Asset Purchase Agreement - Reuters America Inc. and Instinet Group Inc.
EXECUTION COPY
ASSET PURCHASE AGREEMENT
BETWEEN
REUTERS AMERICA INC.
AND
INSTINET GROUP INCORPORATED
DATED
DECEMBER 18, 2001
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TABLE OF CONTENTS
Page
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ARTICLE I
THE CLOSING
1.1 Purchase and Sale of the Assets....................................... 1
1.2 Assumption of Liabilities............................................. 3
1.3 Consideration......................................................... 3
1.4 Closing Date Payments................................................. 3
1.5 Payments; Ledger...................................................... 4
1.6 Payment Dispute Resolution............................................ 5
1.7 Closing Deliveries.................................................... 6
1.8 Allocation of Purchase Price.......................................... 6
1.9 Further Assurances.................................................... 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
2.1 Organization.......................................................... 7
2.2 Authority; Enforceability............................................. 7
2.3 No Breach............................................................. 7
2.4 Financial Statements.................................................. 7
2.5 Consents.............................................................. 8
2.6 Actions and Proceedings............................................... 8
2.7 Title to Property; Sufficiency........................................ 8
2.8 Intellectual Property................................................. 8
2.9 Compliance with Legal Requirements.................................... 9
2.10 Employment Matters.................................................... 9
2.11 Contracts............................................................. 10
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
3.1 Organization; Authority and Enforceability............................ 10
3.2 No Breach............................................................. 10
3.3 Consents.............................................................. 11
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ARTICLE IV
COVENANTS
4.1 Employee Matters...................................................... 11
4.2 Ancillary Agreements.................................................. 12
4.3 Account Receivables................................................... 12
4.4 Certain Customer Arrangements......................................... 13
4.5 Insurance Claims...................................................... 13
4.6 Taxes................................................................. 13
4.7 Migration............................................................. 13
ARTICLE V
PRE-CLOSING COVENANTS AND OTHER AGREEMENTS
5.1 Conduct of the Business Pending the Closing........................... 13
5.2 Public Announcements; Communications with Customers................... 14
5.3 Third Party Consents.................................................. 14
5.4 Further Actions....................................................... 14
5.5 Proprietary Information............................................... 15
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to the Obligations of the Parties................ 15
ARTICLE VII
TERMINATION
7.1 General............................................................... 16
7.2 No Liabilities in Event of Termination................................ 16
ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by the Seller......................................... 17
8.2 Indemnification by the Purchaser...................................... 17
8.3 Method of Asserting Claims............................................ 17
8.4 Survival.............................................................. 19
8.5 Method of Satisfying Claims........................................... 19
8.6 Limitation of Liability............................................... 19
8.7 Sole and Exclusive Remedy............................................. 19
8.8 Consequential Damages................................................. 20
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8.9 Coordination of Indemnification Rights................................ 20
ARTICLE IX
MISCELLANEOUS
9.1 Costs and Expenses.................................................... 20
9.2 Notices............................................................... 20
9.3 Entire Agreement...................................................... 21
9.4 Governing Law......................................................... 21
9.5 No Third Party Rights; Assignment..................................... 21
9.6 Waivers and Amendments................................................ 22
9.7 Additional Definitions................................................ 22
9.8 Resolution of Disputes; Consent to Jurisdiction....................... 23
9.9 Counterparts.......................................................... 23
9.10 Bulk Sales............................................................ 23
9.11 Disclosure Schedule................................................... 23
SCHEDULES
1.1(a)(i) Equipment
1.1(a)(ii) Contracts
1.1(a)(iv) Intellectual Property
1.1(b) Excluded Assets
1.2 Assumed Liabilities
1.4 Pre-Closing Expenses
2.1 Organization
2.2 Authority; Enforceability
2.3 No Breach
2.4 Pro Forma Financial Information
2.5 Consents
2.6 Actions and Proceedings
2.7 Title to Property
2.8 Intellectual Property
2.9 Permits
2.10 Seller Plans
2.11 Contracts
3.1 Organization; Authority and Enforceability
3.2 No Breach
3.3 Consents
4.1 Transferred Employees
Exhibits
A Form of Mutual Services Agreement
B Form of Intellectual Property License
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ASSET PURCHASE AGREEMENT (this "Agreement"), dated December 18,
2001, between INSTINET GROUP INCORPORATED, a Delaware corporation (the "Seller")
and REUTERS AMERICA INC., a Delaware corporation (the "Purchaser") (each of the
Purchaser and the Seller, are individually referred to herein as a "Party" and
collectively referred to herein as the "Parties").
WHEREAS, on September 28, 2001, certain affiliates of the Parties
entered into an agreement whereby (1) the Seller agreed to sell to the
Purchaser, and the Purchaser agreed to purchase from the Seller, effective as of
September 28, 2001 (the "Effective Date"), the assets, rights, claims and
contracts used by the Seller in the business of development, sales, marketing,
support and distribution of the U.S. equity market research/real-time financial
market data platform currently marketed by Seller as the "Research and
Analytics" ("R&A") product (the "Business") and (2) the Purchaser agreed to
assume certain liabilities and obligations of the Business effective as of the
Effective Date, in the case of each of clause (1) and (2) as more fully set
forth herein;
WHEREAS, the Purchaser and the Seller agreed to provide certain
services related to the Business to each other; and
WHEREAS, the Purchaser and the Seller agreed to memorialize their
agreements in definitive documentation, consisting of this Asset Purchase
Agreement and the ancillary agreements attached hereto or referred to herein.
NOW, THEREFORE, in consideration of the mutual promises hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
THE CLOSING
On the date hereof, the closing of the transactions provided for in
this Agreement (the "Closing") shall be held (but only if all of the conditions
set forth in Article VI shall have been satisfied or waived prior to the
Closing) at the offices of the Seller, Three Times Square, New York, New York
10036, or at such other place or on such other date as may be agreed to in
writing by the Seller and the Purchaser (the "Closing Date"). The Closing may
occur by facsimile counterparts. Each of the Parties hereby agrees that the
following actions shall occur simultaneously at the Closing and shall be
effective as of the Effective Date.
