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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
NOVEMBER 14, 1999
(DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED))
DATA BROADCASTING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION)
0-20311 13-3668779
(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NO.)
3490 CLUBHOUSE DRIVE, I-2, JACKSON, WYOMING 83001
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(307) 733-9742
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
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Item 5. Other Events.
On November 14, 1999, the Registrant, Data Broadcasting Corporation, a
Delaware corporation ("DBC"), entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Interactive Data Corporation, a Delaware corporation
("Interactive Data"), Pearson Longman, Inc, a Delaware corporation and the sole
shareholder of Interactive Data ("Pearson") and Detective Merger-Sub, Inc., a
Delaware corporation and wholly owned subsidiary of DBC ("Merger Subsidiary").
Pursuant to the Merger Agreement and subject to the terms and conditions set
forth therein, Merger Subsidiary will be merged with and into Interactive Data
(the "Merger") and become a wholly owned subsidiary of DBC. At the Effective
Time (as defined in the Merger Agreement) of the Merger, each issued and
outstanding share of common stock of Merger Subsidiary, par value $.01 per
share, will be converted into one share of common stock, par value $.01 per
share, of Interactive Data and DBC shall issue 56,453,800 restricted shares,
subject to adjustment, of its common stock, par value $.01 per share (the "DBC
Common Stock") to Pearson.
In connection with the execution of the Merger Agreement, DBC and
Interactive Data entered into a Stock Option Agreement, dated as of November
14, 1999 (the "Stock Option Agreement"), pursuant to which DBC has granted to
Interactive Data an option (the "Option") to purchase up to 6,889,293.63 shares
of DBC Common Stock, subject to adjustment, at a price of $7.65 per share,
subject to adjustment. The Option is exercisable only upon the occurrence of
certain events specified in the Stock Option Agreement.
In connection with the Merger, Interactive Data entered into Voting and
Standstill Agreements, each dated November 14, 1999 (the "Voting Agreements"),
with the Alan J. Hirschfield Living Trust and with the AFT/FGT Family Partners
Ltd and the Tessler Family Limited Partnership (collectively, the
"Stockholders"). The Stockholders, who own approximately 2,741,704 shares of
DBC Common Stock, have granted a proxy to Interactive Data to vote their shares
of DBC Common Stock in favor of the Merger and the transactions contemplated
thereby at a meeting of the stockholders of DBC.
The Merger is intended to constitute a reorganization under Section 368(a)
of the Internal Revenue Code of 1986, as amended. Consummation of the Merger is
subject to various conditions, including, among other things, receipt of the
necessary approvals of DBC's stockholders and receipt of required regulatory
approvals.
A copy of the Merger Agreement is attached hereto as Exhibit 5.1 and is
incorporated herein by reference. A copy of the Stock Option Agreement is
attached hereto as Exhibit 5.2 and is incorporated herein by reference. Copies
of the Voting Agreements are attached hereto as Exhibits 5.3 and 5.4 and are
incorporated herein by reference. The foregoing description is qualified in its
entirety by reference to the full text of such exhibits.
A joint press release announcing the execution of the Merger Agreement is
attached hereto as Exhibit 99.1 and is incorporated herein by reference.
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Item 7. Financial Statements and Exhibits.
(c) The following exhibits are filed with this report:
(5.1) Agreement and Plan of Merger, dated as of November 14, 1999
by and among Interactive Data Corporation, Pearson Longman,
Inc., Data Broadcasting Corporation and Detective
Merger-Sub, Inc.
(5.2) Stock Option Agreement, dated as of November 14, 1999,
between Data Broadcasting Corporation, as Issuer and
Interactive Data Corporation, as Grantee.
(5.3) Voting and Standstill Agreement, dated as of November 14,
1999 by and between Interactive Data Corporation and AFT/FGT
Family Partners Ltd and Tessler Family Limited Partnership.
(5.4) Voting and Standstill Agreement, dated as of November 14,
1999 between Interactive Data Corporation and Alan J.
Hirschfield Living Trust.
(99.1) Press Release, dated November 15, 1999 announcing the
execution of the Merger Agreement.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
DATA BROADCASTING CORPORATION
By: /s/ Andrew P. Schlotterbeck
----------------------------------------
Name: Andrew P. Schlotterbeck
Title: Vice President and Controller
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EXHIBIT 5.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
dated as of November 14, 1999
among
INTERACTIVE DATA CORPORATION
PEARSON LONGMAN, INC.
DATA BROADCASTING CORPORATION
and
DETECTIVE MERGER-SUB, INC.
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS..........................................................................................1
SECTION 1.01. Certain Defined Terms.........................................................1
SECTION 1.02. Other Defined Terms...........................................................8
SECTION 1.03. Terms Generally...............................................................9
ARTICLE II
THE MERGER...........................................................................................9
SECTION 2.01. The Merger....................................................................9
SECTION 2.02. Closing.......................................................................9
SECTION 2.03. Effective Time...............................................................10
SECTION 2.04. Effects of the Merger........................................................10
SECTION 2.05. Certificate of Incorporation; By-laws........................................10
SECTION 2.06. Directors and Officers.......................................................10
SECTION 2.07. Conversion of Securities.....................................................10
SECTION 2.08. Closing Deliveries by Lynx...................................................10
SECTION 2.09. Closing Deliveries by Detective and Acquisition Sub..........................12
SECTION 2.10. Adjustments..................................................................13
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LYNX AND LYNX PARENT..............................................13
SECTION 3.01. Authority of Lynx............................................................13
SECTION 3.02. Incorporation and Capital Stock of the Lynx Companies........................13
SECTION 3.03. No Conflict..................................................................14
SECTION 3.04. Consents and Approvals.......................................................14
SECTION 3.05. Financial Information........................................................15
SECTION 3.06. Absence of Certain Changes or Events.........................................15
SECTION 3.07. Absence of Litigation........................................................17
SECTION 3.08. Compliance with Laws.........................................................17
SECTION 3.09. Governmental Licenses and Permits............................................17
SECTION 3.10. Tangible Personal Property...................................................17
SECTION 3.11. Real Property................................................................18
SECTION 3.12. Intellectual Property........................................................18
SECTION 3.13. Employee Benefits Matters....................................................19
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SECTION 3.14. Taxes........................................................................20
SECTION 3.15. Environmental Matters........................................................21
SECTION 3.16. Material Contracts...........................................................21
SECTION 3.17. Brokers......................................................................22
SECTION 3.18. Questionable Payments........................................................22
SECTION 3.19. Nondistributive Intent.......................................................23
SECTION 3.20. Exclusivity of Representations...............................................23
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
DETECTIVE AND ACQUISITION SUB.......................................................................24
SECTION 4.01. Incorporation and Authority of Detective and Acquisition Sub.................24
SECTION 4.02. Capital Stock of Detective; Detective's Subsidiaries.........................24
SECTION 4.03. No Conflict..................................................................26
SECTION 4.04. Consents and Approvals.......................................................26
SECTION 4.05. SEC Documents; Financial Information.........................................26
SECTION 4.06. Absence of Certain Changes or Events.........................................27
SECTION 4.07. Absence of Litigation........................................................29
SECTION 4.08. Compliance with Laws.........................................................29
SECTION 4.09. Governmental Licenses and Permits............................................29
SECTION 4.10. Tangible Personal Property...................................................29
SECTION 4.11. Real Property................................................................30
SECTION 4.12. Intellectual Property........................................................30
SECTION 4.13. Employee Benefits Matters....................................................31
SECTION 4.14. Taxes........................................................................32
SECTION 4.15. Environmental Matters........................................................33
SECTION 4.16. Material Contracts...........................................................33
SECTION 4.17. Brokers......................................................................34
SECTION 4.18. Insurance....................................................................34
SECTION 4.19. Registration Rights..........................................................35
SECTION 4.20. NASD Matters.................................................................35
SECTION 4.21. State Anti-Takeover Statutes; Anti-Takeover Defenses.........................35
SECTION 4.22. Vote Required................................................................35
SECTION 4.23. Opinion of Financial Advisers................................................35
SECTION 4.24. Questionable Payments........................................................35
SECTION 4.25. Representations Relating to Marksman.........................................36
SECTION 4.26. Exclusivity of Representations...............................................36
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ARTICLE V
ADDITIONAL AGREEMENTS...............................................................................36
SECTION 5.01. Access to Information........................................................36
SECTION 5.02. Confidentiality..............................................................37
SECTION 5.03. Regulatory and Other Authorizations; Consents................................37
SECTION 5.04. Further Action...............................................................38
SECTION 5.05. Ancillary Agreements.........................................................38
SECTION 5.06. Stockholders' Meeting........................................................38
SECTION 5.07. NASDAQ National Market.......................................................39
SECTION 5.08. Fees and Expenses............................................................39
SECTION 5.09. Public Announcements.........................................................40
SECTION 5.10. Tax Treatment................................................................40
SECTION 5.11. Reorganization; Intercompany Transactions....................................40
SECTION 5.12. Advice of Changes............................................................41
SECTION 5.13. Board of Directors...........................................................41
SECTION 5.14. Indemnification, Exculpation and Insurance...................................41
SECTION 5.15. Repayment of Indebtedness....................................................42
SECTION 5.16. Letter Agreements............................................................42
ARTICLE VI
CONDUCT OF BUSINESS PENDING CLOSING.................................................................42
SECTION 6.01. Conduct of Business of Detective and its Subsidiaries
Prior to the Closing.........................................................42
SECTION 6.02. Conduct of Business of the Lynx Companies Prior to the Closing...............45
SECTION 6.03. No Solicitation by Detective.................................................48
ARTICLE VII
CONDITIONS TO CLOSING...............................................................................50
SECTION 7.01. Conditions to Each Party's Obligations.......................................50
SECTION 7.02. Conditions to Obligations of Lynx............................................51
SECTION 7.03. Conditions to Obligations of Detective and Acquisition Sub...................52
SECTION 7.04. Frustration of Closing Conditions............................................52
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER...................................................................52
SECTION 8.01. Termination..................................................................52
SECTION 8.02. Effect of Termination........................................................53
SECTION 8.03. Amendment....................................................................53
SECTION 8.04. Extension; Waiver............................................................53
ARTICLE IX
GENERAL PROVISIONS..................................................................................54
SECTION 9.01. Nonsurvival of Representations and Warranties................................54
SECTION 9.02. Notices......................................................................54
SECTION 9.03. Headings.....................................................................55
SECTION 9.04. Severability.................................................................55
SECTION 9.05. Entire Agreement.............................................................55
SECTION 9.06. Assignment...................................................................55
SECTION 9.07. No Third-Party Beneficiaries.................................................55
SECTION 9.08. Sections and Schedules.......................................................56
SECTION 9.09. Governing Law................................................................56
SECTION 9.10. Counterparts.................................................................56
SECTION 9.11. No Presumption...............................................................56
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SCHEDULES
Schedule I Lynx Companies
Schedule II Detective Disclosure Schedule
Schedule III Lynx Disclosure Schedule
Schedule IV Parties to Voting and Standstill Agreements
EXHIBITS
Exhibit A Form of Lynx Option Agreement
Exhibit B Form of Registration Rights Agreement
Exhibit C Form of Tax Cooperation Agreement
Exhibit D Form of Voting and Standstill Agreement
Exhibit E Form of Letter Agreements
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AGREEMENT AND PLAN OF MERGER, dated as of November 14, 1999,
among Data Broadcasting Corporation, a Delaware corporation ("Detective"),
Pearson Longman, Inc. a Delaware corporation and the sole shareholder of Lynx
("Lynx Parent"), Detective Merger-Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of Detective ("Acquisition Sub"), and Interactive Data
Corporation, a Delaware corporation ("Lynx").
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of Detective,
Acquisition Sub and Lynx have approved and declared advisable this Agreement and
the merger of Acquisition Sub with and into Lynx (the "Merger"), upon the terms
and subject to the conditions of this Agreement, whereby (a) Lynx will survive
the Merger as a wholly-owned subsidiary of Detective and (b) Lynx Parent will
receive 56,453,800 newly issued shares of Detective Common Stock (the "Detective
Shares"); and
WHEREAS, the parties hereto intend that the Merger be treated
as a reorganization within the meaning of Section 368(a) of the Code; and
WHEREAS, Lynx owns, or prior to, or contemporaneously with,
the Effective Time shall own, either directly or indirectly, 100% of the issued
and outstanding shares of stock (the "Lynx Company Shares") of each of the
companies set forth in Schedule I hereto (such companies, together with Lynx,
the "Lynx Companies").
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.
"Advisers Act" means the Investment Advisers Act of 1940, as
amended, and the rules and regulations promulgated thereunder.
"Affiliate" means, with respect to any specified Person, any
other Person that, directly or indirectly through one or more
intermediaries, Controls, is Controlled by or is
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under common Control with such specified Person; provided, however,
that in the case of Detective the persons on Schedule IV shall also
constitute Affiliates.
"Agreement" means this Agreement, including all Schedules and
exhibits hereto and all amendments hereto made in accordance with
Section 8.03.
"Ancillary Agreements" means the Registration Rights
Agreement, the Voting and Standstill Agreements, the Tax Cooperation
Agreement, the Certificate of Merger, the Letter Agreements and the
Lynx Option Agreement.
"Business Day" means any day that is not a Saturday, a Sunday
or other day on which banks are required or authorized by Law to be
closed in the City of New York.
"Closing Date" means the date on which the Closing actually
occurs which date shall be (a) the third Business Day after the date on
which the last of the consents, approvals, actions, filings, notices or
waiting periods described in or related to the filings described in
Article VII have been obtained, made or given or have expired, as
applicable, or (b) such other date as Lynx, Acquisition Sub and
Detective may mutually agree upon in writing.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder.
"Contract" means any agreement, arrangement, lease, license,
evidence of indebtedness, mortgage, indenture, security agreement, deed
of trust or other contract, commitment or obligation (whether written
or oral).
"Control" means, as to any Person, the power to direct or
cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by Contract or
otherwise. The term "Controlled" shall have a correlative meaning.
"Detective Acquisition Agreement" means any letter of intent,
agreement in principle, acquisition agreement or other Contract related
to any Detective Takeover Proposal.
"Detective Disclosure Schedule" means the Disclosure Schedule
delivered by Detective and Acquisition Sub to Lynx on the date hereof
and attached hereto as Schedule II.
"Detective Stockholder Approval" shall mean the affirmative
vote at the Detective stockholder's meeting convened pursuant to
Section 5.06 of the holders of a majority of the outstanding shares of
Detective Common Stock to approve this Agreement, the Amended Charter,
the election of the Post-Closing Directors to the Board of Directors of
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Detective and all other matters required to be approved by the
stockholders of Detective pursuant to this Agreement and the Ancillary
Agreements.
"Environmental Law" means any Law relating to pollution or
protection of the environment, including the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"Environmental Liability" means any claim or demand, order,
suit, obligation, Action, liability, cost (including the cost of any
investigation, testing, compliance or remedial action), damages
(consequential or direct), Loss or expense (including reasonable
attorneys' and consultants' fees and expenses) arising out of, relating
to or resulting from any environmental matter or condition and related
in any way to the businesses of Detective, Acquisition Sub or the Lynx
Companies, the ownership of the Detective Shares or to this Agreement
or its subject matter.
"Environmental Permit" means any permit, approval,
identification number, License and other authorization required under
or issued pursuant to any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Fully Diluted Basis" means, with respect to the calculation
of the number of shares of Detective Common Stock, as of each date of
determination thereof, the sum of (i) all shares of Detective Common
Stock outstanding at the time of determination and (ii) all shares of
Detective Common Stock issuable upon the exchange, exercise or
conversion of all Options (other than the Lynx Option) then outstanding
(including those Options Detective has agreed to issue subject to
receipt of shareholder approval) (whether or not such Options are then
exercisable or subject to contingencies).
"Governmental Authority" means any United States federal,
state or local or any foreign government, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal,
or judicial or arbitral body or any arbitrator (including any private
arbitrator) or any self-regulatory authority.
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or
with any Governmental Authority.
"Hazardous Materials" means (a) petroleum, petroleum products,
by-products or breakdown products, radioactive materials, friable
asbestos or polychlorinated biphenyls,
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and (b) any chemical, material or substance defined or regulated as
toxic or as a pollutant, contaminant or waste under any Environmental
Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
"Intellectual Property" means United States and international:
(i) patents, patent applications and statutory invention registrations,
including reissues, divisions, continuations, continuations in part,
extensions and reexaminations thereof, all rights therein provided by
international treaties or conventions, and all improvements thereto,
(ii) trademarks, service marks, trade dress, logos, trade names,
corporate names, and other source identifiers (whether or not
registered) including all common law rights, and registrations and
applications for registration thereof, all rights therein provided by
international treaties or conventions, and all reissues, extensions and
renewals of any of the foregoing, (iii) copyrightable works, copyrights
(whether or not registered) and registrations and applications for
registration thereof, and all rights therein provided by international
treaties or conventions, (iv) confidential and proprietary information,
including methodologies for generating evaluated prices and other trade
secrets, (v) Software and Third Party Software, (vi) coded values,
formats, data, historical or current databases, whether or not
copyrightable and (vii) URLs, domain names, Internet web sites or
identities used or held for use exclusively by the Lynx Companies or
Detective or its Subsidiaries.
"knowledge of a given Person" or "knowledge" or words of
similar import means (i) with respect to Detective and Acquisition Sub,
the actual knowledge of the individuals listed in Section 1.01 of the
Detective Disclosure Schedule and (ii) with respect to any of the Lynx
Companies and Lynx Parent, the actual knowledge of the individuals
listed in Section 1.01 of the Lynx Disclosure Schedule, in each case
without specific investigation or inquiry by such persons.
"Law" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, interpretation, code, common law, order,
other requirement or rule of law of any Governmental Authority
applicable in the relevant jurisdiction.
"Liabilities" means any and all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent, matured
or unmatured or determined or determinable, including, without
limitation, those arising under any Law, Action or Governmental Order
and those arising under any Contract, License, agreement, arrangement,
commitment or undertaking or otherwise.
"Licenses" means all licenses, permits, certificates of
authority, authorizations, approvals, registrations, filings,
qualifications, privileges, franchises and similar consents granted or
issued by any Governmental Authority.
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"Lien" means any mortgage, deed of trust, pledge,
hypothecation, security interest, encumbrance, claim, lien or charge of
any kind.
"Lynx Disclosure Schedule" means the Disclosure Schedule
delivered by Lynx and Lynx Parent to Detective and Acquisition Sub on
the date hereof and attached hereto as Schedule III.
"Lynx Option" means the Option granted by Detective to Lynx to
purchase Detective Common Stock pursuant to the Lynx Option Agreement.
"Lynx Option Agreement" means the Option Agreement, dated the
date hereof, among Detective and Lynx in the form of Exhibit A, as such
agreement may be amended, modified or restated from time to time.
"Marksman" shall mean MarketWatch.com, Inc. (including its
Subsidiaries), a Delaware company.
"Material Adverse Effect" means any occurrence, circumstance,
change in, or effect on the Lynx Companies or Detective and its
Subsidiaries (taken as a whole) or Marksman (including any
Subsidiaries) (taken as a whole), as applicable, that, individually or
in the aggregate has had or would reasonably be expected to have a
material adverse effect on the businesses, results of operations or the
financial condition or prospects of the Lynx Companies or Detective and
its Subsidiaries (taken as a whole) or Marksman (including any
Subsidiaries) (taken as a whole), as applicable, taken as a whole.
"NASD" means the National Association of Securities Dealers,
Inc.
"Option" with respect to any Person means any security, right,
subscription, warrant, option, "phantom" stock right or other Contract
that gives the right to (i) purchase or otherwise receive or be issued
any shares of capital stock or share capital of such Person or any
security of any kind convertible into or exchangeable or exercisable
for any shares of capital stock or share capital of such Person or (ii)
receive any benefits or rights similar to any rights enjoyed by or
accruing to the holder of shares of capital stock or share capital of
such Person, including without limitation any rights to participate in
the equity, income or election of directors or officers of such Person.
"Permitted Liens" means the following Liens: (a) Liens for
Taxes, assessments or other governmental charges or levies not yet due
or payable or that are being contested in good faith by appropriate
proceedings; (b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, repairmen and other Liens imposed
by Law for amounts not yet due; (c) Liens incurred or deposits made in
the ordinary course of business and on a basis consistent with past
practice in connection with worker's compensation, unemployment
insurance or other types of social security; (d) minor
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defects of title, easements, rights-of-way, restrictions and other
similar charges or encumbrances not materially detracting from the
value of the Lynx Companies, or Detective, its Subsidiaries or the
Detective Shares, as applicable, or interfering with the ordinary
conduct of businesses of the Lynx Companies or Detective or its
Subsidiaries, as applicable; and (e) Liens not created by the Lynx
Companies or Detective or its Subsidiaries, as applicable, which affect
the underlying fee interest of any Detective Leased Real Property or
Lynx Company Leased Real Property, as applicable.
"Person" shall mean any natural person, general or limited
partnership, corporation, limited liability company, firm, association
or other legal entity.
"Registration Rights Agreement" means the Registration Rights
Agreement among Detective and Lynx Parent, substantially in the form
and to the effect of Exhibit B, as such agreement may be amended,
modified or restated from time to time.
"Reorganization" means the transaction or series of
transactions as more fully described in Section 5.11 (which shall be in
form and substance reasonably satisfactory to Detective) pursuant to
which Lynx shall acquire prior to the Effective Time, either directly
or indirectly, 100% of the capital stock or issued share capital of
each of the Lynx Companies (other than any such stock that Lynx owns as
of the date of this Agreement and other than the stock of Lynx which is
owned by Lynx Parent), it being understood, however, that prior to, or
simultaneously with, the consummation of the Reorganization (i) certain
assets and properties will be conveyed by the Lynx Companies to
non-Lynx Company Affiliates of the Lynx Companies, (ii) certain assets
and properties will be conveyed to the Lynx Companies by non-Lynx
Company Affiliates of the Lynx Companies, and (iii) the Lynx Companies
shall enter into certain Contracts to specify operating procedures
and/or trade practices among the Lynx Companies and certain non- Lynx
Company Affiliates of the Lynx Companies, which Contracts shall provide
for charges to the Lynx Companies for goods and services which are no
higher than the rates being charged on the date hereof (other than
pricing changes in the ordinary course of business consistent with past
practice and other than with regard to tax, treasury, human resources,
legal and accounting arrangements, the terms of which shall be agreed
upon by the parties) and which shall otherwise be in form and substance
reasonably satisfactory to Detective.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Software" means all computer software developed or currently
being developed by or on behalf of the Lynx Companies or Detective or
its Subsidiaries, as applicable, for use exclusively by the Lynx
Companies or Detective or its Subsidiaries, as applicable, including
source code, object code, comments, user interfaces, menus, buttons and
icons,
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and all files, data, manuals, design notes and other items and
documentation related thereto or associated therewith, but excluding
Third Party Software.
"Subsidiary" of any Person means any corporation, partnership,
joint venture, limited liability company, trust or estate of which (or
in which) more than 50% of (a) the issued and outstanding capital stock
or the issued share capital having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether at the time capital stock or share capital of any other class
or classes of such corporation shall or might have voting power upon
the occurrence of any contingency), (b) the interest in the capital or
profits of such partnership, joint venture or limited liability company
or (c) the beneficial interest in such trust or estate, is at the time
directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of
such Person's other Subsidiaries; provided, however, that (i) in the
case of Lynx, the other Lynx Companies shall each be deemed a
Subsidiary of Lynx for the purposes of the representations and
warranties hereunder and the defined terms used therein and (ii) all
Subsidiaries of a Person shall also be Affiliates of that Person.
"Tax" or "Taxes" means all income, excise, gross receipts, ad
valorem, sales, use, employment, franchise, profits, gains, property,
transfer, payroll, intangibles or other taxes, fees, stamp taxes,
duties, charges, levies or assessments of any kind whatsoever (whether
payable directly or by withholding), together with any interest and any
penalties, additions to tax or additional amounts imposed by any Tax
authority with respect thereto.
"Tax Cooperation Agreement" means the Tax Cooperation
Agreement between Detective and Lynx Parent in the form of Exhibit C,
as such agreement may be amended, modified or restated from time to
time.
"Tax Returns" means all returns and reports (including
elections, declarations, disclosures, schedules, estimates, statements,
and information returns) required to be supplied to a Tax authority
relating to Taxes.
"Third Party Software" means all computer software used by or
on behalf of the Lynx Companies or Detective or its Subsidiaries, as
applicable, developed by a third party that was not developed by or on
behalf of the Lynx Companies or Detective or its Subsidiaries, as
applicable, (including source code, object code, comments, user
interfaces, menus, buttons and icons and all files, data, manuals,
design notes and other items and documentation related thereto), but
excluding commercially available shrink- wrapped software.
"Voting and Standstill Agreements" means the Voting and
Standstill Agreements, dated the date hereof, among Lynx and each of
the Persons listed in Schedule IV hereto,
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each in the form of Exhibit D, as such agreements may be amended,
modified or restated from time to time.
"Year 2000 Compliant" means, with respect to any of the
services, operations or businesses of the Lynx Companies or Detective
or its Subsidiaries, as applicable, as demonstrated through appropriate
testing of the same, design and performance capabilities (including,
without limitation, the ability of services and products distributed by
Detective or its Subsidiaries or the Lynx Companies, as applicable, to
recognize the century and to manage and manipulate data involving
dates, including single century and multi-century formulas and date
values, without resulting in the generation of incorrect values
involving such dates or causing any abnormal endings) such that prior
to, during, and after the calendar year 2000, none of the assets,
services or operations of Detective or its Subsidiaries, or the Lynx
Companies, as applicable, will malfunction, produce errors, cause or
suffer premature cancellation or expiration of contractual rights,
cause or suffer deletion of data or invalid or incorrect results, or
abnormally cease to function or exhibit any other problems in
connection with (i) the year 2000 (and all subsequent years) as
distinct from 1900s years, (ii) the date February 29, 2000, and all
subsequent leap years, (iii) the date September 9, 1999, or (iv) any
other calendar date (such failures and other problems, the "Year 2000
Problem").
