<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED
IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS
THERETO FILED PURSUANT TO RULE 13d-2(a)
MARKETWATCH.COM, INC.
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(Name of Issuer)
Common Stock, par value $ .01 per share
- --------------------------------------------------------------------------------
(Title of Class of Securities)
570619106
- --------------------------------------------------------------------------------
(CUSIP Number)
Philip J. Hoffman
c/o Pearson Inc.
1330 Avenue of the Americas, 7th Floor
New York, New York 10019
(212) 641-2421
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
With Copies To:
Anne E. Gold, Esq.
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
(212) 309-6000
March 28, 2000
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13D
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box / /.
NOTE: Schedules filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. SEE Rule 13d-7(b) for
other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 23 Pages)
(1)The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, SEE the
Notes).
<PAGE>
CUSIP No. 570619106 13D Page 2 of 23 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PEARSON PLC EIN:
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
NOT APPLICABLE
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
ENGLAND & WALES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH SEE ITEM 5 OF ATTACHED SCHEDULE
REPORTING -----------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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<PAGE>
CUSIP No. 570619106 13D Page 3 of 23 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PEARSON OVERSEAS HOLDINGS LTD. EIN:
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
NOT APPLICABLE
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
ENGLAND & WALES
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH SEE ITEM 5 OF ATTACHED SCHEDULE
REPORTING -----------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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<PAGE>
CUSIP No. 570619106 13D Page 4 of 23 Pages
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PEARSON NETHERLANDS BV EIN:
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
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3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
NOT APPLICABLE
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
NETHERLANDS
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH SEE ITEM 5 OF ATTACHED SCHEDULE
REPORTING -----------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
-4-
<PAGE>
CUSIP No. 570619106 13D Page 5 of 23 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PEARSON AG EIN:
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
NOT APPLICABLE
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
SWITZERLAND
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH SEE ITEM 5 OF ATTACHED SCHEDULE
REPORTING -----------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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<PAGE>
CUSIP No. 570619106 13D Page 6 of 23 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PEARSON INC. EIN: 51-0261654
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
NOT APPLICABLE
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH SEE ITEM 5 OF ATTACHED SCHEDULE
REPORTING -----------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE ITEM 5 OF ATTACHED SCHEDULE
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
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<PAGE>
CUSIP No. 570619106 13D Page 7 of 23 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PEARSON LONGMAN, INC. EIN: 13-2971110
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
NOT APPLICABLE
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH SEE ITEM 5 OF ATTACHED SCHEDULE
REPORTING -----------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
SEE ITEM 5 OF ATTACHED SCHEDULE
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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<PAGE>
CUSIP No. 570619106 13D Page 8 of 23 Pages
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1 NAME OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
DATA BROADCASTING CORPORATION EIN: 13-3668779
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b) /X/
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC (SEE ITEM 3 OF ATTACHED SCHEDULE)
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0
SHARES -----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY
EACH 5,636,814
REPORTING -----------------------------------------------------
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
-----------------------------------------------------
10 SHARED DISPOSITIVE POWER
5,636,814
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,636,814
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
34.4%
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14 TYPE OF REPORTING PERSON*
CO
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*SEE INSTRUCTIONS BEFORE FILLING OUT!
-8-
<PAGE>
ITEM 1. SECURITY AND ISSUER
This Statement on Schedule 13D (the "Statement") relates to
the common stock, par value $.01 per share ("Common Stock"), of MarketWatch.com,
Inc., a Delaware corporation (the "Company"). The principal executive office of
the Company is 825 Battery Street, San Francisco, California 94111. Information
given in response to each item shall be deemed incorporated by reference in all
other items.
ITEM 2. IDENTITY AND BACKGROUND
(a) This Statement is being filed by each of the following
persons pursuant to Rule 13d-1(a) promulgated by the Securities and Exchange
Commission (the "Commission"): (i) Pearson plc, a corporation organized under
the laws of England & Wales ("Pearson"); (ii) Pearson Overseas Holdings Ltd., a
corporation organized under the laws of England & Wales ("Pearson Overseas");
(iii) Pearson Netherlands BV, a corporation organized under the laws of the
Netherlands ("Pearson Netherlands"); (iv) Pearson AG, a corporation organized
under the laws of Switzerland ("Pearson AG"); (v) Pearson Inc., a corporation
organized under the laws of Delaware ("Pearson Inc."); (vi) Pearson Longman,
Inc., a corporation organized under the laws of Delaware ("Pearson Longman");
and (vii) Data Broadcasting Corporation, a corporation organized under the laws
of Delaware ("DBC" and, collectively with Pearson, Pearson Overseas, Pearson
Netherlands, Pearson AG, Pearson Inc. and Pearson Longman, the "Reporting
Persons").
Pearson is an international media company which is the
majority stockholder of Pearson Overseas. Pearson Overseas is an investment
holding company which owns 100% of Pearson Netherlands. Pearson Netherlands is a
holding company which owns 100% of Pearson AG. Pearson AG is a holding company
which is the majority stockholder of Pearson Inc. Pearson Inc. is a holding
company which owns 100% of Pearson Longman. Pearson Longman is a holding company
which is the majority stockholder of DBC. DBC is a distributor of financial and
business information.
(b) The addresses of the principal offices of each of the
Reporting Persons are as set forth on Schedule A. Schedule A is incorporated
into and made a part of this Statement.
(c) Attached as Schedule B is the name, principal occupation
(where applicable) and business address of each member, executive officer and/or
director of each of the Reporting Persons. Schedule B is incorporated into and
made a part of this Statement.
(d) During the last five years, none of the Reporting Persons
nor any person listed on Schedule B has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors).
(e) During the last five years, none of the Reporting Persons
nor any person listed on Schedule B has been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The total amount of funds required by DBC to acquire the
Common Stock of the Company pursuant to the Stock Purchase Agreement (as
described in the response to Item 4) is $43,000,000.00 (the "Purchase Price").
DBC is to obtain a portion of the Purchase Price from its working capital. The
remainder of
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<PAGE>
such funds are to be borrowed from an affiliate or an independent third party,
the terms of which will be finalized prior to the date upon which the Common
Stock of the Company is acquired by DBC.
The shares of Common Stock of the Company owned by DBC as of
the date hereof were received in connection with the merger of Marketwatch.com,
LLC with and into the Company. Pursuant to a Contribution Agreement, dated as of
October 29, 1997, among CBS Inc., a New York corporation, DBC and
Marketwatch.com, LLC, as consideration for all of DBC's right, title and
interest in assets relating to its online/news business, as well as $2,000,000
in cash paid in two equal installments on each of October 29, 1997 and October
29, 1998, Marketwatch.com, LLC assumed certain liabilities of DBC and DBC
received a 50% membership interest in Marketwatch.com, LLC. Thereafter, on
January 13, 1999, Marketwatch.com, LLC merged with and into the Company (the
"Merger"). In connection with the Merger, the membership interest of DBC in
Marketwatch.com, LLC was exchanged for 4,500,000 shares of Common Stock of the
Company. A copy of the Contribution Agreement has been filed as an exhibit
hereto.
ITEM 4. PURPOSES OF TRANSACTIONS
On March 28, 2000, the Company, DBC and CBS Broadcasting Inc.,
a New York corporation ("CBS"), entered into a Stock Purchase Agreement (the
"Stock Purchase Agreement"), a copy of which has been filed as an exhibit
hereto. The Stock Purchase Agreement provides that, upon the satisfaction of
certain conditions, DBC shall purchase 1,136,814 shares of Common Stock of the
Company for the Purchase Price.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) DBC owns 4,500,000 shars of Common Stock of the Company
and, pursuant to the Stock Purchase Agreement, DBC, for purposes of Rule
13d-3 promulgated under the Exchange Act, may be deemed to beneficially own
an additional 1,136,814 shares of Common Stock of the Company (collectively,
the "Shares"). DBC's aggregate holding of 5,636,814 shares of Common Stock of
the Company represents approximately 34.4% of the issued and outstanding
shares of Common Stock of the Company. Pearson, Pearson Overseas, Pearson
Netherlands, Pearson AG, Pearson Inc., and Pearson Longman, which are
affiliates of DBC, may be deemed to beneficially own the Shares indirectly as
a result of their control relationship with DBC. Any such beneficial
ownership would represent the same shared voting and dispositive power
exercised by DBC over the Shares. Each of the Reporting Persons other than
DBC disclaims beneficial ownership of the Shares.
(b) The responses of the Reporting Persons to Items (7)
through (11) of the portions of pages 2 through 8 hereto which relate to shares
of Common Stock beneficially owned are incorporated herein by reference.
(c) Except as described in the response to Item 4, there have
been no transactions in the shares of Common Stock during the past sixty days by
any Reporting Person or any other person listed on Schedule B.
(d) No person is known to have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the sale of,
the shares of Common Stock beneficially owned by DBC.
(e) Not applicable
Except as described in this response to Item 5, none of the
persons listed on Schedule B beneficially own any shares of Common Stock.
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<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
In connection with the Merger, a Stockholders' Agreement,
dated as of January 13, 1999 (the "Stockholders' Agreement"), was entered into
among Marketwatch.com, LLC, the Company, CBS and DBC (DBC and CBS, each a
"Stockholder" for purposes thereof). A summary of certain provisions contained
in the Stockholders' Agreement is set forth below:
(a) CHANGE OF CONTROL OF DBC. CBS shall have the right (but
not the obligation) in its sole discretion to purchase the securities
in the Company held by DBC or require that such securities be
transferred to an independent trustee within 60 days after a competitor
of CBS has directly or indirectly acquired beneficial ownership of more
than thirty percent (30%) of the outstanding shares of the common
stock, or securities representing, in the aggregate, more than thirty
percent (30%) of the voting power, of DBC (or any person controlling
DBC), or all or substantially all of DBC's assets, at a time when DBC
and its affiliates shall then own in the aggregate a number of shares
of Common Stock equal to at least ten percent (10%) of the outstanding
shares of Common Stock on the IPO Closing Date (as defined in the
Stockholders' Agreement) without the prior written consent of CBS.
(b) DIRECTOR NOMINATION RIGHTS. For so long as DBC continues
to own a number of Voting Securities (as defined in the Stockholders'
Agreement) equal to at least one percent (1%) of the outstanding Voting
Securities, the Company shall provide DBC written notice at least
thirty (30) days prior to any stockholder solicitation or action
relating to the election of directors. After such receipt by DBC, DBC
may request that the Company nominate, and the Company shall nominate,
to the board of directors of the Company (i) one director, if DBC holds
a number of Voting Securities greater than or equal to one percent (1%)
but less than twenty percent (20%) of the Company's outstanding Voting
Securities, or (ii) two directors, if DBC holds a number of Voting
Securities greater than or equal to twenty percent (20%) but less than
thirty percent (30%) of the Company's outstanding Voting Securities, or
(iii) three directors, if DBC holds a number of Voting Securities
greater than or equal to thirty percent (30%) of the Company's
outstanding Voting Securities, with each such candidate being
reasonably acceptable to the Company. If such designation is not in
connection with a stockholder solicitation or action relating to the
election of directors, the Company shall appoint such designee as soon
as practicable upon written notice from DBC. The number of designees
shall be adjusted in the event that the size of the board of directors
of the Company is increased to a number greater than nine (9) members.
In accordance with an increase in the size of the board of directors,
Messrs. Alan J. Hirschfield, Carl Spielvogel, Allan R. Tessler and
Mark F. Imperiale currently are the DBC nominees serving as members
of the board of directors pursuant to this provision.
(c) RIGHT OF FIRST REFUSAL. In the event that any Stockholder
or affiliate of any Stockholder intends to transfer any securities in
the Company, such Stockholder or affiliate (the "Selling Stockholder")
must give written notice to the Company and other Stockholder, subject
to certain exceptions as stated in the Stockholders' Agreement, stating
(a) the Selling Stockholder's bona fide intention to transfer such
securities; (b) the number of offered securities proposed to be
transferred to each proposed transferee; (c) the name, address and
relationship, if any, to the Selling Stockholder of each proposed
transferee and (d) the bona fide cash price or, in reasonable detail,
other consideration, per share for which the Selling Stockholder
proposes to transfer such offered securities to each proposed
transferee and the proposed time of payment and other relevant terms of
the proposed sale. Certain other information shall be included in the
written notice if the proposed sale is to be effected on the open
market pursuant to Rule 144. The non-Selling Stockholder shall have a
right to purchase any portion of the offered securities covered by the
written notice unless (i) the offered securities are to be sold in a
private sale to one purchaser, in which case the non-Selling
Stockholder will only be permitted to exercise this right of first
refusal if it purchases
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<PAGE>
all of the offered securities, or (ii) the Selling Stockholder is
selling the offered securities through a registered offering and the
quantity of offered securities that the non-Selling Stockholder
proposes to purchase would, in the good faith opinion of the managing
underwriter, jeopardize the success of the offering. In such a
circumstance, the non-Selling Stockholder will only be permitted to
purchase either all of the offered securities or such offered
securities, if any, that would not, in the good faith opinion of the
managing underwriter, jeopardize the success of the offering. If the
non-Selling Stockholder has not elected to purchase all or a portion,
as applicable, of the offered securities pursuant to this right of
first refusal, the Selling Stockholder may transfer the offered
securities to the proposed transferee(s) under certain terms and
conditions as stated in the Stockholders' Agreement.
(d) PARTICIPATION RIGHTS. Subject to certain exceptions and
conditions, if from time to time, the percentage of Total Voting Power
(as defined in the Stockholders' Agreement) represented by the Voting
Power (as defined in the Stockholders' Agreement) of all Voting
Securities then owned, directly or indirectly, by a Stockholder (the
"Applicable Percentage") would be reduced as a result of any issuance
of Voting Securities by the Company or could be reduced as a result of
any issuance of Convertible Securities (as defined in the Stockholders'
Agreement), the Company shall notify the Stockholder in writing not
less than ten (10) business days prior to the proposed date of any such
issuance and shall offer to sell to the Stockholder (and if such offer
is accepted pursuant to the terms contained in the Stockholders'
Agreement, the Company shall sell to the Stockholder) that portion of
the Voting Securities or Convertible Securities to be issued which
would allow such Stockholder to maintain its then current Applicable
Percentage.
In connection with the Merger, a Registration Rights
Agreement, dated as of January 13, 1999 (the "Registration Rights Agreement"),
was entered into among CBS, DBC (DBC and CBS, each a "Stockholder" for purposes
thereof) and the Company. A summary of certain provisions contained in the
Registration Rights Agreement is set forth below:
(a) DEMAND REGISTRATION. If the Company shall receive at any
time after 180 days following the effective date of the registration
statement for the Company's initial public offering, a written request
from a Stockholder that the Company file a registration statement under
the Securities Act of 1933 covering the registration of Registrable
Securities (as defined in the Registration Rights Agreement) with a
reasonably anticipated aggregate price to the public of at least three
million dollars ($3,000,000), then the Company shall effect, as soon as
practicable, and in any event use its best efforts to effect within
sixty (60) days of such request, registration of all Registrable
Securities which the initiating Stockholder requests to be registered
and included in such registration, subject to limitations as stated in
the Registration Rights Agreement. With the approval of the Company,
which approval shall not be unreasonably withheld, the initiating
Stockholder may distribute the Registrable Securities by means of an
underwriting, but priority will be given to the initiating Stockholder
if the underwriter determines that market factors require a limitation
on the number of shares to be sold. The Company is obligated to effect
only two (2) such registrations for each Stockholder; HOWEVER, the
Company shall not be deemed to have effected such registration unless a
registration statement in respect thereof shall have been declared
effective by the Securities and Exchange Commission and remains
effective for 120 days or such earlier time until all Registrable
Securities registered under such registration statement have been sold
(or withdrawn from such registration at the request of the initiating
Stockholder). The initiating Stockholder may withdraw the request for
registration at any time prior to the effective date of the
registration statement related to such registration, subject to certain
terms as stated in the Registration Rights Agreement.
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<PAGE>
(b) PIGGYBACK REGISTRATIONS. Subject to certain exceptions, if
the Company proposes to register any of its securities in connection
with the public offering of such securities, the Company must
provide all holders of Registrable Securities with written notice
thereof at least thirty (30) days prior to filing any registration
statement. Upon the written request of any such holder given within
twenty (20) days after the receipt of such notice, the Company shall
afford such holder the opportunity to include in such registration
statement all or any part of the Registrable Securities then held by
such holder; PROVIDED, HOWEVER, that if the registration statement in
connection with the public offering is to be underwritten, the shares
which the Company proposes to sell will be given priority in the event
that the underwriter determines that market factors require a
limitation on the number of shares to be sold.
c) FORM S-3 REGISTRATION. Subject to certain exceptions, at
any time, if a Stockholder requests that the Company effect a
registration on Form S-3, the Company must file and use its best
efforts to effect such registration and all such qualifications and
compliances as may be so requested and as would permit or facilitate
the sale and distribution of all or such portion of such Stockholder's
or its affiliates' Registrable Securities as are specified in such
request. The requesting Stockholder may withdraw the request for
registration at any time prior to the effective date of the
registration statement related to such registration, subject to certain
terms as stated in the Registration Rights Agreement.
d) PAYMENT OF EXPENSES. All expenses incurred in connection
with a registration pursuant to exercise of the foregoing rights,
including without limitation all registration and qualification fees,
printers' and accounting fees, fees and disbursements of counsel for
the Company, and the reasonable fees and disbursements of one counsel
for the selling holders to be selected by the Selling Stockholder(s)
(but excluding underwriters' discounts and commissions), shall be borne
by the Company. Each holder participating in a registration pursuant to
the Registration Rights Agreement shall bear such holder's
proportionate share (based on the total number of shares sold in such
registration other than for the account of the Company) of all
discounts, commissions or other amounts payable to underwriters or
brokers in connection with such offering.
In connection with the formation of Marketwatch.com, LLC, DBC
agreed to loan Marketwatch.com, LLC, until October 2000, up to $5,000,000 at an
annual interest rate equal to The Chase Manhattan National Bank's prime rate
plus two percent (2%). On January 13, 1999, a Revolving Credit Agreement (the
"Credit Agreement"), was entered into between DBC and the Company in order to
evidence DBC's prior loan obligation. Under the Credit Agreement, DBC agreed to
loan the Company up to $5,000,000 through October 2000. The loan is unsecured
and bears interest at a rate equal to The Chase Manhattan National Bank's prime
rate plus two percent (2%) per annum and matures on October 29, 2000. The
previous borrowings by the Company from DBC were included as indebtedness
outstanding under the Credit Agreement. Pursuant to the Credit Agreement, a
Revolving Promissory Note was issued by the Company to DBC.
See the response to Item 4 regarding the Stock Purchase
Agreement.
Except for the agreements described in the responses to Items
3 and 4 and this Item 6, none of the Reporting Persons, nor, to the best of
their knowledge, any persons listed on Schedule B hereto has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person, with respect to any securities of the Company.
A copy of the each of the Contribution Agreement, the Stock
Purchase Agreement, the Stockholders' Agreement, the Registration Rights
Agreement, the Revolving Credit Agreement and the Revolving Promissory Note have
been filed as exhibits hereto and are incorporated herein by reference. The
foregoing descriptions of the Contribution Agreement in the response to Item 3,
the Stock Purchase Agreement in the
-13-
<PAGE>
response to Item 4 and the Stockholders' Agreement, the Registration Rights
Agreement, the Revolving Credit Agreement and the Revolving Promissory Note in
this response to Item 6 are qualified in their entirety by reference to such
agreements.
-14-
<PAGE>
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS
The following materials are filed as Exhibits to this Statement:
Exhibit A: Contribution Agreement, dated as of October 29, 1997, among
CBS Inc., Data Broadcasting Corporation and Marketwatch.com, LLC
Exhibit B: Stock Purchase Agreement, dated as of March 28, 2000, among
MarketWatch.com, Inc., Data Broadcasting Corporation and CBS Broadcasting Inc.
Exhibit C: Stockholders' Agreement, dated as of January 13, 1999, among
Marketwatch.com, LLC, MarketWatch.com, Inc., Data Broadcasting Corporation and
CBS Broadcasting Inc.
Exhibit D: Registration Rights Agreement, dated as of January 13, 1999,
among MarketWatch.com, Inc., Data Broadcasting Corporation and CBS Broadcasting
Inc.
Exhibit E: Revolving Credit Agreement, dated as of January 13, 1999,
between Data Broadcasting Corporation and MarketWatch.com, Inc., together with
Revolving Promissory Note, dated as of January 13, 1999, issued by
MarketWatch.com, Inc. in favor of Data Broadcasting Corporation.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of the knowledge and
belief of each of the undersigned, each of the undersigned certifies that the
information set forth in this statement is true, complete and correct.
Dated: April 7, 2000
Pearson plc
By: /s/ Julia Casson
--------------------------------------
Name: Julia Casson
Title: Company Secretary
Pearson Overseas Holdings Ltd.
By: /s/ D.H. Colville
--------------------------------------
Name: D.H. Colville
Title: Director
Pearson Netherlands BV
By: /s/ D.H. Colville
--------------------------------------
Name: D.H. Colville
Title: Director
Pearson AG
By: /s/ Philip Hoffman
--------------------------------------
Name: Philip Hoffman
Title: Member
Pearson Inc.
By: /s/ Philip Hoffman
--------------------------------------
Name: Philip Hoffman
Title: Director and President
-16-
<PAGE>
Pearson Longman, Inc.
By: /s/ William H. Cowan
--------------------------------------
Name: William H. Cowan
Title: Assistant Secretary
Data Broadcasting Corporation
By: /s/ Steven G. Crane
--------------------------------------
Name: Steven G. Crane
Title: Executive Vice President
and Chief Financial Officer
-17-
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
Name of Reporting Person Address of the Principal Office
- ------------------------ -------------------------------
<S> <C>
Pearson 3 Burlington Gardens, London W1X 1LE, England
Pearson Overseas 3 Burlington Gardens, London W1X 1LE, England
Pearson Netherlands Media Centre, 4th Floor, Room 405, Sumatralaan 45, 1217 GP
Hilversum, The Netherlands
Pearson AG Chollerstrasse 37, CH-6301 Zug, Switzerland
Pearson Inc. 1330 Avenue of the Americas, 7th Floor, New York, New York
10019
Pearson Longman c/o Headland Digital Media, Inc., 444 Spear Street, San Francisco,
California 94105
DBC 22 Crosby Drive, Bedford, Massachusetts 01730
</TABLE>
-18-
<PAGE>
SCHEDULE B
<TABLE>
<CAPTION>
PEARSON PLC
Name Position Principal Occupation/Business Address
<S> <C> <C>
Lord Stevenson Chairman Director/Cloaca Maxima, 2nd Floor, 68 Pall Mall, London SW1Y SES
Marjorie M. Scardino Chief Executive Director/Pearson plc, 3 Burlington Gardens, London W1X 1LE
David C. M. Bell Executive Director Director/Pearson plc, 3 Burlington Gardens, London W1X 1LE
John C. Makinson Finance Director Finance Director/Pearson plc, 3 Burlington Gardens, London W1X 1LE
Lord Burns Non-Executive Director Member of House of Lords/13 North Avenue, London W13 8AP
Gill M. Lewis Non-Executive Director Managing Partner/Heidrick & Struggles, 100 Picaddilly, London W1V
9FN
Reuben Mark Non-Executive Director Chairman and Chief Executive Officer/Colgate-Palmolive Co, 300 Park
Avenue, New York, NY 10022-7499
Vernon L. Sankey Non- Executive Director Director/67 Alma Road, Windsor, Berkshire SL4 3HD
Julia M. Casson Secretary Secretary/Pearson plc, 3 Burlington Gardens, London W1X 1LE
Rana Talwar Non-Executive Director Director/Standard Chartered Bank PLC, 1 Aldermanbury Square,
London EC2V 7SB
<CAPTION>
PEARSON OVERSEAS HOLDINGS LTD.
Name Position Principal Occupation/Business Address
<S> <C> <C>
David H. Colville Director Chartered Accountant/Pearson plc, 3 Burlington Gardens, London W1X
1LE
John C. Makinson Director Finance Director/Pearson plc, 3 Burlington Gardens, London W1X 1LE
Peter R. Gill Director Director, Financial Operations/Pearson plc, 3 Burlington Gardens,
London W1X 1LE
J.E. Gomm Secretary Secretary/Pearson plc, 3 Burlington Gardens, London W1X 1LE
Marjorie M. Scardino Director Director/Pearson plc, 3 Burlington Gardens, London W1X 1LE
Alan C. Miller Director Accountant/Pearson plc, 3 Burlington Gardens, London W1X 1LE
</TABLE>
-19-
<PAGE>
<TABLE>
<CAPTION>
PEARSON NETHERLANDS
Name Position Principal Occupation/Business Address
<S> <C> <C>
George F. Nicolai Director Director/MeesPierson Trust, Aert van Nesstraat 45, P.O. Box 548, 3000
AM Rotterdam
Jan Francis van der Drift Director Businessman/Leeteinde 20-22, 1151 AK Broek in Waterland, Holland
Matthieu van Sint Truiden Director Attorney/Nauta Dutilh, Postbus 7113, 1007 JC Amsterdam
David H. Colville Director Group Tax Director/Pearson plc, 3 Burlington Gardens, London W1X
1LE
<CAPTION>
PEARSON AG
Name Position Principal Occupation/Business Address
<S> <C> <C>
Peter R. Gill Chairman Director, Financial Operations/Pearson plc, 3 Burlington Gardens,
London W1X 1LE
Josef Grand Vice - Chairman Certified Public Accountant, Bundtacherstrasse 35, 8127 Forch,
Switzerland
Martin Frey Member Attorney/Baker & McKenzie, Zollikerstrasse 225, Postfach 57, 8034
Zurich
Philip J. Hoffman Member President/Pearson Inc., 1330 Avenue of the Americas, 7th Floor,
New York, NY 10019
</TABLE>
-20-
<PAGE>
<TABLE>
<CAPTION>
PEARSON INC.