1.1 Purchase and Sale of the Assets. (a) Upon the terms set forth
in this Agreement, the Seller shall sell, transfer, convey, assign and deliver,
or cause to be sold, transferred, conveyed, assigned and delivered, to Reuters
Research & Analytics, LLC, a Delaware limited liability company ("Reuters R&A")
or such other affiliate of the Purchaser as directed by the Purchaser, and the
Purchaser shall cause to be purchased, acquired and accepted, from the Seller,
all right, title and interest, free and clear of all Liens, other than Permitted
Liens (as defined in Section 9.7), in the following properties, assets, rights,
claims and contracts, but excluding the Excluded Assets (as defined in Section
1.1(b)) (the "Assets"):
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(i) all of the computer hardware, machinery, equipment and tangible
personal property listed on Schedule 1.1(a)(i) (the "Equipment");
(ii) all rights in and under the contracts, agreements, licenses or
other arrangements, in each case, relating to the Business to the extent
such contracts, agreements, licenses or other arrangements relate to the
Business and arising, accruing or payable from and after the Effective
Date, including those rights relating to contracts, agreements, licenses,
other arrangements and account receivables listed on Schedule 1.1(a)(ii)
(the "Contracts") and all rights to receive payment for products and
services sold (billed and unbilled) and to receive goods and services
purchased pursuant to such Contracts and to assert claims and take other
actions in respect of breaches or other violations thereof;
(iii) to the extent not covered in (ii) above, all accounts
receivable relating exclusively to the Business arising or accruing from
and after the Effective Date;
(iv) all trade secrets and confidential and proprietary business
information, whether patentable or nonpatentable and whether or not
reduced to practice, know-how, research and development information,
published and unpublished works of authorship, whether copyrightable or
not, copyrights therein and thereto, and registrations and applications
therefor, and all renewals, extensions, restorations and reversions
thereof, inventions, know-how, patents, patent applications, registrations
and applications for patent registrations, including divisions,
continuations, continuations-in-part and renewal applications, and
including renewals, extensions and reissues, software, source code,
manuals, instructions, existing software development in progress, data and
information, trademarks, trade, fictitious and assumed names, product and
brand names, service marks, Internet domain names, logos, symbols, trade
dress, and other indicia of origin, all applications and registrations for
all of the foregoing, and all goodwill associated therewith and symbolized
thereby, including all extensions, modifications and renewals of same and
all other intellectual property assets, including the goodwill associated
therewith, in each case developed for or used exclusively in the Business
and owned by the Seller or any of its subsidiaries, and all other
proprietary rights relating to any of the foregoing (including remedies
against infringements, misappropriations or other violations thereof and
rights of protection of interest thereon under the laws of all
jurisdictions) and copies and tangible embodiments thereof (collectively,
the "Intellectual Property Assets"), including, without limitation, those
intellectual property assets listed on Schedule 1.1(a)(iv);
(v) copies of all books of account, records, files and invoices,
including files relating to the Transferred Employees (as defined in
Section 4.1(a) below), accounting records, sales and sales promotional
data, advertising materials, customer lists, cost and pricing information,
supplier lists, business plans, catalogs, quality control records and
manuals, research and development files, patent disclosures,
correspondence and any other corporate records and operating data used in
connection with the Business, wherever located;
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(vi) all permits, authorizations, approvals, registrations and
licenses granted by or obtained from any governmental, administrative or
regulatory authority (each a "Permit" and collectively, the "Permits")
that are listed on Schedule 2.9; and
(vii) all claims, prepayments, refunds, causes of action, chooses in
action, rights of recovery, rights of set off and rights of recoupment
related exclusively to the Business arising, accruing or paid from and
after the Effective Date.
(b) The Assets shall not include those assets listed on Schedule
1.1(b) (the "Excluded Assets").
1.2 Assumption of Liabilities. (a) Upon the terms and subject to
the conditions of this Agreement, Reuters R&A shall assume, from and after the
Effective Date, the liabilities, obligations and commitments ("Liabilities") set
forth on Schedule 1.2, (collectively, the "Assumed Liabilities").
Notwithstanding the foregoing, the Assumed Liabilities shall not include
Liabilities related to the collection of sales tax in connection with the sale
of the R&A product arising prior to the date the Seller ceases to provide
billing and collection services to the Purchaser under the Mutual Services
Agreement.
(b) Neither the Purchaser nor Reuters R&A shall assume, or shall
be responsible for the payment, performance or discharge of any Liabilities
(whether known or unknown, absolute or contingent, liquidated or unliquidated or
due or to become due and whether claims with respect thereto are asserted before
or after the Closing) of the Seller, including any Liabilities arising under
contracts or agreements which are not listed on Schedule 1.1(a)(ii) and any
Liabilities relating to the collection of sales taxes referred to Section 1.2(a)
above, other than the Assumed Liabilities (such Liabilities being hereinafter
referred to as the "Retained Liabilities").
1.3 Consideration. (a) The Purchaser shall pay, or cause to be
paid, to the Seller $7,867,665 (the "Purchase Price Consideration") for the
Assets. The Purchase Price Consideration shall be payable pursuant to Section
1.5 below.
(b) The Parties agree that the Purchase Price is exclusive of any
sales tax payable with respect to the transfer of the Assets contemplated herein
(the "Transfer Taxes"). After the Closing, the Purchaser shall pay to the Seller
all such Transfer Taxes within the time specified for the payment of such
Transfer Taxes under applicable Law.
1.4 Post-Closing Payments. Within thirty (30) days after the
Closing, the Seller shall deliver to the Purchaser a net revenue statement (the
"Net Revenue Statement") reflecting the net cash revenues (revenues earned and
collected, less expenses as set forth on Schedule 1.4) of the Business during
the period commencing on the Effective Date and ending as of the Closing Date
(the "Net Revenue"). If the Net Revenue, as determined on the Net Revenue
Statement, is a positive amount, the Purchaser shall enter such Net Revenue as a
credit payable to the Purchaser on the Ledger (as defined in Section 1.5(a)
below). If the Net Revenue, as determined on the Net Revenue Statement, is a
negative amount, the Purchaser shall enter such Net Revenue as a credit payable
to the Seller on the Ledger. Any payment of Net Revenue pursuant to this Section
1.4, any payment of Transfer Taxes pursuant to Section 1.3(b) of this
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Agreement and any payments pursuant to Sections 4.1(a) (Pre-Closing Expenses
relating to Business Employees), 4.1(c) (Bonuses), 4.3 (Accounts Receivable) and
4.5 (Insurance Claims) of this Agreement and Sections 4(a) (to the extent such
payments are for applicable statutory sales or value-added taxes), 4(b)(i)
(Non-Recurring Fixed Costs relating to Customer Support Services), 4(c) (Support
Fees) and 4(d) (Costs related to the lease of the Kansas Development Center) of
the Mutual Services Agreement are collectively the "Cash Payments".
1.5 Payments; Ledger.
(a) In order to facilitate (i) the Cash Payments and (ii) the
various payments to be made in credits pursuant to Sections 1.3(a) (Purchase
Price Consideration) of this Agreement and Sections 4(a) (Customer Support Fees,
other than any applicable statutory sales tax or value-added taxes payable
thereunder) of the Mutual Services Agreement (collectively, the "Credit-Based
Payments"), the Purchaser shall prepare and administer a ledger (the "Ledger")
reflecting all Cash Payments and Credit-Based Payments to be made by the
Purchaser to the Seller and by the Seller to the Purchaser, during the period
commencing on the Closing Date and ending on the eighteen month anniversary of
the Closing in accordance with this Section 1.5.
(b) At the Closing, the Purchaser shall enter the Purchase Price
Consideration as a credit payable to the Seller in the Ledger. After the
Closing, if a Credit-Based Payment is owed to the Seller by the Purchaser, the
Purchaser shall, within two (2) days of receiving notice that such payment is
owed by means of an invoice, enter the Credit-Based Payment as a credit payable
to the Seller in the Ledger. If a Credit-Based Payment is owed to the Purchaser
by the Seller, the Purchaser shall, within two (2) days of delivering notice to
the Seller that such payment is owed by means of an invoice, enter the
Credit-Based Payment as a credit payable to the Purchaser in the Ledger.
(c) At the Closing, the Purchaser shall enter in the Ledger the
Cash Payments referred to in Section 1.7(d) below and shall indicate that such
Cash Payments were paid to the Seller at the Closing. After the Closing, if a
Cash Payment is owed to the Seller by the Purchaser, the Purchaser shall, within
two (2) days of receiving notice that such payment is owed by the means of an
invoice or, in respect of the Net Revenue, by means of the Net Revenue
Statement, enter the Cash Payment as a credit payable to the Seller in the
Ledger. If a Cash Payment is owed to the Purchaser by the Seller, the Purchaser
shall, within two (2) days of delivering notice to the Seller that such payment
is owed by means of an invoice or, in respect of the Net Revenue by the means of
the Net Revenue Statement, enter the Cash Payment as a credit payable to the
Purchaser in the Ledger.
(d) At the end of every fiscal quarter thereafter until the later
of (i) the eighteen (18) month anniversary of the Closing and (ii) the end of
the fiscal quarter in which the last Cash Payment is incurred, the Purchaser
shall prepare and deliver to the Seller within fifteen (15) Business Days of the
end of each such fiscal quarter (and no sooner than ten (10) Business Days after
the end of each fiscal quarter) a quarterly net balance statement (the
"Quarterly Ledger Balance Statement"). The Credit-Based Payments invoiced and
payable each fiscal quarter shall be netted against each other, resulting in a
quarterly net credit balance reflecting the
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quarterly net amount owed or owing by the Purchaser and the Seller (the "Net
Credit Amounts"). The Cash Payments invoiced and payable each fiscal quarter
after the Closing shall be netted against each other, resulting in a quarterly
net cash balance reflecting the quarterly net cash amount owed or owing by the
Purchaser and the Seller (the "Net Cash Amounts").