SECTION 1.02. Other Defined Terms. The following terms have
the meanings defined for such terms in the Sections set forth below:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Acquisition Sub Preamble
Amended Charter 5.06
Certificate of Merger 2.03
Closing 2.02
Confidentiality Agreement 5.02
Detective Preamble
Detective Common Stock 4.02
Detective Leased Real Property 4.11
Detective Licensed Intellectual Property 4.12(a)
Detective Loan Agreements 5.15
Detective Material Contracts 4.16(a)
Detective Owned Intellectual Property 4.12(a)
Detective Plans 4.13(a)
Detective Shares Recitals
Detective Shrink-Wrapped Software 4.12(a)
Detective Superior Proposal 6.03(a)
Detective Takeover Proposal 6.03(a)
Detective Year 2000 Plan 4.12(f)
DGCL 2.01
</TABLE>
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<PAGE> 14
<TABLE>
<S> <C>
Effective Time 2.03
FTAM 3.05(a)
FTRP 3.05(a)
Interim FTAM Financial Statements 3.05(a)
Letter Agreements 5.16
Lynx Preamble
Lynx Companies Recitals
Lynx Company Audited Financial Statements 3.05(a)
Lynx Company Leased Real Property 3.11
Lynx Company Licensed Intellectual Property 3.12(a)
Lynx Company Material Contracts 3.16(a)
Lynx Company Owned Intellectual Property 3.12(a)
Lynx Company Plans 3.13(a)
Lynx Company Shares Recitals
Lynx Company Shrink-Wrapped Software 3.12(a)
Lynx Company Year 2000 Plan 3.12(f)
Lynx Parent Preamble
Merger Recitals
1998 Financial Statements 3.05(a)
Other Filings 5.06
Pearson 3.05(b)
Post-Closing Directors 5.13
Proxy Material 5.06
Reference Balance Sheet 3.05(a)
Restraints 7.01(e)
SEC Documents 4.05
Section 1018 Approval 5.03(b)
Surviving Corporation 2.01
Termination Fee 5.08(b)
Year 2000 Problem 1.01
</TABLE>
SECTION 1.03. Terms Generally. (a) Words in the singular shall
be held to include the plural and vice versa and words of one gender shall be
held to include the other genders as the context requires, (b) the term
"hereof," "herein," and "herewith" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement and not to any
particular provision of this Agreement, and Article, Section, paragraph, Exhibit
and Schedule references are to the Articles, Sections, paragraphs, Exhibits and
Schedules to this Agreement unless otherwise specified, (c) the word "including"
and words of similar import when used in this Agreement shall mean "including,
without limitation," unless otherwise specified, (d) provisions shall apply,
when appropriate, to successive events and transactions, and (e) references to
amounts stated in dollars shall mean U.S. dollars and shall include reference to
amounts in other denominations of equal value based upon prevailing exchange
rates.
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<PAGE> 15
ARTICLE II
THE MERGER
SECTION 2.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the Delaware
General Corporation Law (the "DGCL"), Acquisition Sub shall be merged with and
into Lynx at the Effective Time. Following the Effective Time, Lynx shall be the
surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Acquisition Sub in accordance with the
DGCL.
SECTION 2.02. Closing. Subject to the terms and conditions of
this Agreement, the closing of the Merger shall take place at a closing (the
"Closing") to be held at 10:00 a.m., New York City time, on the Closing Date,
concurrently with the Effective Time at the offices of Morgan, Lewis & Bockius
LLP, New York, New York, or at such other place as Lynx, Detective and
Acquisition Sub may mutually agree upon in writing.
SECTION 2.03. Effective Time. Subject to the provisions of
this Agreement, on or prior to the Closing Date, the parties shall file a
certificate of merger or other appropriate documents (in any such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL and shall at such time or thereafter, as appropriate, make all other
filings or recordings required under the DGCL. The Merger shall become effective
at such time as the Certificate of Merger is duly filed with the Delaware
Secretary of State, or at such other time as Lynx and Acquisition Sub shall
agree and specify in the Certificate of Merger (the time the Merger becomes
effective being hereinafter referred to as the "Effective Time").
SECTION 2.04. Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the DGCL.
SECTION 2.05. Certificate of Incorporation; By-laws. The
Certificate of Incorporation and by-laws of Lynx, as in effect immediately prior
to the Effective Time, shall be the Certificate of Incorporation and by-laws of
the Surviving Corporation, in each case until thereafter changed or amended as
provided therein or by applicable law.
SECTION 2.06. Directors and Officers. The directors of Lynx
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and by-laws of the Surviving Corporation, and the officers of Lynx
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, in each case until their respective successors are duly
elected or appointed and qualified.
SECTION 2.07. Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of Detective,
Acquisition Sub, Lynx, Lynx Parent or the holders of any of the following
securities:
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<PAGE> 16
(a) Capital Stock of Acquisition Sub. Each issued and
outstanding share of capital stock of Acquisition Sub shall be converted into
and become one fully paid and nonassessable share of common stock, par value
$1.00 per share, of the Surviving Corporation.
(b) Conversion of Lynx Shares. The issued and outstanding
shares of capital stock of Lynx shall be converted into the right to receive the
Detective Shares. As of the Effective Time, all such Lynx shares shall
automatically be canceled and shall cease to be outstanding, and each holder of
a certificate that immediately prior to the Effective Time represented any such
Lynx shares shall cease to have any rights with respect thereto, except the
right to receive the Detective Shares.
SECTION 2.08. Closing Deliveries by Lynx. At the Closing, Lynx
shall deliver or cause to be delivered to Detective and Acquisition Sub:
(a) executed copies of the Certificate of Merger and the
Registration Rights Agreement;
(b) the minute books, stock books and stock ledgers (to the
extent such exist) of the Lynx Companies;
(c) a certificate of the Secretary or an Assistant Secretary
of Lynx certifying the names and signatures of the officers of Lynx or
an Affiliate of Lynx authorized to sign this Agreement, the Ancillary
Agreements to which it is a party and the other documents to be
delivered hereunder with a true and complete copy of the by-laws of
each Lynx Company in full force and effect on the Closing Date,
attached thereto;
(d) a certificate of an officer of Lynx and Lynx Parent as
reasonably requested by Detective certifying that (i) the
representations and warranties of Lynx and Lynx Parent contained in
Article III are true and correct in all material respects as of the
Closing Date as though made on and as of the Closing Date except (A)
for changes specifically permitted by this Agreement and (B) that those
representations and warranties that address matters only as of a
particular date remain true and correct in all material respects as of
such date (provided, however, that any representation or warranty that
is qualified by materiality or by reference to a Material Adverse
Effect shall be true and correct in all respects as of the Closing Date
or as of such earlier date, as the case may be); and (ii) the covenants
contained in this Agreement to be complied with by Lynx and Lynx Parent
on or before the Closing Date shall have been complied with in all
material respects;
(e) a true and complete copy, certified by the Secretary or an
Assistant Secretary of Lynx, of the resolutions duly and validly
adopted by the Board of Directors of Lynx evidencing its authorization
of the execution and delivery of this Agreement and the Ancillary
Agreements to which it is a party and the consummation of the
transactions
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<PAGE> 17
contemplated hereby and thereby as well as a true and complete copy,
certified by the Secretary or an Assistant Secretary of Lynx Parent, of
its consent to the Merger in its capacity as the sole shareholder of
Lynx;
(f) Lynx Parent's receipt for the Detective Shares;
(g) copies of the certificates or articles of incorporation
(or other comparable corporate charter documents), including all
amendments thereto, of each of the Lynx Companies, certified by the
Secretary of State or other appropriate official of the applicable
jurisdictions of incorporation; and
(h) such other documents and instruments as Detective,
Acquisition Sub and Lynx mutually agree to be reasonably necessary to
consummate the transactions described herein.
SECTION 2.09. Closing Deliveries by Detective and Acquisition
Sub. At the Closing, Detective and Acquisition Sub shall deliver or cause to be
delivered to Lynx (or Lynx Parent, where specified):
(a) stock certificates evidencing all of the Detective Shares
issued in the name of Lynx Parent or its designees and delivered to
Lynx Parent or its designees as specified by Lynx Parent;
(b) executed copies of the Registration Rights Agreement;
(c) certificates of the Secretary or an Assistant Secretary of
Detective and Acquisition Sub, as applicable, certifying the names and
signatures of the officers of Detective and Acquisition Sub or their
Affiliates authorized to sign this Agreement, the Ancillary Agreements
to which either is a party and the other documents to be delivered
hereunder with a true and complete copy of the by-laws of Detective and
each of its Subsidiaries, as in full force and effect on the Closing
Date, attached thereto;
(d) certificates of officers of Detective and Acquisition Sub,
as applicable, certifying that (i) the representations and warranties
of Detective and Acquisition Sub contained in Article IV are true and
correct in all material respects as of the Closing Date as though made
on and as of the Closing Date, except (A) for changes specifically
permitted by this Agreement and (B) that those representations and
warranties that address matters only as of a particular date remain
true and correct in all material respects as of such date (provided,
however, that any representation or warranty that is qualified by
materiality or by reference to a Material Adverse Effect shall be true
and correct in all respects as of the Closing Date or as of such
earlier date, as the case may be); and (ii) the covenants contained in
this Agreement to be complied with by Detective and Acquisition Sub on
or before the Closing Date have been complied with in all material
respects,
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<PAGE> 18
except that Detective and Acquisition Sub shall have complied in all
respects with their obligations regarding the delivery of the Detective
Shares;
(e) true and complete copies, certified by the Secretary or an
Assistant Secretary of Detective and Acquisition Sub, as applicable, of
the resolutions duly and validly adopted by the Board of Directors of
Detective and Acquisition Sub, evidencing the authorization of the
execution and delivery of this Agreement, the Amended Charter and the
Ancillary Agreements to which they are a party and the consummation of
the transactions contemplated hereby and thereby;
(f) copies of the certificates or articles of incorporation
(or other comparable corporate charter documents), including all
amendments thereto (as well as the Amended Charter), of Detective and
each of its Subsidiaries, certified by the Secretary of State or other
appropriate officials of the applicable jurisdictions of incorporation;
(g) a copy of the listing application prepared by Detective,
and approved by the NASD, pursuant to Section 5.07 of this Agreement;
(h) the resignations from Detective's and Marksman's (if so
requested by Lynx) Boards of Directors contemplated pursuant to Section
5.13; and
(i) such other documents and instruments as Detective,
Acquisition Sub and Lynx mutually agree to be reasonably necessary to
consummate the transactions described herein.
SECTION 2.10. Adjustments. If at any time during the period
between November 10, 1999 and the Closing, any change in the number of shares of
capital stock of Detective (on a Fully Diluted Basis) shall occur by reason of
any reclassification, recapitalization, stock split or combination, issuance,
exchange or readjustment of shares or Options, or any similar transaction, or
any stock dividend thereon with a record date during such period, the number of
shares of Detective Common Stock (or Options to acquire such shares) issuable
pursuant to this Agreement or the Lynx Option Agreement shall be appropriately
adjusted to provide Lynx and Lynx Parent the same economic effect as
contemplated by this Agreement or the Lynx Option Agreement prior to such event.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF LYNX AND LYNX PARENT
Lynx Parent and Lynx each represent and warrant to Detective
and Acquisition Sub as follows:
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<PAGE> 19
SECTION 3.01. Authority of Lynx and Lynx Parent. Each of Lynx
and Lynx Parent has all necessary corporate power and authority to enter into
this Agreement and the Ancillary Agreements to which it is a party, to carry out
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and such Ancillary Agreements by Lynx and Lynx Parent, the performance by Lynx
and Lynx Parent of their respective obligations hereunder and thereunder and the
consummation by Lynx and Lynx Parent of the transactions contemplated hereby and
thereby have been duly authorized by all requisite corporate action on the part
of Lynx and Lynx Parent. This Agreement has been, and upon execution such
Ancillary Agreements will be, duly executed and delivered by Lynx and Lynx
Parent, and (assuming due authorization, execution and delivery by Detective and
each Affiliate of Detective executing this Agreement or one or more of such
Ancillary Agreements) this Agreement constitutes, and upon execution such
Ancillary Agreements will constitute, legal, valid and binding obligations of
Lynx and Lynx Parent enforceable against Lynx and Lynx Parent in accordance with
their terms.
SECTION 3.02. Incorporation and Capital Stock of the Lynx
Companies. (a) Each Lynx Company is a corporation duly organized, validly
existing and in good standing under the Laws of its jurisdiction of
incorporation and has full corporate power and authority to conduct its business
as and to the extent now conducted, and to own, use and lease its assets and
properties. Except as set forth on Section 3.02 of the Lynx Disclosure Schedule,
each Lynx Company is duly qualified, licensed or admitted to do business and is
in good standing in those jurisdictions in which the ownership, use or leasing
of such Lynx Company's assets and properties, or the conduct or nature of its
business, makes such qualification, licensing or admission necessary except
where the failure to be so qualified, licensed or admitted would not have a
Material Adverse Effect. Section 3.02 of the Lynx Disclosure Schedule lists for
each Lynx Company the amount of its authorized and outstanding capital stock or
issued share capital. The Lynx Company Shares have been duly authorized and
validly issued, are fully paid and nonassessable, and are owned, or prior to the
Effective Time will be owned, beneficially and of record, in the case of Lynx by
Lynx Parent, and in the case of the other Lynx Companies by Lynx or another Lynx
Company, free and clear of all Liens. Except as set forth on Section 3.02 of the
Lynx Disclosure Schedule, there are no outstanding Options with respect to any
such Lynx Company and no agreements, arrangements or understandings to issue
Options with respect to any such Lynx Company and there are no preemptive rights
or agreements, arrangements or understandings to issue preemptive rights with
respect to any such Lynx Company. Other than as listed in Section 3.02 of the
Lynx Disclosure Schedule, and except for the capital stock or issued share
capital of such other Lynx Companies, neither Lynx nor such Subsidiaries hold
any equity, partnership, joint venture or other interest in any Person.
SECTION 3.03. No Conflict. Assuming all consents, approvals,
authorizations and other actions described in Section 3.04 have been obtained,
and except as may result from any facts or circumstances relating solely to
Detective, Acquisition Sub or any of their Affiliates or as described in Section
3.03 of the Lynx Disclosure Schedule, the execution, delivery and performance of
this Agreement and the Ancillary Agreements to which it is a party by Lynx and
Lynx Parent does not and will not (a) violate or conflict with the Certificate
of Incorporation,
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<PAGE> 20
other constitutive documents or by-laws of Lynx and Lynx Parent, (b) conflict
with or violate any Law or Governmental Order applicable to Lynx Parent or any
Lynx Company, or (c) result in any breach of, or constitute a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or give to any Person any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of any Lien on any
Lynx Company pursuant to, any Contract, License or other material instrument to
which any Lynx Company is a party or by which any such company or its assets is
bound or affected, except, in the case of clauses (b) and (c) above, (i) for
conflicts, violations, breaches, defaults, rights of termination, amendment,
acceleration or cancellation, or Liens as would not, individually or in the
aggregate, (A) have a Material Adverse Effect, (B) impair the ability of any
Lynx Company or Lynx Parent to perform its obligations under this Agreement or
any of the Ancillary Agreements to which it is a party or (C) prevent or
materially delay the consummation of the transactions contemplated by this
Agreement or any of the Ancillary Agreements, or (ii) for Liens created by or
through Detective, Acquisition Sub or any of their Affiliates.
SECTION 3.04. Consents and Approvals. The execution and
delivery of this Agreement and each Ancillary Agreement to which it is a party
by Lynx and Lynx Parent does not, and the performance of this Agreement and each
such Ancillary Agreement by Lynx and Lynx Parent will not, require any consent,
approval, authorization or other action by, or filing with or notification to,
any Governmental Authority, except (a) as described in Section 3.04 of the Lynx
Disclosure Schedule, (b) the notification requirements of the HSR Act and
applicable filings, notifications or receipts of any required clearances under
foreign antitrust and competition Laws, (c) where failure to obtain such
consent, approval, authorization or action, or to make such filing or
notification, would not, individually or in the aggregate, (A) have a Material
Adverse Effect, (B) impair the ability of Lynx or Lynx Parent to perform its
obligations under this Agreement or any of the Ancillary Agreements to which it
is a party or (C) prevent or materially delay the consummation of the
transactions contemplated by this Agreement or any of the Ancillary Agreements,
and (d) as may be necessary as a result of any facts or circumstances relating
solely to Detective, Acquisition Sub or any of their Affiliates.
SECTION 3.05. Financial Information. (a) Set forth in Section
3.05(a) of the Lynx Disclosure Schedule are (i) the unaudited consolidated
balance sheet as of December 31, 1998 and the unaudited consolidated income
statement for the fiscal year then ended for Financial Times Asset Management
Group ("FTAM") and Financial Times Research Products ("FTRP"), FTRP having been
sold on February 19, 1999 (the "1998 Financial Statements"), (ii) the unaudited
consolidated balance sheet as of September 30, 1999 (the "Reference Balance
Sheet") and the unaudited consolidated profit and loss statement for the
nine-month period then ended for FTAM (the "Interim FTAM Financial Statements")
and (iii) the audited statutory balance sheet as of December 31, 1998 and the
audited statutory profit and loss statements for the fiscal year then ended for
each of ExShare Financial Limited (including FTRP), Financial Times Information
(H.K.) Limited, Financial Times Information Australia Pty Limited and Financial
Times Information (Singapore) PTE Limited, and the audited balance sheet as of
December 31, 1998 for Interactive Data Corporation (the "Lynx Company Audited
Financial Statements").
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<PAGE> 21
(b) The 1998 Financial Statements constitute the year-end
consolidating financial statements for FTAM and FTRP provided to Pearson plc, a
company organized under the laws of England and Wales ("Pearson") by the
management of FTAM and FTRP and incorporated by Pearson in its consolidated
audited financial statements as of December 31, 1998 and for the fiscal year
then ended.
(c) The Interim FTAM Financial Statements have been extracted
from the books and records of FTAM and have been prepared by the management of
FTAM in the ordinary course of business for incorporation into the management
accounts of Pearson as of September 30, 1999 and for the nine-month period then
ended.
(d) The Lynx Company Financial Statements were prepared in
accordance with the generally accepted accounting principles stated to be
applicable thereto and fairly present for each Lynx Company covered thereby the
consolidated financial position as of December 31, 1998 and the results of
operations for the fiscal year then ended.
SECTION 3.06. Absence of Certain Changes or Events. Since
September 30, 1999, except (i) as disclosed in Section 3.06 of the Lynx
Disclosure Schedule, or (ii) as contemplated by this Agreement (including,
without limitation, the Reorganization), the businesses of the Lynx Companies
have been conducted in the ordinary course and there has not been any Material
Adverse Effect. None of the other representations or warranties set forth in
this Agreement shall be deemed to limit the foregoing. In addition, without
limiting the foregoing, except (i) as disclosed in Section 3.06 of the Lynx
Disclosure Schedule, or (ii) as contemplated by this Agreement (including,
without limitation, the Reorganization) there has not occurred since September
30, 1999:
(a) any declaration, setting aside or payment of any dividend
or other distribution in respect of the capital stock or share capital
of the Lynx Companies, or any direct or indirect redemption, purchase
or other acquisition by any of the Lynx Companies of any such capital
stock or share capital of, or any Option with respect to, the Lynx
Companies;
(b) except for the execution, delivery and performance by Lynx
or Lynx Parent of this Agreement and the transactions contemplated
hereby, any authorization, issuance, sale or other disposition by the
Lynx Companies of any shares of capital stock or share capital of, or
any Option with respect to, the Lynx Companies, or any modification or
amendment of any right of any holder of any outstanding shares of
capital stock or share capital of, or any Option with respect to, the
Lynx Companies;
(c) incurrences by the Lynx Companies of indebtedness or any
voluntary purchase, cancellation, prepayment or complete or partial
discharge in advance of a scheduled payment date with respect to, or
waiver of any right of the Lynx Companies under, any indebtedness of or
owing to the Lynx Companies (in either case other than in
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<PAGE> 22
the ordinary course of business or any indebtedness of the Lynx
Companies owing to the Lynx Companies or any Affiliate of the Lynx
Companies);
(d) any physical damage, destruction or other casualty loss
(whether or not covered by insurance) affecting any of the real or
personal property or equipment of the Lynx Companies in an aggregate
amount exceeding $100,000;
(e) any write-off or write-down of or any determination to
write off or write down any of the assets and properties of the Lynx
Companies in an aggregate amount exceeding $100,000;
(f) any acquisition of any assets and properties of any Person
or license or disposition of, or incurrence of a Lien (other than a
Permitted Lien or any Lien in aggregate amount less than $100,000) on,
any assets and properties of the Lynx Companies, in each case, other
than acquisitions, licenses or dispositions of products and services in
the ordinary course of business of such Lynx Company consistent with
past practice or any Lien in aggregate amount less than $100,000);
(g) any commencement, termination or change by any Lynx
Company of any line of business;
(h) any transaction by any Lynx Company with any officer,
director, stockholder, Affiliate or associate of any Lynx Company,
other than pursuant to any Contract in effect on September 30, 1999 and
disclosed to Detective and Acquisition Sub pursuant to Section 3.16(a)
other than pursuant to any arrangement with regard to intercompany
indebtedness between the Lynx Companies and any non-Lynx Company
Affiliate of the Lynx Companies, or other than pursuant to any contract
of employment listed pursuant to Section 3.16(a) of the Lynx Disclosure
Schedule or other than in the ordinary course of business consistent
with past practice;
(i) any change in accounting or Tax principles, methods or
practices; or
(j) (i) any granting by any of the Lynx Companies to any
current or former director, executive officer or other employee of the
Lynx Companies of any increase in compensation, bonus or other
benefits, except for normal increases in cash compensation in the
ordinary course of business consistent with past practice or as was
required under any employment agreements in effect as of the date of
the Reference Balance Sheet, (ii) any granting by any of the Lynx
Companies to any such current or former director, executive officer or
employee of any increase in severance or termination pay, (iii) any
entry by any of the Lynx Companies into, or any amendments of, any
employment, deferred compensation, consulting, severance, termination
or indemnification agreement with any such current or former director,
executive officer or employee or (iv) any amendment to, or modification
of, any Option, or the benefits under any Lynx Company Plan.
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<PAGE> 23
SECTION 3.07. Absence of Litigation. As of the date hereof,
except as set forth in Section 3.07 of the Lynx Disclosure Schedule, there are
no Actions pending or, to the knowledge of the Lynx Companies or Lynx Parent
threatened, against Lynx Parent or any Lynx Company, that would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or
that would materially impair Lynx's ability to consummate the Merger.
SECTION 3.08. Compliance with Laws. Neither Lynx Parent nor
any of the Lynx Companies is in violation of any Laws (including, without
limitation, the Advisers Act) or any Governmental Orders applicable to the Lynx
Companies, or by which any of them is bound, except (i) as set forth in Section
3.08 of the Lynx Disclosure Schedule and (ii) for violations the existence of
which would not, individually or in the aggregate, have a Material Adverse
Effect.
SECTION 3.09. Governmental Licenses and Permits. The Lynx
Companies hold all Licenses necessary to the operation of their businesses as
currently operated and are in compliance with the terms of such Licenses, except
(a) as set forth in Section 3.09 of the Lynx Disclosure Schedule or (b) for
violations, the existence of which would not, individually or in the aggregate,
have a Material Adverse Effect.
SECTION 3.10. Tangible Personal Property. Except as disclosed
in Section 3.10 of the Lynx Disclosure Schedule, the Lynx Companies are in
possession of and have good and marketable title to, or have valid leasehold
interests in or valid rights under Contract to use, all tangible personal
property used in the conduct of their businesses, including all tangible
personal property reflected on the Reference Balance Sheets and tangible
personal property acquired since September 30, 1999 other than property disposed
of since such date in the ordinary course of business consistent with past
practice and the terms of this Agreement. Except as disclosed in Section 3.10 of
the Lynx Disclosure Schedule, all such tangible personal property is free and
clear of all Liens, other than Permitted Liens or Liens created by or through
Detective, Acquisition Sub or any of their Affiliates, and is in good working
order and condition, ordinary wear and tear excepted, and its use complies in
all material respects with all applicable Laws and, to the knowledge of Lynx, is
adequate and suitable for the conduct by the Lynx Companies of the businesses
presently conducted by them.
SECTION 3.11. Real Property. None of the Lynx Companies owns
any real property. Each parcel of real property leased by the Lynx Companies and
used exclusively in the business of such Lynx Company, including, without
limitation, those properties set forth in Section 3.11 of the Lynx Disclosure
Schedule (the "Lynx Company Leased Real Property"), is leased, free and clear of
all Liens, except (i) as disclosed in Section 3.11 of the Lynx Disclosure
Schedule, (ii) Permitted Liens and (iii) Liens created by or through Detective,
Acquisition Sub or any of their Affiliates.
SECTION 3.12. Intellectual Property. (a) The Lynx Companies
own exclusively or have the right to use all Intellectual Property and
commercially available shrink-wrapped software that is material to the operation
of the Lynx Companies ("Lynx
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<PAGE> 24
Company Owned Intellectual Property", "Lynx Company Licensed Intellectual
Property" or "Lynx Company Shrink-Wrapped Software", as applicable). Section
3.12(a) of the Lynx Disclosure Schedule sets forth a true and complete list of
all material registered patents and patent applications, common law trademarks,
registered trademarks and trademark applications, copyright registrations,
domain name registrations and Software owned by the Lynx Companies. Except as
would not have a Material Adverse Effect, the Lynx Company Owned Intellectual
Property, the Lynx Company Licensed Intellectual Property and Lynx Company
Shrink-Wrapped Software collectively constitute all of the Intellectual Property
necessary for the continued operation of the businesses of the Lynx Companies.
(b) Except for such infringements as would not, individually
or in the aggregate, have a Material Adverse Effect (i) the Lynx Company Owned
Intellectual Property does not infringe upon the Intellectual Property rights of
any third party, and (ii) no written claim has been asserted to the Lynx
Companies which is currently pending or, to the knowledge of Lynx or Lynx Parent
threatened that the use of such Lynx Company Owned Intellectual Property or Lynx
Company Licensed Intellectual Property in a manner consistent with past practice
does or may infringe upon the Intellectual Property rights of any third party.
(c) To the knowledge of Lynx and Lynx Parent, the Lynx
Companies are the exclusive owners of the entire right, title and interest in
and to all Lynx Company Owned Intellectual Property and are entitled to use all
Lynx Company Owned Intellectual Property, Lynx Company Licensed Intellectual
Property and Lynx Company Shrink-Wrapped Software in the continued operation of
their businesses in a manner consistent in all material respects with past
practice.
(d) To the knowledge of Lynx and Lynx Parent, except as set
forth in Section 3.12(d) of the Lynx Disclosure Schedule, no Person is engaging
in any activity that infringes upon the Lynx Company Owned Intellectual
Property. Except as would not, individually or in the aggregate, have a Material
Adverse Effect, the consummation of the transactions contemplated by this
Agreement will not result in the termination or impairment of any of the Lynx
Company Owned Intellectual Property, Lynx Company Licensed Intellectual Property
or Lynx Company Shrink-Wrapped Software, or any license relating thereto.
(e) None of the Lynx Companies is in breach of, or default
under, any material term of any license or sublicense of the Lynx Company Owned
Intellectual Property, Lynx Company Licensed Intellectual Property or Lynx
Company Shrink-Wrapped Software, and, to the knowledge of Lynx and Lynx Parent,
no other party to such license or sublicense is in breach thereof or default
thereunder, except in any such case as would not, individually or in the
aggregate, have a Material Adverse Effect.