Name Position Principal Occupation/Business Address
<S> <C> <C>
Philip J. Hoffman Director, President President/Pearson Inc., 1330 Avenue of the Americas, 7th Floor,
New York, NY 10019
Randall Keller Director, Executive Vice President Head of Human Resource Dept./Pearson Inc., 1330 Avenue of the
- Human Resources Americas, 7th Floor, New York, NY 10019
John C. Makinson Director Finance Director/Pearson plc, 3 Burlington Gardens, London
W1X 1LE
Thomas Wharton Director, Vice President of Vice President of Taxation/Pearson Inc., 1330 Avenue of the
Taxation, Secretary Americas, 7th Floor, New York, NY 10019
Mike Fortini Vice President Vice President of Finance/Pearson Inc., 1330 Avenue of the
Americas, 7th Floor, New York, NY 10019
Shaheda Sayed Assistant Secretary Director of Taxation/Pearson Inc., 1330 Avenue of the Americas,
7th Floor, New York, NY 10019
Ken Lockhart Vice President of Real Estate Vice President of Real Estate/Pearson Inc., 1330 Avenue of the
Americas, 7th Floor, New York, NY 10019
Dick Koplitz Vice President of Global Vice President of Global Purchasing/Pearson Inc., 1330 Avenue
Purchasing of the Americas, 7th Floor, New York, NY 10019
Susan Costomiris Controller Controller/Pearson Inc., 1330 Avenue of the Americas, 7th Floor,
New York, NY 10019
<CAPTION>
PEARSON LONGMAN, INC.
Name Position Principal Occupation/Business Address
<S> <C> <C>
William Lincoln President Vice President of Operations/Pearson Television North America,
2700 Colorado Ave., Suite 450, Santa Monica, CA 90404
Mark Nieker Treasurer President/Headland Digital Media, Inc.,
444 Spear Street, San Francisco, CA 94105
William Cowan Assistant Secretary Attorney/Cowan & Minetz,
180 N. LaSalle St., Suite 1922, Chicago, IL 60601
</TABLE>
-21-
<PAGE>
<TABLE>
<CAPTION>
DATA BROADCASTING CORPORATION
Name Position Principal Occupation/Business Address
<S> <C> <C>
Stephen Hill Director Chief Executive Officer/The Financial Times Group, 1 Southwark
Bridge, London SE1 9HL
Robert Berkley Director Executive Vice President and Chief Information Officer/Pearson
Technology Centre, 200 Old Tappan Road, Old Tappan, NJ 07675
Stuart J. Clark Director, President and President and Chief Executive Officer/Data Broadcasting Corporation,
Chief Executive Officer 22 Crosby Drive, Bedford, MA 01730
John Fallon Director Communications Director/Pearson plc, 3 Burlington Gardens, London
W1X 1LE
Dr. Donald P. Greenberg Director Professor/Cornell University, 109 Highgate Place, Ithaca, NY 14850
Alan J. Hirschfield Director Vice Chairman/J NET Enterprises, Inc., 3490 Clubhouse Drive, I-2
Wilson, WY 83014
Philip J. Hoffman Director President/Pearson Inc., 1330 Avenue of the Americas, New York, NY
10019
John C. Makinson Director Group Finance Director/Pearson plc, 3 Burlington Gardens, London
W1X 1LE
Carl Spielvogel Director President/Carl Spielvogel Associates, Inc., 1330 Avenue of the
Americas, New York, NY 10019
Allan R. Tessler Director Chief Executive Officer/J NET Enterprises, Inc., 3490 Clubhouse Drive,
I-2 Wilson, WY 83014
Steven G. Crane Executive Vice President Executive Vice President and Chief Financial Officer/Data Broadcasting
and Chief Financial Officer Corporation, 498 Seventh Avenue, 19th Floor, New York, NY 10018
Andrea H. Loew Vice President, General Vice President, General Counsel and Secretary/ Data Broadcasting
Counsel and Secretary Corporation, 22 Crosby Drive, Bedford, MA 01730
John King Chief Operating Officer Interactive Data Corporation/ 22 Crosby Drive, Bedford, MA 01730
</TABLE>
-22-
<PAGE>
EXHIBIT INDEX
The following materials are filed as Exhibits to this Statement:
Exhibit A: Contribution Agreement, dated as of October 29, 1997, among
CBS Inc., Data Broadcasting Corporation and Marketwatch.com, LLC
Exhibit B: Stock Purchase Agreement, dated as of March 28, 2000, among
MarketWatch.com, Inc., Data Broadcasting Corporation and CBS Broadcasting Inc.
Exhibit C: Stockholders' Agreement, dated as of January 13, 1999, among
Marketwatch.com, LLC, MarketWatch.com, Inc., Data Broadcasting Corporation and
CBS Broadcasting Inc.
Exhibit D: Registration Rights Agreement, dated as of January 13, 1999,
among MarketWatch.com, Inc., Data Broadcasting Corporation and CBS Broadcasting
Inc.
Exhibit E: Revolving Credit Agreement, dated as of January 13, 1999,
between Data Broadcasting Corporation and MarketWatch.com, Inc., together with
Revolving Promissory Note, dated as of January 13, 1999, issued by
MarketWatch.com, Inc. in favor of Data Broadcasting Corporation.
-23-
<PAGE>
Exhibit 99.1
================================================================================
CONTRIBUTION AGREEMENT
among
CBS INC.,
DATA BROADCASTING CORPORATION
and
MARKETWATCH.COM, LLC
Dated as of October 29, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
Contributions
SECTION 1.01. DBC Contribution; DBC Assets ................................. 1
SECTION 1.02. Assumption of Certain Liabilities ............................ 2
SECTION 1.03. Consents of Third Parties .................................... 5
SECTION 1.04. CBS Contribution ............................................. 5
ARTICLE II
The Closing
SECTION 2.01. The Closing .................................................. 6
SECTION 2.02. Transactions To Be Effected at the Closing ................... 6
ARTICLE III
Representations and Warranties of DBC
SECTION 3.01. Organization, Standing and Power ............................. 7
SECTION 3.02. Authority; Execution and Delivery; Enforceability ............ 7
SECTION 3.03. No Conflicts; Consents ....................................... 8
SECTION 3.04. Financial Statements ......................................... 8
SECTION 3.05. DBC Assets ................................................... 9
SECTION 3.06. Intellectual Property ........................................ 9
SECTION 3.07. Contracts .................................................... 11
SECTION 3.08. Personal Property ............................................ 14
SECTION 3.09. Permits ...................................................... 14
SECTION 3.10. Insurance .................................................... 15
SECTION 3.11. Sufficiency of DBC Assets .................................... 15
SECTION 3.12. Taxes ........................................................ 15
SECTION 3.13. Proceedings .................................................. 16
SECTION 3.14. Benefit Plans ................................................ 16
SECTION 3.15. Absence of Changes or Events ................................. 18
SECTION 3.16. Compliance with Applicable Laws .............................. 18
SECTION 3.17. Transactions with Affiliates ................................. 19
SECTION 3.18. Effect of Transaction ........................................ 19
SECTION 3.19. Disclosure ................................................... 19
<PAGE>
Contents, p. 2
ARTICLE IV
Representations and Warranties of CBS
SECTION 4.01. Organization, Standing and Power ............................. 19
SECTION 4.02. Authority; Execution and Delivery; Enforceability ............ 20
SECTION 4.03. No Conflicts; Consents ....................................... 20
ARTICLE V
Covenants
SECTION 5.01. Reasonable Best Efforts ...................................... 21
SECTION 5.02. Expenses; Transfer Taxes ..................................... 21
SECTION 5.03. Post-Closing Cooperation ..................................... 21
SECTION 5.04. Further Assurances ........................................... 22
SECTION 5.05. Year 2000 Compliance ......................................... 22
ARTICLE VI
Indemnification
SECTION 6.01. Indemnification by DBC ....................................... 23
SECTION 6.02. Indemnification by CBS ....................................... 23
SECTION 6.03. Calculation of Losses ........................................ 24
SECTION 6.04. Termination of Indemnification ............................... 24
SECTION 6.05. Procedures ................................................... 24
SECTION 6.06. Survival of Representations .................................. 27
ARTICLE VII
General Provisions
SECTION 7.01. Assignment ................................................... 27
SECTION 7.02. No Third-Party Beneficiaries ................................. 27
SECTION 7.03. Attorney Fees ................................................ 27
SECTION 7.04. Notices ...................................................... 27
SECTION 7.05. Interpretation; Exhibits and Schedules; Certain Definitions .. 29
SECTION 7.06. Counterparts ................................................. 29
SECTION 7.07. Entire Agreement ............................................. 30
SECTION 7.08. Severability ................................................. 30
SECTION 7.09. Amendments and Waivers ....................................... 30
SECTION 7.10. Consent to Jurisdiction ...................................... 30
SECTION 7.11. Governing Law ................................................ 31
<PAGE>
CONTRIBUTION AGREEMENT (this "Agreement") dated as of
October 29, 1997, among CBS INC., a New York corporation
("CBS"), DATA BROADCASTING CORPORATION, a Delaware corporation
("DBC"), and MARKETWATCH.COM, LLC, a Delaware limited
liability company (the "Company").
WHEREAS, immediately prior to the execution and delivery of this
Agreement, CBS and DBC entered into the Limited Liability Company Agreement of
Marketwatch.Com, LLC dated as of the date hereof, in the form attached as
Exhibit A hereto (the "LLC Agreement");
WHEREAS, simultaneously herewith, CBS and the Company are entering
into the License Agreement, in the form attached as Exhibit B hereto (the
"License Agreement") and DBC and the Company are entering into the Services
Agreement, in the form attached as Exhibit C hereto (the "DBC Services
Agreement"); and
WHEREAS, in connection with the execution and delivery of the LLC
Agreement, the License Agreement and the DBC Services Agreement and the
formation of the Company, each of CBS and DBC desires to receive certain
representations and warranties from the other and each of them desires to
receive certain agreements from the other.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound by the terms hereof applicable to each of them, hereby agree as
follows:
ARTICLE I
Contributions
SECTION 1.01. DBC Contribution; DBC Assets. (a) On the terms and
subject to the conditions of this Agreement, DBC hereby sells, assigns,
transfers, conveys and delivers or is causing one or more of its subsidiaries to
sell, assign, transfer, convey and deliver to the Company, and the Company
hereby acquires from DBC, or such subsidiary, effective as of the date hereof,
all the right, title and interest of the DBC Companies (as defined below) in, to
and under the DBC Assets (as defined below), and
<PAGE>
2
agrees to make the cash payments to the Company required pursuant to Section
1.01(b), in exchange for (i) a 50% membership interest in the Company (the "DBC
Interest") and (ii) the assumption of the Assumed DBC Liabilities (as defined in
Section 1.02). The contribution and acquisition of the DBC Assets, the making of
the cash payments pursuant to Section 1.01(b) and the assumption of the Assumed
DBC Liabilities is referred to in this Agreement as the "DBC Contribution". The
term "Business" means the businesses conducted by DBC and its subsidiaries and
known as DBC News and DBC On-Line, including, but not limited to, the "Financial
Markets", "Mutual Fund Center", "Trading Center", "Stock Chat" and "MarketWatch"
portions of the Internet website owned by DBC and known as dbc.com. The term
"DBC Companies" means DBC and any of its subsidiaries that engage in the
operation of the Business or own, lease or license any DBC Assets. The term "DBC
Assets" means the business, properties, assets, goodwill and rights of any of
the DBC Companies, of whatever kind and nature, real or personal, tangible or
intangible, that are owned, leased or licensed by any of the DBC Companies and
are set forth on Schedule 1.01.
(b) On the terms and subject to the conditions of this Agreement,
DBC hereby agrees to pay to the Company by wire transfer of immediately
available funds, to an account specified by the Company in writing, $1,000,000
on each of the date hereof and the first anniversary of the date hereof.
SECTION 1.02. Assumption of Certain Liabilities. (a) On the terms
and subject to the conditions of this Agreement, the Company hereby assumes,
effective as of the date hereof, and from and after the date hereof the Company
agrees to pay, perform and discharge when due, any liability, obligation or
commitment of the DBC Companies under the contracts, leases, licenses,
indentures, agreements, Commitments and other legally binding arrangements,
whether oral or written ("Contracts"), listed on Schedule 1.02 (the "DBC
Contracts"), to the extent such liability, obligation or commitment relates to
the period from and after the date hereof (the "Assumed DBC Liabilities"), other
than any Excluded DBC Liabilities.
(b) Notwithstanding Section 1.02(a), or any other provision of this
Agreement or any of the other agreements and instruments executed and delivered
in connection herewith and the transactions contemplated hereby, including, but
not limited to, the License Agreement and the DBC Services Agreement (the
"Ancillary Agreements"), and regardless of any disclosure to CBS or the Company,
the
<PAGE>
3
Company shall not assume any Excluded DBC Liability, each of which shall be
retained and paid, performed and discharged when due by one of the DBC
Companies. The term "Excluded DBC Liability" means:
(i) any liability, obligation or commitment of any of the DBC
Companies not specifically assumed pursuant to Section 1.02(a);
(ii) any liability, obligation or commitment of any of the DBC
Companies, whether express or implied, liquidated, absolute, accrued,
contingent or otherwise, or known or unknown, arising out of the operation
or conduct by any of the DBC Companies or any of their respective
affiliates of any business other than the Business, and any liability,
obligation or commitment of any subsidiary of DBC that is not a DBC
Company, whether express or implied, liquidated, absolute, accrued,
contingent or otherwise, or known or unknown;
(iii) any liability, obligation or commitment of any of the DBC
Companies (A) arising out of any actual or alleged breach by any of the
DBC Companies of, or nonperformance by any of the DBC Companies under, any
Contract (including any DBC Contract) prior to the date hereof or (B)
accruing under any DBC Contract with respect to any period prior to the
date hereof;
(iv) any liability, obligation or commitment of any of the DBC
Companies arising out of (A) any suit, action or proceeding ("Proceeding")
pending or, to the knowledge of any of the DBC Companies, threatened as of
the date hereof or (B) any actual or alleged violation by any of the DBC
Companies or any of their respective affiliates of any Applicable Law (as
defined in Section 3.03) prior to the date hereof;
(v) any account payable or accrued liability of any of the DBC
Companies;
(vi) any liability, obligation or commitment for Taxes (as defined
in Section 3.12), whether or not accrued, assessed or currently due and
payable, (A) of any of the DBC Companies or (B) relating to the operation
or ownership of the Business or the assets for any Tax period (or portion
thereof) ending on or prior to the date hereof (for purposes of this
clause (vii), all real property Taxes, personal property Taxes and similar
ad valorem obligations levied with respect to the DBC Assets for a Tax
period that includes (but does not end on) the date hereof
<PAGE>
4
shall be apportioned between DBC and the Company based upon the number of
days of such period included in the Tax period prior to the date hereof
and the number of days of such Tax period after the date hereof (which
period shall include the date hereof));
(vii) except as provided in Section 5.02 (b), any liability,
obligation or commitment for transfer, documentary, sales, use,
registration, value-added and other similar Taxes and related amounts
(including any penalties, interest and additions to Tax) incurred in
connection with this Agreement, the Ancillary Agreements, the DBC
Contribution and the other transactions contemplated hereby and thereby
("Transfer Taxes");
(viii) any liability, obligation or commitment of any of the DBC
Companies arising under any DBC Benefit Plan (as defined in Section
3.14(a));
(ix) any liability, obligation or commitment of any of the DBC
Companies that relates to, or that arises out of, products or services
shipped or sold by or on behalf of any of the DBC Companies on or prior to
the date hereof (including claims of negligence, personal injury, product
damage, product liability, product warranties, promotional obligations,
strict liability, product recall or any other claims (including workers
compensation, employer's liability or otherwise)), whether such liability,
obligation or commitment relates to or arises out of accidents, injuries
or losses occurring on or prior to or after the date hereof;
(x) any liability, obligation or commitment of any of the DBC
Companies that relates to, or that arises out of, the employment or the
termination of the employment with any of the DBC Companies of any
employee or former employee of the Business (including as a result of the
transactions contemplated by this Agreement); and
(xi) any liability, obligation or commitment of any of the DBC
Companies to any of their respective affiliates.
(c) The Company shall acquire the DBC Assets free and clear of all
liabilities, obligations and commitments of any of the DBC Companies, other than
the Assumed DBC Liabilities, and free and clear of all Liens (as defined in
<PAGE>
5
Section 3.05), other than Permitted Liens (as defined in Section 3.05).
SECTION 1.03. Consent of Third Parties. (a) Notwithstanding anything
in this Agreement to the contrary, this Agreement shall not constitute an
agreement to assign any asset or any claim or right or any benefit arising under
or resulting from such asset if an attempted assignment thereof, without the
consent of a third party, would constitute a breach or other contravention of
the rights of such third party, would be ineffective with respect to any party
to an agreement concerning such asset, or would in any way adversely affect the
rights of any of the DBC Companies or, upon transfer, the Company under such
asset. If any transfer or assignment by any of the DBC Companies to, or any
assumption by the Company of, any interest in, or liability, obligation or
commitment under, any asset requires the consent of a third party, then such
assignment or assumption shall be made subject to such consent being obtained.
To the extent any DBC Contract may not be assigned to the Company by reason of
the absence of any such consent, the Company shall not be required to assume any
Assumed DBC Liabilities arising under such DBC Contract.
(b) In connection with those consents that have not been obtained as
of the date hereof, DBC and the Company hereby agree that, until any such
required consent is obtained, DBC, or one or more of its subsidiaries, as
appropriate, shall, with the reasonable and necessary cooperation of the
Company, and at the Company's direction, continue to fulfill any and all
obligations and commitments, and enforce any and all rights, of the DBC
Companies in connection with any asset, claim or right that constitutes a DBC
Asset but for which any required consent has not been obtained, and that the
Company shall be entitled to all of the economic claims, rights and benefits
under such asset, claim or right and DBC shall pay or cause to be paid to the
Company all such economic benefits as promptly as practicable following receipt
by DBC or any of its subsidiaries. To the extent, and only to the extent, a
required consent is received to the transfer of any asset, claim or right, the
Company shall be responsible for the Assumed DBC Liabilities, if any, arising
under such asset, claim or right.
SECTION 1.04. CBS Contribution. On the terms and subject to the
conditions of this Agreement, CBS will contribute to the Company, over a period
of five years and on the terms set forth in Exhibit D, advertising time with an
aggregate rate card value of $50 million calculated in
<PAGE>
6
accordance with the terms set forth in Exhibit D (the "CBS Contribution" and,
together with the DBC Contribution, the "Contributions"), which contribution is
deemed to have a discounted present value equal to the discounted present value
of the DBC Contribution, in exchange for a 50% membership interest in the
Company (the "CBS Interest").
ARTICLE II
The Closing
SECTION 2.01. The Closing. The closing of the Contributions (the
"Closing") is taking place at the offices of Cravath, Swaine & Moore, 825 Eighth
Avenue, New York, New York 10019, on the date hereof.
SECTION 2.02. Transactions To Be Effected at the Closing. At the
Closing:
(a) DBC is delivering (i) appropriately executed copies of this
Agreement and each Ancillary Agreement to which it is specified to be a
party, (ii) such appropriately executed bills of sale, assignments and
other instruments of transfer relating to the DBC Assets in form and
substance reasonably satisfactory to CBS and the Company and (iii) such
other documents as CBS or the Company have reasonably requested to
demonstrate compliance with the terms and provisions of this Agreement;
(b) CBS is delivering (i) appropriately executed copies of this
Agreement and each Ancillary Agreement to which it is specified to be a
party, and (ii) such other documents as DBC or the Company have reasonably
requested to demonstrate compliance with the terms and provisions of this
Agreement; and
(c) the Company is delivering (i) appropriately executed copies of
this Agreement and each Ancillary Agreement to which it is specified to be
a party, (ii) such appropriately executed assumption agreements and other
instruments of assumption providing for the assumption of the Assumed DBC
Liabilities in form and substance reasonably satisfactory to CBS and DBC
and (iii) such other documents as CBS or DBC have reasonably requested to
demonstrate compliance with the terms and provisions of this Agreement.
<PAGE>
7
ARTICLE III
Representations and Warranties of DBC
DBC hereby represents and warrants to CBS and the Company, as of the
date of this Agreement, as follows:
SECTION 3.01. Organization, Standing and Power. Each of the DBC
Companies is duly organized, validly existing and in good standing under the
laws of the jurisdiction in which it is organized and has full corporate power
and authority and possesses all governmental franchises, licenses, permits,
authorizations and approvals necessary to enable it to own, lease or otherwise
hold its properties and assets and to conduct the Business and its other
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually or in the
aggregate, have not had and could not reasonably be expected to have a material
adverse effect (i) on the business, assets, condition (financial or otherwise)
or results of operations or prospects of DBC and its subsidiaries, taken as a
whole, or of the Business, (ii) on the ability of DBC to perform its obligations
under this Agreement and the Ancillary Agreements or (iii) on the ability of the
DBC Companies to consummate the DBC Contribution and the other transactions
contemplated hereby and thereby (a "DBC Material Adverse Effect"). Each of the
DBC Companies is duly qualified to do business as a foreign corporation in each
jurisdiction where the character of the DBC Assets held by it or the nature of
the Business make such qualification necessary for it to conduct the Business as
currently conducted by it or the failure to so qualify has had or could
reasonably be expected to have a DBC Material Adverse Effect. DBC has delivered
to the Company true and complete copies of the certificate of incorporation and
by-laws of each of the DBC Companies, in each case as amended through the date
of this Agreement.
SECTION 3.02. Authority; Execution and Delivery; Enforceability. DBC
has full power and authority to execute this Agreement and the Ancillary
Agreements to which it is a party. Each of the DBC Companies has full power and
authority to consummate the DBC Contribution and the other transactions
contemplated hereby and thereby. The execution and delivery by DBC of this
Agreement and the Ancillary Agreements to which it is a party and the
consummation by the DBC Companies of the DBC Contribution and the other
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action. DBC has duly executed and delivered this Agreement
and each Ancillary
<PAGE>
8
Agreement to which it is a party, and this Agreement, and each Ancillary
Agreement to which it is a party, constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms except as
enforcement may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally or equitable principles relating to or limiting
creditors' rights generally.
SECTION 3.03. No Conflicts; Consents. The execution and delivery by
DBC of this Agreement and each Ancillary Agreement to which it is a party and
the consummation of the DBC Contribution and the other transactions contemplated
hereby and thereby and compliance by DBC with the terms hereof and thereof do
not conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material benefit
under, or result in the creation of any Lien upon any of the properties or
assets of DBC or any of its subsidiaries under, any provision of (i) the
certificate of incorporation or by-laws of DBC or any of its subsidiaries, (ii)
any Contract to which DBC or any of its subsidiaries is a party or by which any
of their respective properties or assets is bound or (iii) any judgment, order
or decree ("Judgment") or statute, law, ordinance, rule or regulation
("Applicable Law") applicable to DBC or any of its subsidiaries or their
respective properties or assets, other than, in the case of clauses (ii) and
(iii) above, any such items that, individually or in the aggregate, have not had
and could not reasonably be expected to have a DBC Material Adverse Effect. No
consent, approval, license, permit, order or authorization ("Consent") of, or
registration, declaration or filing with, any Federal, state, local or foreign
government or any court of competent jurisdiction, administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign (a "Governmental Entity"), is required to be obtained or made by or with
respect to DBC or any of its subsidiaries in connection with (A) the execution,
delivery and performance of this Agreement or any Ancillary Agreement or the
consummation of the DBC Contribution or the other transactions contemplated
hereby and thereby or (B) the conduct by the Company of the Business following
the Closing as conducted on the date hereof.
SECTION 3.04. Financial Statements. (a) Schedule 3.04 sets forth for
the Business (i) a Statement of Assets as of June 30, 1997 (the "Year End
Balance Sheet"), (ii) a Statement of Assets as of September 30, 1997 (the "First
Quarter Balance Sheet"), (iii) an Income Statement
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9
for the twelve months ended June 30, 1997 (the "Full Year Income Statement"),
and (iv) an Income Statement for the three months ended September 30, 1997 (the
"First Quarter Income Statement"). The Year End Balance Sheet and the Full Year
Income Statement were derived from the audited consolidated financial statements
of DBC and its subsidiaries for the year ended June 30, 1997, as audited and
opined upon by Price Waterhouse LLP in their report dated August 8, 1997. The
term "Financial Statements" shall mean the Year End Balance Sheet, the First
Quarter Balance Sheet, the Full Year Income Statement and the First Quarter
Income Statement. The Financial Statements have been prepared from the books and
records of DBC and its subsidiaries relating to the Business and fairly present
the financial condition and results of operations of the Business as of the
respective dates and for the respective periods indicated.
(b) The Business does not have any material liabilities or
obligations of any nature (whether accrued, absolute, contingent, unasserted or
otherwise), except for items set forth in Schedule 3.04(b).
SECTION 3.05. DBC Assets. One of the DBC Companies has good and
valid title to all the DBC Assets, in each case free and clear of all mortgages,
liens, security interests, charges, easements, leases, subleases, covenants,
rights of way, options, claims, restrictions or encumbrances of any kind
(collectively, "Liens"), except (i) such as are set forth in Schedule 3.05 (all
of which shall be discharged prior to the Closing), (ii) mechanics', carriers',
workmen's, repairmen's or other like Liens arising or incurred in the ordinary
course of business, Liens arising under original purchase price conditional
sales contracts and equipment leases with third parties entered into in the
ordinary course of business and liens for Taxes that are not due and payable or
that may thereafter be paid without penalty, and (iii) other imperfections of
title or encumbrances, if any, that do not, individually or in the aggregate,
materially impair the continued use and operation of the assets to which they
relate in the conduct of the Business as presently conducted (the Liens
described in clauses (ii) and (iii) above are referred to collectively as
"Permitted Liens").