(e) At the end of the period commencing on the date of the Closing
and ending on the eighteen month anniversary of the Closing, the Purchaser shall
prepare and deliver to the Seller a final Quarterly Ledger Balance Statement
(the "Final Ledger Statement"). If the Final Ledger Statement reflects that the
Net Credit Amount payable to the Purchaser is less than the Net Credit Amount
payable to the Seller, the Purchaser shall pay to the Seller, in cash within
five (5) Business Days of the delivery of the Final Ledger Statement, an amount
equal to such deficiency, pursuant to wire or other payment instructions
provided by the Seller. If the Final Ledger Statement reflects that the Net
Credit Amount payable to the Seller is less than the Net Credit Amount payable
to the Purchaser, the Seller shall pay to the Purchaser, in cash within five (5)
Business Days of the delivery of the Final Ledger Statement, an amount equal to
such deficiency, pursuant to wire or other payment instructions provided by the
Purchaser.
(f) If the Quarterly Ledger Balance Statement (including for
purposes of this Section 1.5(f), the Final Ledger Statement) reflects that the
Net Cash Amount payable to the Purchaser is less than the Net Cash Amount
payable to the Seller, the Purchaser shall pay to the Seller an amount equal to
such deficiency in cash within five (5) Business Days of the delivery of the
Quarterly Ledger Statement pursuant to wire or other payment instructions
provided by the Seller. If the Quarterly Ledger Balance Statement reflects that
the Net Cash Amount payable to the Seller is less than the Net Cash Amount
payable to the Purchaser, the Seller shall pay to the Purchaser an amount equal
to such deficiency in cash within five (5) Business Days of the delivery of the
Quarterly Ledger Balance Statement pursuant to wire or other payment
instructions provided by the Purchaser.
(g) The Purchaser and the Seller agree that the Purchaser may
designate Reuters R&A or another affiliate of the Purchaser to prepare and
maintain the Ledger in accordance with this Section 1.5.
1.6 Payment Dispute Resolution. If there is a dispute between the
Seller and the Purchaser regarding the Credit-Based Payments, the Quarterly
Ledger Balance Statement, the Net Revenue Statement, the Final Ledger Statement
and/or the Cash Payments, the Seller and/or the Purchaser, as applicable, shall
furnish to the other Party reasonable documentation to substantiate such
disputed Credit-Based Payment, Quarterly Ledger Balance Statement, Net Revenue
Statement, Final Ledger Statement and/or Cash Payment. Upon delivery of such
documentation, the Parties shall cooperate and use their best efforts to resolve
such dispute among themselves, but if they do not reach a final resolution
within sixty (60) Business Days of the initiation of such dispute, the Purchaser
and the Seller shall select an accounting firm mutually acceptable to the
Parties to resolve the dispute. If the use of an accounting firm becomes
necessary to resolve a dispute, the Purchaser and the Seller shall share the
fees and expenses incurred. Any dispute which is not resolved within six (6)
months of the
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commencement of discussions between the Purchaser and the Seller may then be
submitted to the courts within the State of New York pursuant to Section 9.8(b).
1.7 Closing Deliveries. At the Closing:
(a) The Seller shall deliver to the Purchaser the various
certificates, instruments and documents which are deliverable by the Seller
pursuant to Section 6.1(e) and the Seller shall deliver to the Purchaser and
Reuters R&A a duly executed bill of sale (the "Bill of Sale") and such other
instruments of conveyance as the Purchaser and Reuters R&A may reasonably
request in order to effect the sale, transfer, conveyance and assignment to
Reuters R&A of valid ownership of the Assets, in each case in a form reasonably
satisfactory to the Purchaser and Reuters R&A. The Seller shall also deliver to
Reuters R&A, or otherwise put the Purchaser in possession or control of, all of
the Assets of a tangible nature.
(b) The Purchaser shall deliver to the Seller (i) the various
certificates, instruments and documents which are deliverable by the Purchaser
pursuant to Section 6.1(e) and (ii) a true and correct copy of the Ledger, after
entering the Purchase Price Consideration as a credit payable to the Seller and
the Cash Payments referred to in Section 1.7(d) and indicating that such Cash
Payments were paid to the Seller at the Closing. The Purchaser and Reuters R&A
shall deliver a duly executed instrument of assumption of liabilities (the
"Assumption Agreement") and such other instruments as the Seller may reasonably
request in order to effect the assumption by Reuters R&A of the Assumed
Liabilities, in a form reasonably satisfactory to the Seller.
(c) The Purchaser and the Seller shall execute and deliver the
Mutual Services Agreement attached hereto as Exhibit A (the "Mutual Services
Agreement") and the Purchaser and the Seller shall execute and deliver the
Technology and Trademark Cross-License attached hereto as Exhibit B (the
"Intellectual Property License," and together with the Mutual Services
Agreement, the "Ancillary Agreements").
(d) The Purchaser shall pay to the Seller any Cash Payments
expressly contemplated to be paid at the Closing pursuant to Section 4.1(a) of
this Agreement and Section 4(d) of the Mutual Services Agreement.
(e) The Purchaser, Reuters R&A and the Seller shall execute and
deliver to each other a cross-receipt evidencing the transactions referred to
above.
1.8 Allocation of Purchase Price. The Purchase Price will be
allocated among the Assets as set forth on Schedule 1.1(a)(i).
1.9 Further Assurances. At any time and from time to time after
the Closing, and upon request by either the Purchaser or the Seller, as the case
may be, and without further consideration, each Party shall promptly execute and
deliver such instruments of sale, transfer, conveyance, assignment,
confirmation, and assumption and take such other action, as each Party may with
commercial reasonableness request to more effectively transfer, convey and
assign to the Purchaser, and to confirm the Purchaser's title to, all of the
Assets, to put the Purchaser in actual possession and operating control thereof,
to transfer convey and assign to the Purchaser, and to confirm the Purchaser's
assumption of, all of the Assumed Liabilities, to assist the
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Purchaser and the Seller in the exercise of their respective rights thereto and
to carry out the purpose and intent of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF
THE SELLER
Except as set forth in the Seller's Disclosure Schedule provided by
the Seller to the Purchaser as of the date hereof, the Seller hereby represents
and warrants to the Purchaser as follows:
2.1 Organization. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority to conduct the Business.
2.2 Authority; Enforceability. The Seller has the corporate power
and authority to enter into this Agreement and the Ancillary Agreements and to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and the Ancillary Agreements and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action and no other corporate action or proceeding on the
part of the Seller is necessary to authorize the execution and delivery by the
Seller of this Agreement or the Ancillary Agreements or the consummation by the
Seller of the transactions contemplated hereby or thereby. This Agreement has
been duly executed and delivered by the Seller and is a legal, valid and binding
obligation of the Seller, enforceable against the Seller in accordance with its
terms. Upon execution and delivery by the Seller, each of the Ancillary
Agreements will be a legal, valid and binding obligation of the Seller,
enforceable against the Seller in accordance with its terms.
