Exhibit 10.5
PARENT VOTING AGREEMENT
AGREEMENT, dated as of June 9, 2002 (this "Agreement"), by and
among Reuters Limited, Reuters C Corp and Reuters Holdings Switzerland SA (each,
including Reuters Limited, a "Stockholder"), Island Holding Company, Inc. (the
"Company"), and Instinet Group Incorporated ("Parent").
WHEREAS, simultaneously with the execution of this Agreement,
Parent, Instinet Merger Corporation, a Delaware corporation ("Merger Sub"), and
the Company are entering into an Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement") providing, among other things, for the
merger of Merger Sub with the Company (the "Merger");
WHEREAS, as of the date hereof, Reuters C Corp and Reuters
Holdings Switzerland SA are direct or indirect wholly-owned subsidiaries of
Reuters Limited and are the Beneficial Owners (as defined below) of, and have
the sole right to vote and dispose of 166,430,360 and 40,469,640 shares,
respectively, of common stock, $0.01 par value per share, of Parent (the "Parent
Common Stock") (such shares, together with any additional Securities hereafter
acquired by the Stockholders or their controlled Affiliates, the "Subject
Shares"); and
WHEREAS, as a condition to the Company's entering into the
Merger Agreement, the Company has required that the Stockholders agree, and the
Stockholders have agreed, to enter into this Agreement.
NOW, THEREFORE, to induce the Company to enter into the Merger
Agreement and in consideration of the premises herein contained, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Certain Definitions. Capitalized terms used but not defined
in this Agreement are used in this Agreement with the meanings given to such
terms in the Merger Agreement. In addition, for purposes of this Agreement:
"Affiliate" means, with respect to any specified Person, any
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified. For purposes of this Agreement, with respect to the Stockholders,
"Affiliate" shall not include Parent and the Persons that directly, or
indirectly through one or more intermediaries, are controlled by Parent.
"Beneficially Owned" or "Beneficial Ownership" with respect to
any securities means having beneficial ownership of such securities (as
determined pursuant to Rule 13d-3 under the Exchange Act, disregarding the
phrase "within 60 days" in paragraph (d)(1)(i) thereof), including pursuant to
any agreement, arrangement or understanding, whether or not in writing. Without
duplicative counting of the same securities by the same holder, securities
Beneficially Owned by a Person shall include securities Beneficially Owned by
all Affiliates of such Person and all other Persons with whom such Person would
constitute a "Group" within the meaning of Section 13(d) of the Exchange Act and
the rules promulgated thereunder.
"Beneficial Owner" with respect to any securities means a
Person that has Beneficial Ownership of such securities.
"Derivative Transaction" means any transaction involving a
security linked to Parent Common Stock, including any equity swap, put, put
equivalent, collar, sale of exchangeable security or similar transaction.
"DGCL" means the Delaware General Corporation Law, as amended
from time to time.
"Person" means an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
"Reuters Parent" means the ultimate parent entity, from time
to time, of Reuters Limited, which is currently Reuters Group PLC.
"Transfer" means, with respect to a security, the sale,
transfer, pledge, hypothecation, encumbrance, assignment or disposition of such
security or the Beneficial Ownership thereof, whether directly or indirectly
(pursuant to any transaction involving a security linked to such security,
including any equity swap, put, put equivalent, collar, sale of exchangeable
security or similar transaction, the creation of a derivative security or
otherwise), the offer to make such a sale, transfer or other disposition, and
each option, agreement, arrangement or understanding, whether or not in writing,
to effect any of the foregoing. As a verb, "Transfer" shall have a correlative
meaning.
2. Stockholder Vote. Each Stockholder agrees, severally and
not jointly, that unless this Agreement has been terminated in accordance with
its terms, (a) at such time as Parent conducts a meeting of or otherwise seeks a
vote or consent of its stockholders for the purpose of approving the Parent
Share Issuance and/or the Parent Charter Amendment it will vote or provide a
consent with respect to and will cause its controlled Affiliates to vote or
provide a consent with respect to, as the case may be, all Subject Shares then
Beneficially Owned by such Stockholder or its controlled Affiliates in favor of
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the Parent Share Issuance and/or the Parent Charter Amendment (as applicable)
and (b) it will vote its Subject Shares against, and it will not consent to, and
will cause its controlled Affiliates to vote against and not to consent to, any
Prohibited Transaction. Without limiting the foregoing, it is understood that
the obligations under this Section 2 shall remain applicable in respect of each
meeting of stockholders of Parent duly called (or solicitation of consents) for
the purpose of approving the Parent Share Issuance and/or the Parent Charter
Amendment and/or any Prohibited Transaction regardless of the position of
Parent's board of directors as to the Parent Share Issuance and/or the Parent
Charter Amendment at the time of such meeting or solicitation.
