to
view the documents. Alternatively, at Company's option, the Company Web Site
can be accessed directly by its own URL without requiring that The User
first visit the Company's home page, but a password will still be required.
2. Multex will create User ID's and Passwords to be issued to the Company for
Internal and External Distribution.
3. Multex will distribute within the Company the Internal Documents which have
been contributed by the Company and, subject to Section 6 below, the Sell
Side Research which has been contributed by the brokers.
4. The Company will access the Additional Services via workstations connected
to the Company's own web server over the Company's own WAN or the Intranet,
which in turn will redirect any inquires for research to Multex's web
server. These connections will be via a suitable browser (HTTP) of Company's
choice (Netscape, Explorer, etc.) and over a secure (port 443) or unsecured
(port 80) line. All requests will be resolved at Multex's central site and
all matching headlines returned to the workstation as a linked HTML page.
5. The Multex Internet servers are shared among several clients, with dedicated
hardware available for an additional fee. When a document is queried, it is
copied from Multex's central site to the workstation. Thus the file copy is
exposed to the speed of the slowest link between Multex and the desktop.
(e.g. private connection, Company's WAN, desktop LAN speed, etc.).
Centralised file caching is available on Company's site with additional
hardware.
6. If as of the date hereof, the Company receives Sell Side Research from
Brokers, then Multex will as part of the Service distribute the Sell Side
Research to Company, subject to the consent and approval of the Brokers and
any restrictions
<PAGE>
or limitations imposed by the Broker. The Company is responsible for
obtaining the approval of each Broker for the Company to (i) contribute the
Sell Side Research to Multex and (ii) permit Multex to distribute the Sell
Side Research to Users. Once the approval referred to in subsection (i) has
been obtained, Multex will co-operate with the Company to set up and install
broker for contribution of its Sell Side Research to Multex.
7. Multex will provide the number of User ID's and Passwords requested by the
Company, as provided in this Agreement. The Company is responsible for
distributing the User ID's and Passwords to qualified Users to be used in
accordance with this Agreement.
8. Multex will provide the following reports to the Company: (a) Monthly
Entitled Reports, indicating the Users entitled for access to the Additional
Services, and the document groups to which the Users are entitled; (b)
Monthly Usage Reports, indicating the frequencies and types of documents
accessed by Users or user groups.
B. Software/Hardware Requirements for the Additional Services
In order to access the Services, the Company must have the following minimum
configuration:
1. Hardware: 1 HP LaserJet 4M or better printer or equivalent (for non-
- -- --------
postscript printers 8Mb of memory is required).
2. Network: The Company must have a minimum of 1 dedicated TI line between the
- -- -------
Company and Multex Systems, Inc.'s central site (based on Company's network
design and access requirements), including routers and modems. Prior to the
installation of the dedicated line, a URL link will be provided so that the
Company's web server may access the Services via Multex Systems, Inc.'s own
web server.
3. Software. Netscape ( 2.0 or above ) or Internet explorer (3.0 or above)
- -- --------
browser; TCP/IP; Windows NT or Windows 95 operating system.
4. Optional Equipment/Software: Based on the Company's network design, the
- -- ---------------------------
addition of proxy servers could optimise the usage of Company's internal WAN
and reduce the traffic across the line between the Company and Multex.
All equipment, software and data communications facilities set forth above shall
be provided by the Company at its sole expense. However, in order to ensure
compatibility and efficient installation. Multex will purchase and supply the
software required for the Services, and will invoice the Company for all costs
associated therewith. Company will pay such invoices within 30 days of receipt
thereof.
<PAGE>
C. The Company's Obligations:
1. The Company will provide to Multex, in writing, the name, address, fax and
e-mail address of each User, with instructions regarding what document
groups to entitle for each User. The Company shall designate one contact
(and one alternate) for the purpose of providing entitlement information to
Multex. The Company shall be solely responsible for determining which Users
are to be entitled for the Additional Services and for individual documents
groups. Accordingly, Multex shall only be obligated to entitle or de-entitle
a User for the Additional Services if it receives written notification from
the designated contact and then only in accordance with the specific
information provided by such contact. Multex shall have no liability arising
out of or in connection with any entitlement requests which do not comply
with the procedures set forth in this Section. Alternatively, Multex may
provide the Company with the ability to entitle the Company's Users on-line,
in which case Company shall perform, control and administer all aspects of
the entitlements, and Multex shall have no responsibility or liability in
connection therewith.
2. The Company shall be responsible for invoicing and collecting any fee which
the Company charges it Users for access to the Company Web Site.
3. The Company will maintain, monitor, and provide for the timely contribution
of all Documents contributed by Company to Multex.
4. The Company will keep accurate books and records relating to Users,
Passwords and its use of the Services.