(f) Except as set forth in Section 3.12(f) of the Lynx
Disclosure Schedule, the Lynx Companies have (i) initiated a review and
assessment of the business operations of the Lynx Companies (including those
areas affected by suppliers and vendors) that could reasonably be affected by
the Year 2000 Problem, (ii) developed a comprehensive plan, which has been
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delivered to Detective on or before the date hereof (the "Lynx Company Year 2000
Plan"), to address the Lynx Company Year 2000 Problem, and (iii) implemented and
complied with (including dates by which steps and actions are to be taken and
performed by) the Lynx Company Year 2000 Plan in accordance with the terms
thereof. Except as set forth in Section 3.12(f) of the Lynx Disclosure Schedule,
the Lynx Company Year 2000 Plan includes all appropriate, necessary and timely
steps, actions and plans to make the Lynx Companies Year 2000 Compliant in
accordance with the methods and the time frames set forth therein. Except as set
forth in Section 3.12(f) of the Lynx Disclosure Schedule, as of the date hereof,
there are no issues or events that prevent the Lynx Companies from fully
addressing the Year 2000 Problem consistent with the terms of the Lynx Company
Year 2000 Plan. Except as set forth in Section 3.12(f) of the Lynx Disclosure
Schedule, all Third Party Software and all hardware used by the Lynx Companies
has been certified by the providers thereof to be Year 2000 Compliant for the
intended uses and purposes of such Third Party Software and such hardware.
(g) To the knowledge of Lynx and Lynx Parent, except as set
forth in Section 3.12(g) of the Lynx Disclosure Schedule, there are no Contracts
of any of the Lynx Companies under which such Lynx Companies make a Year 2000
warranty that do not limit or cap the Liability of such Lynx Companies with
respect to any Year 2000 Problem.
SECTION 3.13. Employee Benefits Matters. (a) Section 3.13(a)
of the Lynx Disclosure Schedule contains a true and complete list of all
employee benefit plans (within the meaning of Section 3(3) of ERISA), all bonus,
stock option, stock purchase, restricted stock, incentive, deferred
compensation, supplemental retirement, severance or other benefit plans,
programs or arrangements, and all employment, termination, severance or other
Contracts or agreements with respect to which any Lynx Company or any of its
Affiliates has any obligation and which are maintained, contributed to or
sponsored by any Lynx Company or any of its Affiliates for the benefit of any
current or former employee of any Lynx Company (collectively, the "Lynx Company
Plans").
(b) Except as otherwise disclosed in Section 3.13(b) of the
Lynx Disclosure Schedule, none of the Lynx Company Plans (i) is a "multiemployer
plan", within the meaning of Section 3(37) or 4001(a)(3) of ERISA, or a
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA, or
(ii) provides or promises to provide retiree medical or life insurance benefits.
(c) None of the Lynx Companies or any of their Affiliates has
incurred any liability under, arising out of or by operation of Title IV of
ERISA (other than liability for premiums to the Pension Benefit Guaranty
Corporation arising in the ordinary course). None of the assets of the Lynx
Companies or any of their Affiliates is the subject of any lien arising under
Section 302(f) of ERISA or Section 412(n) of the Code; none of the Lynx
Companies or any of their Affiliates has been required to post any security
under Section 307 of ERISA or Section 401(a)(29) of the Code; and no fact or
event exists which could give rise to any such lien or requirement to post any
such security.
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(d) Except as set forth in Section 3.13(d) of the Lynx
Disclosure Schedule, (i) no benefit or any right to a benefit under any Lynx
Company Plan will become payable, accelerated or be enhanced in any way solely
by reason of the consummation of the transactions contemplated by this Agreement
or by reason of the consummation of the transactions contemplated by this
Agreement coupled with another event (e.g., termination of employment), and (ii)
any tax deduction otherwise allowable in respect of remuneration to current or
former Lynx Company employees or Affiliates payable upon or after the Closing
will not be disallowed by operation of Section 280G of the Code in respect of
the consummation of the transactions contemplated by this Agreement.
(e) Except as disclosed in Section 3.13(e) of the Lynx
Disclosure Schedule, none of the Lynx Companies is a party to any collective
bargaining or other labor union Contract applicable to any Lynx Company
employees. As of the date hereof, there is, to the knowledge of Lynx, no
material labor strike, slowdown or work stoppage pending or, to the knowledge of
Lynx, threatened in writing, which may interfere in any material respect with
the business activities of any of the Lynx Companies.
SECTION 3.14. Taxes. Each of the Lynx Companies has timely
filed or been included in, or will timely file or be included in, all material
Tax Returns required to be filed by it or in which it is to be included with
respect to Taxes for any period ending on or before the Closing Date and such
Tax Returns are or will be, as the case may be, accurate, complete and correct
in all material respects. All Taxes shown to be payable on such material Tax
Returns have been paid or will be paid except to the extent the same are being
contested in good faith and have been adequately reserved for. As of the date
hereof, there are no pending or threatened actions or proceedings for the
proposed assessment or assessment or collection of Taxes against any of the Lynx
Companies. There are no material Liens or other encumbrances for Taxes (other
than for Taxes not yet due and payable) upon the assets of the Lynx Companies.
SECTION 3.15. Environmental Matters. Except as disclosed in
Section 3.15 of the Lynx Disclosure Schedule, to the knowledge of Lynx and Lynx
Parent, the Lynx Companies are in compliance with all applicable Environmental
Laws and have obtained and are in compliance with all applicable Environmental
Permits other than any non-compliance that would not have a Material Adverse
Effect.
SECTION 3.16. Material Contracts. (a) Section 3.16(a) of the
Lynx Disclosure Schedule lists and briefly describes (including the parties to
and the date and subject matter of) as of the date hereof each of the following
Contracts of any of the Lynx Companies (such Contracts being "Lynx Company
Material Contracts"):
(i) each Contract for the purchase of materials or real or
personal property with any supplier or for the furnishing of services
to the Lynx Companies under the terms of which any of the Lynx
Companies: (I) is likely to pay or otherwise give consideration of more
than $100,000 in the aggregate during the calendar year ending December
31,
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1999 or (II) is likely to pay or otherwise give consideration of more
than $300,000 in the aggregate over the remaining term of such
Contract;
(ii) each Contract for the sale of personal property or for
the furnishing of services by any of the Lynx Companies which: (I) is
likely to involve consideration of more than $250,000 in the aggregate
during the calendar year ending December 31, 1999 or (II) is likely to
involve consideration of more than $750,000 in the aggregate over the
remaining term of the Contract;
(iii) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising Contracts requiring payments in
excess of $250,000, to which any Lynx Company is a party;
(iv) all management Contracts and Contracts with independent
contractors or consultants (or similar arrangements) to which any Lynx
Company is a party requiring payments in excess of $250,000 and which
are not cancelable without penalty or further payment and without more
than 30 days' notice;
(v) all Contracts relating to indebtedness of any Lynx Company
which individually are in excess of $250,000;
(vi) all Contracts with any Governmental Authority to which
any Lynx Company is a party;
(vii) all Contracts that limit or purport to limit the ability
of any Lynx Company or any Person to compete in any line of business or
with any other Person or in any geographic area or during any period of
time;
(viii) all Contracts between or among any Lynx Company and any
Affiliate of any Lynx Company;
(ix) all Contracts relating in whole or in part to
Intellectual Property pursuant to which any Lynx Company obtains from a
third party the right to sell, distribute, display or otherwise use
data or works owned or controlled by such third party and that is (I)
likely to involve consideration of more than $100,000 in the aggregate
during the calendar year ending December 31, 1999 or (II) that does not
involve any cash consideration but is otherwise material to any Lynx
Company;
(x) all Contracts relating in whole or in part to Intellectual
Property pursuant to which any Lynx Company grants to a third party the
right to sell, distribute, display or otherwise use data or works owned
or controlled by such Lynx Company and that is (I) likely to involve
consideration of more than $100,000 in the aggregate during the
calendar year ending December 31, 1999 or (II) that does not involve
any cash consideration but is otherwise material to any Lynx Company;
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(xi) all Contracts relating to employment of any Person by any
of the Lynx Companies; and
(xii) all other Contracts whether or not made in the ordinary
course of business, which are material to the conduct of the businesses
of the Lynx Companies taken as a whole or the absence of which would
have a Material Adverse Effect.
(b) Except as disclosed in Section 3.16(b) of the Lynx
Disclosure Schedule and except as would not, individually or in the aggregate,
have a Material Adverse Effect, each such Lynx Company Material Contract is
valid and binding on the Lynx Companies and is in full force and effect. Except
as would not, individually or in the aggregate, have a Material Adverse Effect,
no Lynx Company, or to the knowledge of Lynx or Lynx Parent, any other party
thereto, is in breach of, or in default under, any such Lynx Company Material
Contract.
(c) Except as disclosed in Section 3.16(c) of the Lynx
Disclosure Schedule, there is no Contract granting any Person any preferential
right to purchase any of the properties or assets of any Lynx Company.
SECTION 3.17. Brokers. Other than Goldman Sachs & Co., no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement and the Ancillary Agreements based upon arrangements made by or on
behalf of the Lynx Companies or their Affiliates.
SECTION 3.18. Questionable Payments. None of the Lynx
Companies nor, to the knowledge of Lynx or Lynx Parent, any director, officer,
agent, employee or other Person associated with or acting on behalf of the Lynx
Companies has, directly, or indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to
political activity; made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns
from corporate funds; established or maintained any unlawful or unrecorded fund
of corporate monies or other assets; made any false or fictitious entry on the
books or records of the Lynx Companies; or made any bribe, kickback, or other
payment of a similar or comparable nature, whether lawful or not, to any Person
or entity, private or public, regardless of form, whether in money, property, or
services, to obtain favorable treatment in securing business or to obtain
special concessions, or to pay for favorable treatment for business secured or
for special concessions already obtained.
SECTION 3.19. Nondistributive Intent. Lynx Parent is acquiring
the Detective Shares to be issued pursuant to Section 2.07 hereof for its own
account (and not for the account of others) for investment and not with a view
to the distribution thereof. Lynx Parent acknowledges that the Detective Shares
are being issued to it pursuant to an exemption from registration under the
Securities Act and, accordingly, are restricted (as defined by the Securities
Act) and may not be resold without either subsequent registration under the
Securities Act or an appropriate exemption therefrom.
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SECTION 3.20. EXCLUSIVITY OF REPRESENTATIONS. (a) THE
REPRESENTATIONS AND WARRANTIES MADE BY LYNX AND LYNX PARENT IN THIS AGREEMENT
AND THE ANCILLARY AGREEMENTS ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER
REPRESENTATIONS AND WARRANTIES, INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTIES. LYNX AND LYNX PARENT HEREBY DISCLAIM ANY SUCH OTHER OR IMPLIED
REPRESENTATIONS OR WARRANTIES, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO
DETECTIVE, ACQUISITION SUB OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING
ANY FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA).
(b) Detective and Acquisition Sub acknowledge that (i) the
representations and warranties contained in Sections 3.05(b), 3.06, 3.07, 3.12,
3.13, 3.14, 3.15 and 3.16 are the only representations and warranties being made
with respect to (A) Intellectual Property, (B) compliance with or liability
under ERISA, (C) Taxes and (D) compliance with or liability under Environmental
Laws, respectively, or with respect to any Intellectual Property, employee
benefit, Tax or environmental, health or safety matter related in any way to the
Lynx Companies and their Affiliates or to this Agreement or its subject matter,
and (ii) no other representation or warranty contained in this Agreement shall
apply to any such matters and no other representation or warranty, express or
implied, is being made with respect thereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
DETECTIVE AND ACQUISITION SUB
Detective and Acquisition Sub jointly and severally represent
and warrant to Lynx as follows:
SECTION 4.01. Incorporation and Authority of Detective and
Acquisition Sub. Detective and Acquisition Sub are corporations duly
incorporated, validly existing and in good standing under the laws of their
jurisdiction of incorporation and have all necessary corporate power and
authority to enter into this Agreement and the Ancillary Agreements to which it
is a party, to carry out their obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and such Ancillary Agreements by Detective and
Acquisition Sub, the performance by Detective and Acquisition Sub of their
obligations hereunder and thereunder and the consummation by Detective and
Acquisition Sub of the transactions contemplated hereby and thereby have been
duly authorized by all requisite corporate action on the part of Detective and
Acquisition Sub. This Agreement has been, and upon execution such Ancillary
Agreements will be, duly executed and delivered by Detective and Acquisition
Sub, and (assuming due authorization, execution and
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delivery by Lynx and each Affiliate of Lynx executing this Agreement or one or
more of such Ancillary Agreements) this Agreement constitutes, and upon
execution such Ancillary Agreements will constitute, legal, valid and binding
obligations of Detective and Acquisition Sub enforceable against Detective and
Acquisition Sub in accordance with their terms.
SECTION 4.02. Capital Stock of Detective; Detective's
Subsidiaries. (a) As of the date hereof, the authorized capital stock of
Detective consists of 75,000,000 shares of common stock, par value $.01 per
share (the "Detective Common Stock"), and 5,000,000 shares of Preferred Stock,
par value $.01 per share. As of November 10, 1999, 34,463,700 shares of
Detective Common Stock are validly issued, outstanding, fully paid and
nonassessable, and have been issued in compliance with all applicable federal
and, to the knowledge of Detective, state securities laws. 2,981,350 shares of
Detective Common Stock are held as treasury stock. No other shares of capital
stock of Detective have been issued or are outstanding. Section 4.02 of the
Detective Disclosure Schedule describes the nature, holder, exercise price and
other material terms of each outstanding Option of Detective, in each case, as
of the date hereof. Except as disclosed in Section 4.02 of the Detective
Disclosure Schedule, there are no outstanding Options or agreements,
arrangements or understandings to issue Options with respect to Detective and
there are no preemptive rights or agreements, arrangements or understandings to
issue preemptive rights with respect to the issuance or sale of Detective's
capital stock. On the Closing Date, the delivery to Lynx Parent of the
certificate or certificates representing the Detective Shares will vest in Lynx
Parent good and valid title to such Detective Shares, free and clear of all
Liens, and such Detective Shares will have been duly authorized, validly issued,
fully paid and nonassessable. Detective has taken all necessary corporate
actions to reserve the full number of shares of Detective Common Stock issuable
upon exercise of the Lynx Option. The Detective Common Stock issuable upon
exercise of the Lynx Option, when issued, will be duly authorized, validly
issued, fully paid and nonassessable. Except as set forth herein or in Section
4.02 of the Detective Disclosure Schedule, neither the execution, delivery or
performance by Detective or Acquisition Sub of this Agreement or the Ancillary
Agreements, the issuance of the Detective Shares or the Lynx Option as
contemplated hereby, the issuance of shares of Detective Common Stock upon
conversion of the Lynx Option, the performance by Detective or Acquisition Sub
of its respective obligations under the Ancillary Agreements nor the exercise by
any holder of the Detective Shares of the rights granted to such holder under
the Ancillary Agreements, will give rise to or result in (with or without
notice, lapse of time or both) any antidilution adjustment (other than as
disclosed in Section 4.02 of the Detective Disclosure Schedule), acceleration of
vesting or other change under or to any Option. Neither Detective nor
Acquisition Sub is a party or subject to any agreement or understanding and, to
the knowledge of Detective, there is no agreement or understanding between or
among Persons which relates to the voting or giving of written consents or
nominating directors, with respect to Detective, any of its Subsidiaries or any
of their respective securities.
(b) Each Subsidiary of Detective is a corporation duly
organized, validly existing and in good standing under the Laws of its
jurisdiction of incorporation and has full corporate power and authority to
conduct its business as and to the extent now conducted, to own, use and lease
its assets and properties and to enter into this Agreement and/or the Ancillary
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Agreements to which it is a party. Section 4.02(b) of the Detective Disclosure
Schedule lists each Detective Subsidiary. Except as set forth in Section 4.02(b)
of the Detective Disclosure Schedule, each such Subsidiary is duly qualified,
licensed or admitted to do business and is in good standing in those
jurisdictions in which the ownership, use or leasing of such Subsidiary's assets
and properties, or the conduct or nature of its business, makes such
qualification, licensing or admission necessary except where the failure to be
so qualified, licensed or admitted would not have a Material Adverse Effect.
Section 4.02(b) of the Detective Disclosure Schedule lists for each Detective
Subsidiary and, to Detective's knowledge for Marksman, the amount of its
authorized and outstanding capital stock or issued share capital. All of the
outstanding shares of capital stock or issued share capital, of each Detective
Subsidiary, and those shares of the capital stock of Marksman owned by
Detective, have been duly authorized and validly issued, are fully paid and
nonassessable, and, except as set forth in Section 4.02(b) of the Detective
Disclosure Schedule, are wholly owned, beneficially and of record, by Detective
or its Subsidiaries free and clear of all Liens. Except as set forth in Section
4.02(b) of the Detective Disclosure Schedule, there are no outstanding Options
with respect to any Detective Subsidiary and no agreements, arrangements or
understandings to issue Options with respect to any Detective Subsidiary and
there are no preemptive rights or agreements, arrangements or understandings to
issue preemptive rights with respect to any Detective Subsidiary. Other than as
listed in Section 4.02(b) of the Detective Disclosure Schedule, and except for
the capital stock of the Detective Subsidiaries and Marksman, neither Detective
nor the Detective Subsidiaries hold any equity, partnership, joint venture or
other interest in any Person. There are no Liens on any shares of capital stock
of any of the Detective Subsidiaries or on those shares of the capital stock of
Marksman owned by Detective other than Permitted Liens or Liens created by Lynx
or its Affiliates, except as set forth as Section 4.02(b) of the Detective
Disclosure Schedule.
(c) Other than in connection with the transactions
contemplated by this Agreement, since its date of incorporation, Acquisition Sub
has not conducted any business, has not owned, leased or operated any real
property or other assets and has not incurred and is not subject to any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise.
SECTION 4.03. No Conflict. Assuming all consents, approvals,
authorizations and other actions described in Section 4.04 have been obtained,
and except as may result from any facts or circumstances relating solely to the
Lynx Companies or any of their Affiliates or as described in Section 4.03 of the
Detective Disclosure Schedule, the execution, delivery and performance of this
Agreement and the Ancillary Agreements to which either is a party by Detective
or Acquisition Sub does not and will not (a) violate or conflict with the
Certificate of Incorporation, other constitutive documents or by-laws of
Detective or Acquisition Sub, (b) conflict with or violate any Law or
Governmental Order applicable to Detective or any of its Subsidiaries, or (c)
result in any breach of, or constitute a default (or event which with the giving
of notice or lapse of time, or both, would become a default) under, or give to
any Person any rights of termination, amendment, acceleration or cancellation
of, or result in the creation of any Lien on Detective or any of its
Subsidiaries pursuant to, any Contract, License or other material instrument to
which Detective or any of its Subsidiaries is a party or by which Detective, any
of
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its Subsidiaries or any of their assets are bound or affected, except, in the
case of clauses (b) and (c) above, (i) for conflicts, violations, breaches,
defaults, rights of termination, amendment, acceleration or cancellation, or
Liens as would not, individually or in the aggregate, (A) have a Material
Adverse Effect, (B) impair the ability of Detective or Acquisition Sub to
perform their respective obligations under this Agreement or any of the
Ancillary Agreements to which either is a party or (C) prevent or materially
delay the consummation of the transactions contemplated by this Agreement or any
of the Ancillary Agreements, or (ii) for Liens created by or through Lynx or any
of its Affiliates.
SECTION 4.04. Consents and Approvals. The execution and
delivery of this Agreement and each Ancillary Agreement to which either is a
party by Detective or Acquisition Sub, does not, and the performance of this
Agreement and each such Ancillary Agreement by Detective or Acquisition Sub will
not, require any consent, approval, authorization or other action by, or filing
with or notification to, any Governmental Authority, except (a) as described in
Section 4.04 of the Detective Disclosure Schedule, (b) the notification
requirements of the HSR Act and applicable filings, notifications or receipts of
any required clearances under foreign antitrust and competition Laws, (c) where
failure to obtain such consent, approval, authorization or action, or to make
such filing or notification, would not, individually or in the aggregate, (A)
have a Material Adverse Effect, (B) impair the ability of Detective or
Acquisition Sub to perform their respective obligations under this Agreement or
any of the Ancillary Agreements to which either is a party or (C) prevent or
materially delay the consummation of the transactions contemplated by this
Agreement or any of the Ancillary Agreements, and (d) as may be necessary as a
result of any facts or circumstances relating solely to Lynx or any of its
Affiliates.
SECTION 4.05. SEC Documents; Financial Information. (a) Each
report, schedule, form, statement and other document required to be filed by
Detective with the SEC (each an "SEC Document", and collectively, the "SEC
Documents") has been so filed. As of its filing date, each SEC Document, and any
SEC Documents that will be filed prior to or after the Closing, complied or will
comply in all material respects with the applicable requirements of the
Securities Act and the Exchange Act. None of the SEC Documents, except to the
extent that information contained therein has been revised or superseded by an
SEC Document subsequently filed with the SEC, contains or will contain any
untrue statement of a material fact or omits, omitted or will omit to state a
material fact (x) necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading or (y) required to
be stated therein or necessary to make the statements therein not misleading.
The financial statements of Detective and the Subsidiaries included in the SEC
Documents comply in all material respects with applicable requirements under the
Securities Act and the Exchange Act and any other published rules and
regulations of the SEC with respect to accounting requirements, have been
prepared in accordance with U.S. generally accepted accounting principles
(except as may be indicated in the notes thereto) and fairly present the
consolidated financial position of Detective and its Subsidiaries as of the
respective dates thereof and the consolidated results of their operations and
cash flows for the respective periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments which will not have
or reflect a Material Adverse Effect).
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(b) Except as set forth in Section 4.05(b) of the Detective
Disclosure Schedule and except for Liabilities incurred in the ordinary course
of business since June 30, 1999, there are no material Liabilities of Detective
or any of its Subsidiaries which are not reflected or disclosed in the SEC
Documents.
(c) To the knowledge of Detective, each report, schedule, form
and other document filed by Marksman with the SEC complies in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act. To the knowledge of Detective, none of such documents, except to the extent
information contained therein has been revised or superseded by another such
document subsequently filed with the SEC, contains or will contain any untrue
statement of a material fact or omits, omitted or will omit to state a material
fact (x) necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (y) required to be
stated therein to make the statements therein not misleading. To the knowledge
of Detective, except as set forth in Section 4.05(c) of the Detective Disclosure
Schedule and except for liabilities incurred in the ordinary course of business
since June 30, 1999, there are no material liabilities of Marksman which are not
reflected or disclosed in such documents.
SECTION 4.06. Absence of Certain Changes or Events. Since June
30, 1999, except (i) as disclosed in Section 4.06 of the Detective Disclosure
Schedule, or (ii) as contemplated by this Agreement, the businesses of Detective
and its Subsidiaries have been conducted in the ordinary course and there has
not been any Material Adverse Effect. None of the other representations or
warranties set forth in this Agreement shall be deemed to limit the foregoing.
In addition, without limiting the foregoing, except (i) as disclosed in Section
4.06 of the Detective Disclosure Schedule, or (ii) as contemplated by this
Agreement there has not occurred since June 30, 1999:
(a) any declaration, setting aside or payment of any dividend
or other distribution in respect of the capital stock or share capital
of Detective or any of its Subsidiaries, or any direct or indirect
redemption, purchase or other acquisition by Detective or any of its
Subsidiaries of any such capital stock or share capital of, or any
Option with respect to, Detective or any of its Subsidiaries;
(b) except for the execution, delivery and performance by
Detective and Acquisition Sub of this Agreement and the transactions
contemplated hereby, any authorization, issuance, sale or other
disposition by Detective or any of its Subsidiaries of any shares of
capital stock or issued shares of, or any Option with respect to,
Detective or any of its Subsidiaries, or any modification or amendment
of any right of any holder of any outstanding shares of capital stock
or issued shares of, or any Option with respect to, Detective or any of
its Subsidiaries;
(c) incurrences by Detective or any of its Subsidiaries of
indebtedness or any voluntary purchase, cancellation, prepayment or
complete or partial discharge in advance
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of a scheduled payment date with respect to, or waiver of any right of
Detective or any of its Subsidiaries under, any indebtedness of or
owing to Detective or any of its Subsidiaries (in either case other
than any indebtedness of Detective or any of its Subsidiaries owing to
Detective or any of its Subsidiaries);
(d) any physical damage, destruction or other casualty loss
(whether or not covered by insurance) affecting any of the real or
personal property or equipment of Detective or any of its Subsidiaries
in an aggregate amount exceeding $100,000;
(e) any write-off or write-down of or any determination to
write off or write down any of the assets and properties of Detective
or any of its Subsidiaries in an aggregate amount exceeding $100,000;
(f) any acquisition of any assets and properties of any Person
or license or disposition of, or incurrence of a Lien (other than a
Permitted Lien or any Lien in aggregate amount less than $100,000) on,
any assets and properties of Detective or any of its Subsidiaries, in
each case, other than acquisitions, licenses or dispositions of
products and services in the ordinary course of business of Detective
or any of its Subsidiaries consistent with past practice or any Lien in
aggregate amount less than $100,000);
(g) any commencement, termination or change by Detective or
any of its Subsidiaries of any line of business;
(h) any transaction by Detective or any of its Subsidiaries
with any officer, director, stockholder, Affiliate or associate of
Detective or any of its Subsidiaries, other than pursuant to any
Contract in effect on June 30, 1999 and disclosed to Lynx pursuant to
Section 4.16(a) of the Detective Disclosure Schedule or other than
pursuant to any contract of employment listed pursuant to Section
4.16(a) of the Detective Disclosure Schedule;
(i) any change in accounting or Tax principles, methods or
practices; or
(j) (i) any granting by Detective or any of its Subsidiaries
to any current or former director, executive officer or other employee
of Detective or any of its Subsidiaries of any increase in
compensation, bonus or other benefits, except for normal increases in
cash compensation in the ordinary course of business consistent with
past practice or as was required under any employment agreements in
effect as of the date of the most recent financial statements included
in the SEC Documents, (ii) any granting by Detective or any of its
Subsidiaries to any such current or former director, executive officer
or employee of any increase in severance or termination pay, (iii) any
entry by Detective or any of its Subsidiaries into, or any amendments
of, any employment, deferred compensation, consulting, severance,
termination or indemnification agreement with any such current or
former director, executive officer or employee or (iv) any amendment
to, or modification of, any Option or the benefits under any Detective
Plan.
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SECTION 4.07. Absence of Litigation. As of the date hereof,
except as set forth in Section 4.07 of the Detective Disclosure Schedule, there
are no Actions pending or, to the knowledge of Detective threatened, against
Detective or any of its Subsidiaries, or to which any of the Detective Shares
are subject, that (a) would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect or that would materially impair
Detective's or Acquisition Sub's ability to consummate the Merger or (b) are
required under the Exchange Act to be described in any SEC Documents.
SECTION 4.08. Compliance with Laws. Neither Detective nor any
of its Subsidiaries is in violation of any Laws (including, without limitation,
the Advisers Act, the Exchange Act and the rules of the NASD) or any
Governmental Orders applicable to Detective or any of its Subsidiaries, the
Detective Shares or by which any of them is bound, except (i) as set forth in
Section 4.08 of the Detective Disclosure Schedule and (ii) for violations the
existence of which would not, individually or in the aggregate, have a Material
Adverse Effect.
SECTION 4.09. Governmental Licenses and Permits. Detective or
its Subsidiaries hold all Licenses necessary to the operation of their
businesses as currently operated and are in compliance with the terms of such
Licenses, except (a) as set forth in Section 4.09 of the Detective Disclosure
Schedule or (b) for violations, the existence of which would not, individually
or in the aggregate, have a Material Adverse Effect.