SECTION 3.06. Intellectual Property. (a) Schedule 3.06 sets forth a
true and complete list of all patents (including all reissues, divisions,
continuations and extensions thereof), patent applications, patent rights,
trademarks, trademark registrations, trademark applications, servicemarks, trade
names, business
<PAGE>
10
names, brand names, domain names, copyrights, copyright registrations and
renewals, designs, design registrations, software (together with all related
source code(s)) and all rights to any of the foregoing ("Intellectual Property")
owned, used, filed by or licensed to any of the DBC Companies and used, held for
use or intended to be used in the operation or conduct of the Business, other
than unregistered designs and copyrights that, individually and in the
aggregate, are not material to the conduct of the Business as presently
conducted. With respect to all Intellectual Property constituting DBC Assets
("Contributed Intellectual Property") that is registered or subject to an
application for registration, Schedule 3.06 sets forth a list of all
jurisdictions in which such Contributed Intellectual Property is registered or
registrations applied for and all registration and application numbers. Except
as set forth in Schedule 3.06 (i) all the Contributed Intellectual Property has
been duly registered in, filed in or issued by the appropriate Governmental
Entity where such registration, filing or issuance is necessary or appropriate
for the conduct of the Business as presently conducted, (ii) one or more of the
DBC Companies is the sole and exclusive owner of, and DBC has the right to use,
execute, reproduce, display, perform, modify, enhance, distribute, prepare
derivative works of and sublicense, without payment to any other person, all the
Contributed Intellectual Property and the consummation of the DBC Contribution
and the other transactions contemplated hereby does not and will not conflict
with, alter or impair any such rights, and (iii) during the past three years,
none of the DBC Companies has received any written or oral communication from
any person asserting any ownership interest in any Contributed Intellectual
Property.
(b) None of the DBC Companies has granted any license of any kind
relating to any trade secrets, confidential information, inventions, know-how,
formulae, processes, procedures, research records, records of inventions, test
information, market surveys, subscriber lists and marketing know-how of DBC
constituting DBC Assets (the "Technology"), or to any Contributed Intellectual
Property or the marketing or distribution thereof, except nonexclusive licenses
to end-users in the ordinary course of business. None of the DBC Companies is
bound by or a party to any option, license or agreement of any kind relating to
the Intellectual Property of any other person for the use of such Intellectual
Property in the conduct of the Business, except as set forth in Schedule 3.06
and except for so-called "shrink-wrap" license agreements relating to computer
software licensed in the ordinary course of the Business. The conduct of the
Business as presently conducted does not
<PAGE>
11
violate, conflict with or infringe the Intellectual Property of any other
person. Except as set forth in Schedule 3.06, (i) no claims are pending or, to
the knowledge of DBC, threatened, as of the date of this Agreement against any
of the DBC Companies by any person with respect to the ownership, validity,
enforceability, effectiveness or use in the Business of any Intellectual
Property and (ii) during the past three years DBC and its affiliates have not
received any written or oral communication alleging that DBC or any of its
affiliates has in the conduct of the Business violated any rights relating to
Intellectual Property of any person.
(c) All material Technology has been maintained in confidence in
accordance with protection procedures customarily used in the industry to
protect rights of like importance. All former and current members of management
and key personnel of DBC or any of its affiliates, including all former and
current employees, agents, consultants and independent contractors who have
contributed to or participated in the conception and development of material
Technology (collectively, "Personnel") either (i) have been party to a
"work-for-hire" arrangement or agreement with any of the DBC Companies, in
accordance with all Applicable Laws, that has accorded any of the DBC Companies
full, effective, exclusive and original ownership of all tangible and intangible
property thereby arising or (ii) have executed appropriate instruments of
assignment in favor of one of the DBC Companies as assignee that have conveyed
to one of the DBC Companies full, effective and exclusive ownership of all
tangible and intangible property thereby arising. No former or current Personnel
have any claim against any of the DBC Companies in connection with such person's
involvement In the conception and development of any Technology and no such
claim has been asserted or is threatened. None of the current officers and
employees of any of the DBC Companies has any patents issued or applications
pending for any device, process, design or invention of any kind now used or
needed by any of the DBC Companies in the furtherance of the Business, which
patents or applications have not been assigned to one of the DBC Companies, with
such assignment duly recorded in the United States Patent and Trademark Office.
(d) All Contributed Intellectual Property, as applicable, is free of
any "bugs" or "viruses" that could materially interfere with the Company's use
of such Intellectual Property.
SECTION 3.07. Contracts. (a) Except as set forth in Schedule 3.07,
and except for Contracts relating
<PAGE>
12
solely to assets that do not constitute DBC Assets, no DBC Company is a party to
or bound by any Contract that is used, held for use or intended for use in, or
that arises out of, the operation or conduct of the Business and that is:
(i) an employment agreement or employment Contract;
(ii) a collective bargaining agreement or other Contract with any
labor organization, union or association;
(iii) a covenant not to compete or other covenant of any of the DBC
Companies restricting the development, manufacture, marketing or
distribution of the products and services of the Business;
(iv) a Contract with (A) any shareholder or affiliate of DBC or (B)
any current or former officer, director or employee of DBC or any of its
affiliates;
(v) a lease, sublease or similar Contract with any person under
which (A) any of the DBC Companies is lessee of, or holds or uses, any
machinery, equipment, vehicle or other tangible personal property owned by
any person or (B) any of the DBC Companies is a lessor or sublessor of, or
makes available for use by any person, any tangible personal property
owned or leased by any of the DBC Companies, in any such case has an
aggregate future liability or receivable, as the case may be, in excess of
$5,000;
(vi) (A) a continuing Contract for the future purchase of materials,
supplies or equipment, (B) a management, service, consulting or other
similar Contract or (C) an advertising agreement or arrangement, in any
such case that has an aggregate future liability to any person in excess
of $5,000;
(vii) a material license, option or other Contract relating in whole
or in part to the Contributed Intellectual Property (including any license
or other Contract under which any of the DBC Companies is licensee or
licensor of any Contributed Intellectual Property) or to any Technology;
(viii) (A) a Contract under which any of the DBC Companies has
borrowed any money from, or issued any note, bond, debenture or other
evidence of indebtedness to, any person or (B) any other note, bond,
debenture or other evidence of indebtedness issued to any person;
<PAGE>
13
(ix) a Contract (including any so-called take-or-pay or keepwell
agreement) under which (A) any person has directly or indirectly
guaranteed indebtedness, liabilities or obligations of any of the DBC
Companies or (B) or any of the DBC Companies has directly or indirectly
guaranteed indebtedness, liabilities or obligations of any other person
(in each case other than endorsements for the purpose of collection in the
ordinary course of business);
(x) a Contract under which any of the DBC companies has, directly or
indirectly, made any advance, loan, extension of credit or capital
contribution to, or other investment in, any person (other than extensions
of trade credit in the ordinary course of the Business);
(xi) a Contract granting a Lien upon any DBC Asset;
(xii) a Contract providing for indemnification of any person with
respect to material liabilities relating to any current or former business
of DBC or any predecessor person;
(xiii) a Contract not made in the ordinary course of the Business;
(xiv) a confidentiality agreement;
(xv) a Contract for the sale of any DBC Asset or the grant of any
preferential rights to purchase any DBC Asset or requiring the consent of
any party to the transfer thereof;
(xvi) a Contract for any joint venture, partnership or similar
arrangement;
(xvii) other Contract that has an aggregate future liability to any
person in excess of $5,000 and is not terminable by one of the DBC
Companies by notice of riot more than 60 days for a cost of less than
$5,000; or
(xviii) a Contract other than as set forth above to which any of the
DBC Companies is a party or by which it or any of its assets or businesses
is bound or subject that is material to the Business or the use or
operation of the DBC Assets.
(b) Except as set forth in Schedule 3.07, all DBC Contracts are
valid, binding and in full force and effect and are enforceable by the
applicable DBC Companies in
<PAGE>
14
accordance with their terms except as enforcement may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally or equitable
principles relating to or limiting creditors' rights generally. Except as set
forth in Schedule 3.07, the applicable DBC Companies have performed all material
obligations required to be performed by them to date under the DBC Contracts,
and they are not (with or without the lapse of time or the giving of notice, or
both) in breach or default in any material respect thereunder and, to the
knowledge of DBC, no other party to any DBC Contract is (with or without the
lapse of time or the giving of notice, or both) in breach or default in any
material respect thereunder. No DBC Company has, except as disclosed in the
applicable Schedule, received any notice of the intention of any party to
terminate any DBC Contract. Complete and correct copies of all Contracts listed
in the Schedules, together with all modifications and amendments thereto, have
been delivered to CBS and the Company.
(c) Schedule 3.07 sets forth each DBC Contract with respect to which
the Consent of the other party or parties thereto is required by virtue of the
execution and delivery of this Agreement or the consummation of the DBC
Contribution to avoid the invalidity of the transfer of such Contract, the
termination thereof, a breach, violation or default thereunder or any other
change or modification to the terms thereof, each of which has been or will be
obtained.
SECTION 3.08. Personal Property. Each material item of tangible
personal property and interests therein, including all machinery, equipment,
furniture and vehicles, of any of the DBC Companies that constitute DBC Assets
(the "Personal Property") is in good working order (ordinary wear and tear
excepted), is free from any material defect and has been maintained in all
material respects in accordance with the past practice of the Business and
generally accepted industry practice, and no repairs, replacements or regularly
scheduled maintenance relating to any such item has been deferred. All leased
personal property of the Business is in all respects in the condition required
of such property by the terms of the lease applicable thereto.
SECTION 3.09. Permits. (a) Schedule 3.09 sets forth all material
certificates, licenses, permits, authorizations and approvals ("Permits") issued
or granted to any of the DBC Companies by Governmental Entities that are
necessary or desirable for the conduct of the Business. Except as set forth in
Schedule 3.09, (i) all such Permits are validly held by one of the DBC
Companies, and the applicable DBC Companies have complied in all material
<PAGE>
15
respects with all terms and conditions thereof, (ii) during the past three
years, no DBC Company has received notice of any Proceedings relating to the
revocation or modification of any such Permits the loss of which, individually
or in the aggregate, has had or could reasonably be expected to have a DBC
Material Adverse Effect, and (iii) none of such Permits will be subject to
suspension, modification, revocation or nonrenewal as a result of the execution
and delivery of this Agreement or the consummation of the DBC Contribution.
(b) The applicable DBC Companies possess all material Permits to own
or hold under lease and operate the DBC Assets and to conduct the Business as
currently conducted.
SECTION 3.10. Insurance. The DBC Companies maintain policies of fire
and casualty, liability and other forms of insurance with respect to the
Business in such amounts, with such deductibles and against such risks and
losses as are, in DBC's judgment, reasonable for the Business. The material
insurance policies maintained by the DBC Companies with respect to the Business
are listed in Schedule 3.10. All such policies are in full force and effect,
all premiums due and payable thereon have been paid, and no notice of
cancelation or termination has been received with respect to any such policy
which has not been replaced on substantially similar terms prior to the date of
such cancelation. To the knowledge of DBC, the Business has been conducted in a
manner so as to conform in all material respects to all applicable provisions
of such insurance policies.
SECTION 3.11. Sufficiency of DBC Assets. The DBC Assets, together
with the services to be provided by DBC under the DBC Services Agreement, are
sufficient for the conduct of the Business immediately following the Closing in
the same manner as currently conducted. There are not ally assets used, held for
use or intended to be used in the operation or conduct of the Business that do
not constitute DBC Assets or which are not to be made available to the Company
pursuant to the DBC Services Agreement.
SECTION 3.12. Taxes. (a) For purposes of this Agreement:
"Tax" means (i) any tax, governmental fee or other like assessment
or charge of any kind whatsoever (including any tax imposed under Subtitle A of
the Code and any net income, alternative or add-on minimum tax, gross income,
gross receipts, sales, use, ad valorem, value added,
<PAGE>
16
transfer, franchise, profits, license, withholding tax on amounts paid, payroll,
employment, excise, severance, stamp, capital stock, occupation, property,
environmental or windfall profit tax, premium, custom, duty or other tax),
together with any interest, penalty, addition to tax or additional amount due,
imposed by any Governmental Entity (domestic or foreign) responsible for the
imposition of any such tax (a "Taxing Authority"), (ii) any liability for the
payment of any amount of the type described in clause (i) above as a result of a
party to this Agreement being a member of an affiliated, consolidated or
combined group with any other corporation at any time on or prior to the date
hereof and (iii) any liability of any person with respect to the payment of any
amounts of the type described in clause (i) or (ii) above as a result of any
express or implied obligation of such person to indemnify any other person.
"Code" means the Internal Revenue Code of 1986, as amended.
(b) Except as set forth in Schedule 3.12, (i) DBC, and any
affiliated group, within the meaning of Section 1504 of the Code, of which any
of the DBC Companies is or has been a member, has filed or caused to be filed in
a timely manner (within any applicable extension periods) all material Tax
returns, reports and forms required to be filed by the Code or by applicable
state, local or foreign Tax laws, (ii) all Taxes shown to be due on such
returns, reports and forms have been timely paid in full, or will be timely paid
in full, by the due date thereof, and (iii) no material Tax Liens have been
filed and no material claims are being asserted in writing with respect to any
Taxes.
(c) Except as set forth in Schedule 3.12, (i) neither DBC nor any of
its affiliates has made with respect to DBC, or any assets of the Business, any
consent under Section 341 of the Code, (ii) none of the DBC Assets is "tax
exempt use property" within the meaning of Section 168(h) of the Code, and (iii)
none of the DBC Assets is a lease made pursuant to Section 168(f) (8) of the
Internal Revenue Code of 1954.
(d) None of the DBC Companies is a "foreign person" within the
meaning of Section 1445 of the Code.
SECTION 3.13. Proceedings. Schedule 3.13 sets forth a list of all
pending Proceedings or claims with respect to which any of the DBC Companies
has been contacted in writing by counsel for the plaintiff or claimant, arising
out of the conduct of the Business or against or affecting
<PAGE>
17
any DBC Asset and that (a) relate to or involve more than $5,000, (b) seek any
material injunctive relief or (c) may give rise to any legal restraint on or
prohibition against the transactions contemplated by this Agreement. Except as
set forth in Schedule 3.13, none of the Proceedings or claims listed in Schedule
3.13 as to which there is at least a reasonable possibility of adverse
determination would have, if so determined, individually or in the aggregate, a
DBC Material Adverse Effect. Except as set forth in Schedule 3.13, to the
knowledge of DBC, there are no unasserted claims of the type that would be
required to be disclosed in Schedule 3.13 if counsel for the claimant had
contacted DBC that if asserted would have at least a reasonable possibility of
an adverse determination. Except as set forth in Schedule 3.13, no DBC Company
is a party or subject to or in default under any material Judgment applicable to
the conduct of the Business or any DBC Asset or Assumed DBC Liability. Except as
set forth in Schedule 3.13, there is not any Proceeding or claim by any of the
DBC Companies pending, or which any of the DBC Companies intends to initiate,
against any other Person arising out of the conduct of the Business. Except as
set forth in Schedule 3.13, to the knowledge of DBC, there is no pending or
threatened investigation of or affecting the conduct of the Business or any DBC
Asset or Assumed DBC Liability.
SECTION 3.14. Benefit Plans. (a) Schedule 3.14 contains a list and
brief description of all "employee pension benefit plans" (as defined in Section
3(2) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), maintained or contributed to by any of the DBC Companies for the
benefit of any officers or employees of the Business ("DBC Pension Plans") and
all "employee welfare benefit plans" (as defined in Section 3(1) of ERISA),
bonus, stock option, stock purchase, deterred compensation plans or arrangements
and other employee fringe benefit plans maintained, or contributed to, by any of
the DBC Companies for the benefit of any officers or employees of the Business
(all the foregoing, including DBC Pension Plans, being herein called "DBC
Benefit Plans"). DBC has made available to the Company true, complete and
correct copies of (i) each DBC Benefit Plan (or, in the case of any unwritten
DBC Benefit Plans, descriptions thereof), (ii) the two most recent annual
reports on Form 5500 (including all schedules and attachments thereto) filed
with the Internal Revenue Service with respect to each DBC Benefit Plan (if any
such report was required), (iii) the most recent summary plan description for
each DBC Benefit Plan for which such a summary plan description is required and
(iv) each trust
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18
agreement, group annuity contract or other funding and financing arrangement
relating to any DBC Benefit Plan.
(b) Each DBC Benefit Plan has been administered in all material
respects in accordance with its terms. The applicable DBC Companies and all the
DBC Benefit Plans are in compliance in all material respects with the applicable
provisions of ERISA, the Code, all other Applicable Laws and all applicable
collective bargaining agreements. Except as set forth in Schedule 3.14, all
material reports, returns and similar documents with respect to the DBC Benefit
Plans required to be filed with any Governmental Entity or distributed to any
DBC Benefit Plan participant have been duly and timely filed or distributed.
Except as set forth in Schedule 3.14, there are no Proceedings pending or, to
the knowledge of DBC, threatened against or involving any DBC Benefit Plan and
there are no investigations by any Governmental Entity or other claims (except
routine claims for benefits payable in the normal operation of the DBC Benefit
Plans) pending or, to the knowledge of DBC, threatened against or involving any
DBC Benefit Plan or asserting any rights to benefits under any DBC Benefit Plan.
(c) Except as set forth in Schedule 3.14, no employee or former
employee of the Business will become entitled to any bonus, retirement,
severance, job security or similar benefit or any enhanced benefit solely as a
result of the transactions contemplated hereby.
SECTION 3.15. Absence of Changes or Events. Except as set forth in
Schedule 3.15, since the date of the First Quarter Balance Sheet, there has not
been any material adverse change in the business, assets, condition (financial
or otherwise), results of operations or prospects of the Business, taken as a
whole. Except as set forth in Schedule 3.15, since the date of the First Quarter
Balance Sheet, DBC has caused the Business to be conducted in the ordinary
course and in substantially the same manner as previously conducted and has made
all reasonable efforts consistent with past practices to preserve the
relationships of the Business with customers, suppliers and others with whom the
Business deals.
SECTION 3.16. Compliance with Applicable Laws. Except as set forth
in Schedule 3.16, the Business is in compliance in all material respects with
all Applicable Laws, including those relating to occupational health and safety.
Except as set forth in Schedule 3.16, no DBC Company has received any written or
oral communication during the past three years from a Governmental Entity that
alleges that the Business is not in compliance in any
<PAGE>
19
material respect with any Applicable Laws. No DBC Company has received any
written notice that any investigation or review by any Governmental Entity with
respect to any DBC Asset or the Business is pending or that any such
investigation or review is contemplated. This Section 3.16 does not relate to
matters with respect to Taxes, which are the subject of Section 3.12.
SECTION 3.17. Transactions with Affiliates. Except as set forth in
Schedule 3.17, none of the Contracts set forth in Schedule 3.07 between the
Business, on the one hand, and DBC or any of its affiliates, on the other hand,
will continue in effect subsequent to the Closing.
SECTION 3.18. Effect of Transaction. Except as set forth in Schedule
3.18, no creditor, employee, client, customer or other person having a material
business relationship with the Business has informed any of the DBC Companies
that such person intends to change such relationship because of the contribution
of the Business or the consummation of any other transaction contemplated
hereby.
SECTION 3.19. Disclosure. No representation or warranty of DBC
contained in this Agreement or in any Ancillary Agreement, and no statement
contained in any document, certificate or Schedule furnished or to be furnished
by or on behalf of DBC to CBS or the Company or any of their representatives
pursuant to this Agreement, contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact necessary, in
light of the circumstances under which it was or will be made, in order to make
the statements herein or therein not misleading or necessary in order to fully
and fairly provide the information required to be provided in any such document,
certificate or Schedule.
ARTICLE IV
Representations and Warranties of CBS
CBS hereby represents and warrants to DBC and the Company, as of the
date of this Agreement, as follows:
SECTION 4.01. Organization, Standing and Power. CBS is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has full corporate power and authority
and possesses all governmental franchises, licenses, permits, authorizations and
approvals necessary to enable it to own, lease or
<PAGE>
20
otherwise hold its properties and assets and to conduct its businesses as
presently conducted, other than such franchises, licenses, permits,
authorizations and approvals, the lack of which, individually or in the
aggregate, have not had and could not reasonably be expected to have a material
adverse effect on the ability of CBS to perform its obligations under this
Agreement and the Ancillary Agreements to which it is a party or to consummate
the CBS Contribution and the other transactions contemplated hereby and thereby
(a "CBS Material Adverse Effect").
SECTION 4.02. Authority; Execution and Delivery; Enforceability. CBS
has full power and authority to execute this Agreement and the Ancillary
Agreements to which it is a party and to consummate the CBS Contribution and the
other transactions contemplated hereby and thereby. The execution and delivery
by CBS of this Agreement and the Ancillary Agreements to which it is a party and
the consummation by it of the CBS Contribution and the other transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action. CBS has duly executed and delivered this Agreement and each
Ancillary Agreement to which it is a party, and this Agreement and each
Ancillary Agreement to which it is a party constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms except
as enforcement may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally or equitable principles relating to or
limiting creditors' rights generally.
SECTION 4.03. No Conflicts; Consents. The execution and delivery by
CBS of this Agreement and each Ancillary Agreement to which it is a party and
the consummation of the CBS Contribution and the other transactions contemplated
hereby and thereby and compliance by CBS with the terms hereof and thereof do
not conflict with, or result in any violation of or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material benefit
under or result in the creation of any Lien upon any of the properties or assets
of CBS or any of its subsidiaries under, any provision of (i) the certificate of
incorporation or by-laws of CBS or any of its subsidiaries, (ii) any Contract to
which CBS or any of its subsidiaries is a party or by which any of their
respective properties or assets is bound or (iii) any Judgment or Applicable Law
applicable to CBS or any of its subsidiaries or their respective properties or
assets, other than, in the case of clauses (ii) and (iii) above, any such items
that, individually or in the aggregate, have not had and could not reasonably be
<PAGE>
21
expected to have a CBS Material Adverse Effect. No Consent of, or registration,
declaration or filing with, any Governmental Entity is required to be obtained
or made by or with respect to CBS or any of its subsidiaries in connection with
(A) the execution, delivery and performance of this Agreement or any Ancillary
Agreement or the consummation of the CBS Contribution or the other transactions
contemplated hereby and thereby or (B) the conduct by the Company of the
Business following the Closing as conducted on the date hereof.
ARTICLE V
Covenants
SECTION 5.01. Reasonable Best Efforts. (a) Each party shall, and
shall cause its affiliates to, use its reasonable best efforts (at its own
expense) to obtain, and to cooperate in obtaining, all consents from third
parties necessary or appropriate to permit the Contributions to be completed.
SECTION 5.02. Expenses; Transfer Taxes. (a) Except as set forth in
Section 5.02(b) below and in Sections 5.03 and 7.03, all costs and expenses
incurred in connection with this Agreement and the Ancillary Agreements and the
transactions contemplated hereby and thereby shall be paid by the party
incurring such expense, including all costs and expenses incurred pursuant to
Sections 1.04 and 5.01.
(b) The Company shall be responsible for and shall pay, as and when
incurred, all Transfer Taxes, documentary Taxes and filing or recording fees
applicable to the Contributions up to a maximum aggregate amount of $50,000; to
the extent that the aggregate amount of such Taxes and fees exceeds $50,000, the
party incurring such Tax or fee shall be responsible for its payment. Each party
shall use reasonable efforts to avail itself of any available exemptions from
any such Taxes or fees, and to cooperate with the other parties in providing any
information and documentation that may be necessary to obtain such exemptions.
SECTION 5.03. Post-Closing Cooperation. (a) CBS, DBC and the Company
shall cooperate with each other, and shall cause their respective officers,
employees, agents, auditors and representatives to cooperate with each other,
after the Closing to ensure the orderly transition of the Business from DBC to
the Company and to minimize any
<PAGE>
22
disruption to the Business that might result from the transactions contemplated
hereby. After the Closing, upon reasonable written notice, CBS, DBC and the
Company shall furnish or cause to be furnished to each other and to their
respective employees, counsel, auditors and representatives access, during
normal business hours, to such information and assistance relating to the
Business (to the extent within the control of such party) as is reasonably
necessary for financial reporting and accounting matters.
(b) After the Closing, upon reasonable written notice, CBS, DBC and
the Company shall furnish or cause to be furnished to each other, as promptly as
practicable, such information and assistance relating to the DBC Assets
(including, access to books and records) and the Contributions, to the extent
within the control of such party, as is reasonably necessary for the filing of
all Tax returns, and making of any election related to Taxes, the preparation
for any audit by any Taxing Authority, and the prosecution or defense of any
claim, suit or proceeding related to any Tax return. CBS, DBC and the Company
shall cooperate with each other party in the conduct of any audit or other
proceeding relating to Taxes involving the Business.
(c) Each party shall reimburse the others for reasonable
out-of-pocket costs and expenses incurred in assisting such party pursuant to
this Section 5.03. No party shall be required by this Section 5.03 to take any
action that would unreasonably interfere with the conduct of its business or
unreasonably disrupt its normal operations.
SECTION 5.04. Further Assurances. From time to time, as and when
requested by any party, each party shall execute and deliver, or cause to be
executed and delivered, all such documents and instruments and shall take, or
cause to be taken, all such further or other actions (subject to Section 5.01),
as such other party may reasonably deem necessary or desirable to consummate the
transactions contemplated by this Agreement and the Ancillary Agreements,
including, in the case of CBS and DBC, executing and delivering to the Company
such assignments, deeds, bills of sale, consents and other instruments as the
Company or its counsel may reasonably request as necessary or desirable for such
purpose.
SECTION 5.05. Year 2000 Compliance. Notwithstanding anything herein
to the contrary, DBC agrees to use its best efforts (at its own expense) to
ensure that all Contributed Intellectual Property, as applicable, is free of any
"Year 2000 Problem" such that such Intellectual
<PAGE>
23
Property will not experience any malfunctions or other usage problems in
connection with the year 2000 (and later years) as distinct from the years 1900
through 1999, and earlier years.