2.3 No Breach. The execution, delivery and performance by the
Seller of this Agreement and the Ancillary Agreements and the consummation by
the Seller of the transactions contemplated hereby and thereby does not and will
not: (i) conflict with or constitute a violation by the Seller of any law, rule
or regulation of any governmental, administrative or regulatory authority
("Law") or any judgment, order, ruling or award of any court, arbitrator or
other judicial authority or any governmental, administrative or regulatory
authority ("Judgment"), in each case applicable to the Business or any of the
Assets, (ii) conflict with, or result in the breach of any provision of the
Seller's certificate of incorporation, by-laws or other constituent documents,
(iii) violate, conflict with or result in the breach or termination of, or
otherwise give any other Person the right to terminate, or constitute a default,
event of default, or an event which, with notice, lapse of time or both, would
constitute a default or event of default under the terms of any contract or
other instrument or obligation to which the Seller is a party or by which its
properties or businesses are bound, including the Contracts, which such default
or event of default is reasonably likely to have a Seller Material Adverse
Effect or (iv) result in the creation of any material Lien.
2.4 Financial Statements. (a) The Seller has delivered to the
Purchaser copies of unaudited financial information related to the Business
including the information attached as
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Schedule 2.4 (the "Pro Forma Financial Information"). The Pro Forma Financial
Information presents fairly in all material respects the results of the
operations of the Business, on a stand-alone basis, for the two-months ended
November 30, 2001, represents the Seller's good faith estimates of the results
of the operations of the Business for the month ended December 31, 2001 and is
consistent with the books and records of the Seller. The Parties Acknowledge and
agree that the revenue numbers estimated in the Pro Forma Financial Information
represent the actual billings for the R&A product for the months ended October,
2001 and November, 2001 and a good faith estimate of the billings for the month
ended December, 2001, and the expense numbers contained in the Pro Forma
Financial Information represent (i) 175% of the base salaries of the Transferred
Employees and (ii) are based on the Seller's good faith estimates of all
allocations and charges to be assessed by the Seller pursuant to the Mutual
Services Agreement.
(b) Since December 1, 2001, there has occurred no Seller Material
Adverse Effect.
2.5 Consents. No consent, waiver, approval, authorization,
exemption, registration, license or declaration (a "Consent") of or by, or
filing with, any other Person is required to be made or obtained by the Seller,
other than those set forth on Schedule 2.5, in connection with (i) the
execution, delivery or enforceability of this Agreement and the Ancillary
Agreements or (ii) the consummation of any of the transactions provided for
hereby or thereby.
2.6 Actions and Proceedings. There is no action, suit, claim or
legal, administrative, arbitration or other alternative dispute resolution
proceeding or investigation (each a "Proceeding" and collectively,
"Proceedings") pending or, to the knowledge of the Seller, threatened, nor any
Judgment (which has not been discharged) that could have a Seller Material
Adverse Effect.
2.7 Title to Property; Sufficiency. (a) The Seller has, and,
except as set forth in Schedule 2.7, following the Closing, the Purchaser will
have, good title to the owned Assets, and good, valid interests in the non-owned
Assets, free and clear of all Liens (other than Permitted Liens) or Liabilities
(other than Assumed Liabilities).
(b) The Assets include all properties, rights, claims, contracts,
interests and other assets (other than the Excluded Assets) necessary for the
conduct of the Business consistent with the past practices of the Seller, except
for certain assets to be used by the Seller to provide hosting administrative
and other support services to the Purchaser under the Mutual Services Agreement
and the assets which will be made available under the Intellectual Property
License. All of the Equipment listed on Schedule 1.1(a)(i) is free from material
defects and is in good operating condition and repair (subject to normal wear
and tear) and is suitable for the purposes for which it is presently being used,
except for defects or conditions that, individually or taken as a whole, are not
reasonably expected to have a Seller Material Adverse Effect.
2.8 Intellectual Property. To Seller's knowledge, Schedule
1.1(a)(iv) includes a complete and accurate list of all of the Intellectual
Property Assets. All of the Intellectual Property Assets are valid, subsisting
and enforceable. To Seller's knowledge, all software included within the
Intellectual Property Assets as they currently exist as of the Closing Date
functions adequately for its intended use. None of the Intellectual Property
Assets has been
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abandoned, canceled or adjudicated invalid (excepting any expirations in the
ordinary course), or is subject to any outstanding Judgment restricting its use
or adversely affecting or reflecting Seller's rights thereto. With respect to
each Intellectual Property Asset that is the subject of an application or
registration with an appropriate authority in the relevant jurisdiction as
indicated on Schedule 1.1(a)(iv), the Seller has taken all reasonable steps to
have such applications or registrations properly maintained and/or renewed in
accordance with all legal requirements, no due dates for filings or payments
concerning such registrations or applications (including without limitation
office action responses, affidavits of use, affidavits of continuing use,
renewals, requests for extension of time, maintenance fees, application fees and
foreign convention priority filings) fall due within ninety (90) days of the
Closing Date, whether or not such due dates are extendable. There are no pending
or to the knowledge of the Seller, threatened, adverse claims or demands by or
against the Seller pertaining to any of the Intellectual Property Assets listed
on Schedule 1.1(a)(iv) or any use by the Seller thereof, and, to the knowledge
of the Seller, there is no valid basis for any such claim. The Seller has, and
following the Closing the Purchaser shall have, the sole and exclusive right to
use the Intellectual Property Assets owned by the Seller.
2.9 Compliance with Legal Requirements. Except as relates to
Retained Liabilities, the Seller is currently conducting the Business in
compliance in all material respects with all applicable Laws, Judgments and
Permits. Schedule 2.9 sets forth a list of all Permits necessary to conduct the
Business and own and operate the Assets. The Seller has not received any notice
in any form (including any citations, notices of violations, complaints, consent
orders or inspection reports) which would indicate that the Seller is not in
compliance with all applicable Laws, Judgments and Permits.
2.10..Employment Matters. (a) Schedule 2.10 sets forth all written
consulting, employment, severance, termination and compensation agreements (the
"Seller Employment Arrangements") between the Seller and any Business Employees
(as defined in Section 4.1(a)) and each material compensation, bonus,
profit-sharing, pension, retirement, stock option or purchase, severance pay,
life, health, medical, disability or accident insurance, vacation or other
material employee benefit plan, program, arrangement or agreement which the
Seller maintains, or contributes to, with respect to any Business Employee (the
"Seller Plans"). There is no Proceeding pending or, to the best knowledge of the
Seller, threatened, nor any Judgment (which has not been discharged) against the
Seller related to any of the Transferred Employees that is reasonably expected
to have a Seller Material Adverse Effect.
(b) True and correct copies of each of the Seller Employment
Arrangements and the Seller Plans referred to in Section 2.10(a) have been made
available to the Purchaser.
(c) With respect to the Seller Employment Arrangements and the
Seller Plans referred to in Section 2.10(a), no material benefit, payment,
compensation or other material entitlement shall become established, payable,
vested, accelerated or funded with respect to any Transferred Employee of the
Seller solely by reason of the execution of this Agreement or the consummation
of any of the transactions contemplated hereby.
(d) None of the Seller Plans is a multiemployer plan as defined in
Section 3(37) of ERISA.
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2.11..Contracts. Schedule 1.1(a)(ii) lists the Contracts which the
Seller has agreed to assign to the Purchaser. All Contracts to be assigned are
assignable without Consent and all Contracts to be terminated shall be
terminated without penalty or liability to the Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER
Except as set forth in the Purchaser's Disclosure Schedule provided
by the Purchaser to the Seller as of the date hereof the Purchaser hereby
represents and warrants to the Seller as follows:
3.1 Organization; Authority and Enforceability. (a) The Purchaser
is a corporation duly organized and validly existing under the laws of the State
of Delaware. The Purchaser has the corporate power and authority to enter into
this Agreement and the Ancillary Agreements and to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and the
Ancillary Agreements and the consummation of the transactions provided for
hereby and thereby have been duly authorized by all necessary corporate action
and no other corporate action or proceeding on the part of the Purchaser is
necessary to authorize the execution and delivery of this Agreement and the
Ancillary Agreements or the consummation by the Purchaser of the transactions
contemplated hereby or thereby. This Agreement has been duly executed and
delivered by the Purchaser and is a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms. Upon
execution and delivery by the Purchaser each of the Ancillary Agreements will be
a legal, valid and binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms.