SECTION 4.10. Tangible Personal Property. Except as disclosed
in Section 4.10 of the Detective Disclosure Schedule, Detective or its
Subsidiaries are in possession of and have good and marketable title to, or have
valid leasehold interests in or valid rights under Contract to use, all tangible
personal property used in the conduct of their businesses, including all
tangible personal property reflected on the financial statements contained in
the SEC Documents and tangible personal property acquired since June 30, 1999
other than property disposed of since such date in the ordinary course of
business consistent with past practice and the terms of this Agreement. Except
as disclosed in Section 4.10 of the Detective Disclosure Schedule, all such
tangible personal property is free and clear of all Liens, other than Permitted
Liens or Liens created by or through Lynx or any of its Affiliates, and is in
good working order and condition, ordinary wear and tear excepted, and its use
complies in all material respects with all applicable Laws and, to the knowledge
of Detective, is adequate and suitable for the conduct by Detective and its
Subsidiaries of the businesses presently conducted by them.
SECTION 4.11. Real Property. Neither Detective nor any of its
Subsidiaries owns any real property. Each parcel of real property leased by
Detective or any of its Subsidiaries including, without limitation, those
properties set forth in Section 4.11 of the Detective Disclosure Schedule (the
"Detective Leased Real Property"), is leased, free and clear of all Liens,
except (i) as disclosed in Section 4.11 of the Detective Disclosure Schedule,
(ii) Permitted Liens and (iii) Liens created by or through Lynx or any of its
Affiliates.
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SECTION 4.12. Intellectual Property. (a) Detective or its
Subsidiaries own exclusively or have the right to use all Intellectual Property
and commercially available shrink-wrapped software that is material to the
operation of Detective or any of its Subsidiaries ("Detective Owned Intellectual
Property", "Detective Licensed Intellectual Property" or "Detective
Shrink-Wrapped Software", as applicable). Section 4.12(a) of the Detective
Disclosure Schedule sets forth a true and complete list of all material
registered patents and patent applications, common law trademarks, registered
trademarks and trademark applications, copyright registrations, domain name
registrations and Software owned by Detective or any of its Subsidiaries. Except
as would not have a Material Adverse Effect, the Detective Owned Intellectual
Property, the Detective Licensed Intellectual Property and the Detective
Shrink-Wrapped Software collectively constitute all of the Intellectual Property
necessary for the continued operation of the businesses of Detective or any of
its Subsidiaries.
(b) Except for such infringements as would not, individually
or in the aggregate, have a Material Adverse Effect (i) the Detective Owned
Intellectual Property does not infringe upon the Intellectual Property rights of
any third party, and (ii) no written claim has been asserted to Detective or any
of its Subsidiaries which is currently pending or, to the knowledge of
Detective, threatened that the use of such Detective Owned Intellectual Property
or Detective Licensed Intellectual Property in a manner consistent with past
practice does or may infringe upon the Intellectual Property rights of any third
party.
(c) To the knowledge of Detective, Detective or its
Subsidiaries are the exclusive owners of the entire right, title and interest in
and to all Detective Owned Intellectual Property and are entitled to use all
Detective Owned Intellectual Property, Detective Licensed Intellectual Property
and Detective Shrink-Wrapped Software in the continued operation of its
businesses in a manner consistent in all material respects with past practice.
(d) To the knowledge of Detective, except as set forth in
Section 4.12(d) of the Detective Disclosure Schedule, no Person is engaging in
any activity that infringes upon the Detective Owned Intellectual Property.
Except as would not, individually or in the aggregate, have a Material Adverse
Effect, the consummation of the transactions contemplated by this Agreement will
not result in the termination or impairment of any of the Detective Owned
Intellectual Property, Detective Licensed Intellectual Property or Detective
Shrink-Wrapped Software, or any license relating thereto.
(e) Neither Detective nor any of its Subsidiaries is in breach
of, or default under, any material term of any license or sublicense of the
Detective Owned Intellectual Property, Detective Licensed Intellectual Property
or Detective Shrink-Wrapped Software, and, to the knowledge of Detective, no
other party to such license or sublicense is in breach thereof or default
thereunder, except in any such case as would not, individually or in the
aggregate, have a Material Adverse Effect.
(f) Detective or its Subsidiaries have (i) initiated a review
and assessment of the business operations of Detective and its Subsidiaries
(including those areas affected by
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suppliers and vendors) that could reasonably be affected by the Year 2000
Problem, (ii) developed a comprehensive plan, which has been delivered to Lynx
on or before the date hereof (the "Detective Year 2000 Plan"), to address the
Year 2000 Problem, and (iii) implemented and complied with (including dates by
which steps and actions are to be taken and performed by) the Detective Year
2000 Plan in accordance with the terms thereof. The Detective Year 2000 Plan
includes all appropriate, necessary and timely steps, actions and plans to make
Detective and its Subsidiaries Year 2000 Compliant in accordance with the
methods and the time frames set forth therein. As of the date hereof, there are
no issues or events that prevent Detective and its Subsidiaries from fully
addressing the Year 2000 Problem consistent with the terms of the Detective Year
2000 Plan. All Third Party Software and all hardware used by Detective or its
Subsidiaries has been certified by the providers thereof to be Year 2000
Compliant for the intended uses and purposes of such Third Party Software and
such hardware.
(g) To the knowledge of Detective, except as set forth in
Section 4.12(g) of the Detective Disclosure Schedule, there are no Contracts of
Detective or any of its Subsidiaries under which such company makes a Year 2000
warranty that do not limit or cap the Liability of Detective or any of its
Subsidiaries with respect to any Year 2000 Problem.
SECTION 4.13. Employee Benefits Matters. (a) Section 4.13(a)
of the Detective Disclosure Schedule contains a true and complete list of all
employee benefit plans (within the meaning of Section 3(3) of ERISA), all bonus,
stock option, stock purchase, restricted stock, incentive, deferred
compensation, supplemental retirement, severance or other benefit plans,
programs or arrangements, and all employment, termination, severance or other
Contracts or agreements with respect to which Detective or any of its
Subsidiaries has any obligation and which are maintained, contributed to or
sponsored by Detective or any of its Subsidiaries for the benefit of any current
or former employee of Detective or any of its Subsidiaries (collectively, the
"Detective Plans").
(b) Except as otherwise disclosed in Section 4.13(b) of the
Detective Disclosure Schedule, none of the Detective Plans (i) is a
"multiemployer plan", within the meaning of Section 3(37) or 4001(a)(3) of
ERISA, or a "single-employer plan", within the meaning of Section 4001(a)(15) of
ERISA, or (ii) provides or promises to provide retiree medical or life insurance
benefits.
(c) Neither Detective nor any of its Affiliates has incurred
any liability under, arising out of or by operation of Title IV of ERISA (other
than liability for premiums to the Pension Benefit Guaranty Corporation arising
in the ordinary course). None of the assets of Detective or any of its
Affiliates is the subject of any lien arising under Section 302(f) of ERISA or
Section 412(n) of the Code; neither Detective nor any of its Affiliates has been
required to post any security under Section 307 of ERISA or Section 401(a)(29)
of the Code; and no fact or event exists which could give rise to any such lien
or requirement to post any such security.
(d) Except as set forth in Section 4.13(d) of the Detective
Disclosure Schedule, (i) no benefit or any right to a benefit under any
Detective Plan will become payable,
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accelerated or be enhanced in any way solely by reason of the consummation of
the transactions contemplated by this Agreement or by reason of the consummation
of the transactions contemplated by this Agreement coupled with another event
(e.g., termination of employment), and (ii) any tax deduction otherwise
allowable in respect of remuneration to current or former Detective employees or
Affiliates payable upon or after the Closing will not be disallowed by operation
of Section 280G of the Code in respect of the consummation of the transactions
contemplated by this Agreement.
(e) Except as disclosed in Section 4.13(e) of the Detective
Disclosure Schedule, neither Detective nor any of its Subsidiaries is a party to
any collective bargaining or other labor union Contract applicable to any
employees of Detective or any of its Subsidiaries. As of the date hereof, there
is, to the knowledge of Detective, no material labor strike, slowdown or work
stoppage pending or, to the knowledge of Detective, threatened in writing, which
may interfere in any material respect with the business activities of Detective
or any of its Subsidiaries.
SECTION 4.14. Taxes. Detective and its Subsidiaries have
timely filed or been included in, or will timely file or be included in, all
material Tax Returns required to be filed by them or in which they are to be
included with respect to Taxes for any period ending on or before the Closing
Date and such Tax Returns are or will be, as the case may be, accurate, complete
and correct in all material respects. All Taxes shown to be payable on such
material Tax Returns have been paid or will be paid except to the extent the
same are being contested in good faith and have been adequately reserved for. As
of the date hereof, there are no pending or threatened actions or proceedings
for the proposed assessment or assessment or collection of Taxes against
Detective or any of its Subsidiaries. There are no material Liens or other
encumbrances for Taxes (other than for Taxes not yet due and payable) upon the
assets of Detective or any of its Subsidiaries.
SECTION 4.15. Environmental Matters. Except as disclosed in
Section 4.15 of the Detective Disclosure Schedule, to Detective's knowledge,
Detective and its Subsidiaries are in compliance with all applicable
Environmental Laws and have obtained and are in compliance with all applicable
Environmental Permits other than any non-compliance that would not have a
Material Adverse Effect.
SECTION 4.16. Material Contracts. (a) Section 4.16(a) of the
Detective Disclosure Schedule lists and briefly describes (including the parties
to and the date and subject matter of) as of the date hereof each of the
following Contracts of Detective or its Subsidiaries (such Contracts being
"Detective Material Contracts"):
(i) each Contract for the purchase of materials or real or
personal property with any supplier or for the furnishing of services
to Detective or any of its Subsidiaries under the terms of which
Detective or any of its Subsidiaries: (I) is likely to pay or otherwise
give consideration of more than $100,000 in the aggregate during the
calendar
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year ending December 31, 1999 or (II) is likely to pay or otherwise
give consideration of more than $300,000 in the aggregate over the
remaining term of such Contract;
(ii) each Contract for the sale of personal property or for
the furnishing of services by Detective or any of its Subsidiaries
which: (I) is likely to involve consideration of more than $250,000 in
the aggregate during the calendar year ending December 31, 1999 or (II)
is likely to involve consideration of more than $750,000 in the
aggregate over the remaining term of the Contract;
(iii) all broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing consulting and advertising Contracts requiring payments in
excess of $250,000, to which Detective or any of its Subsidiaries is a
party;
(iv) all management Contracts and Contracts with independent
contractors or consultants (or similar arrangements) to which Detective
or any of its Subsidiaries is a party requiring payments in excess of
$250,000 and which are not cancelable without penalty or further
payment and without more than 30 days' notice;
(v) all Contracts relating to indebtedness of Detective or any
of its Subsidiaries which individually are in excess of $250,000;
(vi) all Contracts with any Governmental Authority to which
Detective or any of its Subsidiaries is a party;
(vii) all Contracts that limit or purport to limit the ability
of Detective or any of its Subsidiaries or any Person to compete in any
line of business or with any other Person or in any geographic area or
during any period of time;
(viii) all Contracts between or among Detective or any of its
Subsidiaries and any Affiliate of Detective;
(ix) all Contracts relating in whole or in part to
Intellectual Property pursuant to which Detective or any of its
Subsidiaries obtains from a third party the right to sell, distribute,
display or otherwise use data or works owned or controlled by such
third party and that is (I) likely to involve consideration of more
than $100,000 in the aggregate during the calendar year ending December
31, 1999 or (II) that does not involve any cash consideration but is
otherwise material to Detective or any of its Subsidiaries;
(x) all Contracts relating in whole or in part to Intellectual
Property pursuant to which Detective or any of its Subsidiaries grants
to a third party the right to sell, distribute, display or otherwise
use data or works owned or controlled by Detective or any of its
Subsidiaries and that is (I) likely to involve consideration of more
than $100,000 in the aggregate during the calendar year ending December
31, 1999 or (II) that
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does not involve any cash consideration but is otherwise material to
Detective or any of its Subsidiaries;
(xi) all Contracts relating to employment of any Person by
Detective or its Subsidiaries; or
(xii) all other Contracts whether or not made in the ordinary
course of business, which are material to the conduct of the businesses
of Detective or any of its Subsidiaries taken as a whole or the absence
of which would have a Material Adverse Effect.
(b) Except as disclosed in Section 4.16(b) of the Detective
Disclosure Schedule and except as would not, individually or in the aggregate,
have a Material Adverse Effect, each such Detective Material Contract is valid
and binding on Detective or its Subsidiaries and is in full force and effect.
Except as would not, individually or in the aggregate, have a Material Adverse
Effect, neither Detective nor any of its Subsidiaries, nor to the knowledge of
Detective any other party thereto, is in breach of, or in default under, any
such Detective Material Contract.
(c) There is no Contract granting any Person any preferential
right to purchase any of the properties or assets of Detective or any of its
Subsidiaries.
SECTION 4.17. Brokers. Other than Hambrecht and Quist LLC, and
as described in Section 6.01 of the Detective Disclosure Schedule, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
and the Ancillary Agreements based upon arrangements made by or on behalf of
Detective or its Affiliates.
SECTION 4.18. Insurance. Detective and its Subsidiaries carry
all liability, property, workers' compensation, directors' and officers'
liability and other insurance policies in amounts and have coverages that are
reasonable and customary for Persons engaged in the businesses and operations of
Detective and its Subsidiaries.
SECTION 4.19. Registration Rights. Except as disclosed in
Section 4.19 of the Detective Disclosure Schedule and for the rights granted
pursuant to the Registration Rights Agreement, Detective has not granted
registration rights to any holder of any of the securities of Detective.
SECTION 4.20. NASD Matters. The Detective Common Stock is
listed on the NASDAQ National Market, and the listing agreement between the NASD
and Detective with respect thereto is in full force and effect. The Detective
Shares and the maximum number of shares of Detective Common Stock issuable upon
exercise of the Lynx Option will be approved for listing on the NASDAQ National
Market upon the approval by the NASD of the Company's listing application for
additional shares filed pursuant to the terms of Section 5.07.
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SECTION 4.21. State Anti-Takeover Statutes; Anti-Takeover
Defenses. No "fair price," "moratorium," "control share acquisition" or other
similar anti-takeover statute or regulation, including the restrictions
contained in Section 203 of the DGCL, or any anti-takeover provision in
Detective's Certificate of Incorporation or by-laws is, or at or after the
Effective Time will be, applicable to Lynx, Lynx Parent, any of the Lynx
Companies, the Merger or the other transactions contemplated by this Agreement
or the Ancillary Agreements (or the exercise of any rights hereunder or
thereunder). The Board of Directors of Detective has approved the Merger and the
other transactions contemplated by this Agreement and the Ancillary Agreements
for all purposes of the DGCL. Neither Detective nor any of its Subsidiaries has
adopted a stockholder rights plan, poison pill or other anti-takeover measure.
SECTION 4.22. Vote Required. The only vote of the holders of
any class or series of capital stock necessary to approve this Agreement and the
transactions contemplated hereby (including, without limitation, the Amended
Charter) on behalf of Detective and Acquisition Sub is the affirmative vote of
the holders of a majority of the outstanding shares of Detective Common Stock
and the affirmative vote of the holders of a majority of the common stock of
Acquisition Sub.
SECTION 4.23. Opinion of Financial Advisers. Detective has
received the opinion of its financial advisers, dated the date of this
Agreement, to the effect that, as of such date, the transactions contemplated by
this Agreement and the Ancillary Agreements are fair, from a financial point of
view, to the stockholders of Detective, a signed copy of which has been
delivered to Lynx.
SECTION 4.24. Questionable Payments. Neither Detective, any of
its Subsidiaries, nor, to the knowledge of Detective, any director, officer,
agent, employee or other Person associated with or acting on behalf of Detective
or any of its Subsidiaries has, directly, or indirectly: used any corporate
funds for unlawful contributions, gifts, entertainment, or other unlawful
expenses relating to political activity; made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political
parties or campaigns from corporate funds; established or maintained any
unlawful or unrecorded fund of corporate monies or other assets; made any false
or fictitious entry on the books or records of Detective or any of its
Subsidiaries; or made any bribe, kickback, or other payment of a similar or
comparable nature, whether lawful or not, to any Person or entity, private or
public, regardless of form, whether in money, property, or services, to obtain
favorable treatment in securing business or to obtain special concessions, or to
pay for favorable treatment for business secured or for special concessions
already obtained.
SECTION 4.25. Representations Relating to Marksman. Except as
set forth in Section 4.25 of the Detective Disclosure Schedule, to the knowledge
of Detective, the representations and warranties contained in Sections 4.03,
4.06, 4.07, 4.08, 4.09, 4.10, 4.12 (except with regard to the second and third
sentences of Section 4.12(a)), 4.13(e), 4.14, 4.15, 4.16(c), 4.18 and 4.24,
insofar as they relate to Subsidiaries of Detective, are true and correct
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with regard to Marksman (assuming Marksman is a Subsidiary of Detective for
purposes of such representations and warranties).
SECTION 4.26. EXCLUSIVITY OF REPRESENTATIONS. (a) THE
REPRESENTATIONS AND WARRANTIES MADE BY DETECTIVE AND ACQUISITION SUB IN THIS
AGREEMENT AND THE ANCILLARY AGREEMENTS ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL
OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING WITHOUT LIMITATION ANY IMPLIED
WARRANTIES. DETECTIVE AND ACQUISITION SUB HEREBY DISCLAIM ANY SUCH OTHER OR
IMPLIED REPRESENTATIONS OR WARRANTIES, NOTWITHSTANDING THE DELIVERY OR
DISCLOSURE TO LYNX OR ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION (INCLUDING ANY
FINANCIAL PROJECTIONS OR OTHER SUPPLEMENTAL DATA).
(b) Lynx and Lynx Parent acknowledge that (i) the
representations and warranties contained in Sections 4.05(b) and (c), 4.06,
4.07, 4.12, 4.13, 4.14, 4.15 and 4.16 are the only representations and
warranties being made with respect to (A) Intellectual Property, (B) compliance
with or liability under ERISA, (C) Taxes and (D) compliance with or liability
under Environmental Laws, respectively, or with respect to any Intellectual
Property, employee benefit, Tax or environmental, health or safety matter
related in any way to Detective and its Affiliates or to this Agreement or its
subject matter, and (ii) no other representation or warranty contained in this
Agreement shall apply to any such matters and no other representation or
warranty, express or implied, is being made with respect thereto.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.01. Access to Information. From the date hereof
until the Closing (upon reasonable notice to Detective or Lynx, as applicable)
during normal business hours, Detective shall, and shall cause the officers,
directors, employees, auditors and agents of Detective and its Subsidiaries to;
and Lynx shall and shall cause the officers, directors, employees, auditors and
agents of the Lynx Companies to (i) afford the officers, employees and
authorized agents and representatives of Detective and its Subsidiaries (where
the undertaking is given by Lynx) and of the Lynx Companies (where the
undertaking is given by Detective) reasonable access to the offices, properties,
books and records of Detective and its Subsidiaries (where the undertaking is
given by Detective) and of the Lynx Companies (where the undertaking is given by
Lynx) and (ii) furnish to the officers, employees and authorized agents and
representatives of Detective and its Subsidiaries (where the undertaking is
given by Lynx) and of the Lynx Companies (where the undertaking is given by
Detective) such additional financial and operating data and other information
regarding Detective, its Subsidiaries and Marksman (where the undertaking is
given by Detective) and regarding the Lynx Companies (where the undertaking is
given by Lynx) as Detective and its Subsidiaries (where the
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undertaking is given by Lynx) and as Lynx (where the undertaking is given by
Detective) may from time to time reasonably request; provided, however, that
such investigation shall not unreasonably interfere with any of the businesses
or operations of Detective or its Subsidiaries (where the undertaking is given
by Detective) and of the Lynx Companies (where the undertaking is given by
Lynx); and provided further that Detective or its Subsidiaries (where the
undertaking is given by Detective) and the Lynx Companies (where the undertaking
is given by Lynx) shall not be required to provide any such information or
access to the extent that such information or access would cause Detective or
its Subsidiaries (where the undertaking is given by Detective) and the Lynx
Companies (where the undertaking is given by Lynx) to be in breach of any
confidentiality restrictions applicable to them.
SECTION 5.02. Confidentiality. The terms of the letter
agreement (the "Confidentiality Agreement") between Detective and The Financial
Times Group are hereby incorporated herein by reference and shall continue in
full force and effect until the Closing, at which time the obligations of the
parties under this Section 5.02 and the Confidentiality Agreement shall
terminate but only in respect of that portion of the Evaluation Material (as
defined in the Confidentiality Agreement) exclusively relating to Detective, its
Subsidiaries and the Lynx Companies. If this Agreement is, for any reason,
terminated prior to the Closing, the Confidentiality Agreement shall nonetheless
continue in full force and effect in all respects.
SECTION 5.03. Regulatory and Other Authorizations; Consents.
(a) Detective shall use its commercially reasonable efforts to promptly obtain
all authorizations, consents, orders and approvals of all Governmental
Authorities that may be or become necessary for its execution and delivery of,
and the performance of its obligations pursuant to, this Agreement and the
Ancillary Agreements, and Lynx will cooperate with Detective in promptly seeking
to obtain all such authorizations, consents, orders and approvals, including
providing any required information; it being understood that, except as set
forth in Section 5.03(c), Lynx shall not be required to pay any fees or other
payments to any such regulatory bodies or officials in order to obtain any such
authorization, consent, order or approval. Detective will not take any action
that would have the effect of delaying, impairing or impeding the receipt of any
required approvals.
(b) Detective agrees, if necessary, to promptly make an
appropriate Section 1018 filing (the "Section 1018 Approval") with the NASD with
respect to the change of control of DBC Securities, Inc. and to respond promptly
to any request for any additional information and documentary material that may
be requested by the NASD. Detective further agrees to file any required notices
with, and obtain any required approvals from, state securities regulators in
connection with the change of control of DBC Securities, Inc. Detective shall
bear the filing fees in connection with such filings. Detective will not take
any action that would have the effect of delaying, impairing or impeding the
receipt of any required approvals.
(c) Each party hereto agrees to make an appropriate filing of
a Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby within 25 Business Days after the date hereof
and to respond promptly to any request for any additional information and
documentary material that may be requested pursuant to the HSR Act.
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In addition, each party agrees to promptly make any other filing that may be
required under any antitrust Law or by any antitrust authority. Each party shall
bear its respective filing fees associated with the HSR filings and any other
similar filings required in any other jurisdictions.
(d) Each party hereto shall use its commercially reasonable
efforts to obtain all other consents, novations and approvals that may be
required in connection with the transactions contemplated by this Agreement and
the Ancillary Agreements.
SECTION 5.04. Further Action. From and after the Closing Date,
each of the parties hereto shall execute and deliver such documents and other
papers and take such further actions as may be reasonably required to carry out
the provisions of this Agreement and the Ancillary Agreements and give effect to
the transactions contemplated hereby and thereby.
SECTION 5.05. Ancillary Agreements. On the Closing Date, Lynx
and Detective shall execute and deliver (or shall cause one or more of their
Affiliates to execute and deliver) the Certificate of Merger and the
Registration Rights Agreement, as applicable.
SECTION 5.06. Stockholders' Meeting. Detective shall as
promptly as practicable following the date of this Agreement call and cause to
be held a stockholders meeting for the purpose of approving the Merger and the
issuance of the Detective Shares and the Lynx Option and the other matters
contemplated by this Agreement including, without limitation, the Amended and
Restated Certificate of Incorporation of Detective, which shall be in form and
substance reasonably satisfactory to Detective and Lynx (the "Amended Charter"),
and the election of the Post-Closing Directors. In connection therewith, subject
to Section 6.03(b), the Board of Directors of Detective shall declare advisable
and recommend the approval of the Merger, the Amended Charter, the election of
the Post-Closing Directors to Detective's Board of Directors and such other
matters necessary in connection with the consummation of the transactions
contemplated herein, and shall prepare and file with the SEC under the Exchange
Act, and shall use all reasonable efforts to have promptly cleared by the SEC,
and promptly thereafter shall mail to its stockholders, the proxy materials, as
they may be amended and supplemented, to be used in connection with such
stockholder meeting (the "Proxy Material"). Detective shall provide Lynx with a
reasonable opportunity to review and comment upon the Proxy Material prior to
its filing with the SEC and distribution to Detective's stockholders. Detective
shall promptly and properly prepare and file any other filings required under
the Exchange Act or any other Federal or state laws relating to the transactions
contemplated herein (collectively, the "Other Filings"). Detective shall notify
Lynx promptly of the receipt of any comments of the SEC and of any request by
the SEC for amendments or supplements to the Proxy Material or by any other
governmental official with respect to any Other Filings or for additional
information and will supply Lynx with copies of all correspondence between
Detective and its representatives, on the one hand, and the SEC or the members
of its staff or any other appropriate government official, on the other hand,
with respect to the Proxy Material and any Other Filings. Detective shall obtain
and furnish the information required to be included in the Proxy Material and
any Other Filings; and Detective, after consultation with Lynx, shall (and Lynx
agrees to reasonably cooperate with Detective in connection therewith) respond
promptly
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to any comments made by the SEC with respect to the Proxy Material and any Other
Filings and any preliminary version thereof and cause the Proxy Material and
related form of proxy to be mailed to its stockholders at the earliest
practicable time. Detective shall notify Lynx of its intention to mail the Proxy
Material to the stockholders of Detective at least 48 hours prior to the
intended time of such mailing. Detective represents and warrants that the
information (other than information with respect to the Lynx Companies which is
supplied by Lynx in writing to Detective specifically for use in the Proxy
Material) contained in the Proxy Material will not, at the date of mailing to
Detective's stockholders or at the date of such stockholder meeting, contain any
statement which, at the time and in light of the circumstances under which it is
made, be false or misleading with respect to any material fact required to be
stated therein or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for such stockholder
meeting. Detective represents and warrants that the Proxy Material will comply
as to form in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder. Lynx and Lynx Parent represent and
warrant that the information supplied by Lynx or Lynx Parent in writing to
Detective and Acquisition Sub specifically for use in the Proxy Material will
not, at the date of mailing to Detective's stockholders or at the date of such
stockholder meeting, contain any statement which, at the time and in light of
the circumstances under which it is made, be false or misleading with respect to
any material fact required to be stated therein or necessary to correct any
statement in any earlier communication with respect to the solicitation of
proxies for such stockholder meeting.
SECTION 5.07. NASDAQ National Market. Prior to the Closing,
Detective shall cause the Detective Shares to be approved for listing on the
NASDAQ National Market.
SECTION 5.08. Fees and Expenses. (a) Except as provided in
this Section 5.08, all fees and expenses incurred in connection with this
Agreement, the Ancillary Agreements and the transactions contemplated hereby and
thereby shall be paid by the party incurring such fees or expenses, whether or
not the Closing occurs.