ARTICLE VI
Indemnification
SECTION 6.01. Indemnification by DBC. DBC shall indemnify each of
CBS and the Company and each of their respective affiliates and each of their
respective officers, directors, employees, stockholders, agents and
representatives against, and hold them harmless from, any loss, liability,
claim, damage or expense (including reasonable legal fees and expenses)
("Losses"), as incurred (payable promptly upon written request), arising from,
in connection with or otherwise with respect to:
(i) any breach of any representation or warranty of DBC that
survives the Closing and is contained in this Agreement, in any Ancillary
Agreement or in any document delivered in connection herewith;
(ii) any breach of any covenant of DBC contained in this Agreement
or in any Ancillary Agreement;
(iii) any Excluded DBC Liability;
(iv) the disclosure by any current or former Personnel of any
proprietary information of DBC and its affiliates;
(v) the failure to comply with statutory provisions relating to bulk
sales and transfers, if applicable; and
(vi) any fees, expenses or other payments incurred or owed by DBC to
any brokers, financial advisors or comparable other persons retained or
employed by it in connection with the transactions contemplated by this
Agreement.
SECTION 6.02. Indemnification by CBS. CBS shall indemnify each of
DBC and the Company and each of their respective affiliates and each of their
respective officers, directors, employees, stockholders, agents and
representatives against, and hold them harmless from, any Losses, as incurred
(payable promptly upon written request),
<PAGE>
24
arising from, in connection with or otherwise with respect to:
(i) any breach of any representation or warranty of CBS that
survives the Closing and is contained in this Agreement, in any Ancillary
Agreement or in any document delivered in connection herewith;
(ii) any breach of any covenant of CBS contained in this Agreement
or in any Ancillary Agreement;
(iii) any fees, expenses or other payments incurred or owed by CBS
to any brokers, financial advisors or comparable other persons retained or
employed by it in connection with the transactions contemplated by this
Agreement.
SECTION 6.03. Calculation of Losses. The amount of any Loss for
which indemnification is provided under this Article VI shall be net of any
amounts actually recovered by the indemnified party under insurance policies
with respect to such Loss and shall be (i) increased to take account of any net
Tax cost incurred by the indemnified party arising from the receipt of indemnity
payments hereunder (grossed up for such increase) and (ii) reduced to take
account of any net Tax benefit realized by the indemnified party arising from
the incurrence or payment of any such Loss. In computing the amount of any such
Tax cost or Tax benefit, the indemnified party shall be deemed to recognize all
other items of income, gain, loss, deduction or credit before recognizing any
item arising from the receipt of any indemnity payment hereunder or the
incurrence or payment of any indemnified Loss.
SECTION 6.04. Termination of Indemnification. The obligations to
indemnify and hold harmless any party, (i) pursuant to Section 6.01(i) or
6.02(i), shall terminate when the applicable representation or warranty
terminates pursuant to Section 6.06 and (ii) pursuant to the other clauses of
Section 6.01 or 6.02 shall not terminate; provided, however, that such
obligations to indemnify and hold harmless shall not terminate with respect to
any item as to which the person to be indemnified shall have, before the
expiration of the applicable period, previously made a claim by delivering a
notice of such claim (stating in reasonable detail the basis of such claim)
pursuant to Section 6.05 to the party to be providing the indemnification.
SECTION 6.05. Procedures. (a) In order for a party (the "indemnified
party"), to be entitled to any
<PAGE>
25
indemnification provided for under this Agreement in respect of, arising out of
or involving a claim made by any person against the indemnified party (a "Third
Party Claim"), such indemnified party must notify the indemnifying party in
writing of the Third Party Claim promptly following receipt by such indemnified
party of written notice of the Third Party Claim; provided, however, that
failure to give such notification shall not affect the indemnification provided
hereunder except to the extent the indemnifying party shall have been actually
and materially prejudiced as a result of such failure. Thereafter, the
indemnified party shall deliver to the indemnifying party, promptly following
the indemnified party's receipt thereof, copies of all notices and documents
(including court papers) received by the indemnified party relating to the Third
Party Claim and not also addressed to the indemnifying party.
(b) If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
indemnifying party; provided, however, that such counsel is not reasonably
objected to by the indemnified party. Should the indemnifying party so elect to
assume the defense of a Third Party claim, the indemnifying party shall not be
liable to the indemnified party for any legal expenses subsequently incurred by
the indemnified party in connection with the defense thereof. If the
indemnifying party assumes such defense, the indemnified party shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the indemnifying party, it being
understood that the indemnifying party shall control such defense. The
indemnifying party shall be liable for the fees and expenses of counsel employed
by the indemnified party for any period during which the indemnifying party has
not assumed the defense thereof. If the indemnifying party chooses to defend or
prosecute a Third Party Claim, all the indemnified parties shall cooperate in
the defense or prosecution thereof. Such cooperation shall include the retention
and (upon the indemnifying party's request) the provision to the indemnifying
party of records and information that are reasonably relevant to such Third
Party Claim, and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. Whether or not the indemnifying party assumes the defense of a Third
Party Claim, the indemnified party shall not admit any liability with respect
to, or settle, compromise or discharge, such Third Party Claim without the
indemnifying party's prior written consent (which consent shall not be
unreasonably
<PAGE>
26
withheld). If the indemnifying party assumes the defense of a Third Party Claim,
the indemnified party shall agree to any settlement, compromise or discharge of
a Third Party Claim that the indemnifying party may recommend and that by its
terms obligates the indemnifying party to pay the full amount of the liability
in connection with such Third Party Claim, which releases the indemnified party
completely in connection with such Third Party Claim and that would not
otherwise adversely affect the indemnified party. Notwithstanding the foregoing,
the indemnifying party shall not be entitled to assume the defense of any Third
Party Claim (and shall be liable for the fees and expenses of counsel incurred
by the indemnified party in defending such Third Party Claim) if the Third Party
Claim seeks an order, injunction or other equitable relief or relief for other
than money damages against the indemnified party that the indemnified party
reasonably determines, after conferring with its outside counsel, cannot be
separated from any related claim for money damages. If such equitable relief or
other relief portion of the Third Party Claim can be so separated from that for
money damages, the indemnifying party shall be entitled to assume the defense of
the portion relating to money damages.
(c) Other Claims. In the event any indemnified party should have a
claim against any indemnifying party under Section 6.01 or 6.02 that does not
involve a Third Party Claim being asserted against or sought to be collected
from such indemnified party, the indemnified party shall deliver notice of such
claim with reasonable promptness to the indemnifying party. The failure by any
indemnified party so to notify the indemnifying party shall not relieve the
indemnifying party from any liability that it may have to such indemnified party
under Section 6.01 or 6.02, except to the extent that the indemnifying party
demonstrates that it has been materially prejudiced by such failure. If the
indemnifying party does not notify the indemnified party within 10 calendar days
following its receipt of such notice that the indemnifying party disputes its
liability to the indemnified party under Section 6.01 or 6.02, such claim
specified by the indemnified party in such notice shall be conclusively deemed a
liability of the indemnifying party under Section 6.01 or 6.02 and the
indemnifying party shall pay the amount of such liability to the indemnified
party on demand or, in the case of any notice in which the amount of the claim
(or any portion thereof) is estimated, on such later date when the amount of
such claim (or such portion thereof) becomes finally determined. If the
indemnifying party has timely disputed its liability with respect to such claim,
as provided above, the indemnifying party and the indemnified party shall
proceed in good faith to negotiate a
<PAGE>
27
resolution of such dispute and, if not resolved through negotiations, such
dispute shall be resolved by litigation in an appropriate court of competent
jurisdiction.
SECTION 6.06. Survival of Representations. The representations and
warranties contained in this Agreement, in any Ancillary Agreement or in any
document delivered in connection herewith shall survive the Closing solely for
purposes of Article VI and shall terminate at the close of business five years
following the date hereof.
ARTICLE VII
General Provisions
SECTION 7.01. Assignment. This Agreement and the rights and
obligations hereunder shall not be assignable or transferable by CBS, DBC or the
Company without the prior written Consent of the other parties hereto; provided,
however, that CBS may assign this Agreement and its rights and obligations
hereunder to any entity controlling, controlled by or under common control with,
CBS, or to any entity that acquires CBS by purchase of stock or by merger or
otherwise, or by acquiring all or substantially all of CBS's assets, provided
that any such assignee succeeds to all of the rights and is subject to all of
the obligations of CBS under this Agreement. Any attempted assignment in
violation of this Section 7.01 shall be null and void ab initio.
SECTION 7.02. No Third-Party Beneficiaries. Except as provided in
Article VI, this Agreement is for the sole benefit of the parties hereto and
their permitted assigns and nothing herein expressed or implied shall give or be
construed to give to any person, other than the parties hereto and such assigns,
any legal or equitable rights hereunder.
SECTION 7.03. Attorney Fees. A party in breach of this Agreement
shall, on demand, indemnify and hold harmless each other party for and against
all reasonable out-of-pocket expenses, including legal tees, incurred by such
other party by reason of the enforcement and protection of its rights under this
Agreement. The payment of such expenses is in addition to any other relief to
which such other party may be entitled.
SECTION 7.04. Notices. All notices or other communications required
or permitted to be given hereunder shall be in writing and shall be delivered by
hand or sent,
<PAGE>
28
postage prepaid, by registered, certified or express mail or reputable overnight
courier service and shall be deemed given when so delivered by hand, or if
mailed, three days after mailing (one business day in the case of express mail
or overnight courier service), as follows:
(i) if to the Company,
c/o Data Broadcasting Corporation
1900 South Norfolk Street
San Mateo, CA 94403
Attention of Larry Kramer
with a copy to CBS and DBC as set forth below;
(ii) if to CBS,
CBS Inc.
51 West 52nd Street
New York, NY 10019
Attention of Derek Reisfield
with copies to:
CBS Inc.
51 West 52nd Street
New York, NY 10019
Attention of Sanford Kryle, and
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention of Peter S. Wilson, Esq.; and
(iii) if to DBC,
Data Broadcasting Corporation
1900 South Norfolk Street
San Mateo, CA 94403
Attention of Mark Imperiale
<PAGE>
29
with a copy to:
Camhy Karlinsky & Stein LLP
1740 Broadway
Sixteenth Floor
New York, NY 10019
Attention of Alan I. Annex, Esq.
SECTION 7.05. Interpretation; Exhibits and Schedules; Certain
Definitions. (a) The headings contained in this Agreement, in any Exhibit or
Schedule hereto and in the table of contents to this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. All Exhibits and Schedules annexed hereto or referred to herein
are hereby incorporated in and made a part of this Agreement as if set forth in
full herein. Any capitalized terms used in any Schedule or Exhibit but not
otherwise defined therein, shall have the meaning as defined in this Agreement.
When a reference is made in this Agreement to a Section, Exhibit or Schedule,
such reference shall be to a Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated.
(b) For all purposes hereof:
"affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
"including" means including, without limitation.
"person" means any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Entity or other
entity.
"subsidiary" of any person means another person, an amount of the
voting securities, other voting ownership or voting partnership interests of
which is sufficient to elect at least a majority of its Board of Directors or
other governing body (or, if there are no such voting interests, 50% or more of
the equity interests of which) is owned directly or indirectly by such first
person.
SECTION 7.06. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been
<PAGE>
30
signed by each of the parties and delivered to each of the other parties.
SECTION 7.07. Entire Agreement. This Agreement and the Ancillary
Agreements, along with the Schedules and Exhibits thereto, contain the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersede all prior agreements and understandings
relating to such subject matter. Neither party shall be liable or bound to any
other party in any manner by any representations, warranties or covenants
relating to such subject matter except as specifically set forth herein or in
the Ancillary Agreements.
SECTION 7.08. Severability. If any provision of this Agreement (or
any portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstances.
SECTION 7.09. Amendments and Wavers. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties hereto. By an instrument in writing, any two parties hereto may waive
compliance by the third party with any term or provision of this Agreement that
such third party was or is obligated to comply with or perform.
SECTION 7.10. Consent to Jurisdiction. Each of CBS, DBC and the
Company irrevocably submits to the exclusive jurisdiction of (a) the Supreme
Court of the State of New York, New York County, and (b) the United States
District Court for the Southern District of New York, for the purposes of any
suit, action or other proceeding arising out of this Agreement, any Ancillary
Agreement or any transaction contemplated hereby or thereby. Each of CBS, DBC
and the Company agrees to commence any such action, suit or proceeding either in
the United States District Court for the Southern District of New York or if
such suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New York
County. Each of CBS, DBC and the Company further agrees that service of any
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth above shall be effective service of process for any
action, suit or proceeding in New York with respect to any matters to which it
has submitted
<PAGE>
31
to jurisdiction in this Section 7.10. Each of CBS, DBC and the Company
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement, any Ancillary
Agreement or the transactions contemplated hereby and thereby in (i) the Supreme
Court of the State of New York, New York County, or (ii) the United States
District Court for the Southern District of New York, and hereby and thereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
SECTION 7.11. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
<PAGE>
IN WITNESS WHEREOF, CBS, DBC and the Company have duly executed this
Agreement as of the date first written above.
CBS INC.
by /s/ Fredric A. Reynolds
-------------------------------------
Name: Fredric A. Reynolds
Title: Chief Financial Officer
DATA BROADCASTING CORPORATION
by /s/ Mark F. Imperiale
-------------------------------------
Name: Mark F. Imperiale
Title: President
MARKETWATCH.COM, LLC
by /s/ Derek R. Reisfield
-------------------------------------
Name: Derek R. Reisfield
Title: Chairman
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "AGREEMENT") is made and entered
into as of March 28, 2000 (the "EFFECTIVE DATE") by and among MarketWatch.com,
Inc., a Delaware corporation (the "COMPANY"), and the parties listed on the
Schedule of Investors attached to this Agreement as EXHIBIT A (each hereinafter
individually referred to as an "INVESTOR" and collectively referred to as the
"INVESTORS").
WHEREAS, the Company desires to sell to the Investors, and the
Investors desire to purchase from the Company, shares of the Company's Common
Stock on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, the parties hereby agree as follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
1.1 AUTHORIZATION. As of the Closing (as defined below) the
Company will have authorized the issuance, pursuant to the terms and conditions
of this Agreement, of up to 2,273,628 shares of the Company's Common Stock, par
value $0.01 per share.
1.2 AGREEMENT TO PURCHASE AND SELL. The Company agrees to sell
to each Investor at the Closing, and each Investor agrees, severally and not
jointly, to purchase from the Company at the Closing, the number of shares of
Common Stock at the price per share and type of consideration set forth beside
such Investor's name on EXHIBIT A. Cash consideration paid by an Investor shall
be allocated among all shares purchased by such Investor so that all of such
shares will be "fully paid" under applicable law. The shares of Common Stock
purchased and sold pursuant to this Agreement will be collectively hereinafter
referred to as the "PURCHASED SHARES."
2. CLOSING. The purchase and sale of the Purchased Shares will take
place at the offices of Fenwick & West LLP, Two Palo Alto Square, Palo Alto,
California, at 10:00 a.m. Pacific Time, on that certain date on which all
applicable waiting periods (and all extensions thereof) under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR ACT") shall have
expired or otherwise been terminated (or such later date following the
satisfaction or waiver of all of the conditions set forth in Sections 5 and 6
hereof) or at such other time and place as the Company and the Investors
mutually agree upon (which time and place are referred to in this Agreement as
the "CLOSING"). At the Closing, the Company will deliver to each Investor a
certificate representing the number of Purchased Shares that such Investor has
agreed to purchase hereunder as shown on EXHIBIT A against delivery to the
Company by such Investor of the full purchase price of such Purchased Shares set
forth beside such Investor's name on EXHIBIT A.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Investor as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company
has been duly incorporated and organized, and is validly existing in good
standing, under the laws of the State of Delaware. The Company has the corporate
power and authority to enter into and
<PAGE>
perform this Agreement, to own and operate its properties and assets and to
carry on its business as currently conducted and as presently proposed to be
conducted. The Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where failure to be so
qualified would have a material adverse effect on the business, assets or
financial condition of the Company taken as a whole.
3.2 CAPITALIZATION. The capitalization of the Company
immediately prior to the Closing consists of the following:
(a) PREFERRED STOCK. A total of 5,000,000 authorized
shares of preferred stock, par value $0.01 per share, of which none are issued
and outstanding.
(b) COMMON STOCK. A total of 30,000,000 authorized
shares of common stock, par value $0.01 per share (the "COMMON STOCK"), of which
approximately 14,108,696 shares were issued and outstanding as of March 20, 2000
(subject to increase only by employee stock option exercises subsequent to March
20, 2000).
(c) OPTIONS, WARRANTS, RESERVED SHARES. Except for
(i) the rights of first refusal granted to certain stockholders under Section 9
of that certain Stockholders' Agreement dated as of January 13, 1999, as amended
(the "STOCKHOLDERS' AGREEMENT"), by and among the Company and such stockholders
(the "EXISTING REFUSAL RIGHTS"), (ii) the 3,685,824 shares of Common Stock
reserved for issuance under the Company's stock option plans under which options
to purchase 2,001,575 shares are outstanding as of March 20, 2000 (subject to
increase prior to the Closing due to option grants in the ordinary course), and
(iii) options to purchase 150,000 shares of the Company's Common Stock issued
outside of the Company's stock option plans, there is no outstanding option,
warrant, right (including conversion or preemptive rights) or agreement for the
purchase or acquisition from the Company of any shares of its capital stock or
any securities convertible into or ultimately exchangeable or exercisable for
any shares of the Company's capital stock. Apart from the exceptions noted in
this Section 3.2(c), and except for any rights of first refusal held by the
Company to purchase shares of its stock issued under the Company's stock option
plans, no shares of the Company's outstanding capital stock, or stock issuable
upon exercise or exchange of any outstanding options, warrants or rights, or
other stock issuable by the Company, are subject to any preemptive rights,
rights of first refusal or other rights to purchase such stock (whether in favor
of the Company or any other person), pursuant to any agreement or commitment of
the Company.
(d) The outstanding shares of the capital stock of
the Company are duly authorized and validly issued, fully paid and
nonassessable.
3.3 DUE AUTHORIZATION. All corporate action on the part of the
Company's directors and stockholders necessary for the authorization, execution,
delivery of, and the performance of all obligations of the Company under, this
Agreement, the authorization, issuance, reservation for issuance and delivery of
all of the Purchased Shares being sold under this Agreement has been taken or
will be taken prior to the Closing, and this Agreement constitutes a valid and
legally binding obligation of the Company, enforceable in accordance with its
terms, except as may be limited by (i) applicable bankruptcy, insolvency,
reorganization or others laws of general application relating to or affecting
the enforcement of creditors' rights generally and (ii) the effect of rules of
law governing the availability of equitable remedies.
2
<PAGE>
3.4 VALID ISSUANCE OF STOCK.
(a) The Purchased Shares, when issued and paid for as
provided in this Agreement will be duly authorized and validly issued, fully
paid and nonassessable.
(b) Based in part on the representations made by the
Investors in Section 4 hereof, the offer and sale of the Purchased Shares solely
to the Investors in accordance with this Agreement are exempt from the
registration and prospectus delivery requirements of the U.S. Securities Act of
1933, as amended (the "1933 ACT") and the securities registration and
qualification requirements of the currently effective provisions of the
securities laws of the States in which the Investors are resident based upon
their addresses set forth on the Schedule of Investors attached hereto as
EXHIBIT A.
3.5 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority is required on
the part of the Company in order to enable the Company to execute, deliver and
perform its obligations under this Agreement EXCEPT FOR such qualifications or
filings under applicable securities laws as may be required in connection with
the transactions contemplated by this Agreement. All such qualifications and
filings will, in the case of qualifications, be effective on the Closing and
will, in the case of filings, be made within the time prescribed by law.
3.6 COMMISSION FILINGS AND FINANCIAL STATEMENTS. The Company
has filed all forms, reports and documents (the "SEC DOCUMENTS") required to be
filed by it with the U.S. Securities and Exchange Commission (the "COMMISSION")
pursuant to the 1933 Act or the U.S. Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), as the case may be, and the rules and regulations of the
Commission thereunder since January 13, 1999 through the date of this Agreement.
As of their respective filing dates, the SEC Documents complied in all material
respects with the requirements of the 1933 Act or the Exchange Act, as the case
may be, and the rules and regulations of the Commission thereunder applicable to
such SEC Documents, and none of the SEC Documents contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their respective
filing dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with the applicable
accounting requirements and the rules and regulations of the Commission
thereunder and were prepared in accordance with generally accepted accounting
principles consistently applied (except as may be indicated in the notes
thereto) and fairly presented, in all material respects, the financial position
of the Company as at the dates thereof and the results of operations and cash
flows of the Company for the periods then ended (subject, in the case of
unaudited statements, to normal, recurring audit adjustments not material in
scope or amount).
3.7 ABSENCE OF CHANGES. Since December 31, 1999 through the
date of this Agreement, there has not been (i) any material adverse change in
the business, assets or financial condition of the Company, (ii) any transaction
that is material to the Company, except transactions entered into in the
ordinary course of business, (iii) any obligation, direct or contingent, that is
material to the Company incurred by the Company, except obligations
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incurred in the ordinary course of business, (iv) any change in the capital
stock or outstanding indebtedness of the Company that is material to the
Company, other than the authorization by the Board of Directors (the "BOARD") of
the Company of an increase in the number of shares of the Company's Common Stock
subject to the Company's 1998 Equity Incentive Plan (the "PLAN") by additional
1,500,000 shares, (v) any dividend or distribution of any kind declared, paid or
made on the capital stock of the Company, or (vi) any loss or damage (whether or
not insured) to the property of the Company which has been sustained or will
have been sustained which has a material adverse effect on the business, assets
or financial condition of the Company.
3.8 SUBSIDIARIES. The Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
partnership, trust, joint venture, association, or other entity, other than (i)
BigCharts Inc., a wholly-owned subsidiary of the Company, and (ii) a joint
venture established pursuant to that certain Joint Venture Agreement made on
January 6, 2000 between the Company and Financial Times Group Limited.
3.9 LITIGATION. There is no action, suit, proceeding, claim,
arbitration or investigation pending ("LITIGATION") (or, to the Company's
knowledge, currently threatened) against the Company, its activities, properties
or assets or, to the Company's knowledge, against any officer, director or
employee of the Company in connection with such officer's, director's or
employee's relationship with, or actions taken on behalf of, the Company, except
for any such Litigation that individually or in the aggregate would have no
material adverse impact on the Company's business.
3.10 STATUS OF PROPRIETARY ASSETS. The Company has full title
and ownership of, or is duly licensed under or otherwise authorized to use, all
patents, patent applications, trademarks, domain names, service marks, trade
names, copyrights, mask works, trade secrets, confidential and proprietary
information, designs and proprietary rights, necessary to enable it to carry on
its business as now conducted without any conflict with or infringement of the
rights of others. Notwithstanding the foregoing, no representation or warranty
is made with respect to (i) trademarks, service marks and other proprietary
rights licensed to the Company by CBS Broadcasting Inc. and/or its affiliates,
and/or (ii) the enforceability of any rights of the Company in, or the ability
of the Company to use, any trademarks or service marks containing the words
"MarketWatch" or "MarketWatch.com." The Company has not received any written
communication from any party or agent thereof alleging that the Company's use of
the marks "MarketWatch" or "MarketWatch.com" may infringe such party's trademark
rights.
3.11 COMPLIANCE WITH LAW AND DOCUMENTS. The Company is not in
violation or default of any provisions of its Certificate of Incorporation or
Bylaws, both as amended, and to the Company's knowledge, except for any
violations that individually or in the aggregate would have no material adverse
impact on the Company's business, the Company is in compliance with all
applicable statutes, laws, regulations and executive orders of the United States
of America and all states or other governmental bodies and agencies having
jurisdiction over the Company's business or properties. The Company has not
received any notice of any violation of any such statute, law, regulation or
order which has not been remedied prior to the date hereof. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby or thereby will not result in any such
violation or default, or be in conflict with or result in a violation or breach
of, with or without the passage of time or
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the giving of notice or both, the Company's Certificate of Incorporation or
Bylaws, any judgment, order or decree of any court or arbitrator to which the
Company is a party or is subject, any agreement or contract of the Company that
is material to the Company's business (taken as a whole), or, to the Company's
knowledge, a violation of any statute, law, regulation or order, or an event
which results in the creation of any lien, charge or encumbrance upon any asset
of the Company, except for defaults and violations that individually or in the
aggregate would have no material adverse impact on the Company's business.
3.12 TITLE TO PROPERTY AND ASSETS. The properties and assets
the Company owns are owned by the Company free and clear of all mortgages, deeds
of trust, liens, encumbrances and security interests except for statutory liens
for the payment of current taxes that are not yet delinquent and liens,
encumbrances and security interests which arise in the ordinary course of
business and which do not affect material properties and assets of the Company.
With respect to the property and assets it leases, the Company is in material
compliance with such leases.
3.13 TAX RETURNS AND PAYMENTS. The Company has timely filed
all tax returns and reports required by law. All tax returns and reports of the
Company are true and correct in all material respects. The Company has paid all
taxes and other assessments due, except those, if any, currently being contested
by it in good faith.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF INVESTORS.
Each Investor hereby represents and warrants to, and agrees with, the Company,
severally and not jointly, that:
4.1 AUTHORIZATION. All corporate action on the part of such
Investor and its officers, directors and stockholders necessary for the
authorization, execution and delivery of, and the performance of all obligations
of such Investor under, this Agreement has been taken or will be taken prior to
the Closing, and this Agreement constitutes such Investor's valid and legally
binding obligation, enforceable in accordance with its terms except as may be
limited by (i) applicable bankruptcy, insolvency, reorganization or other laws
of general application relating to or affecting the enforcement of creditors'
rights generally and (ii) the effect of rules of law governing the availability
of equitable remedies. Each Investor represents that such Investor has full
power and authority to enter into this Agreement.