(b) Reuters R&A is a limited liability company duly organized and
validly existing under the laws of the State of Delaware. Reuters R&A has the
power and authority to enter into the Bill of Sale and the Assumption Agreement
and to carry out its obligations thereunder. The execution and delivery of such
agreements and the consummation of the transactions provided for thereby have
been duly authorized by all necessary corporate action and no other corporate
action or proceeding on part of Reuters R&A is necessary to authorize the
execution and delivery of such agreements or the consummation by Reuters R&A of
the transactions contemplated thereby. The Bill of Sale and the Assumption
Agreement will be, when executed and delivered by Reuters R&A, duly executed and
delivered by Reuters R&A and will be a legal, valid and binding obligation of
Reuters R&A, enforceable against Reuters R&A in accordance with their terms.
3.2 No Breach. Neither the execution and delivery of this
Agreement and the Ancillary Agreements nor the performance by the Purchaser or
Reuters R&A of their respective obligations hereunder and thereunder nor the
consummation of the transactions provided for hereby and thereby does or will:
(i) conflict with or violate any provision of any constituent documents of the
Purchaser or Reuters R&A or (ii) constitute a material violation by the
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Purchaser or Reuters R&A of any Law or Judgment or any contract or other
instrument to which the Purchaser or Reuters R&A is a party.
3.3 Consents. No Consent is required to be made or obtained by the
Purchaser or Reuters R&A in connection with (i) the execution, delivery or
enforceability of this Agreement and the Ancillary Agreements or (ii) the
consummation of any of the transactions provided for hereby and thereby.
ARTICLE IV
COVENANTS
4.1 Employee Matters. (a) During the period commencing on the
Effective Date and ending on December 31, 2001 (or, with respect to any
particular employee, the earlier date on which his or her employment with the
Seller is terminated), the Seller shall make available to the Purchaser the
services of the employees of the Business listed on Schedule 4.1 (the "Business
Employees") on a full time basis to conduct the Business as directed by the
Purchaser. To the extent such Business Employees remain employees of the Seller,
the Purchaser will reimburse the Seller for the services of such employees in an
amount in cash equal to the sum of (x) 175% of the aggregate base salaries of
such employees for the applicable period (excluding commissions, bonuses and
other discretionary pay) and (y) any travel and entertainment expenses incurred
by the Seller in connection with the performance of such services. At the
Closing, the Purchaser shall pay to the Seller in cash all amounts accrued on or
prior to the Closing Date pursuant to the immediately preceding sentence and no
later than January 4, 2002, the Purchaser shall pay to the Seller in cash any
amounts accrued after the Closing Date pursuant to the immediately preceding
sentence. It is understood and agreed that all payments to the Seller pursuant
to this Section 4.1(a) will include all costs associated with the services of
the Business Employees, including, but not limited to, salaries, commissions,
severance packages, housing allowances, tuition reimbursement, meals, travel
expenses, entertainment expenses, transportation expenses, overhead allocations
and any other discretionary pay items.
(b) Effective as of January 1, 2002, the Purchaser shall offer
employment to all of the Business Employees, employed by the Seller on December
31, 2001 (the "Transferred Employees").
(c) No later than December 31, 2001, the Seller shall pay to each
Transferred Employee any annual year-end or semi-annual year-end bonus with
respect to the year ended or six months ended December 31, 2001 to which such
Transferred Employee is entitled. The Purchaser shall reimburse the Seller in
cash, no later than January 4, 2002, an amount equal to the sum of (1) 25% of
the aggregate amount paid by the Seller to all the Transferred Employees who are
paid annual year-end bonuses and (2) 50% of the aggregate amount paid by the
Seller to all Transferred Employees who are paid semi-annual year-end bonuses,
in accordance with the preceding sentence; provided that the sum of (1) and (2)
shall not exceed $200,000.
(d) The Purchaser shall afford the Seller an opportunity to offer
employment to any Transferred Employee whose employment is terminated by the
Purchaser on or before the
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eighteen (18) month anniversary of the Closing Date. To give effect to this
opportunity, Purchaser shall notify the Seller of any intention of the Purchaser
to terminate the employment of any Transferred Employee no later than fifteen
(15) Business Days, or as soon as reasonably possible, prior to such termination
and shall allow the Seller to have full access to such Transferred Employee. The
Seller and the Purchaser agree that any Transferred Employee whose employment is
terminated by the Purchaser and is thereafter employed by the Seller shall not
be eligible for severance benefits from the Purchaser.
(e) To the extent that any employee benefit plan or arrangement is
made available by the Purchaser to the Transferred Employees from and after
January 1, 2002, (i) the Purchaser shall grant all such Transferred Employees
credit for all service completed with the Seller prior to January 1, 2002 for
all purposes, except for benefit accrual purposes, provided that there shall be
no duplication of benefits; and (ii) with respect to any "Employee Benefit
Welfare Plan" (as that term is defined in Section 3(l) of ERISA), the Purchaser
shall (x) waive any exclusions for pre-existing conditions that would result in
a lack of coverage for any condition for which the applicable Transferred
Employee would have been entitled to coverage under the corresponding benefit
plan in which such Transferred Employee was a participant immediately prior to
his or her commencement of participation in the Purchaser's corresponding
benefit plans; and (y) waive any waiting period or medical examination
requirement applicable to any Transferred Employee under any such Purchaser
benefit plan.
(f) Notwithstanding the employment of the Transferred Employees by
the Purchaser pursuant to Section 4.1(b), for the period from January 1, 2002
through March 31, 2002 (the "Benefit Continuation Period"), the Seller shall
make available to the Transferred Employees coverage under any or all of the
Seller Plans, as agreed by the Parties, including payroll and administrative
services, in connection with such continued coverage and the Transferred
Employees employment with Purchaser during the Benefit Continuation Period, on
the same terms and conditions as such coverage is made available to the Seller's
employees, except that the Seller shall not make available to the Transferred
Employees coverage under any Seller Plan (i) that is intended to be qualified
under Section 401(a) of the Code if the current terms of any such Seller Plan do
not permit such continued coverage or (ii) that is a Seller stock option or
other Seller equity based plan or arrangement. The Purchaser shall pay the
Seller for such coverage and payroll and administrative services an amount in
cash equal to the sum of (x) 175% of the aggregate base salaries of the
Transferred Employees for the Benefit Continuation Period (excluding
commissions, bonuses and other discretionary pay) and (y) any travel and
entertainment expenses reimbursed by the Seller with respect to such Transferred
Employees. It is understood and agreed that all payments to the Seller pursuant
to this Section 4.1(f) will be deemed to reimburse the Seller in full for all
salaries, wages, business expense reimbursements and employee benefits provided
to the Transferred Employees by the Seller during the Benefit Continuation
Period.
4.2 Ancillary Agreements. On the Closing Date, the Parties shall
execute and deliver each of the Mutual Services Agreement and the Intellectual
Property License.
4.3 Account Receivables. The Seller agrees that at the end of each
fiscal quarter following the Closing Date, the Seller will determine the
aggregate amount of all payments received in respect of billed but uncollected
receivables of the Business and will notify
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the Purchaser of such amount, by means of an invoice within five (5) Business
Days of the end of such fiscal quarter. Such amounts shall be treated as a Cash
Payment and the Purchaser shall enter such Cash Payment as a credit payable to
the Purchaser in the Ledger. The Seller agrees to notify customers of changes to
remittance instructions as promptly as practicable following the Closing.