(b) In the event that (1) a Detective Takeover Proposal shall
have been made to Detective or any of its Subsidiaries or shall have been made
directly to the stockholders of Detective generally or shall have otherwise
become publicly known or any Person shall have publicly announced an intention
(whether or not conditional) to make a Detective Takeover Proposal and
thereafter this Agreement is terminated by either Detective or Lynx pursuant to
Section 8.01(b)(i) or (ii) or this Agreement is terminated by Lynx pursuant to
Section 8.01(c), or (2) this Agreement is terminated by Lynx pursuant to Section
8.01(e), then Detective shall promptly, but in no event later than the date of
such termination, pay Lynx Parent or its designee a fee equal to $25,500,000
million (the "Termination Fee"), payable by wire transfer of same day funds;
provided, however, that no Termination Fee shall be payable to Lynx Parent or
its designee pursuant to clause (1) of this paragraph (b) unless and until
within 12 months of such termination Detective or any of its Subsidiaries enters
into any Detective Acquisition Agreement with respect to, or consummates, any
Detective Takeover Proposal, in which event the Termination Fee shall be payable
upon the first to occur of such events. Detective acknowledges that the
agreements contained in this Section 5.08(b) are an integral part of the
transactions
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contemplated by this Agreement, and that, without these agreements, Lynx and
Lynx Parent would not enter into this Agreement; accordingly, if Detective fails
promptly to pay the amount due pursuant to this Section 5.08(b), and, in order
to obtain such payment, Lynx and Lynx Parent commence a suit which results in a
judgment against Detective for the fee set forth in this Section 5.08(b),
Detective shall pay to Lynx and Lynx Parent their reasonable costs and expenses
(including reasonable attorneys' fees of one counsel (as well as local counsel)
and expenses) in connection with such suit, together with interest on the amount
of the fee at the prime rate of Citibank, N.A. in effect on the date such
payment was required to be made.
SECTION 5.09. Public Announcements. Promptly after the date
hereof, Detective, Acquisition Sub and Lynx will develop a joint communications
plan and each party hereto shall use all reasonable best efforts to ensure that
all press releases and other public statements with respect to the transactions
contemplated by this Agreement and the Ancillary Agreements shall be consistent
with such joint communications plan. Detective, Acquisition Sub and Lynx will
consult with each other before issuing any press release or otherwise making any
written public statement with respect to the transactions contemplated by this
Agreement and the Ancillary Agreements, and shall not issue any such press
release or make any such written public statement prior to such consultation,
except as either party may determine is required by applicable law or by
obligations pursuant to any listing agreement with any securities exchange or
national trading system. The parties agree that the initial press release to be
issued with respect to the transactions contemplated by this Agreement and the
Ancillary Agreements shall be in the form theretofore agreed to by the parties.
SECTION 5.10. Tax Treatment. Each of Detective, Acquisition
Sub and Lynx shall use its best efforts to cause the Merger to qualify as a
reorganization under the provisions of Section 368(a) of the Code.
SECTION 5.11. Reorganization; Intercompany Transactions. On or
prior to the Effective Time, Lynx shall cause the Reorganization to be effected.
Except as set forth in Section 5.11 of the Lynx Company Disclosure Schedule, the
assets and properties of the Lynx Companies following the consummation of the
Reorganization shall be all of those assets and properties necessary for the
conduct in all material respects of the businesses of FTAM as conducted on the
date hereof. Prior to the Effective Time, the Lynx Companies shall be rendered
cash-free and any inter-company indebtedness between any of the Lynx Companies,
on the one hand, and any non-Lynx Company Affiliates of the Lynx Companies, on
the other, shall be contributed to capital or otherwise eliminated (except for
the $19,224,000 intercompany receivable from Rycade Capital Corporation to
Interactive Data Corporation and the $20,000,000 intercompany payable from
Interactive Data Corporation to Pearson).
SECTION 5.12. Advice of Changes. Detective, Acquisition Sub
and Lynx shall promptly advise the other parties orally and in writing to the
extent they have knowledge of (i) any representation or warranty made by them or
their Affiliates contained in this Agreement or any of the Ancillary Agreements
that is qualified as to materiality becoming untrue or inaccurate in any respect
or any such representation or warranty that is not so qualified becoming
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untrue or inaccurate in any material respect or (ii) their failure to comply
with or satisfy in any material respect any covenant, condition or agreement to
be complied with or satisfied by such parties (or such parties' Affiliates)
under this Agreement or any of the Ancillary Agreements and (iii) any change or
event having, or which is reasonably likely to have, a Material Adverse Effect
on such parties (or such parties' Affiliates) or on the truth of their
respective representations and warranties or the ability of the conditions
contained in this Agreement or any of the Ancillary Agreements to be satisfied;
provided, however, that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or their Affiliates (or
remedies with respect thereto) or the conditions to the obligations of the
parties or their Affiliates under this Agreement or any of the Ancillary
Agreements.
SECTION 5.13. Board of Directors. Detective shall employ its
best efforts to ensure that the Board of Directors of Detective is comprised of
ten members following the shareholders meeting convened pursuant to Section
5.06, it being understood that such membership will include (i) Allan R.
Tessler, Alan J. Hirschfield and Carl Spielvogel; (ii) 1 (one) other independent
director designated by Lynx, who shall be reasonably acceptable to Detective,
prior to the mailing of the Proxy Materials; and (iii) 6 (six) persons
designated by Lynx prior to the mailing of the Proxy Materials (the persons
described in clauses (i), (ii) and (iii) being, collectively, the "Post-Closing
Directors"). Detective shall also obtain, at the request of Lynx, the
resignations, effective at any time as of or after the Effective Time (as
requested by Lynx), of those persons designated by Detective as its
representatives on Marksman's Board of Directors.
SECTION 5.14. Indemnification, Exculpation and Insurance. (a)
The parties hereto agree that all rights to indemnification and exculpation from
liabilities for acts or omissions occurring at or prior to the Effective Time
(and rights for advancement of expenses) now existing in favor of the current or
former directors or officers of Detective or its Subsidiaries as provided in
their respective certificates of incorporation or by-laws (or comparable
organizational documents) and any indemnification or other agreements of
Detective as in effect on the date hereof shall be maintained by Detective after
the Merger, and shall survive the Merger and shall continue in full force and
effect in accordance with their terms.
(b) In the event that Detective or any of its successors or
assigns (i) consolidates with or merges into any other person and is not the
continuing or surviving corporation or entity of such consolidation or merger or
(ii) transfers or conveys all or substantially all its properties and assets to
any person, then, and in each such case, Detective shall cause proper provision
to be made so that the successors and assigns of Detective assume the
obligations set forth in this Section 5.14.
(c) For six years from and after the Effective Time, Detective
shall maintain in effect Detective's current directors' and officers' liability
insurance covering acts or omissions occurring prior to the Effective Time
covering each person currently covered by Detective's directors' and officers'
liability insurance policy on terms with respect to such coverage and amounts no
less favorable than those of such policy in effect on the date hereof; provided
that
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Detective may substitute therefor policies of Lynx Parent or its Affiliates or
its subsidiaries containing terms with respect to coverage and amount no less
favorable to such directors or officers; provided, however, that in no event
shall Detective be required to pay aggregate premiums for insurance under this
Section 5.14(c) in excess of 200% of the amount of the aggregate premiums paid
by Detective in 1999 on an annualized basis for such purpose; provided that
Detective shall nevertheless be obligated to provide such coverage as may be
obtained for such 200% amount.
(d) The provisions of this Section 5.14 (i) are intended to be
for the benefit of, and will be enforceable by, each indemnified party, his or
her heirs and his or her representatives and (ii) are in addition to, and not in
substitution for, any other rights to indemnification or contribution that any
such person may have by contract or otherwise.
SECTION 5.15. Repayment of Indebtedness. Prior to the
Effective Time, Detective shall repay each of its outstanding obligations
pursuant to its loan with Society National Bank and any other similar agreement
required to be disclosed pursuant to Section 4.16(a)(v) (collectively, the
"Detective Loan Agreements").
SECTION 5.16. Letter Agreements. Contemporaneously with the
execution of this Agreement, Detective shall enter into and shall cause each of
Mark F. Imperiale, Allan R. Tessler and Alan J. Hirschfield to enter into Letter
Agreements, substantially in the form and to the effect of Exhibit E (the
"Letter Agreements").
ARTICLE VI
CONDUCT OF BUSINESS PENDING CLOSING
SECTION 6.01. Conduct of Business of Detective and its
Subsidiaries Prior to the Closing. (a) Unless Lynx otherwise agrees in writing
and except as otherwise set forth in Section 6.01 or any other Section of the
Detective Disclosure Schedule or as contemplated by this Agreement, between the
date of this Agreement and the Closing Date, Detective will, and will cause each
of its Subsidiaries to (i) operate only in the ordinary course, (ii) use
commercially reasonable efforts to keep available the services of the key
employees of Detective and such Subsidiaries, (iii) operate in compliance in all
material respects with all Laws and (iv) continue to pay their bills in the
ordinary course of business consistent with past practice.
(b) By way of amplification and not limitation, except as
disclosed in Section 6.01 of the Detective Disclosure Schedule or as
contemplated by this Agreement (including repayment of the Detective Loan
Agreements) or as required by Law, between the date of this Agreement and
Closing Date, Detective will not, and shall cause its Subsidiaries to not, do
any of the following without the prior written consent of Lynx (which consent
shall not be unreasonably withheld or delayed):
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(i) grant any Liens (other than Permitted Liens);
(ii) establish or materially increase any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing,
stock option (including the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards),
stock purchase or other employee benefit plan, or otherwise materially
increase the compensation payable to or to become payable to any
officers or key employees of Detective or any of its Affiliates,
except, in the case of salary, in the ordinary course of business or in
any other case described above as may be required by Law or applicable
employment agreement or collective bargaining agreement;
(iii) enter into any employment agreement with any Person
whose annual compensation exceeds $75,000 or any severance agreement
outside of the ordinary course of business consistent with past
practice;
(iv) except in the ordinary course of business sell, assign,
transfer, lease or otherwise dispose of any of the assets of Detective
or any of its Subsidiaries;
(v) (A) acquire (by merger, consolidation, acquisition of
stock or assets or otherwise) any corporation, partnership or other
business organization or division thereof or (B) incur any indebtedness
for borrowed money or issue any debt securities or assume, grant,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any Person, or make any loans,
advances or distributions of cash;
(vi) take any action, other than reasonable actions in the
ordinary course of business and consistent with past practice, with
respect to accounting policies or procedures;
(vii) pay, discharge or satisfy any material claim, liability
or obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than as required by this Agreement or the payment,
discharge or satisfaction, in the ordinary course of business and
consistent with past practice, of liabilities reflected or reserved
against in the financial statements referred to in Section 4.05 or
subsequently incurred in the ordinary course of business and consistent
with past practice;
(viii) make any material state, local or foreign Tax election
or settle or compromise any material state, local or foreign Tax
liability;
(ix) issue or sell any additional shares of the capital stock
or share capital of, or other equity interests in, Detective or any of
its Subsidiaries or securities convertible into or exchangeable for
such shares or equity interests, or issue or grant any Options,
warrants, calls, subscription rights or other rights of any kind to
acquire additional shares of such capital stock or share capital, such
other equity interests, or such securities (other
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than issuances of Detective Common Stock pursuant to the exercise of
Options outstanding as of the date hereof);
(x) other than as required by this Agreement, amend the
Certificate of Incorporation, other constitutive documents or by-laws
of Detective or any of its Subsidiaries;
(xi) other than dividends and distributions (including
liquidating distributions) by a direct or indirect wholly owned
Subsidiary of Detective and dividends and distributions declared, set
aside or paid by Detective as required by and in accordance with the
respective terms of its capital stock or share capital as of the date
hereof, (x) declare, set aside or pay any dividends on, or make any
other distributions (whether in cash, stock, property or otherwise) in
respect of, any of its capital stock or share capital, (y) split,
combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or (z) purchase, redeem
or otherwise acquire, directly or indirectly, any shares of capital
stock or share capital of Detective or any of its Subsidiaries or any
other securities thereof or any rights, warrants or options to acquire
any such shares or other securities (other than issuances of Detective
Common Stock pursuant to the exercise of Options outstanding as of the
date hereof);
(xii) make or agree to make any new capital expenditure or
expenditures except in the ordinary cause of business consistent with
past practice;
(xiii) except as required by Law or contemplated hereby, enter
into, adopt or amend in any material respect or terminate any Detective
Plan, collective bargaining agreement, employment agreement, deferred
compensation agreement, consulting agreement, severance agreement,
termination agreement, indemnification agreement or any other
agreement, plan or policy involving Detective or any of its
Subsidiaries, and one or more of its current or former directors,
officers or employees, or change any actuarial or other assumption used
to calculate funding obligations with respect to any pension plan, or
change the manner in which contributions to any pension plan are made
or the basis on which such contributions are determined;
(xiv) transfer or license to any person or entity or otherwise
extend, amend or modify any rights to the Detective Owned Intellectual
Property, the Detective Licensed Intellectual Property or the Detective
Shrink-Wrapped Software other than in the ordinary course of business
consistent with past practice or on a non-exclusive basis not
materially different from past practice;
(xv) call or hold any meeting of stockholders of Detective
other than in connection with the election of members of the Board of
Directors of Detective or other routine matters in the ordinary course
of business consistent with past practice;
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(xvi) enter into any contract, agreement, obligation,
commitment, arrangement or understanding with any Affiliate of
Detective that would have been required to be filed as an exhibit to
Detective's annual report on form 10-K for the fiscal year ended June
30, 1999 had Detective or any of its Affiliates been a party thereto as
of June 30, 1999;
(xvii) with respect to any Option or other award the value of
which is based in whole or in part upon the performance of Detective
Common Stock that is outstanding as of the date hereof, take any action
that would cause any condition relating to the exercisability or full
enjoyment of any such Option or other award to lapse in whole or in
part;
(xviii) (I) take or agree or commit to take or agree or commit
to omit any action that would make any representation or warranty of
Detective or Acquisition Sub under this Agreement or the Ancillary
Agreements inaccurate in any material respect (if not qualified by
materiality) and in any respect (if qualified by materiality); or (II)
take any action or course of action inconsistent with compliance with
the covenants or agreements of Detective or Acquisition Sub under this
Agreement or the Ancillary Agreements; or
(xix) authorize, or commit or agree to take, any of the
foregoing actions.
(c) Detective shall (and shall cause its Affiliates to)
implement and remain in compliance with the Detective Year 2000 Plan in
accordance with the terms thereof. Detective shall not amend or modify (or cause
or permit to be amended or modified) the Detective Year 2000 Plan without the
prior written consent of Lynx (which shall not be unreasonably withheld or
delayed). Detective shall provide Lynx with written progress reports as
reasonably requested by Lynx, but no more frequently than monthly, describing in
reasonable detail the steps and measures taken to the date of the report to
implement the Detective Year 2000 Plan, and the status of and the progress made
in connection with the implementation of the Detective Year 2000 Plan. Detective
shall afford Lynx and its agents, representatives and advisors reasonable
access, upon reasonable notice to Detective, to those Persons involved with the
implementation of the Detective Year 2000 Plan in order to monitor the status of
the implementation of the Year 2000 Plan and the progress made in addressing the
Year 2000 Problem.
SECTION 6.02. Conduct of Business of the Lynx Companies Prior
to the Closing. (a) Unless Detective otherwise agrees in writing and except as
otherwise set forth in Section 6.02 or any other Section of the Lynx Disclosure
Schedule, or as contemplated by this Agreement (including, without limitation,
effecting the Reorganization) between the date of this Agreement and the Closing
Date, Lynx and Lynx Parent will cause the Lynx Companies to (i) operate only in
the ordinary course, (ii) use commercially reasonable efforts to keep available
the services of the key employees of the Lynx Companies, (iii) operate in
compliance in all material respects with all Laws and (iv) continue to pay their
bills in the ordinary course of business consistent with past practice.
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(b) By way of amplification and not limitation, except as
disclosed in Section 6.02 of the Lynx Disclosure Schedule or as contemplated by
this Agreement (including effecting the Reorganization) or as required by Law,
between the date of this Agreement and the Closing Date, Lynx and Lynx Parent
will cause the Lynx Companies not to do any of the following without the prior
written consent of Detective (which consent shall not be unreasonably withheld
or delayed):
(i) grant any Liens (other than Permitted Liens);
(ii) establish or materially increase any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing,
stock option (including the granting of stock options, stock
appreciation rights, performance awards or restricted stock awards),
stock purchase or other employee benefit plan, or otherwise materially
increase the compensation payable to or to become payable to any
officers or key employees of the Lynx Companies, except, in the case of
salary, in the ordinary course of business or in any other case
described above as may be required by Law or applicable employment
agreement or collective bargaining agreement;
(iii) enter into any employment agreement with any Person
whose annual compensation exceeds $75,000 or any severance agreement
outside of the ordinary course of business consistent with past
practice;
(iv) except in the ordinary course of business sell, assign,
transfer, lease or otherwise dispose of any of the assets of the Lynx
Companies;
(v) (A) acquire (by merger, consolidation, acquisition of
stock or assets or otherwise) any corporation, partnership or other
business organization or division thereof or (B) incur any indebtedness
(other than indebtedness owing to any Affiliate of the Lynx Companies)
for borrowed money or issue any debt securities or assume, grant,
guarantee or endorse, or otherwise as an accommodation become
responsible for, the obligations of any Person, or make any loans,
advances or distributions of cash;
(vi) take any action, other than reasonable actions in the
ordinary course of business and consistent with past practice, with
respect to accounting policies or procedures;
(vii) other than with respect to transactions between the Lynx
Companies and any of their Affiliates, pay, discharge or satisfy any
material claim, liability or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment, discharge
or satisfaction, in the ordinary course of business and consistent with
past practice, of liabilities reflected or reserved against in the
Reference Balance Sheet referred to in Section 3.05(a) or subsequently
incurred in the ordinary course of business and consistent with past
practice;
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(viii) make any material state, local or foreign Tax election
or settle or compromise any material state, local or foreign Tax
liability;
(ix) issue or sell any additional shares of the capital stock
or share capital of, or other equity interests in, the Lynx Companies
or securities convertible into or exchangeable for such shares or
equity interests, or issue or grant any Options, warrants, calls,
subscription rights or other rights of any kind to acquire additional
shares of such capital stock or share capital, such other equity
interests, or such securities.
(x) amend the Certificate of Incorporation, other constitutive
documents or by-laws of any Lynx Company;
(xi) other than with respect to any dividends or distributions
to any Affiliate of any Lynx Company, and other than for dividends and
distributions (including liquidating distributions) by a direct or
indirect wholly owned Subsidiary of any Lynx Company to its parent and
dividends and distributions declared, set aside or paid by any Lynx
Company as required by and in accordance with the respective terms of
its capital stock or share capital as of the date hereof, (x) declare,
set aside or pay any dividends on, or make any other distributions
(whether in cash, stock, property or otherwise) in respect of, any of
its capital stock or share capital, (y) split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for
shares of their capital stock, or (z) purchase, redeem or otherwise
acquire, directly or indirectly, any shares of capital stock or share
capital of any Lynx Company or any other securities thereof or any
rights, warrants or options to acquire any such shares or other
securities;
(xii) make or agree to make any new capital expenditure or
expenditures except in the ordinary course of business consistent with
past practice;
(xiii) except as required by Law or contemplated hereby, enter
into, adopt or amend in any material respect or terminate any Lynx
Company Plan, collective bargaining agreement, employment agreement,
deferred compensation agreement, consulting agreement, severance
agreement, termination agreement, indemnification agreement or any
other agreement, plan or policy involving any Lynx Company and one or
more of its current or former directors, officers or employees, or
change any actuarial or other assumption used to calculate funding
obligations with respect to any pension plan, or change the manner in
which contributions to any pension plan are made or the basis on which
such contributions are determined;
(xiv) transfer or license to any person or entity or otherwise
extend, amend or modify any rights to the Lynx Company Owned
Intellectual Property, Lynx Company Licensed Intellectual Property or
Lynx Company Shrink-Wrapped Software other than in the ordinary course
of business consistent with past practice or on a non-exclusive basis
not materially different from past practice;
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(xv) with respect to any Option or other award the value of
which is based in whole or in part upon the performance of Lynx shares
that are outstanding as of the date hereof, take any action that would
cause any condition relating to the exercisability or full enjoyment of
any such Option or other award to lapse in whole or in part;
(xvi) enter into any material contract, obligation,
commitment, arrangement or understanding with any Affiliate of any Lynx
Company not in the ordinary course of business;
(xvii) (I) take or agree or commit to take or agree or commit
to omit any action that would make any representation or warranty of
Lynx Parent or any of the Lynx Companies under this Agreement or the
Ancillary Agreements inaccurate in any material respect (if not
qualified by materiality) and in any respect (if qualified by
materiality); or (II) take any action or course of action inconsistent
with compliance with the covenants or agreements of Lynx Parent or any
of the Lynx Companies under this Agreement or the Ancillary Agreements;
or
(xviii) authorize, or commit or agree to take, any of the
foregoing actions;
(c) Lynx shall implement and remain in compliance with the
Lynx Company Year 2000 Plan in accordance with the terms thereof. Lynx shall not
amend or modify (or cause or permit to be amended or modified) the Lynx Company
Year 2000 Plan without the prior written consent of Detective (which shall not
be unreasonably withheld or delayed). Lynx shall provide Detective with written
progress reports as reasonably requested by Detective, but no more frequently
than monthly describing in reasonable detail the steps and measures taken to the
date of the report to implement the Lynx Company Year 2000 Plan, and the status
of and the progress made in connection with the implementation of the Lynx
Company Year 2000 Plan. Lynx shall afford Detective and its agents,
representatives and advisors reasonable access, upon reasonable notice to Lynx,
to those Persons involved with the implementation of the Lynx Company Year 2000
Plan in order to monitor the status of the implementation of the Lynx Company
Year 2000 Plan and the progress made in addressing the Year 2000 Problem.
SECTION 6.03. No Solicitation by Detective. (a) From and after
the date of this Agreement, Detective shall not, nor shall it permit any of its
Subsidiaries to, nor shall it authorize or permit any of its directors, officers
or employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or any of its Subsidiaries to, directly
or indirectly through another Person, (i) solicit, initiate or encourage
(including by way of furnishing information), or take any other action designed
to facilitate, any inquiries or the making of any proposal that constitutes, a
Detective Takeover Proposal or (ii) participate in any discussions or
negotiations (including by way of furnishing information) regarding any
Detective Takeover Proposal. Notwithstanding the foregoing, in the event that
Detective receives a Detective Superior Proposal, Detective may participate in
discussions regarding any Detective Superior Proposal in order to be informed
with respect thereto in order to make any
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determination permitted pursuant to Section 6.03(b)(i). In such event, Detective
shall, no less than 48 hours prior to participating in any such discussions, (i)
inform Lynx of the material terms and conditions of such Detective Superior
Proposal, including the identity of the person making such Detective Superior
Proposal, (ii) inform Lynx of the substance of any discussions relating to such
Detective Superior Proposal and (iii) keep Lynx fully informed of the status,
including any change to the material terms and conditions of, any such Detective
Superior Proposal. For purposes of this Agreement, "Detective Takeover Proposal"
means any bona fide inquiry, proposal or offer from any person relating to any
direct or indirect acquisition or purchase of a business that constitutes 20% or
more of the net revenues, net income or the assets of Detective and its
Subsidiaries, taken as a whole, or 20% or more of any class of equity securities
of Detective or any of its Subsidiaries, any tender offer or exchange offer that
if consummated would result in any person beneficially owning 20% or more of any
class of equity securities of Detective or any of its Subsidiaries, or any
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving Detective or any of its
Subsidiaries, other than the transactions contemplated by this Agreement. For
purposes of this Agreement, "Detective Superior Proposal" means any offer not
solicited by Detective made by a third party to consummate a tender offer,
exchange offer, merger, consolidation or similar transaction which would result
in such third party (or its shareholders) owning, directly or indirectly, more
than 50% of the shares of the Detective Common Stock then outstanding (or of the
surviving entity in a merger) or all or substantially all of the assets of
Detective and its Subsidiaries, taken together, and otherwise on terms which the
Board of Directors of Detective determines in good faith to be reasonably likely
to obtain the Detective Stockholder Approval and to provide consideration to the
holders of the Detective Common Stock with a greater value than the
consideration to be exchanged at the Closing.
(b) Neither the Board of Directors of Detective nor any
committee thereof shall (i) except as required by law as advised in writing by
outside counsel, withdraw or modify, or propose publicly to withdraw or modify,
in a manner adverse to Lynx, the approval or recommendation by such Board of
Directors or such committee of the transactions contemplated by this Agreement
or the Ancillary Agreements, provided, however, the Board of Directors, or such
committee, may, if it believes it is in the best interest of its shareholders to
do so, withdraw or modify such recommendation or (ii) cause Detective to enter
into any Detective Acquisition Agreement.
(c) In addition to the obligations of Detective set forth in
paragraphs (a) and (b) of this Section 6.03, Detective shall immediately advise
Lynx orally and in writing of any request for information or of any Detective
Takeover Proposal, the material terms and conditions of such request or
Detective Takeover Proposal and the identity of the person making such request
or Detective Takeover Proposal. Detective will keep Lynx informed of the status
and details (including amendments or proposed amendments) of any such request or
Detective Takeover Proposal.
(d) Nothing contained in this Section 6.03 shall prohibit
Detective from taking and disclosing to its stockholders a position contemplated
by Rule 14d-9 or 14e-2 promulgated
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<PAGE> 56
under the Exchange Act or from making any disclosure to Detective's stockholders
if, in the good faith judgment of the Board of Directors of Detective, after
consultation with outside counsel, failure so to disclose would be inconsistent
with its obligations under applicable law; provided, however, that, except as
permitted pursuant to Section 6.03(b)(i), neither Detective nor its Board of
Directors nor any committee thereof shall withdraw or modify, or propose
publicly to withdraw or modify, its position with respect to the transactions
contemplated by this Agreement or the Ancillary Agreements.
ARTICLE VII
CONDITIONS TO CLOSING
SECTION 7.01. Conditions to Each Party's Obligations. The
respective obligations of each party to consummate the transactions contemplated
by this Agreement and the Ancillary Agreements are subject to the satisfaction
or waiver on or prior to the Closing Date of the following conditions:
(a) Stockholder Approval. The Detective Stockholder Approval
shall have been obtained.
(b) HSR Act. The waiting periods (and any extension thereof)
applicable to the transactions contemplated hereby under the HSR Act and any
applicable foreign antitrust and competition Laws shall have been terminated or
shall have expired, and any necessary consents or approvals with respect to such
transactions under any applicable foreign antitrust and competition Laws shall
have been obtained.
(c) SEC or NASD Consents; Approvals. All consents, approvals
or orders of authorization of, or actions by, the SEC or NASD shall have been
obtained including, without limitation, the Section 1018 Approval if necessary.
(d) Other Consents. The consents or approvals set forth on
Section 7.01(d) of the Lynx Company Disclosure Schedule shall have been
obtained.
(e) No Litigation. No judgment, order, decree, statute, law,
ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued
by any court or other Governmental Authority of competent jurisdiction or other
legal restraint or prohibition (collectively, "Restraints") shall be in effect,
and there shall not be pending or threatened any suit, action or proceeding by
any Governmental Authority, (i) preventing the consummation of the transactions
contemplated hereby or by the Ancillary Agreements or (ii) which otherwise is
reasonably likely to have a Material Adverse Effect; provided, however, that
each of the parties shall have used its reasonable efforts to prevent the entry
of any such Restraints and to appeal as promptly as possible any such Restraints
that may be entered.