3. Grant of Irrevocable Proxy; Registration Rights. (a) Until
this Agreement is terminated, each Stockholder hereby irrevocably appoints the
Company, its officers, agents and nominees, with full power of substitution, as
proxy for and attorney in fact of the Stockholder to act with respect to and
vote the Subject Shares Beneficially Owned by the Stockholder for and in the
name, place and stead of the Stockholder at any annual, special or other meeting
of the holders of shares of Parent capital stock and at any adjournment or
postponement thereof or pursuant to any written consent in lieu of a meeting, to
the fullest extent that the Subject Shares are entitled to be voted in
accordance with Section 2; provided that the Company, its officers, agents or
nominees may exercise this irrevocable proxy only if such Stockholder fails to
comply with the terms of Section 2. Each Stockholder will cause its controlled
Affiliates to grant such an irrevocable proxy with respect to each Subject Share
now Beneficially Owned or hereafter acquired by such controlled Affiliates. In
all other matters, the Subject Shares shall be voted by and in the manner
determined by the Stockholder upon at least 3 business days' prior written
notice to the Company. Each Stockholder hereby represents that it has not
heretofore granted any irrevocable proxy with respect to the Subject Shares and
hereby revokes any and all proxies which may heretofore have been granted by
such Stockholder with respect to the Subject Shares.
(b) Each Stockholder understands and acknowledges that the
Company is entering into the Merger Agreement in reliance upon the Stockholder's
execution and delivery of this Agreement. Each Stockholder hereby affirms that
the irrevocable proxy set forth in this Section 3 is given in connection with
and as an inducement for the execution by the Company of the Merger Agreement
and to secure the performance of the duties of the Stockholder under this
Agreement. Each Stockholder hereby further affirms that the irrevocable proxy is
coupled with an interest and may not be revoked. Each Stockholder hereby
ratifies and confirms all that such proxy may lawfully do or cause to be done by
virtue hereof in accordance with the provisions hereof. This proxy is executed
and intended to be irrevocable in accordance with the provisions of the DGCL.
(c) Each Stockholder agrees to take all requisite action in
its power so that as promptly as practicable after the date hereof, and in any
event no later than the expiration of Parent's October 1, 2001 Registration
Rights Agreement, a registration rights agreement will be entered into among the
Stockholders, Parent and certain other Persons on the terms and conditions
described in Exhibit J to the Merger Agreement and in the manner contemplated by
Section 4.17 of the Merger Agreement.
4. Additional Covenants of the Stockholders. Each Stockholder
hereby covenants and agrees with the Company that, until this Agreement
terminates:
(a) Except as contemplated by the terms of this Agreement,
such Stockholder shall not, and shall cause its controlled Affiliates not to (i)
without the prior written consent of the Company, Transfer or consent to
Transfer any or all of the Subject Shares, other than (x) to a wholly-owned
subsidiary of Reuters Parent, provided that such subsidiary agrees in writing to
be bound by the terms of this Agreement as a Stockholder and executes a Joinder
Agreement to the Stockholders Agreement in which it agrees to be treated as a
Reuters Party thereunder or (y) any pledge of any Subject Shares in connection
with bona fide debt financings (other than Derivative Transactions) with a
financial institution, provided that, in each case, the interest of any such
financial institution in such shares shall be subject to all of the restrictions
set forth in this Agreement, (ii) reduce such Stockholder's risk (economic or
otherwise) relative to the Subject Shares (including pursuant to any transaction
involving a security linked to Parent Common Stock, including any equity swap,
put, put equivalent, collar, sale of exchangeable security or similar
transaction, the creation of a derivative security or otherwise), (iii) grant
any proxy or power-of-attorney with respect to any such Subject Shares other
than pursuant to this Agreement or (iv) take any action that would have the
effect of preventing, impeding, interfering with or adversely affecting its
ability to perform its obligations under this Agreement.
(b) In the event of a stock dividend or distribution, or any
change in the capital stock of Parent by reason of any stock dividend or
distribution, split-up, recapitalization, combination, exchange of shares or the
like (excluding the Merger), the term "Subject Shares" shall be deemed to refer
to and include the Subject Shares as well as all such stock dividends and
distributions and any securities into which or for which any or all of the
Subject Shares may be changed or exchanged or which are received in such
transaction.