4.2 PURCHASE FOR OWN ACCOUNT. The Purchased Shares to be
purchased by such Investor hereunder will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
public resale or distribution thereof within the meaning of the 1933 Act, and
such Investor has no present intention of selling, granting any participation
in, or otherwise distributing the same. If not an individual, such Investor also
represents that such Investor has not been formed for the specific purpose of
acquiring Purchased Shares.
4.3 DISCLOSURE OF INFORMATION. Such Investor has received or
has had full access to all the information it considers necessary or appropriate
to make an informed investment decision with respect to the Purchased Shares to
be purchased by such Investor under this Agreement. Such Investor further has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Purchased
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Shares and to obtain additional information (to the extent the Company possessed
such information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to such Investor or to which such
Investor had access. The foregoing, however, does not in any way limit or modify
the representations and warranties made by the Company in Section 3.
4.4 INVESTMENT EXPERIENCE. Such Investor understands that the
purchase of the Purchased Shares involves substantial risk. Such Investor: (i)
has experience as an investor in securities of companies in the development
stage and acknowledges that such Investor is able to fend for itself, can bear
the economic risk of such Investor's investment in the Purchased Shares and has
such knowledge and experience in financial or business matters that such
Investor is capable of evaluating the merits and risks of this investment in the
Purchased Shares and protecting its own interests in connection with this
investment and/or (ii) has a preexisting personal or business relationship with
the Company and certain of its officers, directors or controlling persons of a
nature and duration that enables such Investor to be aware of the character,
business acumen and financial circumstances of such persons.
4.5 ACCREDITED INVESTOR STATUS. Such Investor is an
"accredited investor" within the meaning of Regulation D promulgated under the
1933 Act.
4.6 RESTRICTED SECURITIES. Such Investor understands that the
Purchased Shares are characterized as "restricted securities" under the 1933 Act
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under the 1933 Act and applicable
regulations thereunder such securities may be resold without registration under
the 1933 Act only in certain limited circumstances. In this connection, such
Investor represents that such Investor is familiar with Rule 144 of the
Commission, as presently in effect, and understands the resale limitations
imposed thereby and by the 1933 Act. Such Investor understands that the Company
is under no obligation to register any of the securities sold hereunder except
as provided in that certain Registration Rights Agreement dated as of January
13, 1999, as amended, by and among the Company and certain stockholders.
4.7 FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations set forth above, such Investor further agrees not
to make any disposition of all or any portion of the Purchased Shares unless and
until:
(a) there is then in effect a registration statement under the
1933 Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or
(b) such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a
statement of the circumstances surrounding the proposed disposition,
and, at the expense of such Investor or its transferee, with an opinion
of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of such securities under the
1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be required for any transfer
of any Purchased Shares in compliance with Commission Rule 144; PROVIDED that in
each of the foregoing cases (other than any transfer of
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any Purchased Shares pursuant to such a registration statement or in compliance
with Commission Rule 144) the transferee agrees in writing to be subject to the
terms of this Section 4 (other than Section 4.5) to the same extent as if the
transferee were an original Investor hereunder.
4.8 LEGENDS. It is understood that the certificates evidencing
the Purchased Shares will bear the legend set forth below:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED
OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY
PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
The legend set forth above shall be removed by the Company from any certificate
evidencing Purchased Shares if a registration statement under the 1933 Act is at
that time in effect with respect to the legended security or if such security
can be freely transferred in a public sale without such a registration statement
being in effect and if such transfer will not jeopardize the exemption or
exemptions from registration pursuant to which the Company issued the Purchased
Shares.
In addition, it is understood that the certificates evidencing the Purchased
Shares will bear the legends set forth below, or legends substantially
equivalent thereto:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RIGHTS OF FIRST REFUSAL AS SET FORTH IN A STOCKHOLDERS' AGREEMENT DATED
AS OF JANUARY 13, 1999 ENTERED INTO BY THE HOLDER OF THESE SHARES, THE
COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY. A COPY OF SUCH
AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. SUCH RIGHT
OF FIRST REFUSAL IS BINDING ON CERTAIN TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
AGREEMENTS AND RESTRICTIONS WITH REGARD TO THE VOTING OF SUCH SHARES,
AS PROVIDED IN A STOCKHOLDERS' AGREEMENT DATED AS OF JANUARY 13, 1999
ENTERED INTO BY THE ORIGINAL HOLDER OF THESE SHARES, THE CORPORATION
AND CERTAIN STOCKHOLDERS OF THE CORPORATION. A COPY OF SUCH AGREEMENT
IS ON FILE AT THE PRINCIPAL OFFICE OF THE CORPORATION.
The legends set forth above shall be removed by the Company from any certificate
evidencing Purchased Shares upon the termination of such Stockholders'
Agreement.
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5. CONDITIONS TO INVESTORS' OBLIGATIONS AT CLOSING. The obligations of
each Investor under Section 2 of this Agreement are subject to the fulfillment
or waiver, on or before the Closing, of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
to such waiver, which consent may be given by written, oral or telephone
communication to the Company, its counsel or to special counsel to the
Investors:
5.1 REPRESENTATIONS AND WARRANTIES TRUE. Each of the
representations and warranties of the Company contained in Section 3 shall be
true and complete on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.
5.2 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein. The other Investor shall
simultaneously be completing the purchase of the Purchased Shares to be
purchased by such other Investor.
5.3 COMPLIANCE CERTIFICATE. The Company shall have delivered
to each Investor at the Closing a certificate signed on its behalf by its
President, Chief Executive Officer, or Chief Financial Officer certifying that
the conditions specified in Sections 5.1 and 5.2 have been fulfilled and stating
that there shall have been no material adverse change in the business, financial
condition, or assets of the Company since December 31, 1999.
5.4 SECURITIES EXEMPTIONS. The offer and sale of the Purchased
Shares to the Investors pursuant to this Agreement shall be exempt from the
registration requirements of the 1933 Act and the registration and/or
qualification requirements of all other applicable state securities laws.
5.5 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to each Investor and to the Investors' special counsel, and they shall
each have received all such counterpart originals and certified or other copies
of such documents as they may reasonably request. Such documents shall include
(but not be limited to) the following:
(a) CERTIFIED CHARTER DOCUMENTS. A copy of the
Amended and Restated Certificate of Incorporation and the Bylaws of the
Company (as amended through the date of the Closing), certified by the
Secretary of the Company as true and correct copies thereof as of the
Closing.
(b) CORPORATE ACTIONS. A copy of the resolutions of
the Board of Directors and, if required, the stockholders of the
Company evidencing the approval of this Agreement, the issuance of the
Purchased Shares and the other matters contemplated hereby.
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5.6 HART-SCOTT-RODINO ACT. All applicable waiting periods (and
all extensions thereof) under the HSR Act shall have expired or otherwise been
terminated.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to each Investor under this Agreement are subject to the
fulfillment or waiver on or before the Closing of each of the following
conditions by such Investor:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of such Investor contained in Section 4 shall be true and complete on
the date of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
6.2 PAYMENT OF PURCHASE PRICE. Each Investor shall have
delivered to the Company the purchase price specified for such Investor on
EXHIBIT A in accordance with the provisions of Section 2.
6.3 SECURITIES EXEMPTIONS. The offer and sale of the Purchased
Shares to the Investors pursuant to this Agreement shall be exempt from the
registration requirements of the 1933 Act, the qualifications requirements of
the Law and the registration and/or qualification requirements of all other
applicable state securities laws.
6.4 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Company and to the Company's legal counsel, and the Company
shall have received all such counterpart originals and certified or other copies
of such documents as it may reasonably request.
6.5 HART-SCOTT-RODINO ACT. All applicable waiting periods (and
all extensions thereof) under the HSR Act shall have expired or otherwise been
terminated.
7. GENERAL PROVISIONS.
7.1 SURVIVAL OF WARRANTIES. The representations, warranties
and covenants of the Company and the Investors contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of any of the Investors, their counsel or
the Company, as the case may be.
7.2 EXISTING REFUSAL RIGHTS. Each of the Investors hereby
waives (i) its right to notice with respect to the Existing Refusal Rights (as
defined in Section 3.2) as they apply to the issuance and sale of the Purchased
Shares and (ii) agrees that such issuance and sale pursuant to this Agreement
satisfies its Existing Refusal Rights with respect to the issuance and sale of
the Purchased Shares.
7.3 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.
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7.4 GOVERNING LAW. This Agreement shall be governed by and
construed under the internal laws of the State of Delaware, without reference to
principles of conflict of laws or choice of laws.
7.5 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
7.6 HEADINGS. The headings and captions used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.
7.7 NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on EXHIBIT A or, in the case of the Company, at
MarketWatch.com, Inc.,
825 Battery Street,
San Francisco, California 94111,
Attention: Joan P. Platt
Facsimile: (415) 392-1914
with a copy to
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, California 94306
Attention: Jeffrey R. Vetter, Esq.
Facsimile: (650) 494-1417
or at such other address as any party or the Company may designate by giving ten
(10) days advance written notice to all other parties.
7.8 NO FINDER'S FEES. Each party represents that it neither is
nor will be obligated for any finder's or broker's fee or commission in
connection with this transaction. Each Investor agrees to indemnify and to hold
harmless the Company from any liability for any commission or compensation in
the nature of a finders' or broker's fee (and any asserted liability) for which
the Investor or any of its officers, partners, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless each Investor
from any liability for any commission or compensation in the nature of a
finder's or broker's fee (and any asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.
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7.9 COSTS, EXPENSES. Each party to this Agreement shall bear
its own fees and expenses (including, without limitation, the fees and expenses
of its legal counsel) in connection with the preparation, execution and delivery
of this Agreement and the issuance of the Purchased Shares.
7.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
Purchased Shares representing at least a majority of the aggregate number of
shares of the Purchased Shares (excluding any of such shares that have been sold
to the public or pursuant to Commission Rule 144). Any amendment or waiver
effected in accordance with this Section shall be binding upon each holder of
any Purchased Shares at the time outstanding, each future holder of such
securities, and the Company; PROVIDED, HOWEVER, that no condition set forth in
Section 5 may be waived with respect to any Investor who does not consent
thereto.
7.11 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
7.12 ENTIRE AGREEMENT. This Agreement, together with all
exhibits and schedules hereto, constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior negotiations, correspondence, agreements,
understandings duties or obligations between the parties with respect to the
subject matter hereof.
7.13 FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of any Investor or the Company, the Company and the
Investors shall execute and deliver such instruments, documents or other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
MARKETWATCH.COM, INC. CBS BROADCASTING INC.
By:/s/ Joan P. Platt By: /s/ Fredric G. Reynolds
------------------------- -----------------------------
Name: Joan P. Platt Name: Fredric G. Reynolds
--------------------- ---------------------------
Title: CEO Title: Executive President, Chief
---------------------- Financial Officer
--------------------------
DATA BROADCASTING CORPORATION
By: /s/ Stuart J. Clark
-----------------------------
Name: Stuart J. Clark
----------------------------
Title: President and CEO
---------------------------
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Exhibit 99.3
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (the "Agreement") is made and entered into as
of January 13, 1999, by and among CBS Broadcasting Inc., a New York corporation
("CBS"), and Data Broadcasting Corporation, a Delaware corporation ("DBC")
(hereinafter referred to collectively as the "Stockholders" and each singly as
"Stockholder"), MarketWatch.com. Inc., a Delaware corporation (the "Company"),
and Marketwatch.Com LLC, a Delaware limited liability company (the "LLC").
RECITALS
WHEREAS, the parties hereto are parties to a Merger Agreement, dated as of
the date hereof, pursuant to which the LLC will be merged with and into the
Company for the purpose of operating the business of the LLC in a corporate form
(the "Merger");
WHEREAS, as a result of the Merger, the LLC will cease to exist, however,
the parties hereto desire to enter into this Stockholders' Agreement;
WHEREAS. the parties hereto also desire to amend certain provisions of the
Contribution Agreement (the "Contribution Agreement") dated as of October 29,
1997, between the Stockholders and the LLC;
NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereby, intending to be legally bound by the terms
hereof, agree as follows:
1. CERTAIN DEFINITIONS.
1.1 Business. The term "Business" means, collectively the Internet-based
business and financial news and information service offered by the Company,
which includes, without limitation, the businesses conducted with the assets
contributed to the Company by DBC pursuant to the Contribution Agreement as such
businesses may be expanded or otherwise changed from time to time by the
Company.
1.2 Business Day The term "Business Day" means a day that is not a
Saturday, Sunday or other day on which banking institutions in the State of New
York are authorized or required by law, regulation or executive order to be
closed.
1.3 Common Stock. The term "Common Stock" means the Common Stock, $0.01
par value per share of the Company.
1.4 Convertible Securities. The term "Convertible Securities" mean any
securities convertible into or exchangeable for Voting Securities or any
options, warrants or other rights exercisable to acquire Voting Securities.
<PAGE>
1.5 Initial Percentage. The term "Initial Percentage" means the percentage
of then Total Voting Power of the Company represented by the Voting Securities
held by a Stockholder at the time of the consummation of the Company's initial
public offering.
1.6 Offered Securities. The term "Offered Securities" means all Securities
proposed to be Transferred by a Stockholder or, if applicable, an affiliate of a
Stockholder.
1.7 Person. The term "Person" means any natural person, legal entity, or
other organized group of persons or entities. (All pronouns, whether personal or
impersonal, which refer to Person include natural persons and other Persons).
1.8 Securities. The term "Securities" shall mean Voting Securities and
Convertible Securities.
1.9 Total Voting Power. The term "Total Voting Power" means, at any time,
the total number of votes that may be cast in the election of directors of the
Company at any meeting of the holders of Voting Securities held at such time for
such purpose.
1.10 Transfer and Transferred. The terms "Transfer" and "Transferred" mean
and include any sale, assignment. encumbrance, hypothecation, pledge, conveyance
in trust, gift, transfer by bequest, devise or descent, or other transfer or
disposition of any kind, including but not limited to, transfers to receivers,
levying creditors, trustees or receivers in bankruptcy proceedings or general
assignments for the benefit of creditors, whether voluntary or by operation of
law, directly or indirectly, except for:
(a) any transfer of Securities by CBS or DBC to any entity
controlling, controlled by or under common control with CBS or DBC, or to any
entity that acquires CBS of DBC by purchase of stock or by merger or otherwise;
(b) any transfer of Securities by a Stockholder made: (i) pursuant
to a statutory merger or statutory consolidation of the Company with or into
another corporation or corporations; or (ii) pursuant to the winding up and
dissolution of the Company; or
(c) any transfer of Securities by a Stockholder pursuant to a
Stockholder's exercise of such Stockholder's right of first refusal hereunder.
1.11 Voting Power. The term "Voting Power" means, as to any Voting
Security at any time, the number of votes such Voting Security is entitled to
cast for directors of the Company at any meeting of the holders of Voting
Securities held at such time for such purpose.
1.12 Voting Securities. The term "Voting Securities" means the Common
Stock and any other securities issued by the Company having the power to vote in
the election of directors of the Company, including without limitation any
securities having such power only upon the occurrence of a default or any other
extraordinary contingency.
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2. MANDATORY TRANSFERS.
2.1 DBC Change of Control. Notwithstanding anything herein to the
contrary, and absent agreement of the Stockholders to do otherwise, CBS shall
have the right (but not the obligation) in its sole discretion to purchase DBC's
Securities or require that such Securities be transferred to an independent
trustee, as provided in Section 2.2 within 60 days after a competitor of CBS has
directly or indirectly acquired beneficial ownership of more than 30% of the
outstanding shares of the common stock, or securities representing, in the
aggregate, more than 30% of the voting power, of DBC (or any person controlling
DBC), or all or substantially all of DBC's assets (a "DBC Change of Control"),
at a time when DBC and is affiliates shall then own in the aggregate number of
shares of Common Stock equal to at least ten percent (10%) of the outstanding
shares of Common Stock on the IPO Closing Date (defined below) (appropriately
adjusted to reflect any stock splits, reverse stock splits, stock dividends,
recapitalizations and other similar transactions occurring subsequent to the IPO
Closing Date), without the prior written consent of CBS (a "Triggering Event").
The parties hereby agree that DBC may give CBS confidential written notice of
its intent to enter into an agreement which would cause a DBC Change of Control,
together with a description of the party with whom DBC intends to effect such a
transaction. CBS shall have twenty (20) days from receipt of such notice to
respond to DBC in writing as to whether it would elect to trigger the provisions
of this Section 2 with respect to such potential DBC Change of Control. If, and
only if, CBS notifies DBC in writing that it would not make such election, CBS
shall be deemed to have waived its right to trigger such mandatory transfer
provisions with respect to such potential DBC Change of Control.
2.2 Transfer of Shares. Upon the occurrence of a DBC Change of Control,
CBS may elect one of the following within 45 days after written notice from DBC
that a DBC Change of Control has occurred:
(a) (i) CBS may offer to purchase the Securities then held by DBC
and its affiliates, and DBC and its affiliates shall be required to sell to CBS,
such sale to occur no later than 10 days after DBC's receipt of CBS' written
offer to purchase such Securities, at a purchase price for the Securities held
by DBC and its affiliates equal to the Fair Market Value of the Securities on
the date of the Triggering Event.
(ii) Notwithstanding the foregoing provisions of Section
2.2(a)(i), if (y) any legal or regulatory requirements, including, without
limitation, those imposed by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended must be first satisfied prior to making such sale or (z) the
Fair Market Value must be determined according to the terms of subsection (b) of
the definition of Fair Market Value, then such sale shall be made within two
days of the satisfaction of such legal requirements or of the determination of
the Fair Market Value of the Securities, as applicable.
(iii) Upon the date that payment is made for the Securities,
DBC and its affiliates will have no further rights as a holder of such
Securities and DBC and its affiliates will forthwith cause all certificate(s)
evidencing such Securities to be surrendered to the Company or
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its transfer agent for cancellation and new certificates evidencing such
Securities will be promptly delivered to CBS.
(b) CBS may require DBC to transfer all Securities then held by DBC
and its affiliates to an independent trustee reasonably satisfactory to CBS,
which trustee shall then dispose of such Securities formerly held by DBC and its
affiliates to purchaser(s) that is/are not competitor(s) of CBS, subject to the
foregoing, in such a manner as such trustee shall determine with a view to
maximizing the sale price of the shares formerly held by DBC and its affiliates,
while disposing of such shares as promptly as reasonably practicable. Upon such
transfer, such trustee shall have sole voting and dispositive control over such
Securities, DBC shall no longer be entitled to appoint any DBC Designees and all
current DBC Designees shall resign from their positions as members of the
Company's Board of Directors. Unless otherwise agreed in writing by CBS, any
trustee appointed pursuant to this Section 2.2(b) shall be a bank or trust
company incorporated or otherwise organized under the laws of the United States
or a state thereof and having a combined capital and surplus of at least
$100,000,000. The provisions of Article 8 of this Agreement shall not be
applicable to such trustee. Any such trustee shall perform its duties upon
customary terms pursuant to documentation reasonably satisfactory to CBS. it
being understood and agreed that, without the prior written consent of CBS, no
such trustee shall vote any Securities held by it at any meeting of the
stockholders of the Company or otherwise.
"Fair Market Value" of the Securities shall mean (a), for any
Security that is listed on a national securities exchange or authorized for
trading on the National Association of Securities Dealers Nasdaq Stock Market or
other automated quotation system, the average of the closing prices for the five
day period ending on the date of the Triggering Event; and (b), for any other
Security, such price as is determined by an appraiser chosen by the members of
the Company's Board of Directors who are neither employees of the Company, CBS
Designees (defined below) or DBC Designees (defined below) or otherwise
affiliated with or employed by either of CBS, DBC or one of their respective
affiliates (other than as serving as an independent member of the Company's
Board of Directors) (the "Independent Directors"). If there are no Independent
Directors, then Fair Market Value for purposes of this Subsection (b) only,
shall be determined by a panel of appraisers, one (1) chosen by CBS, one (1)
chosen by DBC and the third to be chosen by the first two (2) appraisers. If the
appraisers cannot reach agreement within thirty (30) days of the date of the
Triggering Event, then each appraiser shall deliver its appraisal within 40 days
of the Triggering Event and the appraisal which is neither the highest nor the
lowest shall constitute the Fair Market Value. In the event either Stockholder
fails to choose an appraiser within thirty (30) days of the date of the
Triggering Event, then the appraisal of the sole appraiser shall constitute the
Fair Market Value. Each party shall bear the cost of the appraiser selected by
such Stockholder and the cost of the third appraiser shall be borne one-half by
each Stockholder. In the event either party fails to choose an appraiser, the
cost of the sole appraiser shall be borne one-half by each Stockholder.
2.3 Termination Payment. Upon the termination of the Amended and Restated
License dated as of the date hereof between CBS and the Company (the "Amended
and Restated License") in accordance with its terms, CBS may elect to terminate
its advertising obligation under Section 1.04 of the Contribution Agreement. In
the event CBS elects to exercise this
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termination right, CBS shall pay to the Company a cash payment in the amount of
$500,000 times the number of full calendar months from the date of such
termination remaining until October 2002.
3. AGREEMENT NOT TO COMPETE.
3.1 Agreement of DBC Not To Compete. DBC understands that the Company
shall be entitled to protect and preserve the going concern value of the
Business to the extent permitted by law and, therefore, until October 29, 2005,
DBC shall not, and DBC shall not authorize or permit another Person to, without
the prior written consent of the Company:
(a) (i) sell advertising on an Internet Web site that has as its
primary function and as its principal theme and format the delivering of
comprehensive real-time or delayed stock quotations and financial news in the
English language to consumers or (ii) use the Internet to sell real-time
snap-quotes to individual subscribers or customers who pay a fee for such
information ("Competitive Activities");
(b) solicit, recruit or hire any employees of the Business or person
who has worked for the Business;
(c) solicit or encourage any employee of the Business to leave the
employment of the Business; and
(d) disclose or furnish to anyone any confidential information
relating to the Business or otherwise using such confidential information for
its own benefit or the benefit of any other person.
The Company acknowledges that the maintenance and continued
operation of the dbc.com Web site by DBC shall not be considered to be a
violation of this Section 3.1 provided that dbc.com does not engage in any
Competitive Activities. In addition, this Section 3.1 shall not be deemed
breached as a result of the maintenance, operation, sale or transmission over
the Internet of DBC's existing products, including, but not limited to, Bond Vu,
BondEdge, InSite, Signal Online, and StockEdge Online.
3.2 Non-Competing Activities. The Company acknowledges and agrees that the
following are either not within the express terms of the prohibitions contained
in Section 3.1 or, if so, shall nevertheless be excluded from said prohibitions:
(a) the ownership by DBC of less than an aggregate of 5% of any
class of stock of a Person engaged, directly or indirectly, in Competitive
Activities;
(b) the ownership by DBC of less than 10% in value of any instrument
of indebtedness of a Person engaged, directly or indirectly, in Competitive
Activities;
(c) an Internet service or Web site that delivers general news or
sports or entertainment content with a financial news segment or portion
included, will not be considered
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to have as its primary function or as its principal theme and format the
delivering of comprehensive real-time or delayed stock market quotations and
financial news in the English language to consumers;
(d) an Internet service or Web site will not be considered to have
as its primary function or as its principal theme and format the delivering of
comprehensive real-time or delayed stock market quotations and financial news in
the English language to consumers solely on the basis of its providing a stock
price ticker crawl line;
(e) any activity conducted by DBC and/or its Affiliates as of
January 13, 1999, the execution date of this Agreement; or
(f) any Internet services in which DBC has an interest as of January
13, 1999, the execution date of this Agreement.
3.3 Agreement of the Company not to Compete. The Company agrees that
subsequent to the date hereof through October 29, 2005 or, at such earlier time
(i) as the Amended and Restated Services Agreement has terminated, (ii) upon the
occurrence of a DBC Change of Control, or (iii) at such time as DBC shall hold
less than 10% of the then-outstanding Voting Securities, it will not, except
through DBC, sell any product or service that offers streaming real-time stock
price quotes.
3.4 Enforcement. Notwithstanding any other provision of this Agreement, it
is understood and agreed that the remedies at law would be inadequate in the
case of any breach of the covenant contained in Sections 3.1 or 3.3. Therefore,
the Company or DBC, as the case may be, shall be entitled to equitable relief,
including the remedy of specific performance, with respect to any breach or
attempted breach of such covenant.
3.5 Termination. The Stockholders and the Company acknowledge that the
provisions of this Section 3 shall terminate and cease to apply in the event
that the Company is dissolved or liquidated.
4. DBC CONTRIBUTION. DBC acknowledges that as of each of October 29, 1997 and
October 29, 1998, it had contributed $1,000,000 to the LLC.
5. ASSIGNMENT OF CONTRIBUTION AGREEMENT.
5.1 Assignment and Assumption. Effective immediately upon the dare of this
Agreement, the LLC hereby assigns, transfers, and sets over to the Company all
of LLC's right, title, and interest in and to the Contribution Agreement and its
rights and obligations thereunder and the Company does hereby agree to assume
and does hereby assume all of the obligations and liabilities of LLC related to
the Contribution Agreement.
5.2 Consent of CBS and DBC. Each of CBS and DBC consent to the assignment
and assumption provided for in Section 5.1 hereof.
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6. AMENDMENTS TO CONTRIBUTION ARRANGEMENT.
6.1 Amendments
(a) Section 1.04 of the Contribution Agreement is hereby amended to
delete the reference to "$50 million" in the fifth line thereof and insert "$30
million" therefor and by adding the CBS termination rights described in Section
2.3 hereof.
(b) Exhibit B to the Contribution Agreement is deleted and replaced
in its entirety with the Amended and Restated License Agreement attached hereto
as Exhibit 5.1(b).