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<PAGE> 57
(f) The Reorganization. The Reorganization shall have been
effected (and Lynx or any of its Affiliates shall have received any tax
clearances or consents (including any UK Treasury consent) deemed necessary or
desirable by Lynx or any of its Affiliates in connection therewith).
SECTION 7.02. Conditions to Obligations of Lynx. The
obligation of Lynx to consummate the transactions contemplated hereby and the
Ancillary Agreements is further subject to satisfaction or waiver of the
following conditions:
(a) Representations and Warranties. The representations and
warranties of Detective and Acquisition Sub set forth herein that are qualified
as to materiality shall be true and correct, and those that are not so qualified
shall be true and correct in all material respects, in each case as of the date
hereof and as of the Closing Date, with the same effect as if made at and as of
such time (except to the extent expressly made as of an earlier date, in which
case as of such date); provided, however, that Section 4.25 need only be true
and correct in all material respects as of the date of this Agreement, except to
the extent expressly made as of an earlier date, which need only be true as of
such date. Lynx shall have received a certificate signed on behalf of Detective
and Acquisition Sub by the chief executive officer of Detective to such effect.
(b) Performance of Obligations of Detective and Acquisition
Sub. Detective and Acquisition Sub shall have performed in all material respects
all obligations required to be performed by them under this Agreement and the
Ancillary Agreements at or prior to the Closing Date. Lynx shall have received a
certificate signed on behalf of Detective and Acquisition Sub by the chief
executive officer of Detective to such effect.
(c) NASD Listing. The Detective Shares shall have been
approved for listing, subject to notice of issuance, on the NASDAQ National
Market.
(d) Detective Common Stock Price. For the 10-trading-day
period preceding the Closing Date, the average daily closing price per share of
Detective Common Stock as reported on the NASDAQ National Market (or if not
listed on the NASDAQ National Market, as reported on any national securities
exchange or national securities quotation system on which the Detective Common
Stock is listed or quoted), as reported in the Wall Street Journal (Northeast
edition) shall be equal to or greater than $6.50.
(e) Detective Loan Agreements. Lynx shall have received
evidence, in form and substance reasonably satisfactory to Lynx, of the
repayment of the Detective Loan Agreements and the release of all Liens in
connection therewith.
(f) Tax Treatment. Lynx and Lynx Parent shall have received an
opinion from tax counsel, reasonably acceptable in form and substance to them,
that the Merger will be treated as a "reorganization" under Section 368(a) of
the Code.
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<PAGE> 58
(g) The seven day revocation period under each of the Letter
Agreements shall have expired and the Letter Agreements shall not have been
revoked.
(h) Matters Relating to Marksman. There shall not have
occurred without Lynx's prior consent (i) any change in the authorized or
outstanding capital stock of Marksman (or any Board authorization of any such
change) from June 30, 1999 other than pursuant to common stock options, bonuses
or awards to employees, consultants or directors in the ordinary course of
business consistent with past practice in an amount not exceeding 3 (three)
percent of the outstanding common stock of Marksman as of such date, (ii) any
Material Adverse Effect with respect to Marksman since June 30, 1999, (iii) any
entry by Marksman into any new line of business (or Board approval of such
entry) or (iv) the consummation of any acquisition of any company or business
(whether by merger, purchase of stock or assets or otherwise) by Marksman or the
entry by Marksman into any partnership or joint venture (regardless of legal
form) with any other party, or the entry by Marksman into any Contract to effect
any such transaction (or Board approval of such), in each case involving
payments or contributions by Marksman in excess of $5 million (whether in cash,
property or services).
SECTION 7.03. Conditions to Obligations of Detective and
Acquisition Sub. The obligation of Detective and Acquisition Sub to consummate
the transactions, contemplated hereby and by the Ancillary Agreements is further
subject to satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Lynx set forth herein that are qualified as to materiality shall
be true and correct, and those that are not so qualified shall be true and
correct in all material respects, in each case as of the date hereof and as of
the Closing Date, with the same effect as if made at and as of such time (except
to the extent expressly made as of an earlier date, in which case as of such
date). Detective shall have received a certificate signed on behalf of Lynx by
its chief executive officer to such effect.
(b) Performance of Obligations of Lynx. Lynx shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date. Detective shall have
received a certificate signed on behalf of Lynx by its chief executive officer
to such effect.
SECTION 7.04. Frustration of Closing Conditions. None of Lynx,
Detective or Acquisition Sub may rely on the failure of any condition set forth
in Section 7.01, 7.02 or 7.03, as the case may be, to be satisfied if such
failure was caused by such party's failure to use its reasonable efforts to
consummate the transactions contemplated by this Agreement, and the Ancillary
Agreements, as required by and subject to Section 5.04.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
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<PAGE> 59
SECTION 8.01. Termination. This Agreement may be terminated at
any time prior to the Closing (except as limited as to time in paragraph (b)
below):
(a) by mutual written consent of Lynx and Detective;
(b) by either Lynx or Detective:
(i) if the Closing shall not have occurred prior to May 31,
2000; provided, further, however, that the right to terminate this
Agreement pursuant to this Section 8.01(b)(i) shall not be available to
any party whose failure to perform any of its obligations under this
Agreement results in the failure of the Closing to occur by such time;
or
(ii) if the Detective Stockholder Approval shall not have been
obtained at a Detective Shareholders Meeting duly convened therefor or
at any adjournment or postponement thereof; or
(iii) if any Restraint having any of the effects set forth in
Section 7.01(e) shall be in effect and shall have become final and
nonappealable; provided that the party seeking to terminate this
Agreement pursuant to this Section 8.01(b)(iii) shall have used
reasonable efforts to prevent the entry of and to remove such
Restraint.
(c) by Lynx, if Detective or any of its Affiliates shall have
breached or failed to perform in any material respect any of its
representations, warranties, covenants or other agreements contained in this
Agreement or the Ancillary Agreements, which breach or failure to perform (A)
would give rise to the failure of a condition set forth in Section 7.02(a) or
(b) and (B) has not been or is incapable of being cured by Detective or any of
its Affiliates within 30 calendar days after its receipt of written notice from
Lynx;
(d) by Detective, if Lynx or any of its Affiliates shall have
breached or failed to perform in any material respect any of its
representations, warranties, covenants or other agreements contained in this
Agreement or the Ancillary Agreements, which breach or failure to perform (A)
would give rise to the failure of a condition set forth in Section 7.03(a) or
(b) and (B) has not been or is incapable of being cured by Lynx or any of its
Affiliates within 30 calendar days after its receipt of written notice from or
Detective; or
(e) by Lynx, if there is any material breach of the
obligations set forth in Section 6.03 or if Detective withdraws its
recommendation of the Merger or the transactions contemplated by this Agreement
or the Ancillary Agreements.
SECTION 8.02. Effect of Termination. In the event of
termination of this Agreement by either Detective or Lynx as provided in Section
8.01, this Agreement shall forthwith become void and have no effect, without any
liability or obligation on the part of
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<PAGE> 60
Detective, Acquisition Sub or Lynx, other than the provisions of Section 3.17,
Section 4.17, Section 5.02, Section 5.08, this Section 8.02 and Article IX,
which provisions shall survive such termination, and except to the extent that
such termination results from the wilful and material breach by a party of any
of its representations, warranties, covenants or agreements set forth in this
Agreement. If this Agreement is terminated under circumstances in which Lynx is
entitled to receive the Termination Fee, the payment of such Termination Fee
shall be the sole and exclusive remedy (other than as provided for in the Lynx
Option Agreement) available to Lynx, except if there shall have been a wilful
breach by Detective of Section 6.03.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties at any time before or after the Detective Stockholder Approval;
provided, however, that after any such approval, there shall not be made any
amendment that by law requires further approval by the stockholders of Detective
without the further approval of such stockholders. This Agreement may not be
amended except by an instrument in writing signed on behalf of each of the
parties.
SECTION 8.04. Extension; Waiver. At any time prior to the
Closing, a party may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties of the other parties contained in this
Agreement or in any document delivered pursuant to this Agreement or (c) subject
to the proviso of Section 8.03, waive compliance by the other party with any of
the agreements or conditions contained in this Agreement. Any agreement on the
part of a party to any such extension or waiver shall be valid only if set forth
in an instrument in writing signed on behalf of such party. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Nonsurvival of Representations and Warranties.
None of the representations, warranties, covenants or agreements in this
Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Closing. This Section 9.01 shall not limit any covenant or agreement
of the parties which by its terms contemplates performance after the Closing.
SECTION 9.02. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by overnight courier service, by cable, by facsimile, by
telegram, by telex or by registered or certified mail (postage prepaid, return
receipt requested) to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 9.02):
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<PAGE> 61
(a) if to Detective or Acquisition Sub:
Data Broadcasting Corporation
3490 Clubhouse Drive
Jackson, WY 83001
Attention: President
Telecopier: (307) 733-4935
with a copy to:
Camhy Karlinsky & Stein LLP
1740 Broadway, 16th Floor
New York, NY 10019
Attention: Alan I. Annex, Esq.
Telecopier: (212) 977-8389
(b) if to Lynx or Lynx Parent:
c/o Pearson Inc.
1330 Avenue of the Americas, 7th Floor
New York, NY 10019
Attention: President
Telecopier: (212) 641-2500
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
Attention: Anne E. Gold, Esq.
Telecopier: (212) 309-6273
SECTION 9.03. Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 9.04. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a
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<PAGE> 62
mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent possible.
SECTION 9.05. Entire Agreement. This Agreement and the
Ancillary Agreements constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, other than the Confidentiality Agreement,
with respect to the subject matter hereof and thereof and except as otherwise
expressly provided herein and therein.
SECTION 9.06. Assignment. This Agreement shall not be assigned
by operation of Law or otherwise, except that each of Lynx and Lynx Parent may
assign all or any of its respective rights and obligations hereunder to any of
its Affiliates, provided, however, that no such assignment shall relieve the
assigning party of its obligations hereunder.
SECTION 9.07. No Third-Party Beneficiaries. This Agreement is
for the sole benefit of the parties hereto and their permitted assigns and
nothing herein (other than as set forth in Section 5.14), express or implied, is
intended to or shall confer upon any other Person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement.
SECTION 9.08. Sections and Schedules. Any disclosure with
respect to a Section or Schedule of this Agreement shall be deemed to be
disclosure for all other Sections and Schedules of this Agreement.
SECTION 9.09. Governing Law. This Agreement shall be governed
by, and construed in accordance with, the Laws of the State of Delaware. All
actions and proceedings arising out of or relating to this Agreement shall be
heard and determined in a Delaware state or federal court sitting in the State
of Delaware, and the parties hereto hereby irrevocable submit to the exclusive
jurisdiction of such courts in any such action or proceeding and irrevocably
waive the defense of an inconvenient forum to the maintenance of any such action
or proceeding.
SECTION 9.10. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 9.11. No Presumption. This Agreement shall be
construed without regard to any presumption or rule requiring construction or
interpretation against the party drafting or causing any instrument to be
drafted.
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[signature page to follow]
58
<PAGE> 64
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
INTERACTIVE DATA CORPORATION
By: /s/ Philip J. Hoffman
-----------------------------------
Name: Philip J. Hoffman
Title: Authorized Person
PEARSON LONGMAN, INC.
By: /s/ Philip J. Hoffman
-----------------------------------
Name: Philip J. Hoffman
Title: Authorized Person
DATA BROADCASTING CORPORATION
By: /s/ Mark F. Imperiale
-----------------------------------
Name: Mark F. Imperiale
Title: President
and
DETECTIVE MERGER-SUB, INC.
By: /s/ Mark F. Imperiale
-----------------------------------
Name: Mark F. Imperiale
Title: President
[Signature page to Merger Agreement]
<PAGE> 65
Schedule I
Lynx Companies
1. Muller Data Corporation, a New York corporation
2. Interactive Data Canada Inc., an company organized under the laws of
the Province of Ontario, Canada
3. Financial Times Information (H.K.) Limited, a company organized under
the laws of Hong Kong
4. Financial Times Information (Australia) Pty Limited, a company
organized under the laws of Victoria, Australia
5. Financial Times Information (Singapore) Pte Ltd., a company organized
under the laws of Singapore
6. Financial Times Information (Ireland) Ltd., a company organized under
the laws of Ireland
7. Exshare Financial Limited, a company organized under the laws of
England and Wales
8. Exshare Computing Ltd., a company organized under the laws of England
and Wales
9. The Exchange Telegraph Co. Ltd., a company organized under the laws of
England and Wales
10. Exshare Financial (US) Ltd., a company organized under the laws of
England and Wales
11. W&W Ltd, a company organized under the laws of England and Wales
12. Extel Statistical Services Ltd., a company organized under the laws of
England and Wales
13. Exshare Financial Inc., a Delaware corporation
<PAGE> 66
Schedule IV
Parties to Voting and Standstill Agreements
Alan Hirschfield
Allan Tessler
<PAGE> 1
EXHIBIT 5.2
OPTION AGREEMENT, dated as of November 14, 1999 (the "Agreement"), by
and between DATA BROADCASTING CORPORATION, a Delaware corporation ("Issuer"),
and INTERACTIVE DATA CORPORATION, a Delaware corporation ("Grantee").
RECITALS
WHEREAS, Issuer, Detective Merger-Sub, Inc., a Delaware corporation,
Pearson Longman, Inc., a Delaware corporation and Grantee have entered into an
Agreement and Plan of Merger dated as of the date hereof (the "Merger
Agreement"; defined terms used but not defined herein have the meanings set
forth in the Merger Agreement), providing for, among other things, the merger
of Acquisition Subsidiary, Inc. with and into Grantee which shall become a
wholly-owned subsidiary of Issuer as a result thereof; and
WHEREAS, as a condition and inducement to Grantee's willingness to
enter into the Merger Agreement, Grantee has required that Issuer agree, and
Issuer has agreed, to grant Grantee the Option (as defined below).
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Grant of Option. Subject to the terms and conditions set
forth herein, Issuer hereby grants to Grantee an irrevocable option (the
"Option") to purchase up to 6,889,293.63 (as adjusted as set forth herein)
shares (the "Option Shares") of Detective Common Stock at a purchase price of
$7.65 (as adjusted as set forth herein) per Option Share (the "Purchase
Price").
2. Exercise of Option. (a) Grantee may, at any time or times,
exercise the Option, in whole or in part, subject to the provisions of Section
2(c), after the occurrence of any event as a result of which the Grantee is
entitled to receive the Termination Fee pursuant to Section 5.08 of the Merger
Agreement (a "Purchase Event"); provided, however, that (i) except as provided
in the last sentence of this Section 2(a), the Option will terminate and be of
no further force and effect upon the earliest to occur of (A) the Effective
Time, (B) 12 months after the first occurrence of a Purchase Event, and (C)
termination of the Merger Agreement in accordance with its terms prior to the
occurrence of a Purchase Event, unless, in the case of clause (C), Grantee has
the right to receive a Termination Fee following such termination upon the
occurrence of certain events, in which case the Option will not terminate until
the later of (x) 12 months following the time such Termination Fee becomes
payable and (y) the expiration of the period in which the Grantee has such
right to receive a Termination Fee, and (ii) any purchase of Option Shares upon
exercise of the Option will be subject to compliance with the HSR Act and any
applicable foreign antitrust and competiton Laws, and the obtaining or making
of any consents, approvals, orders, notifications, filings or authorizations,
the failure of which to have obtained or made would violate any law, regulation
or agreement to which Issuer is subject (the
<PAGE> 2
"Regulatory Approvals"). Notwithstanding the foregoing, (A) if all necessary
Regulatory Approvals have not been obtained prior to the termination of the
Option, such termination shall be extended to the date that is the fifth
Business Day after receipt of such Regulatory Approvals, and (B)
notwithstanding the termination of the Option, if Grantee has exercised the
Option in accordance with the terms hereof prior to the termination of the
Option, Grantee will be entitled to purchase the Option Shares and the
termination of the Option will not affect any rights hereunder.
(b) In the event that Grantee is entitled to and wishes
to exercise the Option, it will send to Issuer a written notice (an "Exercise
Notice"; the date of which being herein referred to as the "Notice Date") to
that effect which Exercise Notice also specifies the number of Option Shares,
if any, Grantee wishes to purchase pursuant to this Section 2(b), the number of
Option Shares, if any, with respect to which Grantee wishes to exercise its
Cash-Out Right (as defined herein) pursuant to Section 6(c), the denominations
of the certificate or certificates evidencing the Option Shares which Grantee
wishes to purchase pursuant to this Section 2(b) and a date (an "Option Closing
Date"), subject to the following sentence, not earlier than three Business Days
nor later than 20 Business Days from the Notice Date for the closing of such
purchase (an "Option Closing"). Any Option Closing will be at an agreed
location and time in New York, New York on the applicable Option Closing Date
or at such later date as may be necessary so as to comply with clause (ii) of
the first sentence of Section 2(a).
(c) Notwithstanding anything to the contrary contained
herein, any exercise of the Option and purchase of Option Shares shall be
subject to compliance with applicable laws and regulations, which may prohibit
the purchase of all the Option Shares specified in the Exercise Notice without
first obtaining or making certain Regulatory Approvals. In such event, if the
Option is otherwise exercisable and Grantee wishes to exercise the Option, the
Option may be exercised in accordance with Section 2(b) and Grantee shall
acquire the maximum number of Option Shares specified in the Exercise Notice
that Grantee is then permitted to acquire under the applicable laws and
regulations, and if Grantee thereafter obtains the Regulatory Approvals to
acquire the remaining balance of the Option Shares specified in the Exercise
Notice, then Grantee shall be entitled to acquire such remaining balance.
Issuer agrees to use its reasonable efforts to assist Grantee in seeking the
Regulatory Approvals. In the event (i) Grantee receives notice that a
Regulatory Approval required for the purchase of any Option Shares will not be
issued or granted or (ii) such Regulatory Approval has not been issued or
granted within six months of the date of the Exercise Notice, Grantee shall
have the right to exercise its Cash-Out Right pursuant to Section 6(c) with
respect to the Option Shares for which such Regulatory Approval will not be
issued or granted or has not been issued or granted.
3. Payment and Delivery of Certificates. (a) At any Option
Closing, Grantee will pay to Issuer in immediately available funds by wire
transfer to a bank account designated in writing by Issuer an amount equal to
the Purchase Price multiplied by the number of Option Shares to be purchased at
such Option Closing plus the amount of any transfer, stamp or other similar
taxes or charges imposed in connection therewith.
-2-
<PAGE> 3
(b) At any Option Closing, simultaneously with the
delivery of immediately available funds as provided in Section 3(a), Issuer
will deliver to Grantee a certificate or certificates representing the Option
Shares to be purchased at such Option Closing, which Option Shares will be free
and clear of all Liens, claims, charges and encumbrances of any kind
whatsoever, except pursuant to applicable federal and state securities laws. If
at the time of issuance of Option Shares pursuant to an exercise of the Option
hereunder, Issuer shall have issued any securities similar to rights under a
stockholder rights plan, then each Option Share issued pursuant to such
exercise will also represent such a corresponding right with terms
substantially the same as and at least as favorable to Grantee as are provided
under any such stockholder rights plan then in effect.
(c) Certificates for the Option Shares delivered at an
Option Closing will have typed or printed thereon a restrictive legend which
will read substantially as follows:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE."
It is understood and agreed that (i) the reference to restrictions arising
under the Securities Act in the above legend will be removed by delivery of
substitute certificate(s) without such reference if such Option Shares have
been registered pursuant to the Securities Act, such Option Shares have been
sold in reliance on and in accordance with Rule 144 under the Securities Act or
Grantee has delivered to Issuer a copy of a letter from the staff of the SEC,
or an opinion of counsel to the effect that such legend is not required for
purposes of the Securities Act and (ii) the reference to restrictions pursuant
to this Agreement in the above legend will be removed by delivery of substitute
certificate(s) without such reference if the Option Shares evidenced by
certificate(s) containing such reference have been sold or transferred in
compliance with the provisions of this Agreement under circumstances that do
not require the retention of such reference.
4. Representations and Warranties of Issuer. Issuer hereby
represents and warrants to Grantee as follows:
(a) Incorporation and Authority of Issuer. Issuer is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware and has all necessary corporate power and authority to enter
into this Agreement, to carry out its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Issuer, the performance by Issuer of its obligations hereunder and
the consummation by Issuer of the transactions contemplated hereby have been
duly authorized by all requisite corporate action on the part of Issuer. This
Agreement has been duly executed and delivered by Issuer, and (assuming due
authorization, execution and delivery by Grantee) this
-3-
<PAGE> 4
Agreement constitutes legal, valid and binding obligations of Issuer
enforceable against Issuer in accordance with their terms.
(b) Capital Stock of Issuer. As of the date hereof, the
authorized capital stock of Issuer consists of 75,000,000 shares of common
stock, par value $.01 per share (the "Common Stock"), and 5,000,000 shares of
Preferred Stock, par value $.01 per share. As of November 10, 1999, 34,463,700
shares of Detective Common Stock are validly issued, outstanding, fully paid
and nonassessable, and have been issued in compliance with all applicable
federal and, to the knowledge of Issuer, state securities laws. 2,981,350
shares of Detective Common Stock are held as treasury stock. No other shares of
capital stock of Issuer have been issued or are outstanding. Section 4.02 of
the Detective Disclosure Schedule describes the nature, holder, exercise price
and other material terms of each outstanding Option of Detective, in each case,
as of the date hereof and as of the Closing Date. Except as disclosed in
Section 4.02 of the Detective Disclosure Schedule, there are no outstanding
Options or agreements, arrangements or understandings to issue Options with
respect to Detective and there are no preemptive rights or agreements,
arrangements or understandings to issue preemptive rights with respect to the
issuance or sale of Detective's capital stock. Issuer has taken all necessary
corporate and other action to authorize and reserve and, subject to the
expiration or termination of any required waiting period under the HSR Act and
other Regulatory Approvals that are required, to permit it to issue, and, at
all times from the date hereof until the obligation to deliver Option Shares
upon the exercise of the Option terminates, shall have reserved for issuance,
upon exercise of the Option, shares of Detective Common Stock necessary for
Grantee to exercise the Option, and Issuer will take all necessary corporate
action to authorize and reserve for issuance all additional shares of Detective
Common Stock or other securities which may be issued pursuant to Section 6 upon
exercise of the Option. The shares of Detective Common Stock to be issued upon
due exercise of the Option, including all additional shares of Detective Common
Stock or other securities which may be issuable upon exercise of the Option or
any other securities which may be issued pursuant to Section 6, upon issuance
pursuant hereto, will be duly and validly issued, fully paid and nonassessable,
and will be delivered free and clear of all Liens, claims, charges and
encumbrances of any kind or nature whatsoever, including without limitation any
preemptive rights of any stockholder of Issuer, but will be subject to
applicable securities laws.
(c) No Conflict. The execution, delivery and performance
of this Agreement by Issuer does not and will not (a) violate or conflict with
the Certificate of Incorporation, other constitutive documents or by-laws of
Issuer or any of its Subsidiaries, (b) conflict with or violate any Law or
Governmental Order applicable to Issuer or any of its Subsidiaries, or (c)
result in any breach of, or constitute a default (or event which with the
giving of notice or lapse of time, or both, would become a default) under, or
give to any Person any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of any Lien on Issuer pursuant to,
any Contract, License or other material instrument to which Issuer or any of
its Subsidiaries is a party or by which Issuer or any of its Subsidiaries is
bound or affected, except, in the case of clauses (b) and (c) above, (i) for
conflicts, violations, breaches, defaults, rights of termination, amendment,
acceleration or cancellation, or Liens as would not, individually or in
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<PAGE> 5
the aggregate, have a Material Adverse Effect on Issuer or (ii) for Liens
created by or through Grantee or any of its Affiliates.
5. Representations and Warranties of Grantee. Grantee hereby
represents and warrants to Issuer that:
Purchase Not for Distribution. Any Option Shares or other
securities acquired by Grantee upon exercise of the Option will not be
transferred or otherwise disposed of except in a transaction
registered, or exempt from registration, under the Securities Act.
6. Adjustment upon Changes in Capitalization, Etc. (a) In the
event of any change in Detective Common Stock by reason of a stock dividend,
split-up, merger, recapitalization, combination, exchange of shares, or similar
transaction, the type and number of shares or securities subject to the Option,
and the Purchase Price thereof, will be adjusted appropriately, and proper
provision will be made in the agreements governing such transaction, so that
Grantee will receive upon exercise of the Option the number and class of shares
or other securities or property that Grantee would have received in respect of
Detective Common Stock if the Option had been exercised immediately prior to
such event or the record date therefor, as applicable, provided that no such
adjustment shall be required in connection with the exercise of options or
similar rights under any stock option plan or benefit arrangement in effect on
the date hereof or in connection with the conversion of any convertible or
exchangeable securities outstanding on the date hereof.
(b) Without limiting the parties' relative rights and
obligations under the Merger Agreement, in the event that Issuer enters into an
agreement (i) to consolidate with or merge into any person, other than Grantee
or one of its Subsidiaries, and Issuer will not be the continuing or surviving
corporation in such consolidation or merger, (ii) to permit any Person, other
than Grantee or one of its Subsidiaries, to merge into Issuer and Issuer will
be the continuing or surviving corporation, but in connection with such merger,
the shares of Detective Common Stock outstanding immediately prior to the
consummation of such merger will be changed into or exchanged for stock or
other securities of Issuer or any other person or cash or any other property,
or the shares of Detective Common Stock outstanding immediately prior to the
consummation of such merger will, after such merger, represent less than 50% of
the outstanding voting securities of the merged company, or (iii) to sell or
otherwise transfer all or substantially all of its assets to any person, other
than Grantee or one of its Subsidiaries, then, and in each such case, the
agreement governing such transaction will make proper provision so that the
Option will, upon the consummation of any such transaction and upon the terms
and conditions set forth herein, be converted into, or exchanged for, an option
with identical terms appropriately adjusted to acquire the number and class of
shares or other securities or cash or other property that Grantee would have
received in respect of Detective Common Stock if the Option had been exercised
immediately prior to such consolidation, merger, sale, or transfer, or the
record date therefor, as applicable and make any other necessary adjustments.
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<PAGE> 6
(c) If, at any time during the period commencing on a
Purchase Event and ending on the termination of the Option in accordance with
Section 2, Grantee sends to Issuer an Exercise Notice indicating Grantee's
election to exercise its right (the "Cash-Out Right") pursuant to this Section
6(c), then Issuer shall pay to Grantee, on the Option Closing Date, in exchange
for the cancellation of the Option with respect to such number of Option Shares
as Grantee specifies in the Exercise Notice, an amount in cash equal to such
number of Option Shares multiplied by the difference between (i) the average
closing price, for the 10 trading days commencing on the 12th trading day
immediately preceding the date of delivery of such Exercise Notice, per share
of Detective Common Stock as reported on The NASDAQ National Market (or, if not
listed on The NASDAQ National Market, as reported on any other national
securities exchange or national securities quotation system on which the
Detective Common Stock is listed or quoted, as reported in The Wall Street
Journal (Northeast edition), or, if not reported thereby, any other
authoritative source) (the "Closing Price") and (ii) the Purchase Price.