(c) In his, her or its capacity as a stockholder of Parent,
such Stockholder shall not, nor shall such Stockholder permit any controlled
Affiliate of such Stockholder to, nor shall such Stockholder act in concert with
or permit any controlled Affiliate to act in concert with any Person to make, or
in any manner participate in, directly or indirectly, a "solicitation" of
"proxies" (as such terms are used in the rules of the Securities and Exchange
Commission) or powers of attorney or similar rights to vote, or seek to advise
or influence any Person with respect to the voting of any Securities in
connection with any vote or other action on any matter in a manner inconsistent
with recommending that stockholders of Parent vote (x) in favor of the Parent
Share Issuance and/or the Parent Charter Amendment (as applicable) and otherwise
as expressly provided by this Agreement or (y) against a Prohibited Transaction.
(d) Such Stockholder shall not, nor shall such Stockholder
permit any controlled Affiliate of such Stockholder, nor shall such Stockholder
act in concert with or permit any controlled Affiliate to act in concert with
any Person to, deposit any Securities in a voting trust or subject any
Securities to any arrangement or agreement with any Person with respect to the
voting of such Securities, except as expressly provided by this Agreement.
(e) Such Stockholder will take all action necessary to (i)
permit the voting of all shares of Company Common Stock Beneficially Owned by
such Stockholder in accordance with the terms of this Agreement and (ii) prevent
creditors in respect of any pledge of such shares from exercising their rights
under such pledge in a manner inconsistent with the terms of this Agreement.
(f) Such Stockholder shall not, and shall cause its controlled
Affiliates and representatives not to, directly or indirectly, solicit,
initiate, facilitate or encourage any inquiries or proposals from, discuss or
negotiate with, or provide any non-public information to, any Person relating to
any Prohibited Transaction.
(g) Unless required by applicable law, such Stockholder shall
not, and shall cause its controlled Affiliates not to, make any press release,
public announcement or other public communication with respect to the business
or affairs of the Company or Parent, including this Agreement and the Merger
Agreement and the transactions contemplated hereby and thereby, without the
prior written consent of the Company.
(h) Such Stockholder will (i) use all reasonable efforts to
cooperate with the Company, Parent and Merger Sub in connection with the
transactions contemplated by the Merger Agreement, (ii) promptly take such
actions as are necessary or appropriate to consummate such transactions, and
(iii) provide any information reasonably requested by the Company, Parent and
Merger Sub for any regulatory application or filing (including any registration
statement) made or approval sought for such transactions.
(i) Other than the Parent Charter Amendment, such Stockholder
shall not consent to, and shall cause its controlled Affiliates not to consent
to, any amendment to the certificate of incorporation of Parent or any other
change in the share capital structure of Parent, including the filing of any
certificate of designations relating to preferred stock.
5. Representations and Warranties of the Stockholders. Each
Stockholder hereby represents and warrants to the Company that:
(a) (i) The Subject Shares described in the recitals to this
Agreement are the only shares of capital stock of Parent, securities convertible
into capital stock of Parent, or other rights in respect of capital stock of
Parent (collectively, "Securities") Beneficially Owned or owned of record by the
Stockholder or its controlled Affiliates on the date hereof; (ii) such
Stockholder has valid title to such Subject Shares, free and clear of all liens,
claims, charges, options, proxies, security interests and encumbrances of any
kind whatsoever (except as contemplated by this Agreement), and none of such
Subject Shares is subject to any pledge or any voting trust or other agreement
or arrangement (except as created by this Agreement) with respect to the voting
of such Subject Shares; and (iii) neither the Stockholder nor any of its
controlled Affiliates presently owns any options to purchase or rights to
subscribe for or otherwise acquire any other Securities.
(b) The Stockholder has full right, power and authority to
execute and deliver this Agreement and to perform all of such Stockholder's
obligations hereunder, and such execution, delivery and performance have been
duly authorized by all requisite action of the Stockholder and no other
proceedings or actions are necessary therefor.
(c) This Agreement has been duly and validly executed and
delivered by the Stockholder and represents a valid and legally binding
obligation of the Stockholder, enforceable against the Stockholder in accordance
with its terms.
(d) The execution, delivery and performance of this Agreement
by the Stockholder will not constitute a violation of, conflict with, require
any consent (not yet obtained) under or result in a default (whether with notice
or lapse of time or both) under (i) any of its Constituent Documents or any
contract, understanding or arrangement to which the Stockholder is a party or by
which the Stockholder or the Subject Shares are bound, (ii) any judgment,
injunction, decree or order applicable to the Stockholder, or (iii) any
applicable law, statute, rule or regulation.