(c) Exhibit C to the Contribution Agreement is deleted and replaced
in its entirety with the Amended and Restated Services Agreement attached hereto
as Exhibit 5.1(c).
(d) Exhibit D to the Contribution Agreement is amended by deleting
the last sentence of paragraph 2 thereto.
6.2 Full Force. Except as expressly amended hereby, the Contribution
Agreement shall remain in full force and effect, except to reflect the change of
the LLC's organization from a limited liability company to a corporation as a
result of the Merger.
7. DIRECTOR NOMINATION RIGHTS.
7.1 Board Size. The Company shall maintain a Board of Directors of at
least seven (7) members and shall use its best efforts to maintain a Board of
Directors of nine (9) members immediately after the IPO Closing Date (defined
below).
7.2 Designee. For so long as CBS continues to own a number of Voting
Securities equal to at least one percent (1%) of the Company's outstanding
Voting Securities, the Company shall provide CBS, and for so long as DBC
continues to own a number of Voting Securities equal to at least one percent
(1%) of the outstanding Voting Securities, the Company shall provide DBC, thirty
(30) days prior written notice of any Stockholder solicitation or action
relating to the election of directors. After receipt of such notice by DBC, DBC
may, and after receipt of such notice by CBS, CBS may, by written notice sent to
the Company within ten (10) days of receipt of such notice, request that the
Company nominate, and the Company shall nominate, for election to the Company's
Board of Directors (the "Board of Directors"), in connection with such
Stockholder solicitation or action:
(a) one, if CBS holds a number of Voting Securities greater than or
equal to one percent (1%) but less than twenty percent (20%) of the Company's
outstanding Voting Securities, two, if CBS holds a number of Voting Securities
greater than or equal to twenty percent (20%) but less than thirty percent (30%)
of the Company's outstanding Voting Securities, and three, if CBS holds a number
of Voting Securities greater than or equal to thirty percent (30%) of the
outstanding Voting Securities, candidates designated in the CBS notice, who
shall be reasonably acceptable to the Company (collectively, the "CBS
Designees"); and
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(b) one, if DBC holds a number of Voting Securities greater than or
equal to one percent (1%) but less than twenty percent (20%) of thc Company's
outstanding Voting Securities, two, if DBC holds a number of Voting Securities
greater than or equal to twenty percent (20%) but less than thirty percent (30%)
of the outstanding Voting Securities, and three, if DBC holds a number of
Company's outstanding Voting Securities greater than or equal to thirty percent
(30%) of the Company's outstanding Voting Securities, candidates designated in
the DBC notice, who shall be reasonably acceptable to the Company (collectively,
the "DBC Designees").
In the event that CBS or DBC shall desire to appoint CBS Designees or DBC
Designees, as applicable, otherwise than in connection with a Stockholder
solicitation or action relating to the election of directors, then as soon as
practicable upon written notice from CBS or DBC, as applicable, the Company
shall appoint the CBS Designees or DBC Designees, as applicable, to the Board of
Directors.
In the event that the size of the Company's Board of Directors is
increased to a number greater than nine (9), the number of CBS and DBC Designees
shall be a number equal to the product of (A) the percentage of outstanding
Voting Securities held by such Stockholder times (B) the number of authorized
members of the Company's Board of Directors, rounded up to the nearest whole
number.
Notwithstanding the foregoing, for so long as the Amended and Restated
License remains in effect, CBS shall be entitled to select at least one CBS
Designee, regardless of the number of Voting Securities held by it.
7.3 Affiliates. For purposes of this Agreement, all shares held by an
affiliate (as defined in Rule 405 promulgated under the Securities Act of 1933,
as amended (the "Securities Act")) (each, an "Affiliate") of CBS or DBC, will be
deemed to be owned by CBS or DBC, as applicable.
7.4 Voting of Shares.
(a) The Company shall use its best efforts (i) to cause to be voted
the shares of Voting Securities for which the Company's management or the Board
of Directors holds proxies or is otherwise entitled to vote in favor of the
election of the CBS Designees and DBC Designees nominated pursuant to Section
7.2 to this Agreement; and (ii) to cause the Board of Directors to unanimously
recommend to its stockholders to vote in favor of the CBS Designees and the DBC
Designees.
(b) Each of CBS and DBC shall vote the shares of Voting Securities
held by it for the CBS Designees and the DBC Designees.
7.5 Vacancies. In the event that any CBS or DBC Designee shall cease to
serve as a director of the Company for any reason, the vacancy resulting
therefrom shall be filled by another CBS Designee or DBC Designee, as
applicable.
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7.6 Equal Treatment. The Company shall offer the same compensation and
shall provide rights and benefits of indemnity to each CBS Designee or DBC
Designee as are provided to other non-employee directors, provided however, that
none of the CBS Designees or DBC Designees shall be entitled to participate in
the Company's proposed 1998 Directors Stock Option Plan or any other equity
based plan.
8. RIGHT OF FIRST REFUSAL.
8.1 Notice. Before any Stockholder or affiliate of any Stockholder may
effect any Transfer of any Securities, such Stockholder or affiliate (the
"Selling Stockholder") must give at the same time to the Company and the other
Stockholder a written notice signed by the Selling Stockholder (the "Selling
Stockholder's Notice") stating (a) the Selling Stockholder's bona fide intention
to transfer such Offered Securities; (b) the number of Offered Securities
proposed to be transferred to each proposed purchaser or other transferee
("Proposed Transferee"); (c) the name, address and relationship, if any, to the
Selling Stockholder of each Proposed Transferee; and (d) the bona fide cash
price or, in reasonable detail, other consideration, per share for which the
Selling Stockholder proposes to transfer such Offered Securities to each
Proposed Transferee (the "Offered Price") and the proposed time of payment and
other relevant terms of the proposed sale. If such Selling Stockholder desires
to effect sales into the open market pursuant to Rule 144 promulgated under the
Securities Act ("Open Market Sale"), the Selling Stockholder's Notice shall also
contain the closing price of the Securities on the date prior to the date of
such notice which price shall constitute the Offered Price. Upon the request of
the Company or the other Stockholder, the Selling Stockholder will promptly
furnish to the Company and to the other Stockholder such other information as
may be reasonably requested to establish that the offer and Proposed
Transferee(s) are bona fide. In the event that the notice provisions of this
Section 8 make it impractical or impossible to comply with the notice provisions
of Section 1 of the Registration Rights Agreement, the parties hereto agree that
the notice provisions of the Registration Rights Agreement shall be modified or
waived to the extent necessary so as to permit the operation of this Section 8
in conjunction with the provisions of Section 1 of the Registration Rights
Agreement.
8.2 Stockholders' Right of First Refusal. The non-Selling Stockholder will
have a right of first refusal (the "Right of First Refusal") to purchase any
portion of the Offered Securities made available for purchase in the manner
provided in this Section 8.2 unless (a) the Offered Securities are to be sold in
a private sale to one purchaser, in which case the non-Selling Stockholder will
only be permitted to exercise its Right of First Refusal if it purchases all of
the Offered Securities, or (b) the Selling Stockholder is selling the Offered
Securities through a registered offering and the quantity of Offered Securities
that the non-Selling Stockholder proposes to purchase would, in the good faith
opinion of the managing underwriter, jeopardize the success of the offering. In
such a circumstance, the non-Selling Stockholder will only be permitted to
purchase either all of the Offered Securities or such Offered Securities, if
any, that would not, in the good faith opinion of the managing underwriter,
jeopardize the success of such offering. If the non-Selling Stockholder desires
to purchase any or all, as applicable, of the Offered Securities made available
for purchase such Stockholder must give written notice within the fifteen (15)
day period commencing on the date of the Selling Stockholder's Notice (the
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"Refusal Period"), to the Selling Stockholder (the "Purchase Notice") and to the
Company of such Stockholder's election to purchase the Offered Securities, and
the number of shares and type of Offered Securities that such Stockholder
desires to purchase, provided however, that in the case of a proposed Open
Market Sale, the non-Selling Stockholder must give the Purchase Notice prior to
5:00 p.m. Pacific time on the second Business Day after the non-Selling
Stockholder receives the Purchase Notice.
8.3 Purchase Price. The purchase price for the Offered Securities to be
purchased by the non-Selling Stockholder exercising its Right of First Refusal
under this Agreement will be the Offered Price, and will be payable as set forth
in Section 8.4 hereof. If the Offered Price includes consideration other than
cash, the cash equivalent value of the non-cash consideration will be the Fair
Market Value of such noncash consideration.
8.4 Payment. Payment of the purchase price for Offered Securities
purchased by a Stockholder exercising its Right of First Refusal will be made in
cash within ten (10) days after the date of the Purchase Notice, or if any legal
or regulatory requirements, including, without limitation, those imposed by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, must be first satisfied
prior to making such payment, within two (2) days after the satisfaction of such
legal requirements.
8.5 Rights of Stockholder. Upon the date that payment is made for the
Offered Securities purchased by the non-Selling Stockholder pursuant to the
Right of First Refusal hereunder, the Selling Stockholder will have no further
rights as a holder of such Offered Securities and the Selling Stockholder will
forthwith cause all certificate(s) evidencing such Offered Securities to be
surrendered to the Company or its transfer agent for cancellation and new
certificates evidencing such Offered Securities will be promptly delivered to
the purchasing Stockholder.
8.6 Selling Stockholder's Right to Transfer. If the non-Selling
Stockholder has not elected pursuant to its Right of First Refusal to purchase
all or a portion, as applicable, of the Offered Securities, the Selling
Stockholder may Transfer the Offered Securities to any person named as a
Proposed Transferee in the Selling Stockholder's Notice, at the Offered Price or
at a higher price, provided that such transfer (a) is consummated within one
hundred twenty (120) days after the date of the Selling Stockholder's Notice and
(b) is in accordance with the terms and conditions of this Agreement; provided
however, that in the case of a proposed Open Market Sale, such transfers must
take place within the six (6) week period following the date of the Selling
Stockholder's Notice. If the Offered Stock is transferred in accordance with the
terms and conditions of this Agreement to a non-affiliate, then the
transferee(s) of the Offered Stock will thereafter hold such Offered Securities
free of the Right of First Refusal and all other restrictions imposed by this
Agreement. If the Offered Securities are not so transferred during such one
hundred twenty (120) day period or such six (6) week period, as the case may be,
then the Selling Stockholder will not transfer any of such Offered Stock without
complying again in full with the provisions of this Agreement.
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8.7 Certain Transfers.
Notwithstanding the foregoing:
(i) If the Offered Securities will be sold by means of a
registered underwritten offering, then the Selling Stockholder's Notice need not
name any Proposed Transferee if such notice (x) states that the Offered
Securities will be sold by means of a broadly distributed offering and (y)
contains the proposed underwriter's good faith estimate of the public offering
price (the "Proposed Public Offering Price") based on then-current market
conditions. If the non-Selling Stockholder does not elect, pursuant to its Right
of First Refusal, to purchase all or a portion, as applicable, of the Offered
Securities at the proposed Public Offering Price, the Selling Stockholder may
transfer such Offered Securities as the non-Selling Stockholder has not elected
to so purchase at prices that are based on the prevailing market price for the
Offered Securities at the time of the sale of such Offered Securities even if
such market price is lower than the Proposed Public Offering Price.
(ii) If the Offered Securities will be sold pursuant to block
trades or other brokerage transactions, then the Selling Stockholder's Notice
need not name any Proposed Transferee nor any Offered Price. If the non-Selling
Stockholder does not elect, pursuant to its Right of First Refusal, to purchase
all of the Offered Securities on the date of the Selling Stockholder's Notice at
the closing market price for the Offered Securities on the date of the Selling
Stockholder's Notice, the Selling Stockholder may transfer such Offered
Securities at prices that are based on the prevailing market price in effect for
the Offered Securities at the time of the sale of such Offered Securities
through block trades or other brokerage transaction, even if such market price
is lower than the closing market price for such Offered Securities on the date
of the Selling Stockholder's Notice.
8.8 Legend. Each Stockholder understands and agrees that the Company will
cause the legend set forth below, or a legend substantially equivalent thereto,
to be placed upon any certificate(s) or other documents or instruments
evidencing ownership of Securities by the Stockholder:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RIGHTS OF FIRST REFUSAL AS SET FORTH IN A STOCKHOLDERS' AGREEMENT
DATED AS OF JANUARY 13, 1999 ENTERED INTO BY THE HOLDER OF THESE
SHARES, THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY. A COPY
OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
SUCH RIGHT OF FIRST REFUSAL IS BINDING ON CERTAIN TRANSFEREES OF
THESE SHARES.
The Company will cause such legend to be removed upon the termination of this
Agreement.
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8.9 Stock Transfer Instructions. Each Stockholder agrees, to ensure
compliance with the restrictions referred to herein, that the Company may issue
appropriate "stop transfer" certificates or instructions and that, if the
Company transfers its own securities, it may make appropriate notations to the
same effect in its records.
9. PARTICIPATION RIGHTS.
9.1 New Securities. If from time to time the percentage of the Total
Voting Power represented by the Voting Power of all Voting Securities then
owned, directly or indirectly, by a Stockholder (the "Applicable Percentage")
would be reduced as a result of any issuance of Voting Securities by the Company
or could be reduced as a result of any issuance of Convertible Securities by the
Company (in either case, whether for cash, property otherwise and, such
securities are referred to herein as "New Securities"), the Company shall so
notify the Stockholder in writing not less than ten (10) Business Days prior to
the proposed date of any such issuance and shall offer to sell to the
Stockholder, and, if such offer is accepted in writing by (x) if such issuance
is made pursuant to an underwriting or private placement purchase agreement, the
second Business Day prior to the date of execution of any such agreement (it
being understood that the Company will give the Stockholder at least four (4)
Business Day's prior notice of such date of execution) or (y) if such issuance
is not made pursuant to such an agreement, the fifth (5th) Business Day prior to
the proposed date of such issuance, the Company shall sell to the Stockholder
that portion of the Voting Securities or Convertible Securities to be issued
which would result in such Stockholder's Applicable Percentage immediately prior
to such issuance equaling the Stockholder's Applicable Percentage in effect
immediately prior to such issuance (assuming, in the case of Convertible
Securities, the conversion, exchange or exercise at such time of all Convertible
Securities), or any lesser portion of the Voting Securities or Convertible
Securities to be issued in such issuance as may be designated by the
Stockholder, in either case at a price per share or other trading unit of such
Voting Securities or Convertible Securities, as the case may he, equal to the
price per share or other trading unit of such Voting Securities or Convertible
Securities, as the case may be, to be received by the Company in such issuance,
less any underwriting discounts and commissions (the "Purchase Price"), and
otherwise on the same terms as may be applicable to such issuance; provided,
however, that a Stockholder shall not be entitled to purchase such Voting
Securities or Convertible Securities from the Company pursuant to this Section
9.1 to the extent that such purchase would cause such Stockholder to own,
directly or indirectly, Voting Securities representing an aggregate Voting Power
in excess of a percentage of the Total Voting Power of the Company equal to the
Initial Percentage after giving effect to the proposed issuance; provided,
further, however, that the preceding provisions shall not apply to issuances of:
(a) up to an aggregate of 1,500,000 shares of the Company's Common
Stock (and/or options or warrants therefor) issued to employees, officers,
directors, contractors, advisors or consultants of the Company pursuant to
incentive agreements or plans approved by the Board of Directors of the Company,
such number of shares being subject to proportional adjustment to reflect
subdivisions, combinations and stock dividends affecting the number of
outstanding shares of such stock; or
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(b) securities offered by the Company in its initial public offering
pursuant to a registration statement filed under the Securities Act; or
(c) up to an aggregate of 500,000 shares of the Company's Common
Stock (and/or options or warrants therefor) issued or issuable to parties as
approved by the Board of Directors for any corporate purpose, including, without
limitation, for providing the Company with equipment leases, real property
leases, loans, credit lines, guaranties of indebtedness, cash price reductions
or similar financing, such number of shares being subject to proportional
adjustment to reflect subdivisions, combinations and stock dividends affecting
the number of outstanding shares of such stock.
Notwithstanding the foregoing provisions, in the event the Company
proposes to issue Voting Securities or Convertible Securities for consideration
other than cash, then, in lieu of purchasing a portion of the Voting Securities
of Convertible Securities to be issued, the Stockholder shall be entitled to
require the Company to issue to such Stockholder at a per share price equal to
the Fair Market Value of the additional Voting Securities or Convertible
Securities such that immediately after such issuance, Stockholder's Applicable
Percentage equals such Stockholder's Applicable Percentage in effect immediately
prior to such issuance (assuming, in the case of Convertible Securities, the
conversion, exchange or exercise at such time of all Convertible Securities to
be issued in such issuance). For purposes of calculating the Fair Market Value
of such additional Voting Securities or Convertible Securities, the term
"Triggering Event" shall mean the date of the issuance of such Voting Securities
or Convertible Securities for consideration other than cash.
9.2 Additional Limitations on Participation Rights.
(a) Notwithstanding the provisions of Section 9.1, (i) if the
Company proposes to issue Voting Securities or Convertible Securities pursuant
to the first underwritten public offering of the Company subsequent to its
initial public offering (the "First Follow-On Offering") and a Stockholder would
otherwise be entitled to purchase a portion of such Voting Securities pursuant
to the provisions of Section 9.1, and (ii) if, in the opinion of the
underwriters of such First Follow-On Offering, the public trading market for the
Company's Common Stock would be significantly adversely affected if the
Stockholders exercised their participation rights contained in Section 9.1 with
respect to an amount of Voting Securities or Convertible Securities such that
after exercise of such participation right, the Applicable Percentage of such
Stockholder would be in excess of 25% (assuming, in the case of Convertible
Securities, the conversion, exchange or exercise at such time of all Convertible
Securities), then the Stockholders shall be permitted to exercise their
participation rights specified in Section 9.1 in connection with the First
Follow-On Offering only to the extent that such Stockholder's Applicable
Percentage would not exceed 25% after giving effect to the First Follow-On
Offering, or such higher percentage that would not, in the opinion of the
underwriters of such First Follow-On Offering, significantly adversely affect
such offering.
(b) In the event that a Stockholder was unable to exercise the
participation rights set forth in Section 9.1 to the extent it would have
otherwise been able to exercise as a
13
<PAGE>
result of the provisions of Section 9.2(a), then in the event the Company
proposes to issue Voting Securities or Convertible Securities subsequent to the
First Follow-On Offering, such Stockholder shall be entitled to purchase up to
that portion of the Voting Securities or Convertible Securities to be issued or
to purchase from the Company up to a number of additional Voting Securities or
Convertible Securities pursuant to Section 9.1 such that the Applicable
Percentage of such Stockholder immediately after such purchase equals no more
than such Stockholder's Applicable Percentage (not to exceed such Stockholder's
Initial Percentage) immediately prior to the First Follow-On Offering (assuming,
in the case of Convertible Securities, the conversion, exchange or exercise at
such time of all Convertible Securities).
9.3 Failure to Exercise. In the event that a Stockholder fails to exercise
the participation right within such ten (10) day period, then the Company shall
have 120 days thereafter to sell the New Securities with respect to which the
Stockholder's participation rights hereunder were not exercised, at a price and
upon general terms not materially more favorable to the purchasers thereof than
specified in the Company's notice to the Stockholders. In the event that the
Company has not issued and sold the New Securities within such 120 day period,
then the Company shall not thereafter issue or sell any New Securities without
again first offering such New Securities to the Stockholders pursuant to this
Section 9.
10. SECTION 5.08 OF THE LLC AGREEMENT. Section 5.08 of the LLC's limited
liability company agreement, dated as of October 29, 1997 (the "LLC Agreement"),
establishes the manner in which the Stockholders, as members of the LLC, will
treat contributions to the LLC for U.S. Federal income tax purposes. In order to
induce the Stockholders to enter into this Agreement and to consummate the
transactions identified herein, the Company agrees that it will not take any
action that contradicts or is inconsistent with such agreed treatment of
contributions to the LLC for U.S. Federal income tax purposes unless a final
determination (which shall include the execution of a Form 870-AD or successor
form) requires a different treatment.
11. TERM. This Agreement shall terminate on October 29, 2005.
12. GENERAL PROVISIONS.
12.1 Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:
(a) if to the Company, at:
MarketWatch.com, Inc.
825 Battery Street
San Francisco, CA 94111
Attention: J. Peter Bardwick
Facsimile: 415/392-1972
with a copy to:
14
<PAGE>
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, CA 94306
Attention: Mark C. Stevens
Facsimile: 650/494-1417
(b) If to CBS:
51 West 52nd Street
New York, NY 10019
Attention: Fredric G. Reynolds
Louis J. Briskman
Facsimile: 212/975-9191
212/597-4031
(c) If to DBC:
Data Broadcasting Corporation
3955 Point Eden Way
Hayward, CA 94545
Attention: Mark F. Imperiale
Facsimile: 510/266-6018
Any party hereto (and such party's permitted assigns) may by notice so given
provide and change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or five (5)
days after being deposited in the mail in the manner set forth above.
12.2 Entire Agreement. This Agreement constitutes and contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties respecting
the subject matter hereof.
12.3 Amendment of Rights. Any provision of this Agreement may be amended
and the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the parties hereto (and/or any of their permitted successors or
assigns).
12.4 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the laws of the State of Delaware, excluding that
body of law relating to conflict of laws.
12.5 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, then such provision(s) shall be excluded
form this Agreement and the balance of this Agreement shall be interpreted as if
such provision(s) were so excluded and shall be enforceable in accordance with
its terms.
15
<PAGE>
12.6 Third Parties. Nothing in this Agreement, express or implied, is
intended to confer upon any person, other than the parties hereto and their
successors and permitted assigns, any rights or remedies under or by reason of
this Agreement.
12.7 Successor and Assigns. The provisions of this Agreement shall inure
to the benefit of, and shall be binding upon, the successors and permitted
assigns of the parties hereto.
12.8 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
constitute or interpret this Agreement.
12.9 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.10 No Assignment. No party hereto may assign any of its rights or
obligations hereunder without the prior written consent of the other parties
hereto and any attempt to do so will be void.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
16
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
DATA BROADCASTING CORPORATION CBS BROADCASTING INC.
By: /s/ Mark F. Imperiale By: /s/ Louis J. Briskman
---------------------------- ----------------------------
Name: Mark F. Imperiale Name: Louis J. Briskman
-------------------------- --------------------------
Title: President Title: Executive Vice President
------------------------- and General Counsel
-------------------------
MARKETWATCH.COM, INC. MARKETWATCH.COM, LLC
By: /s/ J. Peter Bardwick By: /s/ J. Peter Bardwick
---------------------------- ----------------------------
Name: J. Peter Bardwick Name: J. Peter Bardwick
-------------------------- --------------------------
Title: Chief Financial Officer Title: Chief Financial Officer
------------------------- -------------------------
[SIGNATURE PAGE TO STOCKHOLDERS' AGREEMENT]
17
<PAGE>
Exhibit 99.4
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of January 13, 1999 (the "Effective Date") by and between
MarketWatch.com. Inc., a Delaware corporation (the "Company"), and the entities
listed on Exhibit A hereto (collectively, the "Stockholders" and each
individually a "Stockholder").
RECITALS
WHEREAS, the Company and the Stockholders have entered into that certain
Merger Agreement (the "Merger Agreement") dated as of the date hereof, which
provides, among other things, that Marketwatch.Com, LLC (the "LLC") shall merge
with and into the Company (the "Merger") with the Company being the entity
surviving the Merger;
WHEREAS, immediately prior to the Merger, the Stockholders were the sole
members of the LLC;
WHEREAS, the Stockholders each received 4,500,000 shares of the Common
Stock of the Company, par value $0.01 per share (the "Merger Shares"), in
exchange for their membership interests in the LLC;
WHEREAS, as a condition to the Stockholders agreeing to enter into the
Merger Agreement, the Company has agreed to grant the Stockholders certain
registration rights with respect to the Merger Shares and other securities of
the Company which they may hold in the future;
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Company and the Stockholders hereby, intending to be legally
bound by the terms hereof, agree as follows:
1. REGISTRATION RIGHTS.
1.1 Definitions. For purposes of this Agreement:
(a) Form S-3. The term "Form S-3" means such form under the
Securities Act as is in effect on the date hereof or any successor registration
form under the Securities Act subsequently adopted by the SEC which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the SEC.
(b) Holder. The term "Holder" means any person owning of
record Registrable Securities that have not been sold to the public or pursuant
to Rule 144 ("Rule 144") promulgated under the Securities Act of 1933, as
amended (the "1933 Act") or any assignee of
<PAGE>
record of such Registrable Securities to whom rights under this Agreement have
been duly assigned in accordance with this Agreement.
(c) Prospectus. The term "Prospectus" shall mean the
prospectus included in any registration statement filed pursuant to the
provisions hereof (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the 1933
Act), as amended or supplemented by any prospectus supplement (including,
without limitation, any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
registration statement), and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
(d) Registrable Securities. The term "Registrable Securities"
means: (1) all of the Merger Shares, (2) any securities of the Company
subsequently acquired by a Stockholder or any entity which controls, is
controlled by, or is under common control with a Stockholder, and (3) any
securities of the Company issued as a dividend or other distribution with
respect to, or in exchange for or in replacement thereof excluding in all cases,
however, (i) any Registrable Securities sold by a person in a transaction in
which rights under this Section 1 are not assigned in accordance with this
Agreement, or (ii) any Registrable Securities sold in a public offering pursuant
to a registration statement filed with the SEC or sold pursuant to Rule 144
except to the extent reacquired by a Stockholder or an entity which controls, is
controlled by or is under common control with a Stockholder as provided in
clause (2) above.
(e) Registrable Securities Then Outstanding. The number of
shares of "Registrable Securities then outstanding" shall mean the number of
Registrable Securities that are common stock of the Company and are issued and
outstanding at such time plus with respect to any Registrable Securities issued
and outstanding at such time that are not common stock of the Company, the
number of shares of common stock of the Company into which such Registrable
Securities are then or will be convertible or otherwise exchangeable or
exerciseable.