IT IS SPECIFICALLY UNDERSTOOD THAT ALL OF THE ADDITIONAL SERVICES TO BE PROVIDED
BY MULTEX ARE SET FORTH IN THIS EXHIBIT C, AND THAT NO OTHER SERVICES, SOFTWARE
DEVELOPMENT, ENHANCEMENTS, MODIFICATIONS, SUPPORT CUSTOMIZATION OR INTEGRATION
ARE INCLUDED IN THE ADDITIONAL SERVICES.
<PAGE>
EXHIBIT D
THIRD PARTY SOFTWARE
THIRD PARTY LICENSE REQUIREMENTS FOR END USERS
Third Party Software
- --------------------
Fulcrum Technologies Search tool (the "Fulcrum Software")
Third Party Software License Requirements for End-Users
- -------------------------------------------------------
The Company acknowledges that
a) title to and ownership of the Fulcrum Software and all rights related
thereto, including patent, trademark and copyright related thereto are
and shall remain the exclusive property of Fulcrum Technologies, Inc.
or its licensees;
b) the Company shall only acquire the right to use the Fulcrum Software
in accordance with this Agreement; and
c) the Company shall take all necessary steps to ensure that all
intellectual property underlying the binary version of the Software
remains confidential.
"End Users" are Internal or External Users as authorised by the Company to use
the Third Party Software to view the Research.
<PAGE>
**** CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMMITTED AND FILED SEPARATELY
WITH THE SECURITIES WITH THE SECURITIES AND EXCHANGE COMMISSION, PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF THE SECURITIES
ACT OF 1933, AS AMENDED.
EXHIBIT 10.15
February 5, 1999
Mr. Chris Kotowski
CIBC Oppenshimer Corp.
Oppenheimer Tower
World Financial Center
New York, NY 10281
Dear Chris:
We are excited to begin redistributing your research into the aftermarket
through our various channels. This letter serves to reinstate and amend
Addendum No. 1, dated February 17, 1998 that is attached to the Agreement for
Electronic Distribution Services, dated February 17, 1998 (attached hereto).
The changes are as follows:
1. Section 2, sentence 2, change "[****]" to "[****],"
2. Section 2, paragraph 2, delete "Multex may not distribute the Embargoed
Research by credit card purchase on the MultexNET web site." CIBC
Oppenheimer Corp. may at its sole option suspend the sale by credit card by
giving Multex at least 30 days written notice.
3. Section 6, fourth sentence from the end, after "Research-On-Demand:" and
before "[****] off of Multex's..." add "based on a minimum annual commitment
of [****]"; it being clearly understood that CIBC Oppenheimer Corp. does not
have any minimum obligation to purchase Research-On-Demand.
4. Section 9, deleted in its entirety.
Further, within 90 days of the date of this letter, CIBC Oppenheimer Corp. and
Multex agree to jointly conduct a review, in good faith, of the pricing of the
Embargoed Research, the general market conditions and other relevant factors
which may affect the sale of any royalties due CIBC Oppenheimer Corp. from the
Embargoed Research with a goal towards agreeing to and implementing such further
mutually acceptable practices that shall obtain the optimal pricing and
royalties due CIBC Oppenheimer Corp.
Unless noted above, the Addendum stays the same. Please indicate your approval
of this letter by signing below and returning to me. Thank you for your
attention to this matter, and we are excited about the new relationship with
CIBC Oppenheimer Corp.
Regards, Agreed: CIBC Oppenheimer Corp.
Phil Callaghan By: /s/ Chris Kotowski
CFO of Multex.com, Inc. -------------------
fka Multex Systems, Inc. Chris Kotowski
Managing Director
<PAGE>
Exhibit 11.1
Multex.com, Inc.