Notwithstanding the termination of the Option, Grantee will be entitled to
exercise its rights under this Section 6(c) if it has exercised such rights in
accordance with the terms hereof prior to the termination of the Option.
7. Profit Limitations. (a) Notwithstanding any other provision
of this Agreement, in no event shall the Total Option Profit (as defined
herein) exceed in the aggregate $3,600,000 million (such amount, the "Profit
Limit") and, if any payment to be made to Grantee otherwise would cause such
aggregate amount to be exceeded, the Grantee, at its sole election, shall
either (i) reduce the number of shares of Detective Common Stock subject to
this Option, (ii) deliver to Issuer for cancellation Option Shares previously
purchased by Grantee, (iii) pay cash to Issuer or (iv) any combination thereof,
so that the Total Option Profit shall not exceed the Profit Limit after taking
into account the foregoing actions.
(b) Notwithstanding any other provision of this
Agreement, the Option may not be exercised for a number of shares of Detective
Common Stock as would, as of the date of exercise, result in a Notional Total
Option Profit (as hereinafter defined) which would exceed in the aggregate the
Profit Limit and, if it otherwise would exceed such amount, the Grantee, at its
sole election, shall on or prior to the date of exercise either (i) reduce the
number of shares of Detective Common Stock subject to such exercise, (ii)
deliver to Issuer for cancellation Option Shares previously purchased by
Grantee, (iii) pay cash to Issuer or (iv) any combination thereof, so that the
Notional Total Option Profit shall not exceed the Profit Limit after taking
into account the foregoing actions, provided that this paragraph (b) shall not
be construed as to terminate the Option in whole or in part or to restrict any
exercise of the Option that is not prohibited hereby on any subsequent date.
(c) As used herein, the term "Total Option Profit" shall
mean the aggregate amount (before taxes) of the following: (i) any amount
received by Grantee pursuant to the Cash-Out Right, (ii)(x) the net
consideration, if any, received by Grantee pursuant to the sale of Option
Shares (or any other securities into which such Option Shares are converted or
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<PAGE> 7
exchanged) to any unaffiliated party, valuing any non-cash consideration at its
fair market value (as defined below), less (y) the Exercise Price and any cash
paid by Grantee to Issuer pursuant to Section 7(a)(iii) or Section 7(b)(iii)
and (iii) the net cash amounts received by Grantee on the transfer (in
accordance with Section 12(g)) of the Option (or any portion thereof) to any
unaffiliated party.
(d) As used herein, the term "Notional Total Option
Profit" with respect to any number of shares of Option Shares as to which
Grantee may propose to exercise the Option shall be the aggregate of (i) the
Total Option Profit determined under paragraph (c) above with respect to prior
exercises and (ii) Total Option Profit with respect to such number of shares of
Detective Common Stock as to which Grantee proposes to exercise and all other
Option Shares held by Grantee and its affiliates as of such date, assuming that
all such shares were sold for cash at the closing market price for Detective
Common Stock as of the close of business on the preceding trading day (less
customary brokerage commissions or underwriting discounts).
(e) As used herein, the "fair market value" of any
non-cash consideration consisting of:
(i) securities listed on a national securities
exchange or traded on The NASDAQ National Market shall be equal to the
average closing price per share of such security as reported on such
exchange or The NASDAQ National Market for the five trading days after
the date of determination; and
(ii) consideration which is other than cash or
securities of the form specified in clause (i) above shall be
determined by a nationally recognized independent investment banking
firm mutually agreed upon by the parties within five business days of
the event requiring selection of such banking firm, provided that if
the parties are unable to agree within two business days after the
date of such event as to the investment banking firm, then the parties
shall each select one firm, and those firms shall select a third
nationally recognized independent investment banking firm, which third
firm shall make such determination.
8. Registration Rights. Issuer will, if requested by Grantee at
any time and from time to time within two years of the exercise of the Option,
as expeditiously as possible prepare and file up to three registration
statements under the Securities Act if such registration is necessary in order
to permit the sale or other disposition of any or all shares of securities that
have been acquired by or are issuable to Grantee upon exercise of the Option in
accordance with the intended method of sale or other disposition stated by
Grantee, including a "shelf" registration statement under Rule 415 under the
Securities Act or any successor provision, and Issuer will use its reasonable
efforts to qualify such shares or other securities under any applicable state
securities laws, provided that Issuer shall not be required to effect such
registration if less than 10% of the Option Shares subject to the Option will
be offered for sale pursuant thereto. Issuer will use reasonable efforts to
cause each such registration statement to
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<PAGE> 8
become effective, to obtain all consents or waivers of other parties which are
required therefor, and to keep such registration statement effective for such
period not in excess of 120 calendar days from the day such registration
statement first becomes effective as may be reasonably necessary to effect such
sale or other disposition. The obligations of Issuer hereunder to file a
registration statement and to maintain its effectiveness may be suspended for
up to 120 calendar days in the aggregate if the Board of Directors of Issuer
shall have determined in good faith that the filing of such registration
statement or the maintenance of its effectiveness would require premature
disclosure of material nonpublic information that would materially and
adversely affect Issuer or otherwise interfere with or adversely affect any
pending or proposed offering of securities of Issuer or any other material
transaction involving Issuer. Any registration statement prepared and filed
under this Section 8, and any sale covered thereby, will be at Issuer's expense
except for underwriting discounts or commissions, brokers' fees and the fees
and disbursements of Grantee's counsel related thereto. Grantee will provide
all information reasonably requested by Issuer for inclusion in any
registration statement to be filed hereunder. If, during the time periods
referred to in the first sentence of this Section 8, Issuer effects a
registration under the Securities Act of Detective Common Stock for its own
account or for any other stockholders of Issuer (other than on Form S-4 or Form
S-8, or any successor form), it will allow Grantee the right to participate in
such registration, and such participation will not affect the obligation of
Issuer to effect demand registration statements for Grantee under this Section
8; provided that, if the managing underwriters of such offering advise Issuer
in writing that in their opinion the number of shares of Detective Common Stock
requested to be included in such registration exceeds the number which can be
sold in such offering, Issuer will include the shares requested to be included
therein by Grantee pro rata with the shares intended to be included therein by
Issuer or any other stockholders who may have priority as to the Issuer. In
connection with any registration pursuant to this Section 8, Issuer and Grantee
will provide each other and any underwriter of the offering with customary
representations, warranties, covenants, indemnification, and contribution in
connection with such registration.
9. Quotation. If Detective Common Stock or any other securities
to be acquired upon exercise of the Option are then approved for quotation on
The NASDAQ National Market (or any other national securities exchange or
national securities quotation system), Issuer, upon the request of Grantee,
will promptly file an application to have approved for quotation the shares of
Detective Common Stock or other securities to be acquired upon exercise of the
Option on The NASDAQ National Market (and any such other national securities
exchange or national securities quotation system) and will use reasonable
efforts to obtain approval of such quotation as promptly as practicable.
10. Loss or Mutilation. Upon receipt by Issuer of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Issuer will execute and deliver a new Agreement of
like tenor and date. Any such new Agreement executed and delivered will
constitute an additional contractual
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<PAGE> 9
obligation on the part of Issuer, whether or not the Agreement so lost, stolen,
destroyed, or mutilated shall at any time be enforceable by anyone.
11. Miscellaneous. (a) Expenses. Each of the parties hereto will
bear and pay all costs and expenses incurred by it or on its behalf in
connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants, and
counsel.
(b) Amendment. This Agreement may not be amended, except
by an instrument in writing signed on behalf of each of the parties.
(c) Extension; Waiver. Any agreement on the part of a
party to waive any provision of this Agreement, or to extend the time for
performance, will be valid only if set forth in an instrument in writing signed
on behalf of such party. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise will not constitute a
waiver of such rights.
(d) Entire Agreement; No Third-Party Beneficiaries. This
Agreement, the Merger Agreement (including the documents and instruments
attached thereto as exhibits or schedules or delivered in connection
therewith), the Registration Rights Agreement, the Voting and Standstill
Agreements, the Tax Cooperation Agreement and the Confidentiality Agreement
constitute the entire agreement, and supersede all prior agreements and
understandings, both written and oral, between the parties (and their
Affiliates) with respect to the subject matter hereof and thereof.
(e) Governing Law. This Agreement will be governed by,
and construed in accordance with, the laws of the State of Delaware, regardless
of the laws that might otherwise govern under applicable principles of conflict
of laws thereof.
(f) Notices. All notices, requests, claims, demands, and
other communications under this Agreement shall be sent in the manner, with the
effect and to the addresses set forth in the Merger Agreement.
(g) Assignment. Neither this Agreement, the Option nor
any of the rights, interests, or obligations under this Agreement may be
assigned or delegated, in whole or in part, by operation of law or otherwise,
by Issuer or Grantee without the prior written consent of the other; provided,
however, that Grantee may assign all or any of its rights and obligations
hereunder to any Affiliate or Affiliates of Grantee, provided, further,
however, that no such assignment shall relieve Grantee of its obligations
hereunder. Any assignment or delegation in violation of the preceding sentence
will be void. Subject to the first and second sentences of this Section 11(g),
this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.
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<PAGE> 10
(h) Further Assurances. In the event of any exercise of
the Option by Grantee, Issuer and Grantee will execute and deliver all other
documents and instruments and take all other actions that may be reasonably
necessary in order to consummate the transactions provided for by such
exercise.
(i) Enforcement. The parties agree that irreparable
damage would occur and that the parties would not have any adequate remedy at
law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties will be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Federal court located in the
State of Delaware or in Delaware state court, the foregoing being in addition
to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (i) consents to submit itself to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated by this Agreement, (ii) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, and (iii) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any court other than a Federal court sitting
in the State of Delaware or a Delaware state court.
(j) Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
[Signature Page to follow]
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IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement to
be signed by their respective officers thereunto duly authorized as of the day
and year first written above.
DATA BROADCASTING CORPORATION
By: /s/ Mark F. Imperiale
------------------------------------
Name: Mark F. Imperiale
Title: President
INTERACTIVE DATA CORPORATION
By: /s/ Philip J. Hoffman
------------------------------------
Name: Philip J. Hoffman
Title: Authorized Person
[Signature Page to Option Agreement]
<PAGE> 1
EXHIBIT 5.3
VOTING AND STANDSTILL AGREEMENT, dated as of November 14, 1999 (this
"Agreement") by and between Interactive Data Corporation, a Delaware
corporation ("Lynx"), and AFT/FGT Family Partners Ltd and Tessler Family
Limited Partnership (each a "Stockholder", collectively, the "Stockholders").
Capitalized terms used but not defined herein shall have the meanings set forth
in the Agreement and Plan of Merger, dated the date hereof (as such agreement
may be amended from time to time, the "Merger Agreement").
WHEREAS, concurrently herewith, Lynx, Pearson Longman, Inc., a
Delaware corporation, Detective Merger-Sub, Inc., a Delaware corporation
("Acquisition Sub") and Data Broadcasting Corporation, a Delaware corporation
("Detective"), are entering into the Merger Agreement, which provides for,
among other things, the merger of Acquisition Sub with and into Lynx.
WHEREAS, as a condition to Lynx's entering into the Merger Agreement,
the Stockholders have agreed to enter into this Agreement with Lynx.
NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual agreements contained herein, the parties hereby
agree as follows:
Section 1. Certain Definitions. The following terms, when used in this
Agreement, shall have the following meanings (such definitions to be equally
applicable to both singular and plural terms of the terms defined):
"Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing.
Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include securities Beneficially
Owned by all other Persons with whom such Person would constitute a "group" as
described in Section 13(d)(3) of the Exchange Act.
"Detective" has the meaning ascribed thereto in the recitals of this
Agreement.
"Existing Shares" has the meaning ascribed thereto in Section 2(a)(i).
"Lynx" has the meaning ascribed thereto in the introductory paragraph
of this Agreement.
"Merger Agreement" has the meaning ascribed thereto in the
introductory paragraph of this Agreement.
<PAGE> 2
"Permitted Transferee" means (a) a spouse or lineal descendent
(including by adoption and stepchildren), heir, executor, testamentary trustee
or legatee of a Stockholder or (b) any trust or estate the beneficiaries of
which, or any corporation, limited liability company or partnership, the
stockholders, members or partners of which, include only the Stockholder and
the Persons described in clause (a) above.
"Shares" means the Existing Shares, together with any shares of
Detective Common Stock acquired of record or beneficially by the Stockholder in
any capacity after the date hereof and prior to the termination hereof, whether
upon exercise of options, conversion of convertible securities, purchase,
exchange or otherwise; provided, however, that in the event of a stock dividend
or distribution, or any change in the Detective Common Stock by reason of any
stock dividend, split-up, recapitalization, combination, exchange of shares or
the like, the term "Shares" shall be deemed to refer to and include the Shares
as well as all such stock dividends and distributions and any shares into which
or for which any or all of the Shares may be changed or exchanged.
"Stockholder" and "Stockholders" have the meaning ascribed thereto in
the introductory paragraph to this Agreement.
"Termination Date" has the meaning ascribed thereto in Section 9 of
this Agreement.
"Trustee" has the meaning ascribed thereto in Section 2(a)(i) of this
Agreement.
Section 2. Representations and Warranties of the Stockholders.
The Stockholders hereby represent and warrant to Lynx as follows:
(a) (i) Each Stockholder is either (A) the record
holder or beneficial owner of the number of, or (B) trustee
("Trustee") of a trust that is the record holder or
beneficial owner of, and whose beneficiaries are the
beneficial owners of the shares of Detective Common Stock set
forth opposite the Stockholder's name on Schedule I hereto
(the "Existing Shares").
(ii) On the date hereof, the Existing Shares
constitute all of the outstanding shares of Detective Common
Stock owned of record or beneficially by each Stockholder.
(iii) Each Stockholder has sole power of
disposition and sole voting power with respect to the matters
set forth in Section 4 hereof and sole power to demand
dissenter's or appraisal rights, in each case with respect to
all of the Existing Shares, with no restrictions on such
rights, subject to applicable securities laws and the terms
of this Agreement.
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<PAGE> 3
(iv) Each Stockholder will have sole power of
disposition and will have sole voting power with respect to
the matters set forth in Section 4 hereof and sole power to
demand dissenter's or appraisal rights, in each case with
respect to all Shares other than Existing Shares, if any,
which become beneficially owned by the Stockholder, with no
restrictions on such rights, subject to applicable securities
laws and the terms of this Agreement.
(b) Each Stockholder has the legal capacity, power and
authority to enter into and perform all of such Stockholder's
obligations under this Agreement. The execution, delivery and
performance of this Agreement by each Stockholder will not violate any
other Contract to which such Stockholder is a party or by which such
Stockholder is bound including, without limitation, any trust
agreement, voting agreement, stockholders agreement, voting trust,
partnership or other agreement. This Agreement has been duly and
validly executed and delivered by the Stockholders and (assuming due
authorization, execution and delivery by Lynx) constitutes a legal,
valid and binding agreement of the Stockholders, enforceable against
the Stockholders in accordance with its terms. All necessary consents
of any beneficiary of or holder of interest in any trust of which
either Stockholder is Trustee to the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been obtained. If a Stockholder is married and such Stockholder's
Shares constitute community property, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and
binding agreement of, such Stockholder's spouse, enforceable against
such person in accordance with its terms.
(c) Except for filings under the HSR Act, if applicable,
(i) no filing with, and no permit, authorization, consent or approval
of, any state or federal public body or authority is necessary for the
execution of this Agreement by the Stockholders and the consummation
by the Stockholders of the transactions contemplated hereby and (ii)
neither the execution and delivery of this Agreement by the
Stockholders nor the consummation by the Stockholders of the
transactions contemplated hereby nor compliance by the Stockholders
with the provisions hereof shall (x) conflict with or result in any
breach of any applicable trust, partnership agreement or other
Contracts or organizational documents applicable to the Stockholders,
(y) result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any right
of termination, cancellation, material modification or acceleration),
under any of the terms, conditions or provisions of any Contract to
which either Stockholder is a party or by which the Stockholders or
any of the Stockholders' properties or assets may be bound or (z)
violate any Governmental Order applicable to the Stockholders or any
of the Stockholders' properties or assets.
(d) Except for the shares of Detective Common Stock
identified in Schedule II hereto (the "Pledged Shares"), the
Stockholder's Shares and the certificates representing such Shares are
now and at all times during the term hereof will be held by the
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<PAGE> 4
Stockholders, or by a nominee or custodian for the benefit of the
Stockholders, free and clear of all Liens, proxies, voting trusts or
arrangements or any other encumbrances whatsoever, except for any of
the same arising hereunder.
(e) No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of either Stockholder in his or her capacity as such.
(f) Each Stockholder understands and acknowledges that
Lynx is entering into the Merger Agreement in reliance upon such
Stockholders' execution and delivery of this Agreement with Lynx.
Section 3. Representations and Warranties of Lynx. Lynx hereby
represents and warrants to each Stockholder as follows:
(a) Lynx is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) Lynx has all necessary corporate power and authority
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and
performance by Lynx of this Agreement and the consummation by Lynx of
the transactions contemplated hereby have been duly and validly
authorized and approved by all required corporate action. This
Agreement has been duly executed and delivered by Lynx, and (assuming
due authorization, execution and delivery by the Stockholders)
constitutes a legal, valid and binding obligation of Lynx, enforceable
against it in accordance with its terms.
(c) Except for filings under the HSR Act, if applicable,
(i) no filing with and no permit, authorization, consent or approval
of, any state or federal public body or authority is necessary for the
execution of this Agreement by Lynx and the consummation by Lynx of
the transactions contemplated hereby and (ii) neither the execution
and delivery of this Agreement by Lynx nor the consummation by Lynx of
the transactions contemplated hereby nor compliance by Lynx with the
provisions hereof shall (x) conflict with or result in any breach of
any applicable trust, partnership agreement or other Contracts or
organizational documents applicable to Lynx, (y) result in a violation
or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any Contract to which Lynx is a
party or by which Lynx or any of Lynx's properties or assets may be
bound or (z) violate any Governmental Order applicable to Lynx or any
of Lynx's properties or assets.
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<PAGE> 5
Section 4. Agreement to Vote; Proxy
(a) Each Stockholder hereby agrees that, until the
Termination Date (as defined in Section 9), at any meeting of the
stockholders of Detective, however called, or in connection with any
action by written consent of the stockholders of Detective, such
Stockholder shall vote (or cause to be voted) or act by written
consent with respect to the Shares (i) in favor of the Merger, the
Amended Charter and the election of the Post-Closing Directors, the
execution and delivery by Detective of the Merger Agreement and the
Ancillary Agreements and the approval of the terms thereof and each of
the other actions contemplated by the Merger Agreement and this
Agreement and any actions required in furtherance hereof and thereof;
(ii) against any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or
agreement of Detective under the Merger Agreement, the Ancillary
Agreements or this Agreement; and (iii) against the following actions
(other than the Merger and the transactions contemplated by the Merger
Agreement or any such actions identified in writing by Lynx in
advance): (A) any extraordinary corporate transaction, including,
without limitation, a merger, consolidation or other business
combination involving Detective or any of its Subsidiaries; (B) a
sale, lease or transfer of a material amount of assets of Detective or
any of its Subsidiaries or a reorganization, recapitalization,
dissolution or liquidation of Detective or any of its Subsidiaries;
(C) any change in the majority of the board of directors of Detective;
(D) any change in the present capitalization of Detective or any
amendment of Detective's Certificate of Incorporation or by-laws
(other than as contemplated by the Amended Charter); (E) any other
change in Detective's corporate structure or business; or (F) any
other action which is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone, discourage or materially
adversely affect the Merger or the transactions contemplated by the
Merger Agreement, the Ancillary Agreements or this Agreement. No
Stockholder shall enter into any Contract or understanding with any
Person to vote or give instructions in any manner inconsistent with
the terms of this Agreement.
(b) EACH STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS,
LYNX AND ANY DESIGNEE OF LYNX, EACH OF THEM INDIVIDUALLY, SUCH
STOCKHOLDER'S IRREVOCABLE (UNTIL THE TERMINATION DATE) PROXY AND
ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE THE SHARES
AS SET FORTH IN SECTION 4(a) ABOVE. EACH STOCKHOLDER INTENDS THIS
PROXY TO BE IRREVOCABLE (UNTIL THE TERMINATION DATE) AND COUPLED WITH
AN INTEREST AND WILL TAKE SUCH FURTHER ACTION AND EXECUTE SUCH OTHER
INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY
AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SUCH STOCKHOLDER
WITH RESPECT TO SUCH SHARES.
-5-
<PAGE> 6
Section 5. Certain Covenants of the Stockholders. Except in
accordance with the terms of this Agreement, the Stockholders hereby covenant
and agree as follows:
(a) Prior to the Termination Date, a Stockholder shall
not, in its capacity as such, directly or indirectly (including
through advisors, agents or other intermediaries), solicit, initiate
or encourage (including by way of furnishing information) or respond
to (or take any other action designed to facilitate) any inquiries or
the making of any proposal by any Person (other than Lynx or any
Affiliate thereof) with respect to Detective that constitutes or could
reasonably be expected to lead to a Detective Takeover Proposal or
engage in any discussions or negotiations with regard to any Detective
Takeover Proposal.
(b) Prior to the Termination Date, a Stockholder shall
not, directly or indirectly (i) except pursuant to the terms of the
Merger Agreement or this Agreement, offer for sale, sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of, enforce or
permit the execution of the provisions of any redemption agreement
with Detective, enter into any Contract, Option or other arrangement
or understanding with respect to, or consent to the offer for sale,
sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, or exercise any discretionary powers to distribute,
any or all of the Shares or any interest therein, including any trust
income or principal, except in each case to a Permitted Transferee who
is or agrees to become bound by this Agreement; (ii) except as
contemplated hereby, grant any proxies or powers of attorney with
respect to any Shares, deposit any Shares into a voting trust or enter
into a voting agreement with respect to any Shares; or (iii) take any
action that would make any representation or warranty of such
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling such Stockholder from performing any of such
Stockholder's obligations under this Agreement.
(c) Each Stockholder hereby waives any rights of
appraisal or rights to dissent from the Merger that such Stockholder
may have. Each Trustee represents that no beneficiary who is a
beneficial owner of Shares under any trust has any right of appraisal
or right to dissent from the Merger which has not been so waived.
(d) Unless, in connection therewith, the Shares held by
any trust which is presently subject to the terms of this Agreement
are transferred to one or more Permitted Transferees who upon receipt
of such Shares become signatories to this Agreement, the Stockholder
acting as a Trustee shall not take any action to terminate, close or
liquidate any such trust and shall take all steps necessary to
maintain the existence thereof at least until the Termination Date.
Section 6. Further Assurances. From time to time, at the other
party's request and without further consideration, each party hereto shall
execute and deliver such additional documents and take all such further action
as may be necessary or desirable to consummate and
-6-
<PAGE> 7
make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.
Section 7. Certain Events. The Stockholders agree that this
Agreement and the obligations hereunder shall attach to the Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of
such Shares shall pass, whether by operation of law or otherwise, including
without limitation the Stockholders' heirs, guardians, administrators or
successors or as a result of any divorce.
Section 8. Stop Transfer. The Stockholders agree with, and
covenant to, Lynx that the Stockholders shall not request that Detective
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 9. Termination. The obligations of the Stockholders and
the irrevocable proxy contained in Section 4(b) of this Agreement shall
terminate upon the first to occur of (a) the Effective Time and (b) the date
the Merger Agreement is terminated in accordance with its terms (unless such
termination is being contested in good faith by Lynx in a court of competent
jurisdiction, in which event this Agreement shall remain in full force and
effect until the resolution of such action from which there is no further right
of appeal) (the "Termination Date"); provided that the provisions of Sections
2, 3 and 10 and any claim for breach of any representation, warranty, covenant
or other agreement under this Agreement shall survive the Termination Date.
Section 10. Miscellaneous.
(a) All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service, by
cable, by facsimile, by telegram, by telex or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other
address for a party as shall be specified in a notice given in
accordance with this Section 10(a)):
If to the Stockholders:
Tessler Family FMC, LLC
4020 Moose Wilson Rd.
Jackson, Wyoming 83001
Telecopier: (307) 733-4935
-7-
<PAGE> 8
If to Lynx:
c/o Pearson Inc.
1330 Avenue of the Americas
7th Floor
New York, NY 10019
Attention: President
Telecopier: (212) 641-2500
with a copy to Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attn: Anne E. Gold, Esq.
Telecopier: (212) 309-6273
(b) At any time prior to the Termination Date, any party
hereto may, with respect to any other party hereto, (i) extend the
time for the performance of any of the obligations or other acts, (ii)
waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (iii) waive
compliance with any of the agreements or conditions contained herein.
Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound
thereby.
(c) The headings contained in this Agreement are for the
convenience of reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
(d) If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or
public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is
not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent
possible.
(e) This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and undertakings, both written and oral
with respect to the subject matter hereof and thereof and except as
otherwise expressly provided herein.
-8-
<PAGE> 9
(f) This Agreement shall not be assigned by operation of
Law or otherwise, except that Lynx may assign all or any of its rights
and obligations hereunder to any of its Affiliates, provided, however,
that no such assignment shall relieve the assigning party of its
obligations hereunder.
(g) The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms. It is
accordingly agreed that the parties hereto (i) will waive, in any
action for specific performance, the defense of adequacy of remedy at
law and (ii) shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are
entitled at law or in equity.
(h) No failure or delay on the part of any party hereto
in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or
partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
(i) Notwithstanding anything herein to the contrary, no
Person executing this Agreement who is, or becomes during the term
hereof, a director of Detective makes any agreement or understanding
herein in his or her capacity as such director, and the agreements set
forth herein shall in no way restrict any director in the exercise of
his or her fiduciary duties as a director of Detective in his or her
capacity as a director of Detective. Each Stockholder has executed
this Agreement solely in his or her capacity as the record or
beneficial holder of the Shares or as the trustee of a trust whose
beneficiaries are the beneficial owners of the Shares.
(j) Each party agrees to bear its own expenses in
connection with the transactions contemplated hereby.
(k) This Agreement shall be governed by, and construed
in accordance with, the Laws of the State of Delaware. All actions and
proceedings arising out of or relating to this Agreement shall be
heard and determined in a Delaware state or federal court sitting in
the State of Delaware, and the parties hereto hereby irrevocable
submit to the exclusive jurisdiction of such courts in any such action
or proceeding and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding.
(l) EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT.
-9-
<PAGE> 10
(m) This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as delivery of
a manually executed counterpart of this Agreement.
[Signature Page to Follow]
-10-
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
INTERACTIVE DATA CORPORATION
By: /s/ Philip J. Hoffman
-------------------------------
Name: Philip J. Hoffman
Title: Authorized Person
AFT/FGT FAMILY PARTNERS LTD.
