Exhibit A
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
dated as of November 14, 1999
among
INTERACTIVE DATA CORPORATION
XXXXXXX LONGMAN, INC.
DATA BROADCASTING CORPORATION
and
DETECTIVE MERGER-SUB, INC.
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
SECTION 3.14. Taxes.............................................................20
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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 IXGENERAL 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
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"),
Xxxxxxx 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
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 Xxxx-Xxxxx-Xxxxxx 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 XxxxxxXxxxx.xxx, 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
5
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,
6
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,
7
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:
Term Section
---- -------
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
8
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
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.
9
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 Xxxxxx, Xxxxx & 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:
10
(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
11
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,
12
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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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,
14
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").
15
(b) The 1998 Financial Statements constitute the year-end
consolidating financial statements for FTAM and FTRP provided to Xxxxxxx 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
16
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.
17
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
18
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
19
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.
20
(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,
21
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;
22
(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 Xxxxxxx Xxxxx & 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.
23
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
24
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
25
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
26
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).
27
(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
28
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.
29
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.
30
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
31
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,
32
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
33
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
34
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 Xxxxxxxxx and Xxxxx 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.
35
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
36
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
37
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.
38
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
39
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
40
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
41
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) Xxxxx X.
Xxxxxxx, Xxxx X. Xxxxxxxxxxx and Xxxx Xxxxxxxxxx; (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
42
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
Xxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxx and Xxxx X. Xxxxxxxxxxx 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):
43
(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
44
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;
45
(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.
46
(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;
47
(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;
48
(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
49
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
50
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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(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.
52
(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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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
54
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 willful
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):
55
(a) if to Detective or Acquisition Sub:
Data Broadcasting Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: President
Telecopier: (000) 000-0000
with a copy to:
Camhy Xxxxxxxxx & Xxxxx LLP
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Annex, Esq.
Telecopier: (000) 000-0000
(b) if to Lynx or Lynx Parent:
c/o Pearson Inc.
0000 Xxxxxx xx xxx Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: President
Telecopier: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxx & Bockius LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Gold, Esq.
Telecopier: (000) 000-0000
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
56
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
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/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Person
XXXXXXX LONGMAN, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Authorized Person
DATA BROADCASTING CORPORATION
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
and
DETECTIVE MERGER-SUB, INC.
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President
[Signature page to Merger Agreement]