(f) Registration. The terms "register," "registered," and
"registration " refer to a registration effected by preparing and filing a
registration statement in compliance with the 1933 Act, and the declaration or
ordering of effectiveness of such registration statement.
(g) SEC. The term "SEC" or "Commission " means the U.S.
Securities and Exchange Commission.
1.2 Demand Registration.
(a) Request by Stockholder. If the Company shall receive at
any time after 180 days following the effective date of the registration
statement for the Company's initial public offering, a written request from
either Stockholder (the "Initiating Holder") that the Company file a
registration statement under the 1933 Act covering the registration of
Registrable
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<PAGE>
Securities with a reasonably anticipated aggregate price to the public of at
least three million dollars ($3,000,000) pursuant to this Section 1.2, then the
Company shall effect, as soon as practicable, and in any event use its best
efforts to effect within 60 days of such request, the registration under the
1933 Act of all Registrable Securities which the Initiating Holder requests to
be registered and included in such registration, subject only to the limitations
of this Section 1.2.
(b) Underwriting. If the Initiating Holder intends to
distribute the Registrable Securities covered by its request by means of an
underwriting, then it shall so advise the Company as a part of its request made
pursuant to this Section 1.2. The Initiating Holder shall (a) select the
managing underwriter to administer such offering after consultation with the
Company and subject to the approval of the Company, which approval shall not be
unreasonably withheld, and (b) enter into an underwriting agreement in customary
form with such managing underwriter. Notwithstanding any other provision of this
Section 1.2, if the underwriter(s) advise(s) the Company in writing that
marketing factors require a limitation of the number of Registrable Securities
which would otherwise be registered and underwritten pursuant hereto the Company
will so advise the Initiating Holder, and the number of securities that may be
included in the underwriting shall be reduced as required by the underwriter(s)
and allocated first, to the Initiating Holder, second, to the Company, third,
among all other holders of Registrable Securities and fourth, among all other
holders of securities of the Company.
(c) Maximum Number of Demand Registrations. The Company is
obligated to effect only two (2) such registrations for each Stockholder
pursuant to this Section 1.2. Only registrations in which a Stockholder is the
Initiating Holder shall count against such limit with respect to such
Stockholder. The Company shall not be deemed to have effected a registration
pursuant to this Section 1.2 unless a registration statement in respect thereof
shall have been declared effective by the SEC and remains effective for 120 days
or such earlier time until all Registrable Securities registered under such
Registration Statement have been sold (or withdrawn from such registration at
the request of the Initiating Holder).
(d) Deferral; Jurisdictional Requirements. Notwithstanding the
foregoing, if the Company shall furnish to the Initiating Holder a certificate
signed by the President or Chief Executive Officer of the Company stating that
it would be seriously detrimental to the Company and its stockholders for such
registration statement to be filed and it is therefore essential to defer the
filing of such registration statement, then the Company shall have the right to
defer such filing for a period of not more than 120 days after receipt of the
request of the Initiating Holder or such earlier time as such a certificate
could no longer be given in good faith; provided, however, that the Company may
not utilize this right more than once in any twelve (12) month period.
(e) Withdrawn Request. The Initiating Holder may withdraw a
request for registration under this Section 1.2 at any time prior to the
effective date of the Registration Statement related to such registration,
provided that if such Stockholder elects to remain liable for all expenses
incurred in conjunction therewith then such withdrawn registration statement
shall not count toward the maximum number of registrations provided for in
section
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<PAGE>
1.2(c). Notwithstanding the foregoing provisions of this Section 1.2(e), if such
withdrawal is the result of a material adverse change in the business, assets,
properties, condition (financial or otherwise), results of operations or
prospects of the Company that was unknown to such Stockholder at the time the
request for registration was made and the withdrawal of such request is made
with reasonable promptness upon learning of such material adverse change, then
such request for registration that is so withdrawn shall not count toward the
maximum number of registrations provided for in Section 1.2(c) and such Holder
shall not be liable for the expenses incurred in connection with such withdrawn
registration statement.
1.3 Piggyback Registrations.
(a) The Company shall notify all Holders of Registrable
Securities in writing at least thirty (30) days prior to filing any registration
statement under the 1933 Act for purposes of effecting a public offering of
securities of the Company (including, but not limited to, registration
statements relating to secondary offerings of securities of the Company, but
excluding registration statements on Form S-8 or S-4 or relating solely to any
employee benefit plan or an acquisition of any entity or business) and will
afford Holders, subject to the terms and conditions set forth herein, an
opportunity to include in such registration statement all or any part of the
Registrable Securities then held by Holders. Holders shall, within twenty (20)
days after receipt of the above-described notice from the Company, so notify the
Company in writing, and in such notice shall inform the Company of the number of
Registrable Securities a Holder wishes to include in such registration
statement. If a Holder decides not to include all of its Registrable Securities
in any registration statement filed by the Company, the Holder shall
nevertheless continue to have the right to include any Registrable Securities
not included in such registration statement in any subsequent registration
statement or registration statements as may be filed by the Company with
respect to offerings of its securities, all upon the terms and conditions set
forth herein.
(b) Underwriting. If a registration statement with respect to
which the Company gives notice under this Section 1.3 pertains to an
underwritten offering, then the Company shall so advise Holders. In such event,
the right of Holders to have the Registrable Securities included in a
registration pursuant to this Section 1.3 shall be conditioned upon Holders'
participation in such underwriting and the inclusion of the Registrable
Securities in the underwriting to the extent provided herein. Each Holder
proposing to sell Registrable Securities in such offering shall enter into an
underwriting agreement in customary form with the managing underwriter or
underwriters selected for such underwriting. Notwithstanding any other provision
of this Agreement, if the managing underwriter or underwriters determine(s) in
good faith that marketing factors require a limitation of the number of
securities to be underwritten, then the managing underwriter(s) may exclude
securities (including Registrable Securities) from the registration and the
underwriting, and the number of securities that may be included in the
registration and the underwriting shall be allocated, first, to the Company,
second, between the Holders, on a pro-rata basis based on the number of
Registrable Securities held by each such Holder and third to any other holders
of the Company's securities, provided that if the registration is a registration
pursuant to Section 1.2, the "cut-back" provisions described in the last
sentence of Section 1.2(b) shall apply. If a Holder disapproves of the terms of
any such
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<PAGE>
underwriting, a Holder may elect to withdraw therefrom by written notice to the
Company and the managing underwriter(s), delivered at least ten (10) business
days prior to the effective date of the registration statement or if notified of
the terms thereafter, promptly after such notification. Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration.
1.4 Form S-3 Registration. In case the Company shall receive from
either Stockholder a written request or requests that the Company effect a
registration on Form S-3 and any related qualification or compliance with
respect to all or a part of the Registrable Securities owned by such Stockholder
or its affiliates, then the Company will:
(a) Registration. As soon as practicable, effect such
registration and all such qualifications and compliances as may be so requested
and as would permit or facilitate the sale and distribution of all or such
portion of such Stockholder's or its affiliates' Registrable Securities as are
specified in such request, provided, however, that the Company shall not be
obligated to effect any such registration, qualification or compliance pursuant
to this Section 1.4:
(1) if Form S-3 is not available for such offering by
the Stockholder;
(2) if the Stockholder, together with the holders of any
other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than one million dollars ($1,000,000); or
(3) if the Company shall furnish to the Stockholder a
certificate signed by the President or Chief Executive Officer of the Company
stating that it would be seriously detrimental to the Company and its
stockholders for such Form S-3 Registration to be effected at such time, in
which event the Company shall have the right to defer the filing of the Form S-3
registration statement no more than once during any twelve month period for a
period of not more than one hundred twenty (120) days after receipt of the
request of the Stockholder under this Section 1.4 or such earlier time as such a
certificate could no longer be given in good faith.
(b) Not Demand Registration. Form S-3 registrations shall not
be deemed to be demand registrations as described in Section 1.2 above.
(c) Notwithstanding anything to the contrary herein, the
Company is obligated to effect only two (2) registrations on Form S-3 per year
and each Stockholder may request only one (1) such registration per year
pursuant to this Section 1.4.
(d) Withdrawn Request. The Stockholder requesting a
registration pursuant to this Section 1.4 may withdraw a request for
registration under this Section 1.4 at any time prior to the effective date of
the Registration Statement related to such registration, provided that if such
Holder elects to remain liable for all expenses incurred in conjunction
therewith then such withdrawn registration statement shall not count toward the
maximum number of
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<PAGE>
registrations provided for in Section 1.4(c). Notwithstanding the foregoing
provisions of this Section 1.4(d), if such withdrawal is the result of a
material adverse change in the business, assets, properties, condition
(financial or otherwise), results of operations or prospects of the Company that
was unknown to such Holder at the time the request for registration was made and
the withdrawal of such request is made with reasonable promptness upon learning
of such material adverse change, then such a request for registration that is so
withdrawn shall not count toward the maximum number of registrations provided
for in Section 1.4(c) and such Holder shall not be liable for the expenses
incurred in connection with such withdrawn registration statement.
1.5 Obligations of the Company. Whenever required to effect the
registration of any Registrable Securities under this Agreement, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities, use its best efforts to cause such
registration statement to become effective as soon as practicable and with
respect to registrations effected pursuant to Sections 1.2, 1.3 and 1.4 keep
such registrations effective for up to one hundred twenty (120) days, excluding
any lock-up period, or such shorter period of time as is agreed to in writing by
the Company and each applicable Holder.
(b) For such period of time as shall be required in connection
with the transactions contemplated thereby and permitted by applicable rules,
regulations and administrative practice of the SEC (but not for more than 120
days from the effective date thereof), file such post-effective amendments and
supplements to such registration statement as shall be necessary so that neither
such registration statement nor any related prospectus shall contain any
material misstatement or omission relative to the Company or any of its assets
or liabilities or its businesses of affairs and will otherwise comply with all
applicable federal, state and foreign securities laws.
(c) Furnish to the Holder such number of copies of a
Prospectus, including a preliminary Prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as it may reasonably
request in order to facilitate the disposition, of the Registrable Securities
owned by it that are included in such registration.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions unless already subject
thereto.
(e) If requested by the underwriters for any underwritten
offering by a Holder pursuant to any registration requested under Section 1.2 or
1.4, the Company shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to be satisfactory in form and
substance to such Stockholder and to contain such representations and warranties
by the Company and such other terms and provisions (including, without
limitation,
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<PAGE>
provisions for indemnification of such underwriters by the Company) as are
customarily contained in such underwriting agreements. The Stockholder shall be
a party to such underwriting agreement and may, at its option, require that any
or all of the representations and warranties by, and the agreements on the part
of, the Company to and for the benefit of such underwriters be made to and for
the benefit of such Stockholder and that any or all of the conditions precedent
to the obligations of such underwriters under such underwriting agreement be
conditions precedent to the obligations of such Stockholder.
(f) Notify the Holders promptly, (i) of the time such
registration statement becomes effective or when any amendment or supplement or
prospectus forming a part of such registration statement has been filed or
becomes effective, (ii) of any request by the SEC or any other federal or state
governmental authority during the period of effectiveness of a registration
statement for amendments or supplements to such registration statement or
related prospectus or for additional information, (iii) of the issuance by the
SEC or any other federal or state governmental authority of any stop order
suspending the effectiveness of a registration statement or the initiation or
threatening of any proceedings for that purpose (and the Company will use its
best efforts to prevent the issuance of any such stop order or to obtain its
withdrawal promptly if such stop order should be issued), (iv) of the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, (v) of the happening of any event which makes any
statement made in a registration statement or related prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or which requires the making of any changes in the registration
statement or prospectus so that, in the case of a registration statement, it
will not contain any untrue statement of a material fact required to be stated
therein or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading and, at the reasonable request of a Holder, the
Company shall also promptly prepare and file with the Securities and Exchange
Commission and make available to such Holder any supplement or amendment
reasonably necessary so that neither such registration statement nor any related
prospectus shall contain any material misstatement or omission as a result of
such event (provided that the 120 day period referred to in Section 1.2, 1.3 or
1.4 shall be extended by the period from which the Company gives the notice
specified in this clause until such supplement or amendment is made available to
such Holder), and (vi) of the Company's reasonable determination that a
post-effective amendment to a registration statement would be appropriate;
except that notice of an event or determination referred to in (v) or (vi) above
need be made only if a registration statement relating to Registrable Securities
is then in effect.
(g) Furnish, at the request of any Holder requesting
registration of Registrable Securities, on the effective date of the
Registration Statement, (i) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering and
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<PAGE>
reasonably satisfactory to the Holder requesting registration, and (ii) a
"comfort" letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to the Holder requesting
registration.
(h) Provide for the listing of the Registrable Securities on
the stock exchange or authorization for trading on automated quotation system on
which the Registrable Securities' class of securities are then listed or quoted;
provided however, nothing contained herein shall obligate the Company to have
listed any Registrable Securities which are of a class of securities of the
Company not then listed on a stock exchange or authorized for trading on
automated quotation system.
(i) Make available for inspection by the Holder, any
underwriter participating in any disposition pursuant to such registration
statement, and any attorney, accountant or other professional retained by the
Holder or such underwriter (collectively, the "Inspectors"), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such Inspector in connection with such registration statement.
1.6 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Sections 1.2. 1.3 or
1.4 with respect to any particular Holder that such Holder shall furnish to the
Company such information regarding such Holder, the Registrable Securities held
by it, and the intended method of disposition of such securities as shall be
required to timely effect the registration of its Registrable Securities.
1.7 Expenses. All expenses incurred in connection with a
registration pursuant to Sections 1.2, 1.3 and 1.4, including without limitation
all registration and qualification fees, printers' and accounting fees, fees and
disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the selling Holders to be selected by the
selling Stockholder(s) (but excluding underwriters' discounts and commissions),
shall be borne by the Company. Each Holder participating in a registration
pursuant to Section 1 shall bear such Holder's proportionate share (based on the
total number of shares sold in such registration other than for the account of
the Company) of all discounts, commissions or other amounts payable to
underwriters or brokers in connection with such offering.
1.8 Indemnification. In the event any registration statement is
filed by the Company:
(a) By the Company. To the extent permitted by law, the
Company will indemnify and hold harmless each Holder, each officer and director
of a Holder, any agent or underwriter (as defined in the 1933 Act) for the
Holders and each person (as defined in Section 2(2) of the 1933 Act), if any,
who controls such Holder or such underwriter within the meaning of Section 15 of
the 1933 Act or the Section 20 of the Securities Exchange Act of 1934,
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<PAGE>
as amended (the "1934 Act") or any similar federal statute then in effect,
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the 1933 Act, the 1934 Act or other federal or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"):
(i) any untrue statement or alleged untrue statement of a
material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or
in any amendments or supplements thereto;
(ii) the omission or alleged omission to state in such
registration statement, including any preliminary prospectus or
final prospectus contained therein or in any amendments or
supplements thereto, a material fact required to be stated therein,
or necessary to make the statements therein not misleading (in the
case of any preliminary prospectus or final prospectus, in the light
of the circumstances under which they are made); or
(iii) any violation or alleged violation by the Company of the
1933 Act, the 1934 Act, any federal or state securities law or any
rule or regulation promulgated under the 1933 Act, the 1934 Act or
any federal or state securities law in connection with the offering
covered by such registration statement;
and the Company will reimburse each Holder, each officer or director of a
Holder, and each such agent, underwriter or controlling person for any legal or
other expenses reasonably incurred by them, as incurred, in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this subsection
1.8(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage or liability
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by such Holder; or by such officer,
director, agent, underwriter or controlling person of such Holder; provided,
further, however, the indemnification rights provided for in this Section 1.8(a)
with respect to a registration statement shall not apply to any Holder who is
not a Stockholder, unless such Holder has included any of its Registrable
Securities in such registration statement.
(b) By Selling Holders. To the extent permitted by law, each
selling Holder, if any, will severally and not jointly indemnify and hold
harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act, as applicable, and any agent
or underwriter, against any losses, claims, damages or liabilities (joint or
several)
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to which the Company or any such director, officer, controlling person, agent or
underwriter may become subject under the 1933 Act, the 1934 Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereto) arise out of or are based upon any Violation, in each case
to the extent (and only to the extent) that such violation occurs in reliance
upon and in conformity with written information concerning such Holder furnished
by such Holder expressly for use in connection with such registration; and each
such Holder will reimburse any legal or other expenses reasonably incurred by
the Company or any such director, officer, controlling person, underwriter in
connection with investigating or defending any such loss, claim, damage,
liability or action to the extent that (and only to the extent that) such
Violation occurs in reliance upon and in conformity with written information
concerning such Holder furnished by such Holder for use in connection therewith;
provided, however, that the indemnity agreement contained in this subsection
1.8(b) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Stockholders, which consent shall not be unreasonably withheld; and
provided further, that the total amounts payable in indemnity by a Holder under
this Section 1.8(b) in respect of any Violation shall not exceed the net
proceeds received by such Holder in the registered offering out of which such
Violation arises.
(c) Notice. Promptly after receipt by an indemnified party
under this Section 1.8 of notice of the commencement of any action (including
any governmental action), such indemnified party will, if a claim for
indemnification in respect thereof is to be made against any indemnifying party
under this Section 1.8, deliver to the indemnifying party a written notice of
the commencement of such an action and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume the
defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified patty by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential conflict of
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
indemnified party under this Section 1.8 except to the extent that the
indemnifying party is actually prejudiced by the failure to give such notice. In
addition, the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.8. The indemnification provided in this
Section 1.8 shall remain in full force and effect, regardless of any
investigation made by or on behalf of any indemnified party, and shall survive
the transfer of any Registrable Securities being registered pursuant to Section
1.2, 1.3 or 1.4.
(d) Defect Eliminated in Final Prospectus. The foregoing
indemnity agreements of the Company and Holders are subject to the limitation
that, insofar as they relate to any Violation made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the SEC at the
time the registration statement in question becomes
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<PAGE>
effective or in the amended prospectus filed with the SEC pursuant to SEC Rule
424(b) (the "Final Prospectus"), such indemnity agreements shall not inure to
the benefit of a selling Holder (or any officer or director of a selling Holder
or any such agent, underwriter or controlling Person of a Holder) if a copy of
the Final Prospectus was timely furnished to the indemnified party, and was not
furnished to the person asserting the loss, liability, claim or damage at or
prior to the time such action is required by the 1933 Act; provided, however,
that this subparagraph (d) shall not apply with respect to any underwritten
offering.
(e) Contribution. In order to provide for just and
equitable contribution to joint liability under the 1933 Act in any case in
which either (i) any Holder exercising rights under this Agreement (and/or
any officer, director, agent, underwriter or controlling person who may be
indemnified under Section 1.8(a)) makes a claim for indemnification pursuant
to this Section 1.8 but it is judicially determined (by the entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact
that this Section 1.8 provides for indemnification in such case, or (ii)
contribution under the 1933 Act may be required on the part of any such
selling Holder (and/or any officer, director, underwriter or controlling
person who may be indemnified under Section 1.8(b)) in circumstances for
which indemnification is provided under this Section 1.8; then, and in each
such case, the Company and such Holder (and/or such other person) will
contribute to the aggregate losses, claims, damages and expenses or
liabilities to which they may be subject (after contribution from others) in
proportion to their relative fault. The relative fault of the Company and a
Holder shall be determined by reference to, among other things, whether the
untrue or alleged omission of a material fact relates to information supplied
by the Company or by such Holder and the parties' relative intent, knowledge,
access to information and opportunity to correct or present such statement or
omission. The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 1.8(e) were determined by
pro rata allocation or by any other method of allocation which does not cake
account of the equitable considerations referred to in the two immediately
preceding sentences, provided, however, that in no event, except in instances
of fraud by a Holder in which there is no limitation, (i) shall such Holder
be responsible for more than the portion represented by the percentage that
the public offering price of the Registrable Securities of such Holder
offered by and sold under the registration statement bears to the public
offering price of all securities offered by and sold under such registration
statement and (ii) shall such Holder be required to contribute any amount in
excess of the public offering price of all such securities offered and sold
by such Holder pursuant to such registration statement; and in any event, no
person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation.
(f) Survival. The obligations of the Company and Holders under
this Section 1.8 shall survive the completion of any offering of Registrable
Securities in a registration statement or otherwise.
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<PAGE>
1.9 Rule 144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Registrable Securities to the public without registration, for
so long as Holders own any Registrable Securities, the Company agrees to:
(a) Make and keep adequate, current public information
available, as required by and defined in Rule 144, at all times;
(b) Use its best efforts to file with the Commission in a
timely manner all reports and other documents required of the Company under the
1934 Act;
(c) So long as a Holder owns any Registrable Security, furnish
to the Holder forthwith upon request a written statement by the Company as to
its compliance with the reporting requirements of said Rule 144, a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents of the Company as a Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing a stockholder of the
Company to sell any such securities without registration; and
(d) Take such further action as a Holder may reasonably
request.
1.10 Termination of the Company's Obligations. The Company shall
have no obligations to register Registrable Securities (i) if all Registrable
Securities have been registered and sold pursuant to registrations effected
pursuant to this Agreement, or (ii) at such time as all outstanding Registrable
Securities may be sold within a three month period under Rule 144, as it may be
amended from time to time, including but not limited to amendments that reduce
that period of time that securities must be held before such securities may be
sold pursuant to such rule.
1.11 "Market Stand-Off" Agreement. Each Holder hereby agrees that it
shall not, to the extent requested by the Company or an underwriter of
securities of the Company, sell or otherwise transfer or dispose of any
Registrable Securities then owned by such Holder (other than to donees or
affiliates of the Holder who agree to be similarly bound) for up to (1) one
hundred eighty (180) days following the effective date of a registration
statement of the Company filed under the Securities Act with respect to the
initial public offering of securities of the Company (the "IPO"), and (2) ninety
(90) days following the first underwritten public offering of securities of the
Company following the IPO; provided, however, that all executive officers and
directors of the Company then holding securities of the Company enter into
similar agreements. In order to enforce the foregoing covenant, the Company
shall have the right to place restrictive legends on the certificates
representing the shares subject to this Section and to impose stop transfer
instructions with respect to the Registrable Securities and such other shares of
stock of cash Holder (and the shares or securities of every other person subject
to the foregoing restriction) until the end of such period.
1.12. Review. Each Stockholder shall have the right to require the
insertion in any registration statement filed by the Company of language, in
form and substance satisfactory
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to the Stockholder, to the effect that the holding by the Stockholder of any
Registrable Securities is not to be construed as a recommendation by the
Stockholder of the investment quality of the securities of the Company and that
such holding does not imply that the Stockholder will assist in meeting any
future financial requirements of the Company. The Company covenants that it will
not file any registration statement under the Securities Act unless it shall
first have given notice thereof to the Stockholders. The Company further
covenants that the Stockholders shall have the right prior to filing with the
SEC, to receive copies of such registration statement and any amendment thereof
or supplement thereto and any prospectus forming a part thereof in a timely
fashion to enable them to participate in the preparation of such registration
statement, amendment, supplement or prospectus and to request the insertion
therein of material furnished in timely fashion (not to exceed ten business days
from the date of receipt of such material) in writing to the Company, which in a
Stockholder's judgment should be included therein. Notwithstanding the foregoing
provisions of this Section 1.12, the rights of a Stockholder under this Section
1.12 shall not apply if the Registrable Securities held by such Stockholder and
its affiliates are equal to or less than five percent (5%) of the total Common
Stock of the Company then outstanding.
2. ASSIGNMENT.
2.1 Assignment. Notwithstanding anything herein to the contrary, the
registration rights of a Holder under Section 1 hereof may be assigned only to
(a) an affiliate of a Holder, (b) a party who acquires from a Holder at least
fifteen percent (15%) of the shares of Common Stock that constituted the
original number of Registrable Securities (as such number may be adjusted to
reflect subdivisions, combinations and stock dividends of the Company's Common
Stock and similar events) or (c) any party who acquires ownership or control of
a Holder through a merger, consolidation, sale of assets or similar business
combination (such party is referred to as a "Assignee"); provided, however, that
(w) no party may be assigned any of the foregoing rights (other than pursuant to
clause (c)) until the Company is given written notice by the assigning party at
the time of such assignment stating the name and address of the assignee and
identifying the securities of the Company as to which the rights in question are
being assigned; (x) any such Assignee shall receive such assigned rights subject
to all the terms and conditions of this Agreement, including without limitation
the provisions of this Section 2, and (y) upon an assignment or assignments
pursuant to clause (b) hereof, the rights held by each Holder under this
Agreement other than the Stockholders or their permitted assignees under clauses
(a) or (c) above, may only be exercised by persons or entities holding a
majority of the Registrable Securities not held by the Stockholders or their
permitted assignees under clauses (a) or (c) above.
3. GENERAL PROVISIONS.
3.1 Notices. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or if deposited in the U.S. mail by registered or
certified mail, return receipt requested, postage prepaid, as follows:
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(a) if to the Company, at:
MarketWatch.com, Inc.
825 Battery Street
San Francisco, CA 94111
Attention: J. Peter Bardwick
Facsimile: 415/392-1972
with a copy to:
Fenwick & West LLP
Two Palo Alto Square
Palo Alto, CA 94306
Attention: Mark C. Stevens
Facsimile: 650/494-1417
(b) If to a Stockholder, at such Stockholder's respective address
as set forth on Exhibit A hereto.
(c) If to any other Holder, at such Holder's respective address as
set forth in the Company's share register.
Any party hereto (and such party's permitted assigns) may by notice so given
provide and change its address for future notices hereunder. Notice shall
conclusively be deemed to have been given when personally delivered or five days
after when deposited in the mail in the manner set forth above.
3.2 Entire Agreement. This Agreement constitutes and contains the
entire agreement and understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior negotiations, correspondence,
agreements, understandings, duties or obligations between the parties respecting
the subject matter hereof.