By: Tessler Family FMC, LLC
By: /s/ Allan R. Tessler
-------------------------------
Allan R. Tessler
TESSLER FAMILY LIMITED PARTNERSHIP
By: Tessler Family FMC, LLC
By: /s/ Allan R. Tessler
-------------------------------
Allan R. Tessler
[Signature page to Voting and Standstill Agreement]
<PAGE> 12
SCHEDULE I
EXISTING SHARES
Stockholder No. of Existing Shares
- ----------- ----------------------
AFT/FGT Family Partners Ltd. 984,559
Tessler Family Limited Partnership 545,000
-12-
<PAGE> 13
SCHEDULE II
PLEDGED SHARES
Number of Pledged Shares Pledgee
- ------------------------ -------
None
-13-
<PAGE> 1
EXHIBIT 5.4
VOTING AND STANDSTILL AGREEMENT, dated as of November 14, 1999 (this
"Agreement") by and between Interactive Data Corporation, a Delaware
corporation ("Lynx"), and Alan J. Hirschfield Living Trust (the "Stockholder").
Capitalized terms used but not defined herein shall have the meanings set forth
in the Agreement and Plan of Merger, dated the date hereof (as such agreement
may be amended from time to time, the "Merger Agreement").
WHEREAS, concurrently herewith, Lynx, Pearson Longman, Inc., a
Delaware corporation, Detective Merger-Sub, Inc., a Delaware corporation
("Acquisition Sub") and Data Broadcasting Corporation, a Delaware corporation
("Detective"), are entering into the Merger Agreement, which provides for,
among other things, the merger of Acquisition Sub with and into Lynx.
WHEREAS, as a condition to Lynx's entering into the Merger Agreement,
the Stockholder has agreed to enter into this Agreement with Lynx.
NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual agreements contained herein, the parties hereby
agree as follows:
Section 1. Certain Definitions. The following terms, when used in this
Agreement, shall have the following meanings (such definitions to be equally
applicable to both singular and plural terms of the terms defined):
"Beneficially Own" or "Beneficial Ownership" with respect to any
securities shall mean having "beneficial ownership" of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing.
Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person shall include securities Beneficially
Owned by all other Persons with whom such Person would constitute a "group" as
described in Section 13(d)(3) of the Exchange Act.
"Detective" has the meaning ascribed thereto in the recitals of this
Agreement.
"Existing Shares" has the meaning ascribed thereto in Section 2(a)(i).
"Lynx" has the meaning ascribed thereto in the introductory paragraph
of this Agreement.
"Merger Agreement" has the meaning ascribed thereto in the
introductory paragraph of this Agreement.
<PAGE> 2
"Permitted Transferee" means (a) a spouse or lineal descendent
(including by adoption and stepchildren), heir, executor, testamentary trustee
or legatee of the Stockholder or (b) any trust or estate the beneficiaries of
which, or any corporation, limited liability company or partnership, the
stockholders, members or partners of which, include only the Stockholder and
the Persons described in clause (a) above.
"Shares" means the Existing Shares, together with any shares of
Detective Common Stock acquired of record or beneficially by the Stockholder in
any capacity after the date hereof and prior to the termination hereof, whether
upon exercise of options, conversion of convertible securities, purchase,
exchange or otherwise; provided, however, that in the event of a stock dividend
or distribution, or any change in the Detective Common Stock by reason of any
stock dividend, split-up, recapitalization, combination, exchange of shares or
the like, the term "Shares" shall be deemed to refer to and include the Shares
as well as all such stock dividends and distributions and any shares into which
or for which any or all of the Shares may be changed or exchanged.
"Stockholder" has the meaning ascribed thereto in the introductory
paragraph to this Agreement.
"Termination Date" has the meaning ascribed thereto in Section 9 of
this Agreement.
"Trustee" has the meaning ascribed thereto in Section 2(a)(i) of this
Agreement.
Section 2. Representations and Warranties of the Stockholder.
The Stockholder hereby represents and warrants to Lynx as follows:
(a) (i) The Stockholder is either (A) the record
holder or beneficial owner of the number of, or (B) trustee
("Trustee") of a trust that is the record holder or
beneficial owner of, and whose beneficiaries are the
beneficial owners of the shares of Detective Common Stock set
forth opposite the Stockholder's name on Schedule I hereto
(the "Existing Shares").
(ii) On the date hereof, the Existing Shares
constitute all of the outstanding shares of Detective Common
Stock owned of record or beneficially by the Stockholder.
(iii) The Stockholder has sole power of
disposition and sole voting power with respect to the matters
set forth in Section 4 hereof and sole power to demand
dissenter's or appraisal rights, in each case with respect to
all of the Existing Shares, with no restrictions on such
rights, subject to applicable securities laws and the terms
of this Agreement.
-2-
<PAGE> 3
(iv) The Stockholder will have sole power of
disposition and will have sole voting power with respect to
the matters set forth in Section 4 hereof and sole power to
demand dissenter's or appraisal rights, in each case with
respect to all Shares other than Existing Shares, if any,
which become beneficially owned by the Stockholder, with no
restrictions on such rights, subject to applicable securities
laws and the terms of this Agreement.
(b) The Stockholder has the legal capacity, power and
authority to enter into and perform all of the Stockholder's
obligations under this Agreement. The execution, delivery and
performance of this Agreement by the Stockholder will not violate any
other Contract to which the Stockholder is a party or by which the
Stockholder is bound including, without limitation, any trust
agreement, voting agreement, stockholders agreement, voting trust,
partnership or other agreement. This Agreement has been duly and
validly executed and delivered by the Stockholder and (assuming due
authorization, execution and delivery by Lynx) constitutes a legal,
valid and binding agreement of the Stockholder, enforceable against
the Stockholder in accordance with its terms. All necessary consents
of any beneficiary of or holder of interest in any trust of which the
Stockholder is Trustee to the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been
obtained. If the Stockholder is married and the Stockholder's Shares
constitute community property, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid and
binding agreement of, the Stockholder's spouse, enforceable against
such person in accordance with its terms.
(c) Except for filings under the HSR Act, if applicable,
(i) no filing with, and no permit, authorization, consent or approval
of, any state or federal public body or authority is necessary for the
execution of this Agreement by the Stockholder and the consummation by
the Stockholder of the transactions contemplated hereby and (ii)
neither the execution and delivery of this Agreement by the
Stockholder nor the consummation by the Stockholder of the
transactions contemplated hereby nor compliance by the Stockholder
with the provisions hereof shall (x) conflict with or result in any
breach of any applicable trust, partnership agreement or other
Contracts or organizational documents applicable to the Stockholder,
(y) result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any right
of termination, cancellation, material modification or acceleration),
under any of the terms, conditions or provisions of any Contract to
which the Stockholder is a party or by which the Stockholder or any of
the Stockholder's properties or assets may be bound or (z) violate any
Governmental Order applicable to the Stockholder or any of the
Stockholder's properties or assets.
(d) Except for the shares of Detective Common Stock
identified in Schedule II hereto (the "Pledged Shares"), the
Stockholder's Shares and the certificates representing such Shares are
now and at all times during the term hereof will be held by the
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<PAGE> 4
Stockholder, or by a nominee or custodian for the benefit of the
Stockholder, free and clear of all Liens, proxies, voting trusts or
arrangements or any other encumbrances whatsoever, except for any of
the same arising hereunder.
(e) No broker, investment banker, financial adviser or
other Person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on
behalf of the Stockholder in his or her capacity as such.
(f) The Stockholder understands and acknowledges that
Lynx is entering into the Merger Agreement in reliance upon the
Stockholder's execution and delivery of this Agreement with Lynx.
Section 3. Representations and Warranties of Lynx. Lynx hereby
represents and warrants to each the Stockholder as follows:
(a) Lynx is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) Lynx has all necessary corporate power and authority
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and
performance by Lynx of this Agreement and the consummation by Lynx of
the transactions contemplated hereby have been duly and validly
authorized and approved by all required corporate action. This
Agreement has been duly executed and delivered by Lynx, and (assuming
due authorization, execution and delivery by the Stockholder)
constitutes a legal, valid and binding obligation of Lynx, enforceable
against it in accordance with its terms.
(c) Except for filings under the HSR Act, if applicable,
(i) no filing with and no permit, authorization, consent or approval
of, any state or federal public body or authority is necessary for the
execution of this Agreement by Lynx and the consummation by Lynx of
the transactions contemplated hereby and (ii) neither the execution
and delivery of this Agreement by Lynx nor the consummation by Lynx of
the transactions contemplated hereby nor compliance by Lynx with the
provisions hereof shall (x) conflict with or result in any breach of
any applicable trust, partnership agreement or other Contracts or
organizational documents applicable to Lynx, (y) result in a violation
or breach of, or constitute (with or without notice or lapse of time
or both) a default (or give rise to any right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any Contract to which Lynx is a
party or by which Lynx or any of Lynx's properties or assets may be
bound or (z) violate any Governmental Order applicable to Lynx or any
of Lynx's properties or assets.
-4-
<PAGE> 5
Section 4. Agreement to Vote; Proxy
(a) The Stockholder hereby agrees that, until the
Termination Date (as defined in Section 9), at any meeting of the
stockholders of Detective, however called, or in connection with any
action by written consent of the stockholders of Detective, the
Stockholder shall vote (or cause to be voted) or act by written
consent with respect to the Shares (i) in favor of the Merger, the
Amended Charter and the election of the Post-Closing Directors, the
execution and delivery by Detective of the Merger Agreement and the
Ancillary Agreements and the approval of the terms thereof and each of
the other actions contemplated by the Merger Agreement and this
Agreement and any actions required in furtherance hereof and thereof;
(ii) against any action or agreement that would result in a breach of
any covenant, representation or warranty or any other obligation or
agreement of Detective under the Merger Agreement, the Ancillary
Agreements or this Agreement; and (iii) against the following actions
(other than the Merger and the transactions contemplated by the Merger
Agreement or any such actions identified in writing by Lynx in
advance): (A) any extraordinary corporate transaction, including,
without limitation, a merger, consolidation or other business
combination involving Detective or any of its Subsidiaries; (B) a
sale, lease or transfer of a material amount of assets of Detective or
any of its Subsidiaries or a reorganization, recapitalization,
dissolution or liquidation of Detective or any of its Subsidiaries;
(C) any change in the majority of the board of directors of Detective;
(D) any change in the present capitalization of Detective or any
amendment of Detective's Certificate of Incorporation or by-laws
(other than as contemplated by the Amended Charter); (E) any other
change in Detective's corporate structure or business; or (F) any
other action which is intended, or could reasonably be expected, to
impede, interfere with, delay, postpone, discourage or materially
adversely affect the Merger or the transactions contemplated by the
Merger Agreement, the Ancillary Agreements or this Agreement. The
Stockholder shall not enter into any Contract or understanding with
any Person to vote or give instructions in any manner inconsistent
with the terms of this Agreement.
(b) STOCKHOLDER HEREBY GRANTS TO, AND APPOINTS, LYNX AND
ANY DESIGNEE OF LYNX, EACH OF THEM INDIVIDUALLY, STOCKHOLDER'S
IRREVOCABLE (UNTIL THE TERMINATION DATE) PROXY AND ATTORNEY-IN-FACT
(WITH FULL POWER OF SUBSTITUTION) TO VOTE THE SHARES AS SET FORTH IN
SECTION 4(a) ABOVE. STOCKHOLDER INTENDS THIS PROXY TO BE IRREVOCABLE
(UNTIL THE TERMINATION DATE) AND COUPLED WITH AN INTEREST AND WILL
TAKE SUCH FURTHER ACTION AND EXECUTE SUCH OTHER INSTRUMENTS AS MAY BE
NECESSARY TO EFFECTUATE THE INTENT OF THIS PROXY AND HEREBY REVOKES
ANY PROXY PREVIOUSLY GRANTED BY SUCH STOCKHOLDER WITH RESPECT TO SUCH
SHARES.
-5-
<PAGE> 6
Section 5. Certain Covenants of the Stockholder. Except in
accordance with the terms of this Agreement, the Stockholder hereby covenants
and agrees as follows:
(a) Prior to the Termination Date, the Stockholder shall
not, in its capacity as such, directly or indirectly (including
through advisors, agents or other intermediaries), solicit, initiate
or encourage (including by way of furnishing information) or respond
to (or take any other action designed to facilitate) any inquiries or
the making of any proposal by any Person (other than Lynx or any
Affiliate thereof) with respect to Detective that constitutes or could
reasonably be expected to lead to a Detective Takeover Proposal or
engage in any discussions or negotiations with regard to any Detective
Takeover Proposal.
(b) Prior to the Termination Date, the Stockholder shall
not, directly or indirectly (i) except pursuant to the terms of the
Merger Agreement or this Agreement, offer for sale, sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of, enforce or
permit the execution of the provisions of any redemption agreement
with Detective, enter into any Contract, Option or other arrangement
or understanding with respect to, or consent to the offer for sale,
sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of, or exercise any discretionary powers to distribute,
any or all of the Shares or any interest therein, including any trust
income or principal, except in each case to a Permitted Transferee who
is or agrees to become bound by this Agreement; (ii) except as
contemplated hereby, grant any proxies or powers of attorney with
respect to any Shares, deposit any Shares into a voting trust or enter
into a voting agreement with respect to any Shares; or (iii) take any
action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing any of the
Stockholder's obligations under this Agreement.
(c) The Stockholder hereby waives any rights of
appraisal or rights to dissent from the Merger that the Stockholder
may have. Each Trustee represents that no beneficiary who is a
beneficial owner of Shares under any trust has any right of appraisal
or right to dissent from the Merger which has not been so waived.
(d) Unless, in connection therewith, the Shares held by
any trust which is presently subject to the terms of this Agreement
are transferred to one or more Permitted Transferees who upon receipt
of such Shares become signatories to this Agreement, the Stockholder
acting as a Trustee shall not take any action to terminate, close or
liquidate any such trust and shall take all steps necessary to
maintain the existence thereof at least until the Termination Date.
Section 6. Further Assurances. From time to time, at the other
party's request and without further consideration, each party hereto shall
execute and deliver such additional documents and take all such further action
as may be necessary or desirable to consummate and
-6-
<PAGE> 7
make effective, in the most expeditious manner practicable, the transactions
contemplated by this Agreement.
Section 7. Certain Events. The Stockholder agrees that this
Agreement and the obligations hereunder shall attach to the Shares and shall be
binding upon any person or entity to which legal or beneficial ownership of
such Shares shall pass, whether by operation of law or otherwise, including
without limitation the Stockholder's heirs, guardians, administrators or
successors or as a result of any divorce.
Section 8. Stop Transfer. The Stockholder agrees with, and
covenants to, Lynx that the Stockholder shall not request that Detective
register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Shares, unless such transfer is
made in compliance with this Agreement.
Section 9. Termination. The obligations of the Stockholder and
the irrevocable proxy contained in Section 4(b) of this Agreement shall
terminate upon the first to occur of (a) the Effective Time and (b) the date
the Merger Agreement is terminated in accordance with its terms (unless such
termination is being contested in good faith by Lynx in a court of competent
jurisdiction, in which event this Agreement shall remain in full force and
effect until the resolution of such action from which there is no further right
of appeal) (the "Termination Date"); provided that the provisions of Sections
2, 3 and 10 and any claim for breach of any representation, warranty, covenant
or other agreement under this Agreement shall survive the Termination Date.
Section 10. Miscellaneous.
(a) All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service, by
cable, by facsimile, by telegram, by telex or by registered or
certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other
address for a party as shall be specified in a notice given in
accordance with this Section 10(a)):
If to the Stockholder:
Alan J. Hirschfield Living Trust
3490 Clubhouse Drive
Jackson, Wyoming 83001
Telecopier: (307) 733-4935
-7-
<PAGE> 8
If to Lynx:
c/o Pearson Inc.
1330 Avenue of the Americas
7th Floor
New York, NY 10019
Attention: President
Telecopier: (212) 641-2500
with a copy to:
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, NY 10178
Attn: Anne E. Gold, Esq.
Telecopier: (212) 309-6273
(b) At any time prior to the Termination Date, any party
hereto may, with respect to any other party hereto, (i) extend the
time for the performance of any of the obligations or other acts, (ii)
waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (iii) waive
compliance with any of the agreements or conditions contained herein.
Any such extension or waiver shall be valid if set forth in an
instrument in writing signed by the party or parties to be bound
thereby.
(c) The headings contained in this Agreement are for the
convenience of reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
(d) If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of Law or
public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is
not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the greatest extent
possible.
-8-
<PAGE> 9
(e) This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and undertakings, both written and oral
with respect to the subject matter hereof and thereof and except as
otherwise expressly provided herein.
(f) This Agreement shall not be assigned by operation of
Law or otherwise, except that Lynx may assign all or any of their
respective rights and obligations hereunder to any of its Affiliates,
provided, however, that no such assignment shall relieve the assigning
party of its obligations hereunder.
(g) The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms. It is
accordingly agreed that the parties hereto (i) will waive, in any
action for specific performance, the defense of adequacy of remedy at
law and (ii) shall be entitled to specific performance of the terms
hereof, this being in addition to any other remedy to which they are
entitled at law or in equity.
(h) No failure or delay on the part of any party hereto
in the exercise of any right hereunder shall impair such right or be
construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor shall any single or
partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under
this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
(i) Notwithstanding anything herein to the contrary, no
Person executing this Agreement who is, or becomes during the term
hereof, a director of Detective makes any agreement or understanding
herein in his or her capacity as such director, and the agreements set
forth herein shall in no way restrict any director in the exercise of
his or her fiduciary duties as a director of Detective in his or her
capacity as a director of Detective. The Stockholder has executed this
Agreement solely in his or her capacity as the record or beneficial
holder of the Shares or as the trustee of a trust whose beneficiaries
are the beneficial owners of the Shares.
(j) Each party agrees to bear its own expenses in
connection with the transactions contemplated hereby.
(k) This Agreement shall be governed by, and construed
in accordance with, the Laws of the State of Delaware. All actions and
proceedings arising out of or relating to this Agreement shall be
heard and determined in a Delaware state or federal court sitting in
the State of Delaware, and the parties hereto hereby irrevocable
submit to the exclusive jurisdiction of such courts in any such action
or proceeding and irrevocably waive the defense of an inconvenient
forum to the maintenance of any such action or proceeding.
-9-
<PAGE> 10
(l) EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT.
(m) This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement. Delivery of an executed counterpart of a signature
page to this Agreement by telecopier shall be effective as delivery of
a manually executed counterpart of this Agreement.
[Signature Page to Follow]
-10-
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
INTERACTIVE DATA CORPORATION
By: /s/ Philip J. Hoffman
-------------------------------
Name: Philip J. Hoffman
Title: Authorized Person
ALAN J. HIRSCHFIELD LIVING TRUST
By: /s/ Alan J. Hirschfield
------------------------------
Name: Alan J. Hirschfield
Title: Trustee
[Signature page to Voting and Standstill Agreement]
<PAGE> 12
SCHEDULE I
EXISTING SHARES
Stockholder No. of Existing Shares
- ----------- ----------------------
Alan J. Hirschfield Living Trust 1,212,145
<PAGE> 13
SCHEDULE II
PLEDGED SHARES
Number of Pledged Shares Pledgee
- ------------------------ -------
None
<PAGE> 1
EXHIBIT 99.1
LONDON AND JACKSON, Wyo.--(BUSINESS WIRE)--Nov. 15, 1999--
CBS.MarketWatch.com and FT.com to Form
International and Domestic Marketing Alliance;
Merger Will Create Major Worldwide Provider of Financial Information
Data Broadcasting Corporation (Nasdaq:DBCC), America's leading provider of
real-time financial market data to traders and individual investors, today
announced an agreement to merge with the specialist asset valuation business
(FTAM) of the Financial Times group, part of Pearson plc, the international
media company.
The Financial Times group will transfer ownership of FTAM to Data Broadcasting
in exchange for a 60% stake in the combined business, which is expected to have
pro forma revenues in 1999 of approximately $320 million, almost three times
the fiscal 1999 revenues of Data Broadcasting. The value of the shares to be
exchanged is more than $800 million based on Data Broadcasting's closing price
on Friday, November 12, 1999 ($14-3/8).
FTAM is the leading provider of specialist pricing, dividend, corporate action
and asset management information to major institutional investors around the
world, and its data bases are used to value many of the world's leading
investment funds. Data Broadcasting specializes in meeting the needs of
individual investors and professional traders by providing news, real-time
streaming quote services, analytical tools and investment models.
The expanded business will be better positioned to provide more comprehensive
service to every sector of the global money management community and develop
more rapidly a wider range of Internet-delivered products. The new business
will also be able to achieve significant integration benefits in data
collection and technology infrastructure.
DBC owns approximately 32% of MarketWatch.com (Nasdaq:MKTW), which operates
CBS.MarketWatch.com, one of the leading financial information Web sites in the
United States. Through its shareholding in Data Broadcasting, the Financial
Times group will form a marketing alliance with MarketWatch.com to
cross-promote CBS.MarketWatch.com and ft.com, the leading international
business information Web site in both North America and Europe.
The transaction, which is subject to the approval of Data Broadcasting's
shareholders, regulatory approvals and other customary conditions with respect
to Data Broadcasting and MarketWatch.com, is expected to be completed early in
2000.
Commenting on the merger, Stephen Hill, chief executive of the Financial Times
group, said: "The merger of FTAM and Data Broadcasting forms a very powerful
combination to offer to the global management community. Both businesses have
strong market positions, highly valued content, flexible technology and
excellent products. Together, we will be in great shape to broaden our scope of
services across the specialist asset management and portfolio evaluation
<PAGE> 2
market and capitalize on the opportunities to deliver more of our products by
Internet."
Allan Tessler and Alan Hirschfield, Data Broadcasting's co-chief executive
officers, said: "As a result of our agreement with Pearson, the merger of FTAM
and Data Broadcasting, together with our stake in MarketWatch.com and the link
to the FT group, will create the world's leading specialist financial
information business. We believe that this transaction will accelerate our
presence in the Internet world and create significant long-term value for our
shareholders."
Commenting on plans for a marketing alliance with MarketWatch.com, Hill added:
"We are very excited at becoming a shareholder in MarketWatch.com, which
operates one of America's foremost financial information Web sites, and the
opportunities it will open for ft.com. These are two very distinctive and
complementary products. CBS.MarketWatch.com is strongly focused on actionable,
market-oriented news, while we are building ft.com as the information partner
of the global business community. There are some very exciting opportunities
for cross-promotion as we develop both businesses in Europe and North America."
Larry Kramer, president and chief executive officer of MarketWatch.com, said:
"This is a very exciting development for CBS.MarketWatch.com. We look forward
to working with our new partner. Our news operations are very complementary, so
we can easily cross-promote and help bring each other's content to our
respective markets."
Note to Editors
Data Broadcasting, whose shares trade on the Nasdaq National Market, generated
revenues of approximately $108 million for the fiscal year ended June 30, 1999.
The business is strongly cash positive, and in the year ended June 30, 1999,
Data Broadcasting registered EBITDA of $14.1 million, or $0.63 per share,
before income taxes, depreciation and goodwill and intangibles amortization
charges of $15 million and its share of MarketWatch.com losses of $6 million.
At the close of trading Friday, November 12, 1999, Data Broadcasting had a
market capitalization of approximately $495 million. Its businesses include
CMS, which provides fixed income portfolio analytics to institutional
investment managers; eSignal, which provides real-time market data, trading and
research delivered via the Internet to active individual traders, brokers and
investors; and InSite, which provides market data and research for the
professional market.
Data Broadcasting owns approximately 32% of MarketWatch.com, operator of
CBS.MarketWatch.com, one of the leading financial news Web sites in the United
States, providing real-time breaking financial news and commentary on
market-moving trends and events. In the three months ended September 30, 1999,
MarketWatch.com attracted an average of 4.6 million unique monthly visitors and
a total of some 434 million page views, according to DoubleClick, a 250%
increase over the same period last year.
In the nine months ended September 30, 1999, the company generated revenues of
approximately $14.9 million. MarketWatch.com trades on the Nasdaq National
Market, following its initial public offering in January 1999, and has a
current market valuation of
<PAGE> 3
approximately $685 million.
In 1998, FTAM generated pro forma revenues of approximately $200 million. The
business operates as the Interactive Data, Muller Data Corporation (MDC) and
Muniview brands in the United States and as Financial Times Information and
Valorinform in Europe and Asia Pacific. It has a database of more than 3.5
million securities, including hard-to-value unlisted fixed income instruments,
and specializes in data collections and internally authored evaluations of
fixed income securities.
FTAM is a leading source of comprehensive disclosure data, factor information
and independent valuations for a comprehensive range of U.S. securities and
offers full descriptive information of more than 2 million U.S. municipal
bonds. It also collects and distributes corporate action information on
equities and bonds all over the world, specializing in "hard to get"
information from emerging markets.
FTAM is part of the Financial Times Group, which also consists of:
- -- the Financial Times newspaper, the world's leading international
business newspaper;
- -- ft.com, one of the world's leading business information Web sites;
- -- the leading business and financial Web sites in France (Les Echos)
and Spain (Expansion), with a new German language business and
finance newspaper to be launched in partnership with Gruner + Jahr,
one of Germany's leading newspaper and magazine publishers, early
in the new year;
- -- Financial Times Business, which produces specialist information on
energy and finance markets;
- -- FTSE International, a joint venture with the London Stock Exchange,
which provides the professional investment community with the
leading UK indices and, together with the Amsterdam Stock Exchange,
publishes the Eurotop family of indices;
- -- AFX news, a news agency jointly owned with Agence France-Presse,
which is a global provider of real-time financial and business
news;
- -- a 50% stake in BDFM, publisher of South Africa's leading financial
newspaper and Web site; and
- -- a 50% stake in The Economist group, which publishes the world's
leading weekly business and current affairs journal.
The Financial Times group is part of Pearson plc, the international media
company, which also owns Pearson Education, the world's leading education
company; Pearson Television, the world's leading international independent
television production company; the Penguin group,
<PAGE> 4
the world's most renowned English-language publisher; and Recoletos, one of
Spain's leading media companies.
Data Broadcasting Corporation is the leading provider of real-time market data
to the individual trader and investor. The company delivers real-time stock
quotes, financial information and news to the PCs, laptops and hand-held
devices of millions of users via the Internet, dedicated lines, wireless FM,
cable and satellite.
With the BondEdge service from its Capital Management Sciences division, Data
Broadcasting also is the leading provider of fixed income portfolio analytics
used for valuation and risk management purposes. Data Broadcasting's Internet
presence includes http://www.dbc.com, http://www.eSignal.com,
http://cbs.marketwatch.com, http://insite.dbc.com, http://www.bondedge.com,
http://sports.dbc.com and http://www.dbceuro.com.
Matters discussed in this release include forward-looking statements that
involve risks and uncertainties, and actual results may be materially
different. Factors that could cause actual results to differ include the
response of competitors to the company's new services, acceptance of the
Internet as a valid real-time distribution platform by institutional customers,
activity levels in the securities markets and other risk factors listed in the
Company's 10-K and 10-Q reports to the Securities and Exchange Commission.
CONTACT: Data Broadcasting Corporation
Dwight H. Egan, 801/562-2252
Or
Pondel/Wilkinson Group
Cecilia A. Wilkinson/Kristin Bruno, 310/207-9300