4.4 Certain Customer Arrangements. Following the Closing, the
Seller shall continue to make available to the customers of the Business as of
the Closing Date soft-dollar payment options in connection with such customers'
use of the R&A product or any replacement product, in each case consistent with
the Seller's soft dollar policies and practices as such policies and practices
may be amended by the Seller in its sole discretion. With respect to any
customers of the Business who subscribe to the R&A product or any replacement
product after the Closing Date, the Seller shall make available soft-dollar
payment options in connection with the R&A product and any replacement product,
subject to the Seller's internal credit committee review. During the Transition
Period, the Purchaser agrees, with respect to the R&A product and any migrated
Improved BridgeStation Terminals (as defined in Section 14(e) of the Mutual
Services Agreement) subscribed to by a Protected Customer (as defined in the
Section 1 of Mutual Services Agreement), not to provide any soft-dollar payment
options directly or through a third party, other than through the Seller.
Following the Closing, the Purchaser shall offer to all customers of the
Business who utilize soft-dollar payment options as of the Closing Date the
option to make such soft-dollar payments through the Seller or any subsidiary of
the Seller designated by the Seller.
4.5 Insurance Claims. The Seller shall notify the Purchaser of the
amount of any proceeds from any insurance claims in respect of the Business
received after the Effective Date, except to the extent such amounts relate to
assets of the Business which have been replaced and such replacement asset is
included in the Assets and the extent such asset is in the control or possession
of the Purchaser. Such amounts shall be treated as a cash payment and the
Purchaser shall enter such Cash Payment as a credit payable to the Purchaser in
the Ledger.
4.6 Taxes. The Seller shall, on behalf of the Purchaser,
pay to the appropriate governmental authority the Transfer Taxes paid by the
Purchaser pursuant to Section 1.3(b).
4.7 Migration. The Parties shall reasonably cooperate with each
other in migrating customers of the Business to appropriate written contracts
where written contracts are not presently in effect with respect to the R&A
product.
ARTICLE V
PRE-CLOSING COVENANTS AND OTHER AGREEMENTS
5.1 Conduct of the Business Pending the Closing. The Seller
covenants and agrees that during the period commencing on the date hereof and
ending on the Closing Date:
(a) except with the prior written consent of the Purchaser or as
expressly contemplated by this Agreement, the Seller shall conduct the
Business only in the ordinary course consistent with past practice; and
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(b) except with the prior written consent of the Purchaser or as
expressly contemplated by this Agreement, the Seller shall not, in
relation to the Business (i) make any commitment to make any capital
expenditures in excess of $100,000 in the aggregate; (ii) dispose of any
Assets; (iii) execute, amend or terminate any of the Contracts; or (iv)
change the terms of employment (including, without limitation, benefits)
of any Transferred Employees in a material manner; provided, however, that
the Seller may make certain reductions in the number of employees employed
in connection with the Business after consulting with the Purchaser in
advance of implementing such reductions.
5.2 Public Announcements; Communications with Customers. (a)
Except as expressly provided in this Section 5.2, neither the Purchaser nor the
Seller shall make any disclosure of this Agreement or the transactions
contemplated hereby, by press release, public statement or other means, prior to
obtaining the other Party's written approval, unless required by law or any
applicable rules of any national stock exchange, in which event, the Party
issuing such press release or causing such announcement or disclosure will use
reasonable efforts to allow the other party to review, in advance of such
issuance, announcement or disclosure, the proposed language thereof.
(b) As promptly as practicable after the Closing Date, the Seller
will issue a written communication to customers of the Business notifying such
customers of the transactions contemplated hereby and by the Ancillary
Agreements. The contents of such communication shall be subject to the
Purchaser's prior review and consent, which shall not be unreasonably withheld.
The Purchaser shall not initiate contact with any customer of the Business
regarding the Business until the Seller issues the written communication
referred to in the immediately preceding sentence. With respect to the Protected
Customers (as defined in the Mutual Services Agreement), as promptly as possible
after the Closing, the Seller will arrange a joint sales call between a
representative of the Seller and a representative of the Purchaser. Thereafter
and until the end of the Transition Period, the Seller and the Purchaser shall
make joint sales calls on all of the Protected Customers. With respect to
twenty-five (25) largest Protected Customers (as measured by October, 2001
revenues from such Protected Customers attributable to the R&A product), the
Seller shall cause the executive vice president of its equity division and the
Purchaser shall cause its chief executive officer to make the initial joint
sales call. Thereafter and with respect to all other Protected Customers, each
of the Purchaser and the Seller shall assign appropriate employees to make such
joint sales calls and to act as the primary account representative for such
Customers.
5.3 Third Party Consents. Before, at and after the Closing, each
of the Seller and the Purchaser shall act in good faith and use reasonable
commercial efforts to obtain promptly all necessary waivers, consents and
approvals from third parties and shall, at the request of the Purchaser, provide
notice to third parties of the termination of certain Contracts upon the
Closing.
5.4 Further Actions. Subject to the terms and conditions herein
provided, each of the Parties agrees to use its reasonable commercial efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under all applicable Laws to consummate
and make effective the transactions contemplated by this
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Agreement, to cause all conditions to the obligations of the Parties to
consummate the Closing specified in Article VI to be satisfied at or prior to
the Closing Date (but only to the extent that such conditions relate to such
Party's obligations, covenants, representations or warranties hereunder) and to
obtain and effect prior to the Closing all Permits, waivers, consents, approvals
and notices required for such Party to consummate the transactions contemplated
hereby.
5.5 Proprietary Information. From and after the Closing, the
Seller and the Purchaser shall hold in confidence, all knowledge, information
and documents of a confidential nature or not generally known to the public with
respect to the Seller or the Purchaser or their respective businesses and shall
not disclose or make use of the same without the written consent of the other
Party, except to the extent that such knowledge, information or documents shall
have become public knowledge other than through a breach of this Agreement by
the Party seeking to disclose the information.
ARTICLE VI
CONDITIONS PRECEDENT
6.1 Conditions Precedent to the Obligations of the Parties. The
obligation of each of the Seller and the Purchaser to consummate the Closing is
subject to the satisfaction at or prior to the Closing of each of the conditions
set forth below; provided, however, that notwithstanding the failure of any one
or more of such conditions, each of the Seller or the Purchaser may nevertheless
proceed with the Closing without satisfaction, in whole or in part, of any one
or more of such conditions, but only if a written waiver thereof is executed by
the Party that has not failed to satisfy the condition.
(a) No Proceeding shall be pending seeking to restrain, prohibit
or declare illegal, or seeking substantial damages in connection with:
(1) any of the transactions contemplated by this
Agreement or by the Ancillary Agreements;
(2) the ownership (including enjoyment of any rights
relating thereto) by Reuters R&A of any of the Assets at and
after the Closing; or
(3) the operation of the Business by the Purchaser or Reuters
R&A at and after the Closing in a manner consistent with the past
practices of the Seller;
and no Judgment to such effect shall be in effect.
(b) The representations and warranties of the Seller (in the case
of the Purchaser) or the Purchaser (in the case of the Seller) in this Agreement
shall be true and correct in all material respects (other than the
representations and warranties which are already qualified by materiality which
shall be true and correct in all respects) on and as of the Closing Date as if
made on and as of the Closing Date, except for representations and warranties
made as of a specific date, which shall be true and correct as of such date.
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(c) The Seller (in the case of the Purchaser) or the Purchaser (in
the case of the Seller) shall have performed and complied with in all material
respects their respective agreements and covenants required to be performed or
complied with by them under the Agreement on or prior to the Closing Date.
(d) The Parties shall have obtained all permits and consents
required for the consummation of the transactions contemplated by this Agreement
and by the Ancillary Agreements and required to allow for the prudent and
uninterrupted operation of the Business after the Closing in a manner consistent
with the past practices of the Seller.