3.3 Amendments of Rights. Any provision of this Agreement may be
amended and the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company, and any Stockholder (and /or any of their
permitted successors or assigns pursuant to clauses (a) or (c) of Section 2.1)
affected by such amendment or waiver. In the event the rights of a Holder who
becomes a Holder pursuant to the provisions of clause (b) under Section 2.1
hereunder are sought to be waived, then the Holders of a majority of the
Registrable Securities owned by such Holders may waive such rights on behalf of
all of such other Holders.
3.4 Governing Law. This Agreement shall be governed by and construed
exclusively in accordance with the laws of the State of Delaware, excluding that
body of law relating to conflict of laws.
3.5 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, then such provision(s) shall be
excluded from this
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<PAGE>
Agreement and the balance of this Agreement shall be interpreted as if such,
provision(s) were so excluded and shall be enforceable in accordance with its
terms.
3.6 Third Parties. Except as expressly provided in Section 1.8,
nothing in this Agreement, express or implied, is intended to confer upon any
person, other than the parties hereto and their successors and assigns, any
rights or remedies under or by reason of this Agreement.
3.7 Successors And Assigns. Subject to the provisions of Section
2.1, the provisions of this Agreement shall inure to the benefit of, and shall
be binding upon, the successors and permitted assigns of the parties hereto.
3.8 Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
3.9 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[The rest of this page intentionally left blank]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
MARKETWATCH.COM, INC. HOLDERS
CBS BROADCASTING INC.
By: /s/ J. Peter Bardwick By: /s/ Louis J. Briskman
----------------------------- -----------------------------
Name: J. Peter Bardwick Name: Louis J. Briskman
--------------------------- ---------------------------
Title: Chief Financial Officer Title: Executive Vice President and
-------------------------- General Counsel
----------------------------
DATA BROADCASTING CORPORATION
By: /s/ Mark F. Imperiale
-----------------------------
Name: Mark F. Imperiale
---------------------------
Title: President
--------------------------
[Signature Page to Registration Rights Agreement]
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Exhibit 99.5
REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement (this "Agreement") is made and entered
into effective as of January 13, 1999 (the "Effective Date") by and between Data
Broadcasting Corporation, a Delaware corporation ("Lender"), and
MarketWatch.com, Inc., a Delaware corporation ("Borrower").
RECITALS
WHEREAS, Lender is a party to that certain Limited Liability Company
Agreement dated as of October 29, 1997, between CBS Inc., a New York corporation
("CBS") and Lender, with respect to Marketwatch.Com, LLC, a Delaware limited
liability company (the "LLC"), which provides, among other things, that Lender
shall provide to the LLC, on an unsecured, revolving basis, loans in amounts up
to $5,000,000 (the "Revolving Loan");
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Reorganization dated as of the date hereof, LLC will merge with and into the
Borrower (the "Merger"), with Borrower to be the entity surviving the Merger;
WHEREAS, Borrower and Lender desire that Lender's obligation to provide
the Revolving Loan shall survive the Merger;
WHEREAS, Lender desires to loan certain sums to Borrower from time to
time, and Borrower wishes to borrow certain sums from Lender, on and subject to
the terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Lender and Borrower hereby, intending to be legally bound by the
terms hereof, agree as follows:
1. CERTAIN DEFINITIONS. As used herein:
1.1 Business Day. The term "Business Day" means any day other than a
Saturday, Sunday, or other day on which commercial banks in San Francisco,
California are authorized or required by law to close.
1.2 Credit Period. The term "Credit Period" means that period of
time beginning on the Effective Date and ending on October 29, 2000.
1.3 Loan Documents. The term "Loan Documents" means, collectively,
this Agreement, the Note (as defined below) executed and delivered pursuant
hereto, and any other documents executed or delivered by Borrower pursuant to
this Agreement or in connection with any Loan.
<PAGE>
1.4 Maturity Date. The term "Maturity Date" means that date which is
the earlier to occur of (a) October 29, 2000; or (b) the date on which Lender
declares the entire unpaid principal amount and all accrued interest on each
outstanding Note immediately due and payable in full under Section 8.2(b).
2. AMOUNT AND TERMS OF CREDIT.
2.1 Commitment to Lend. Subject to all the terms and conditions of
this Agreement, and in reliance on the representations, warranties and covenants
of Borrower set forth in this Agreement, Lender agrees to make loans of funds to
Borrower during the Credit Period on a revolving basis (such loans being
collectively hereinafter referred to as "Loans" and each individually as a
"Loan"), in an aggregate cumulative total principal amount not to exceed five
million Dollars (US $5,000,000). Lender's obligation to make Loans to Borrower
under this Agreement is hereinafter referred to as the "Commitment."
Notwithstanding the foregoing, Lender will not be obligated to make a Loan to
Borrower unless and until Borrower executes and delivers to Lender a Note (as
defined in Section 2.2) for the principal amount of such Loan. In addition,
Lender will not be obligated to advance any Loan to Borrower on or after the
Maturity Date, and Lender's obligation to advance any Loan to Borrower is
subject to satisfaction of all relevant terms and conditions of this Agreement,
including but not limited to the conditions precedent and other provisions of
Sections 5 (with respect to the initial Loan) and 6 (with respect to each Loan).
Notwithstanding the foregoing, Lender will not be obligated to make a Loan to
Borrower unless and until a Borrower first gives Lender written notice of
Borrower's request for a Loan hereunder that sets forth the principal amount to
the borrowed by Borrower under such requested Loan (a "Loan Notice") and the
date on which such Loan is requested to be advanced, which date shall not be
sooner than five (5) Business Days following Lender's receipt of such Loan
Notice.
It is also agreed that amounts previously advanced by Lender
pursuant to Section 12.01 of the Limited Liability Company Agreement dated as of
October 29, 1997 shall be included as part of the Initial Loan.
2.2 Note. Borrower's indebtedness to Lender under each Loan advanced
by Lender under this Agreement will be evidenced by a separate Promissory Note
of Borrower in the form attached hereto as Exhibit "A" (the "Note"). The Note
will provide that interest on unpaid principal will accrue at a rate equal to
the prime rate as announced by The Chase Manhattan Bank as its prime rate in
effect at its principal office in New York City plus two percent (2%) per annum
(calculated on the basis of a 360-day year) compounded annually (but in no event
higher than the highest lawful rates).
2.3 Maturity. Unless payment thereof is accelerated or otherwise
becomes due earlier under the terms of this Agreement (including but not limited
to the provisions of Section 8.2) or the terms of a Note the unpaid principal
amount of all Loans and all unpaid interest accrued thereon, together with any
other fees, expenses or costs incurred in connection therewith, will be
immediately due and payable to Lender in full on the Maturity Date.
2
<PAGE>
2.4 Prepayment. Borrower may at any time and from time to time on
any Business Day prepay any Loan in whole or in part in increments of U.S.
$1,000 on at least one (1) Business Day's prior written notice, or telephonic
notice promptly confirmed in writing, received by Lender no later than 10:00
a.m., Pacific Time. Each prepayment will be applied as follows: (a) first, to
the payment of interest accrued on all Loans outstanding, and (b) second, to the
extent that the amount of such prepayment exceeds the amount of all such accrued
interest, to the payment of principal on such Loan or Loans as Borrower may
designate.
3. CLOSING DATE; DELIVERY.
3.1 Closing Date. The closing of the initial Loan (the "Closing ")
will be held by mail and/or telecopy on the Effective Date (the "Closing Date"),
or at such other time and place as Borrower and Lender may mutually agree.
3.2 Delivery. At the Closing, Borrower will execute and deliver to
Lender the Note, duly executed by Borrower.
4. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower hereby represents
and warrants to Lender that:
4.1 Organization and Standing; Charter Documents. Borrower is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and has all requisite corporate power and authority to
own, lease and operate its properties and to conduct its business as such is
presently conducted and as proposed to be conducted. Borrower is duly qualified
to do business as a foreign corporation in good standing in any state or
jurisdiction in the United States in which it is required to be qualified to do
intrastate business as the Company's business is currently conducted, except for
jurisdictions in which failure to so qualify could not reasonably be expected to
have a material adverse effect on the business and operations of the Company
taken as a whole. True and accurate copies of the Certificate of Incorporation
(the "Charter") and Bylaws of Borrower, each as amended and currently in effect,
have been delivered to Lender and Lender's counsel.
4.2 Authorization. All corporate action on the part of Borrower and
its officers, directors and stockholders that is necessary for the
authorization, execution, delivery and performance of each of the Loan Documents
by Borrower has been taken; and each of the Loan Documents, when executed and
delivered by Borrower, will constitute valid and legally binding obligations of
Borrower, enforceable in accordance with their terms.
5. CONDITIONS INITIAL LOAN. The obligation of Lender to make the initial
Loan under the Commitment is subject to the satisfaction (or written waiver by
Lender) of all the following conditions precedent:
5.1 Representations True. All representations and warranties of
Borrower contained in this Agreement and all other Loan Documents will be true,
correct and complete in all respects with the same effect as though such
representations and warranties had been made on
3
<PAGE>
and as of the Closing; and Lender will have received a certificate executed by
the President or Chief Executive Officer of Borrower certifying the foregoing.
5.2 Note. Lender will have received the Note representing the
initial Loan, executed by a duly authorized officer of Borrower.
5.3 Corporate Documents. Lender will have received, in form and
substance satisfactory to Lender and its counsel, a copy of the records of all
actions taken by Borrower, including all corporate resolutions of Borrower
authorizing or relating to the execution, delivery and performance of the Loan
Documents and the consummation of the transactions contemplated thereby, and a
certified copy of the Charter of Borrower.
5.4 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated by this Agreement and all
documents incident to such transactions will be in form and substance
satisfactory to Lender and Lender's counsel, and Lender will have received all
counterpart originals or certified or other copies of such documents as it may
reasonably request.
6. CONDITIONS PRECEDENT TO LOANS. The obligation of Lender to make each
Loan, including but not limited to the initial Loan, will be subject to the
satisfaction of all the following additional conditions precedent:
6.1 No Event of Default. No event will have occurred and be
continuing, and no event would result from the making of such Loan, that would
constitute an Event of Default as defined herein.
6.2 Note. Lender will have received the Note representing such
additional Loan, executed by a duly authorized officer of Borrower.
6.3 Representations True. All representations and warranties of
Borrower contained in this Agreement or in any other Loan Documents will be
true, correct and complete in all respects with the same effect as though such
representations and warranties had been made on and as of the date such Loan is
actually advanced (except to the extent such representations and warranties
specifically relate to an earlier date, in which case they will be true,
accurate and complete in all material respects as of such earlier date).
6.4 All Agreements Performed. All agreements, obligations,
conditions and covenants set forth in this Agreement and all other Loan
Documents to be performed by Borrower through the date such Loan is advanced
will have been duly performed and complied with in all respects.
4
<PAGE>
7. OTHER COVENANTS OF BORROWER. Borrower hereby covenants and agrees with
Lender as follows:
7.1 Financial and Other Information and Inspection. Except as
provided in Section 7.3, until the Termination Date, Borrower will provide to
Lender all the reports and rights described below in this Section 7.1:
(a) Annual Financial Information. As soon as practicable after
the end of each fiscal year of Borrower, but no later than one hundred twenty
(120) days thereafter, an audited consolidated balance sheet of Borrower and its
subsidiaries as at the end of such fiscal year, and consolidated statements of
income and cash flows of Borrower and its subsidiaries for such year, prepared
in accordance with generally accepted accounting principles and setting forth in
each case in comparative form the financial statements for the previous fiscal
year, all in reasonable detail and audited and certified by independent public
accountants acceptable to Lender.
(b) Quarterly Financial Information. As soon as practicable
after the end of each fiscal quarter of Borrower, and in any event within
forty-five (45) days thereafter, an unaudited consolidated balance sheet of
Borrower and its subsidiaries as at the end of such quarter and consolidated
statements of income and cash flows of Borrower and its subsidiaries for each
such quarter and for the fiscal year to date, prepared in accordance with
generally accepted accounting principles, all in reasonable detail.
(c) Inspection Rights. The right to visit and inspect any of
the properties of Borrower or any of its subsidiaries, and to discuss its and
their affairs and finances with its and their officers, all at such reasonable
times and as often as may reasonably be requested by Lender.
(d) Other Information. With reasonable promptness, such other
information and data, including, without limitation, lists of property and
accounts, budgets, agreements with insurers, forecasts, tax returns and reports,
with respect to Borrower and its subsidiaries as may from time to time may be
reasonably requested by Lender, and all such other information and
communications (including, without limitation, notices of meetings of Borrower's
shareholders) as Borrower will have supplied to its holders of any shares of its
capital stock.
7.2 Termination of Covenants. The covenants set forth in Sections
7.1 and 7.2 will terminate on the earlier or: (a) the date upon which a
registration statement filed by Borrower under the Securities Act of 1933, as
amended, in connection with a firm commitment underwritten public offering of
its securities first becomes effective and the securities registered thereunder
are sold; (b) the date Borrower first becomes subject to filing reports under
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended; or (c)
the repayment in full of all indebtedness under all Notes, provided that Lender
is under no further obligation to make any additional Loans hereunder.
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7.3 Further Assurances. In addition to the obligations and documents
which this Agreement expressly requires Borrower to execute, deliver and
perform, Borrower will execute, deliver and perform, and will cause its
subsidiaries to execute, deliver and perform, any and all further acts or
documents which Lender may reasonably require in order to carry out the purposes
of this Agreement or any of the other Loan Documents.
8. EVENTS OF DEFAULT OF BORROWER.
8.1 Events of Default. The occurrence of any of the following events
will constitute an "Event of Default":
(a) Borrower fails to pay any principal or any accrued
interest under any Note or any Loan when the same is due and payable, or fails
to pay any amount of principal or accrued interest due under any Note or any
Loan on the Maturity Date therefor, and such failure to pay is not cured by
Borrower within five (5) calendar days after Lender gives written notice of such
failure to pay to Borrower;
(b) any material representation or warranty made by or on
behalf of Borrower in this Agreement or in any other Loan Document, or any
statement or certificate that Borrower may at any time give in writing pursuant
thereto or in connection therewith is false, misleading or incomplete in any
material respect when made (or deemed to have been made);
(c) Borrower fails or neglects to perform, keep or observe any
covenant set forth in this Agreement or in any of the other Loan Documents, and
the same has not been cured within ten (10) calendar days after Borrower becomes
aware thereof;
(d) Borrower or any of its subsidiaries becomes insolvent, or
admits in writing its inability to pay its debts as they mature, or makes an
assignment for the benefit of creditors, or applies for or consents to the
appointment of a receiver, liquidator, custodian or trustee for it or for a
substantial part of its property or business, or such a receiver, liquidator,
custodian or trustee otherwise is appointed and is not discharged within thirty
(30) calendar days after such appointment; or
(e) bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors are instituted by or against Borrower or any of its
subsidiaries, or any order, judgment or decree is entered against Borrower or
any such subsidiary decreeing its dissolution or liquidation; provided, however,
with respect to an involuntary petition in bankruptcy, such petition is not have
been dismissed within thirty (30) days after the filing of such petition.
8.2 Remedies of Lender. Upon and after the occurrence of any Event
of Default, Lender will have no further obligation to make any Loan or Loans to
Borrower, and in addition, at Lender's sole option by written notice to
Borrower, Lender take any one or more of the following actions:
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(a) Lender may immediately terminate the Commitment and all
liabilities and obligations of Lender under this Agreement, without affecting
Lender's rights under this Agreement and the Note(s);
(b) Lender may declare the entire principal amount of and all
accrued interest on the Note(s) and all Loans to immediately be due and payable
in full, whereupon such amounts will immediately become due and payable in full,
provided that in the case of an Event of Default listed in paragraph (d) or (e)
of Section 8.1, the principal and interest will immediately become due and
payable without the requirement of any notice or other action by Lender; and
(c) Exercise all rights and remedies granted under the Loan
Documents or otherwise available to Lender at law or in equity.
9. MISCELLANEOUS.
9.1 Survival. The representations and warranties of Borrower
contained in or made pursuant to this Agreement and all the other Loan Documents
will survive the execution and delivery of the Loan Documents.
9.2 Entire Agreement. This Agreement, the Note, and the exhibits and
schedules attached hereto constitute the entire agreement and understanding
among the parties with respect to the subject matter thereof and supersede any
prior understandings or agreements of the parties with respect to such subject
matter.
9.3 Successors and Assigns. The terms and conditions of this
Agreement will inure to the benefit of and be binding upon the respective
successors and assigns of the parties; provided, however, that neither party may
assign or delegate any of its rights or obligations hereunder or under any other
Loan Document or any interest herein or therein without the other party's prior
written consent.
9.4 No Third Party Beneficiaries; Construction. Nothing in this
Agreement, express or implied, is intended to confer upon any third party any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement. This Agreement and
its exhibits are the result of negotiations between the parties and has been
reviewed by each party hereto; accordingly, this Agreement will be deemed to be
the product of the parties hereto, and no ambiguity will be construed in favor
of or against any party.
9.5 Governing Law. This Agreement will be governed by and construed
in accordance with the internal laws of the State of California as applied to
agreements entered into solely between residents of, and to be performed
entirely in, such State, without reference to that body of law relating to
conflicts of law or choice of law.
9.6 Counterparts. This Agreement may be executed in two or mare
counterparts, each of which will be deemed in original, but all of which
together will constitute one and the same instrument.
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9.7 Notices. Any notice required or permitted under this Agreement
will be given in writing and will be deemed effectively given upon personal
delivery; upon confirmed transmission by telecopy or telex; or three (3) days
following deposit with the United States Post Office, by certified or registered
mail, postage prepaid, addressed:
To Borrower:
MarketWatch.Com, Inc.
825 Battery Street
San Francisco, CA 94111
Telephone: (415) 733-0500
Telecopier: (415) 392-1972
Attention: J. Peter Bardwick
To Lender:
Data Broadcasting Corporation
3955 Point Eden Way
Hayward, CA 94545
Telephone: (510) 266-6000
Telecopier: (510) 266-6018
Attention: Mark Imperiale
or at such other address as such party may specify by written notice given in
accordance with this Section.
9.8 Modification; Waiver. This Agreement may be modified or amended
only by a writing signed by both parties hereto. No waiver or consent with
respect to this Agreement will be binding unless it is set forth in writing and
signed by the party against whom such waiver is asserted. No course of dealing
between Borrower and Lender will operate as a waiver or modification of any
party's rights under this Agreement or any other Loan Document. No delay or
failure on the part of either party in exercising any right or remedy under this
Agreement or any other Loan Document will operate as a waiver of such right or
any other right. A waiver given on one occasion will not be construed as a bar
to, or as a waiver of, any right or remedy on any future occasion.
9.9 Rights and Remedies Cumulative. The rights and remedies of
Lender herein provided will be cumulative and not exclusive of any other rights
or remedies provided by law or otherwise.
9.10 Severability. Any invalidity, illegality or unenforceability of
any provision of this Agreement in any jurisdiction will not invalidate or
render illegal or unenforceable the remaining provisions hereof in such
jurisdiction and will not invalidate or render illegal or unenforceable such
provision in any other jurisdiction.
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9.11 Attorneys' Fees. If any party hereto commences or maintains any
action at law or in equity (including counterclaims or cross-complaints) against
the other party hereto by reason of the breach or claimed breach of any term or
provision of this Agreement or any other Loan Document, then the prevailing
party in said action will be entitled to recover its reasonable attorney's fees
and court costs incurred therein.
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement
as of the Effective Date.
MARKETWATCH.COM, INC. DATA BROADCASTING CORPORATION
By: /s/ J. Peter Bardwick By: /s/ Mark F. Imperiale
------------------------------ -------------------------------
J. Peter Bardwick
Title: Chief Financial Officer Title: President
--------------------------- ----------------------------
Attachments:
Exhibit A - Promissory Note
[SIGNATURE PAGE TO REVOLVING CREDIT AGREEMENT]
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS
IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
REVOLVING
PROMISSORY NOTE
San Francisco, California
$5,000,000.00 January 13, 1999
This Revolving Promissory Note (this "Note") is made and delivered
pursuant to that certain Revolving Credit Agreement dated as of January 13, 1999
between Borrower and Lender (as such terms are defined below), as such may be
amended from time to time (the "Credit Agreement"). Unless otherwise defined
herein, all capitalized terms used in this Note shall have the same meanings
that are given to such terms in the Credit Agreement, the terms of which are
incorporated into this Note by reference.
1. Obligation. The undersigned, MarketWatch.com, Inc., a Delaware
corporation ("Borrower") hereby promises to pay to the order of Data
Broadcasting Corporation, a Delaware corporation, ("Lender" or "Holder") on or
before October 27, 2000, at Lender's principal place of business at 3955 Point
Eden Way, Hayward, California 94545, or at such other place as Holder may
direct, the principal sum of five million Dollars ($5,000,000.00) or so much
thereof as may be advanced and outstanding, together with all interest accrued
on unpaid principal, to be computed on each advance of a Loan from the date of
its disbursement to Borrower, at a rate equal to the prime rate as announced by
The Chase Manhattan Bank as its prime rate in effect at its principal office in
New York City plus two percent (2%) per annum (calculated on the basis of a
360-day year), compounded annually. As used herein, the term "Holder" shall
initially mean Lender, and shall subsequently mean each person or entity to whom
this Note is duly assigned.
The outstanding unpaid principal balance of this Note at any time shall be
the total principal amounts advanced hereunder by Holder less the amounts of
payments of principal
<PAGE>
made hereon by Borrower, which balance may be endorsed hereon from time to time
by Holder in accordance with Section 2. Payments of interest on this Note shall
be payable on a quarterly basis, on the last business day of each calendar
quarter.
2. Recording of Loans and Payments. Holder is authorized to record on
Schedule A hereto, and on any continuation(s) of such Schedule that may be
attached to this Note: (a) the date and principal amount of each Loan advanced
by Lender under the Credit Agreement; and (b) the date and amount of each
payment or prepayment of principal and/or accrued interest of any Loan; which
recordation will constitute prima facie evidence of the accuracy of the
information so endorsed on Schedule A; provided, however, that any failure to
record such information on such Schedule or continuation thereof will not in any
manner affect the obligations of Borrower to make payments of principal and
interest in accordance with the terms of this Note. Holder will promptly provide
Borrower with a copy of each recordation made by Holder on Schedule A attached
hereto.
3. Prepayment. Prepayment of unpaid principal and/or interest due under
this Note may be made at any time without penalty as specified in the Credit
Agreement. Unless otherwise agreed in writing by Holder, all payments will be
made in lawful tender of the United States and will be applied (a) first, to the
payment of accrued interest, and (b) second, (to the extent that the amount of
such prepayment exceeds the amount of all such accrued interest), to the payment
of principal.
4. Default; Acceleration of Obligation. Borrower will be deemed to be in
default under this Note and the outstanding unpaid principal balance of this
Note, together with all interest accrued thereon, will immediately become due
and payable in full, without the need for any further action on the part of
Holder, upon the occurrence of any Event of Default (as defined in the Credit
Agreement).
5. Remedies On Default; Acceleration. Upon any Event of Default, Holder
will have, in addition to its rights and remedies under this Note and the Credit
Agreement, full recourse against any real, personal, tangible or intangible
assets of Borrower, and may pursue any legal or equitable remedies that are
available to Holder, and may declare the entire unpaid principal amount of this
Note and all unpaid accrued interest under this Note to be immediately due and
payable in full.
6. Waiver and Amendment. Any provision of this Note may be amended or
modified only by a writing signed by both Borrower and Holder. Except as
provided below with respect to waivers by Borrower, no waiver or consent with
respect to this Note will be binding or effective unless it is set forth in
writing and signed by the party against whom such waiver is asserted. No course
of dealing between Borrower and Holder will operate as a waiver of modification
of any party's rights or obligations under this Note. No delay or failure on the
part of either party in exercising any right or remedy under this Note will
operate as a waiver of such right or any other right. A waiver given on one
occasion will not be construed as a bar to, or as a waiver of, any right or
remedy on any future occasion.
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7. Waivers of Borrower. Borrower hereby waives presentment, notice of
nonpayment, notice of dishonor. protest, demand and diligence. This Note may be
amended only by a writing executed by Borrower and Holder.
8. Governing Law. This Note will be governed by and construed in
accordance with the internal laws of the State of California as applied to
agreements between residents thereof to be performed entirely within such State,
without reference to that body of law relating to conflict of laws or choice of
law.
9. Severability; Headings. The invalidity or unenforceability of any term
or provision of this Note will not affect the validity or enforceability of any
other term or provision hereof. The headings in this Note are for convenience of
reference only and will not alter or otherwise affect the meaning of this Note.
10. Jurisdiction; Venue. Borrower, by its execution of this Note, hereby
irrevocably submits to the in personam jurisdiction of the state courts of the
State of California and of the United States District Court for the Northern
District of California that are located in San Francisco, California, for the
purpose of any suit, action or other proceeding arising out of or based upon
this Note.
11. Attorneys' Fees. If suit is brought for collection of this Note,
Borrower agrees to pay all reasonable expenses, including attorneys' fees,
incurred by Holder in connection therewith whether or not such suit is
prosecuted to judgment.
12. Assignment. This Note is not assignable by Holder without the written
consent of Borrower. This Note may not be assigned or delegated by Borrower,
whether by voluntary assignment or transfer, operation of law, merger or
otherwise.
13. Credit Agreement. This Note incorporates by reference all the
provisions of the Credit Agreement, including but not limited to all provisions
contained therein with respect to Events of Default, waivers, remedies and
covenants, and the description of the benefits, rights and obligations of each
of Borrower and Holder under the Credit Agreement.
IN WITNESS WHEREOF, Borrower has executed this Note as of the date and
year first above written.
BORROWER
MarketWatch.com, Inc. a Delaware corporation
By: /s/ J. Peter Bardwick
----------------------------------------
Name: J. Peter Bardwick
--------------------------------------
Title: Chief Financial Officer
-------------------------------------
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