Computation of Basic and Diluted Net Loss per Share
<TABLE>
<CAPTION>
Net loss Basic and
Period Available Diluted Loss
Shares Outstanding Weighted to Common per Common
Date Outstanding in Days Avg. Shares Stockholders' Share
-------- ----------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Common Stock............ 1/1/96 1,963,750 365 1,963,750
Exercise of options..... 1/1/96 18,750 365 18,750
4/11/96 1,250 265 908
4/18/96 3,125 258 2,209
4/19/96 2,500 257 1,760
4/30/96 3,750 246 2,527
5/1/96 17,500 245 11,747
6/1/96 2,500 214 1,466
7/8/96 625 177 303
7/31/96 37,500 154 15,822
9/1/96 2,500 122 836
11/19/96 15,625 43 1,841
--------- ---------
December 31, 1996....... 2,069,375 2,021,919 (7,812,593) (3.86)
========= =========
Common Stock............ 1/1/97 2,069,375 365 2,069,375
Exercise of options..... 1/1/97 3,750 365 3,750
1/2/97 1,875 364 1,870
1/6/97 12,500 360 12,329
1/28/97 3,125 338 2,894
3/11/97 5,625 296 4,562
3/21/97 1,250 286 979
7/25/97 31,250 160 13,699
8/25/97 5,625 129 1,988
10/9/97 143,750 84 33,082
10/21/97 2,500 72 493
10/30/97 50,000 63 8,630
11/5/97 625 57 98
11/12/97 3,125 50 428
12/7/97 625 25 43
12/31/97 75,000 1 205
Stock issued for servic-
es..................... 4/17/97 35,000 259 24,836
--------- ---------
December 31, 1997....... 2,445,000 2,179,261 (10,218,648) (4.69)
========= =========
Common Stock............ 1/1/98 2,445,000 365 2,445,000
Exercise of options..... 1/2/98 2,500 364 2,493
1/20/98 12,500 346 11,849
3/9/98 12,500 298 10,205
4/1/98 131,875 275 99,358
4/12/98 43,750 264 31,644
4/16/98 21,250 260 15,137
4/17/98 2,500 259 1,774
4/22/98 3,125 254 2,175
4/23/98 3,125 253 2,166
4/27/98 3,125 249 2,132
4/28/98 3,750 248 2,548
4/29/98 8,125 247 5,498
4/30/98 37,500 246 25,274
5/1/98 5,625 245 3,776
5/14/98 5,000 232 3,178
5/20/98 16,875 226 10,449
5/22/98 16,250 224 9,973
5/25/98 250 221 151
5/29/98 1,250 217 743
6/5/98 12,500 210 7,192
6/6/98 3,750 209 2,147
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Net loss Basic and
Period Available Diluted Loss
Shares Outstanding Weighted to Common per Common
Date Outstanding in Days Avg. Shares Stockholders' Share
-------- ----------- ----------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
6/18/98 1,125 197 607
6/24/98 938 191 491
6/25/98 50,000 190 26,027
6/26/98 16,062 189 8,317
6/27/98 12,500 188 6,438
6/28/98 30,000 187 15,370
6/29/98 55,250 186 28,155
6/30/98 625 185 317
10/1/98 1,250 92 315
10/22/98 625 71 122
12/12/98 11,875 20 651
12/17/98 3,750 15 154
12/23/98 50,000 9 1,233
12/24/98 25,000 8 548
Sale of stock in
connection with the
acquisition of certain
assets of Multex Data
Group, Inc. ........... 3/27/98 75,000 280 57,534
Issuance of stock in
connection with the
acquisition of Multex
Data Group, Inc. ...... 12/15/98 125,000 17 5,822
--------- ---------
December 31, 1998....... 3,251,125 2,846,963 (12,422,169) (4.36)
========= =========
</TABLE>
2
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated January 29, 1999 except for Note 14, as to which
the date is March , 1999, in Amendment No. 1 to the Registration Statement
(Form S-1 No. 333-70693) and related Prospectus of Multex.com, Inc.
Ernst & Young LLP
New York, New York
---------------------
The foregoing consent is in the form that will be signed upon the completion
of the restatement of capital accounts described in Note 14 to the financial
statements.
Ernst & Young LLP
New York, New York
February 22, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 2,533
<SECURITIES> 7,664
<RECEIVABLES> 2,054
<ALLOWANCES> 240
<INVENTORY> 0
<CURRENT-ASSETS> 12,270
<PP&E> 5,437
<DEPRECIATION> 3,275
<TOTAL-ASSETS> 14,733
<CURRENT-LIABILITIES> 4,249
<BONDS> 0
37,234
0
<COMMON> 24
<OTHER-SE> (25,708)
<TOTAL-LIABILITY-AND-EQUITY> 14,733
<SALES> 6,014
<TOTAL-REVENUES> 6,014
<CGS> 1,232
<TOTAL-COSTS> 1,232
<OTHER-EXPENSES> 12,944
<LOSS-PROVISION> 168
<INTEREST-EXPENSE> 310
<INCOME-PRETAX> (8,037)
<INCOME-TAX> 0
<INCOME-CONTINUING> (8,037)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (8,037)
<EPS-PRIMARY> (4.69)
<EPS-DILUTED> (4.69)
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 2,318
<SECURITIES> 20,015
<RECEIVABLES> 2,585
<ALLOWANCES> 138
<INVENTORY> 0
<CURRENT-ASSETS> 25,001
<PP&E> 7,211
<DEPRECIATION> 4,368
<TOTAL-ASSETS> 27,968
<CURRENT-LIABILITIES> 5,264
<BONDS> 0
59,860
0
<COMMON> 33
<OTHER-SE> (35,771)
<TOTAL-LIABILITY-AND-EQUITY> 27,968
<SALES> 13,182
<TOTAL-REVENUES> 13,182
<CGS> 2,895
<TOTAL-COSTS> 2,895
<OTHER-EXPENSES> 19,188
<LOSS-PROVISION> 138
<INTEREST-EXPENSE> 482
<INCOME-PRETAX> (9,743)
<INCOME-TAX> 0
<INCOME-CONTINUING> (9,743)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (9,743)
<EPS-PRIMARY> (.55)
<EPS-DILUTED> (.55)
</TABLE>