(e) The Seller (in the case of the Purchaser) or the Purchaser (in
the case of the Seller) shall have delivered to the other a certificate (without
qualifications as to knowledge or materiality or otherwise) to the effect that
each of the conditions specified in clauses (a)-(c) of this Section 6.1, as such
conditions relate to the Party delivering such certificate, is satisfied in all
respects.
ARTICLE VII
TERMINATION
7.1 General. This Agreement may be terminated prior to the
Closing as follows:
(a) by the mutual written consent of the Seller and the
Purchaser at any time prior to the Closing Date;
(b) by written notice from the Seller or the Purchaser to the
other on any date after December 19, 2001 if the Closing has not occurred prior
to such date; provided, however, that if the Closing has not occurred prior to
such date due to a breach of this Agreement by a Party, then the breaching Party
may not terminate this Agreement pursuant to this Section 7.1(b); or
(c) by the Seller or the Purchaser if, after the date hereof and
prior to the Closing, any Law has been enacted that would have the effect of
prohibiting or making unlawful the execution, delivery or performance of this
Agreement or either of the Ancillary Agreements.
7.2 No Liabilities in Event of Termination. In the event of any
termination of this Agreement as provided in this Article VII, this Agreement
shall become void and of no further force and effect (except that the
definitions of defined terms contained herein, Article VIII and Article IX shall
continue in full force and effect) and there shall be no liability on the part
of any Party; provided, however, that notwithstanding any such termination, each
Party shall be liable to the other parties for any damages arising from any
prior breach of this Agreement committed by such party.
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ARTICLE VIII
INDEMNIFICATION
8.1 Indemnification by the Seller. Subject to the provisions of
this Article VIII, the Seller agrees to pay and to indemnify fully, hold
harmless and defend the Purchaser, its affiliates and their respective
directors, officers, employees, consultants, shareholders, members, partners,
agents and representatives of each of them, and all successors and assigns of
the foregoing from and against any and all claims and/or Liabilities, damages,
fines, fees, penalties, Judgments, settlements, interest obligation,
assessments, losses, costs and expenses (including costs of investigations, fees
and expenses of attorneys, accountants, financial advisors and other experts,
and other expenses of litigation), in each case as reasonably incurred
(collectively, "Damages") incurred or suffered by the Purchaser as a result of
(i) any inaccuracy or breach of any covenant, agreement, representation or
warranty of the Seller contained in this Agreement; and (ii) any Retained
Liability (including any claim relating to or arising from the use by a customer
of the Business of the Seller's Real Time Trading System in accordance with an
existing customer agreement) and (iii) any Taxes paid by the Purchaser to the
Seller relating to the Business in connection with the sale of the Assets.
8.2 Indemnification by the Purchaser. Subject to the provisions of
this Article VIII, the Purchaser agrees to pay and to indemnify fully, hold
harmless and defend the Seller, its affiliates and their respective directors,
officers, employees, consultants, shareholders, members, partners, agents and
representatives of each of them, and all successors and assigns of the foregoing
from and against any and all Damages incurred or suffered by the Seller as a
result of (i) any inaccuracy or breach of any covenant, agreement,
representation or warranty of the Purchaser contained in this Agreement or (ii)
any Assumed Liability.
8.3 Method of Asserting Claims. Any Party making a claim for
indemnification under this Article VIII is, for the purposes of this Agreement,
referred to as the "Indemnified Party" and any Party against whom such claims
are asserted under this Article VIII is, for the purposes of this Agreement,
referred to as the "Indemnifying Party". All claims by any Indemnified Party
under this Article VIII shall be asserted and resolved as follows:
(a) In the event that (x) any claim, demand or Proceeding is
asserted or instituted by any Person other than the parties hereto which could
give rise to Damages for which an Indemnifying Party would be liable to an
Indemnified Party hereunder (such claim, demand or Proceeding, a "Third Party
Claim") or (y) any Indemnified Party hereunder shall have a claim to be
indemnified by any Indemnifying Party hereunder which does not involve a Third
Party Claim (such claim, a "Direct Claim"), the Indemnified Party shall as
promptly as possible send to the Indemnifying Party a written notice specifying
the nature of such claim or demand and the amount or estimated amount (which
estimate shall not be conclusive of the final amount of such claim and demand)
(a "Claim Notice"); provided, however, that any failure to give such notice will
not waive any rights of the Indemnified Party except to the extent that the
rights of the Indemnifying Party are actually prejudiced.
(b) In the event of a Third Party Claim, the Indemnifying Party
shall be entitled to participate therein and, if it so desires, to assume the
defense thereof with counsel
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reasonably satisfactory to the Indemnified Party and, after notice from the
Indemnifying Party to the Indemnified Party of its election to assume the
defense thereof, except as provided below the Indemnifying Party shall not be
liable to such Indemnified Party under this Article VIII for any fees of other
counsel or any other expenses, in each case subsequently incurred by such
Indemnified Party in connection with the defense thereof, other than reasonable
costs of investigation. Notwithstanding an Indemnifying Party's election to
assume the defense of a claim, the Indemnified Party shall have the right to
employ separate counsel and to participate in the defense of such claim, and the
Indemnifying Party shall bear the reasonable fees, costs and expenses of such
separate counsel if: (i) the use of counsel chosen by the Indemnifying Party to
represent the Indemnified Party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
claim include both the Indemnifying Party and the Indemnified Party, and the
Indemnified Party shall have reasonably concluded that there may be legal
defenses available to it which are different from or additional to those
available to the Indemnifying Party (in which case the Indemnifying Party shall
not have the right to assume the defense of such claim on the Indemnified
Party's behalf), (iii) the Indemnifying Party shall not have employed counsel
reasonably satisfactory to the Indemnified Party to represent the Indemnified
Party within a reasonable time after notice of the institution of such claim, or
(iv) the Indemnifying Party shall authorize the Indemnified Party to employ
separate counsel at the Indemnifying Party's expense. If an Indemnifying Party
assumes the defense of a claim, no compromise or settlement thereof may be
effected by the Indemnifying Party without the Indemnified Party's written
consent unless (a) there is no finding or admission of any violation of law and
no effect on any other claims that may be made against the Indemnified Party and
(b) the sole relief provided is monetary damages that are to be paid in full by
the Indemnifying Party.
(c) In the event of a Direct Claim, unless the Indemnifying Party
notifies the Indemnified Party within sixty (60) days of receipt of a Claim
Notice that it disputes such claim, the amount of such claim shall be
conclusively deemed a liability of the Indemnifying Party hereunder and shall be
paid to the Indemnified Party immediately.
(d) From and after the delivery of a Claim Notice hereunder, at
the reasonable request of the Indemnifying Party, the Indemnified Party shall
grant the Indemnifying Party and its representatives all reasonable access to
the books, records and properties of the Indemnified Party to the extent
reasonably related to the matters to which the Claim Notice relates. The
Indemnifying Party will not, and shall require that its representatives do not,
use (except in connection with such Claim Notice) or disclose to any third
Person other than the Indemnifying Party's representatives (except as may be
required by applicable Laws) any information obtained pursuant to this Section
which is designated as confidential by the Indemnified Party. All such access
shall be granted during normal business hours, shall be subject to the normal
safety regulations of the Indemnified Party, and shall be granted under
conditions which will not interfere with the business and operations of the
Indemnified Party.
(e) Any and all disputes arising out of any claim to
indemnification pursuant to this Article VIII shall be resolved in accordance
with the provisions of Sections 9.4 and 9.8 of this Agreement.
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(f) In the event that an Indemnified Party has a right against a
third party with respect to any Damages paid to such Indemnified Party by an
Indemnifying Party, then such Indemnifying Party shall, to the extent of such
payment, be subrogated to such rights of such Indemnified Party.