6. Representations, Warranties and Covenants of the Company.
The Company hereby represents and warrants to the Stockholders that (i) the
Company has full corporate right, power and authority to execute and deliver
this Agreement and to perform its obligations hereunder, (ii) such execution,
delivery and performance have been duly authorized by all requisite corporate
action by the Company, and no other corporate proceedings or actions are
necessary therefor, (iii) this Agreement has been duly and validly executed and
delivered by the Company and represents a valid and legally binding obligation
of the Company, enforceable against the Company in accordance with its terms,
and (iv) the execution, delivery and performance of this Agreement by the
Company will not constitute a violation of, conflict with, require any consent
(not yet obtained) under or result in a default (whether with notice or lapse of
time or both) under (A) any of its Constituent Documents or any contract,
understanding or arrangement to which the Company is a party or by which it is
bound, (B) any judgment, injunction, decree or order applicable to the Company,
or (C) any applicable law statute, rule or regulation.
7. Termination. This Agreement, other than the obligations set
forth in Section 9, shall terminate at the earlier of the Effective Time or
immediately upon termination of the Merger Agreement pursuant to its terms.
8. Severability. Any term, provision, covenant or restriction
contained in this Agreement held by a court or other Authority of competent
jurisdiction to be invalid, void or unenforceable shall be ineffective to the
extent of such invalidity, voidness or unenforceability, but neither the
remaining terms, provisions, covenants or restrictions contained in this
Agreement nor the validity or enforceability thereof in any other jurisdiction
shall be affected or impaired thereby. Any term, provision, covenant or
restriction contained in this Agreement that is so found to be so broad as to be
unenforceable shall be interpreted to be as broad as is enforceable.
9. Expenses. Each of the parties hereto shall pay all costs
and expenses incurred by such person or on such person's behalf in connection
with the transactions contemplated hereunder, including fees and expenses of
such person's own financial consultants, investment bankers, accountants and
counsel, except as otherwise provided herein or in the Merger Agreement.
10. Entire Agreement. This Agreement (including the documents
and the instruments referred to herein) constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, agreements or representations by or between the
parties, written and oral, with respect to the subject matter hereof and
thereof.
11. Successors; No Third Party Beneficiaries. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns, but neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any party (whether by operation of law or otherwise) without the
prior written consent of the other parties. Nothing in this Agreement, expressed
or implied, is intended to confer upon any party, other than the parties hereto
and their respective successors and assigns, any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided herein.
12. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or dispatched by a nationally recognized
overnight courier service to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
(a) if to Parent, to:
Instinet Group Incorporated
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxx, Esq.
with a copy to:
Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
(b) if to a Stockholder, to:
c/o Reuters Limited
Reuters Limited
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx
XX0X 0XX
Fax: 000-00-000-000-0000
Attention: General Counsel
with a copy to:
Reuters America Inc.
The Reuters Building
0 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
and to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxxx Xxxxxx, Esq.
(c) if to the Company, to:
Island Holding Company, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxx Xxxxxxxx
with a copy to:
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
13. Counterparts. This Agreement may be executed in
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
14. Specific Performance. The parties hereto agree that if for
any reason the Company or any Stockholder shall have failed to perform its
respective obligations under this Agreement, then the party hereto seeking to
enforce this Agreement against such non-performing party shall be entitled to
specific performance and injunctive and other equitable relief, and the parties
hereto further agree to waive any requirement for the securing or posting of any
bond and the defense of adequacy of a remedy at law in connection with the
obtaining of any such injunctive or other equitable relief. This provision is
without prejudice to any other rights that any party hereto may have against any
other party hereto for any failure to perform its obligations under this
Agreement.
15. Governing Law. This Agreement shall be governed by the
laws of the State of New York applicable to contracts made and to be performed
entirely in such State, except to the extent that the DGCL applies as a result
of Parent being a Delaware corporation.
16. Waiver and Amendment. Any provision of this Agreement may
be waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by the
parties hereto,
17. Additional Subject Shares. Notwithstanding the provisions
of Section 16, in the event that any Stockholder or any of its controlled
Affiliates acquires, or acquires Beneficial Ownership over, any additional
Securities, (i) such Stockholder shall promptly notify the Company in writing of
such acquisition and (ii) such Securities shall, without further action of the
parties, be subject to the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first above written.
ISLAND HOLDING COMPANY, INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: President
REUTERS LIMITED
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Attorney in Fact
REUTERS C CORP
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Authorized Officer
REUTERS HOLDINGS SWITZERLAND SA
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Attorney in Fact
INSTINET GROUP INCORPORATED
By: /s/ Xxxx Xxxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxxx
Title: Chief Executive Officer