8.4 Survival. Notwithstanding any investigation conducted or
notice or knowledge obtained by or on behalf of any Party, each representation
or warranty in this Agreement or in the Disclosure Schedules or certificates
delivered pursuant to this Agreement or the Ancillary Agreements (other than the
representations and warranties contained in Sections 2.3(ii) and 3.2(i) (No
Breach of Constituent Documents) shall survive for a period of eighteen (18)
months after the Closing Date and any claim for indemnification under this
Article VIII arising out of the inaccuracy or breach of any representation or
warranty (other than the representations and warranties contained in Section
2.3(ii)) must be made prior to the termination of such period. The
representations and warranties contained in Sections 2.3(ii) and 3.2(i) shall
survive, and claims for indemnification arising out of the inaccuracy or breach
of any such representation or warranty may be made, until the expiration of the
applicable statute of limitations.
8.5 Method of Satisfying Claims. In addition to any other right or
means a Party may have to enforce the indemnification provided for in Section
8.1 or Section 8.2, the Purchaser or the Seller, as the case may be, shall be
entitled to setoff against any payment by it that is or may become due pursuant
to the Ancillary Agreements any amount that is payable to the Purchaser or the
Seller, as the case may be, pursuant to this Article VIII (and any amount for
which a Claim Notice has been submitted, the disposition of which has not been
finally decided).
8.6 Limitation of Liability. Notwithstanding any other provision
of this Agreement, neither the Seller nor the Purchaser shall have any liability
for Damages under Sections 8.1 or 8.2, respectively, with respect to any breach
of any representation or warranty under this Agreement, except to the extent
that the aggregate amount of such Damages exceeds, on a cumulative basis,
$75,000. The limitations set forth in Section 8.6 shall not apply to any breach
of any covenant or other agreement contained in this Agreement and shall not
apply to the Seller's indemnification obligation under clauses (ii) and (iii) of
Section 8.1 and to the Purchaser's indemnification obligation under clause (ii)
of Section 8.2. In the event that a Party brings one or more claims for an
aggregate amount in excess of $75,000, such Party shall be entitled to
indemnification for the full amount of all indemnified Damages. Notwithstanding
anything in this Agreement to the contrary (other than the last sentence of
Section 8.7), Seller, on the one hand, and the Purchaser, on the other, shall
not have any liability to the other for Damages (on a cumulative basis) in
excess of an amount equal to the Purchase Price whether pursuant to the
indemnification provisions hereof or otherwise for any breach of any
representations or warranties made by such Party.
8.7 Sole and Exclusive Remedy. After the Closing Date, each Party
hereto acknowledges and agrees that such Party's sole and exclusive remedy with
respect to Damages and any and all other claims relating to the subject matter
of this Agreement and the transactions contemplated hereby shall be in
accordance with, and limited by, the indemnification provisions set forth in
this Article VIII. Notwithstanding the foregoing, none of the provisions set
forth in this Agreement shall be deemed a waiver by any party to this Agreement
of any right or remedy
19
<PAGE>
which such party may have at law or equity based on the other party's fraudulent
acts or omissions, nor shall any such provision limit, or be deemed to limit,
the recourse which any such party may seek with respect to a claim for fraud.
8.8 Consequential Damages. Except as provided in the following
sentence, and the last sentence of Section 8.7, in no event shall any Party be
responsible for (whether pursuant to Section 8.1 or Section 8.2 otherwise) any
incidental, consequential, indirect, special or punitive damages. However, any
indemnity related to a Third Party Claim shall include any such incidental,
consequential, indirect, special or punitive damages recovered by any third
party pursuant to such claim.
8.9 Coordination of Indemnification Rights. In the event a Third
Party Claim is brought in which the Liability as between the Parties is alleged
to be joint or in which the entitlement to indemnification under this Article
VIII has not been determined, the Parties shall cooperate in the joint defense
of such claim and shall offer to each other such assistance as may reasonably be
requested in order to ensure the proper and adequate defense of such claim. Such
joint defense shall be under the general management and supervision of the Party
which is expected to ultimately bear the greater share of the Liability, unless
otherwise agreed; provided, however, that no Party shall settle or compromise
any such claim without the written consent of the other Party. Any uninsured
costs of such joint defense shall be borne as the Parties may agree; provided
that in the absence of such agreement, defense costs shall be borne by the Party
incurring such costs, subject to any rights to indemnification of such Party
under this Article VIII.
ARTICLE IX
MISCELLANEOUS
9.1 Costs and Expenses. Each of the Parties shall bear its own
expenses incurred in connection with the negotiation, preparation, execution and
Closing of this Agreement and the Ancillary Agreements and the transactions
provided for hereby whether or not the Closing occurs.
9.2 Notices. All notices or other communications required or
permitted by this Agreement or the Ancillary Agreements shall be effective upon
receipt and shall be in writing and delivered personally or by overnight
courier, or sent by facsimile, as follows:
If to the Purchaser, to:
Reuters America Inc.
3 Times Square
New York, New York 10036
Attention: Michael Naughton
Telephone: (646) 223-5807
Facsimile: (646) 223-7766
with copies to:
20
<PAGE>
Reuters America Inc.
3 Times Square
New York, New York 10036
Attention: General Counsel
Telephone: (646) 223-4200
Facsimile: (646) 223-4237
Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention: Michael R. Littenberg
Telephone: (212) 756-2524
Facsimile: (212) 593-5955
If to the Seller to:
Instinet Group Incorporated
3 Times Square
New York, New York 10036
Attention: David H. Good, Senior Vice President
Telephone: (212) 310-7018
Facsimile: (212) 302-7762
with a copy to:
Cleary, Gottlieb, Steen & Hamilton
1 Liberty Plaza
New York, New York 10006
Attention: Yvette P. Teofan
Telephone: (212) 225-2636
Facsimile: (212) 225-3999
or to such other address as hereafter shall be furnished as provided in this
Section 9.2 by any of the parties hereto to the other parties hereto.
9.3 Entire Agreement. This Agreement (including the Disclosure
Schedule and Exhibits hereto) and the Ancillary Agreements sets forth the entire
understanding and agreement between the Parties as to the matters covered herein
and supersedes and replaces any prior understanding, agreement or statement of
intent, in each case, written or oral, of any and every nature with respect
thereto.
9.4 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF.
9.5 No Third Party Rights; Assignment. This Agreement is intended
to be solely for the benefit of the Parties and is not intended to confer any
benefits upon, or create any rights in favor of, any Person other than the
Parties. This Agreement shall be binding upon and
21
<PAGE>
inure to the benefit of the Parties and their respective successors and
permitted assigns. This Agreement shall not be assignable without the prior
written consent of the other Party; provided, however, that either Party may
assign all or a part of its rights or obligations under this Agreement to an
affiliate; provided, further, that each party shall remain fully responsible for
its obligations (including any obligations it assigns to any of its affiliates)
hereunder.
9.6 Waivers and Amendments. No modification of or amendment to
this Agreement shall be valid unless in a writing signed by the Parties
referring specifically to this Agreement and stating the Parties' intention to
modify or amend the same. Any waiver of any term or condition of this Agreement
must be in a writing signed by the Party sought to be charged with such waiver
referring specifically to the term or condition to be waived, and no such waiver
shall be deemed to constitute the waiver of any other breach of the same or of
any other term or condition of this Agreement.
9.7 Additional Definitions. For purposes of this Agreement, the
following terms shall have the following meanings:
(a) "Business Day" means any day other than a Saturday, Sunday or
other day on which the U.S. national securities markets are closed.
(b) "Kansas Development Center" means the software development
center used by the Seller located at 11900 College Boulevard, Overland Park,
Kansas.
(c) "Lien" means any mortgage, deed or trust, hypothecation, lien,
claim, restriction, pledge, lease, security interest, encumbrance or charge of
any kind.
(d) "Permitted Liens" means the following Liens: (a) Liens for
Taxes, assessments or other governmental charges or levies not yet due or that
are being contested in good faith; (b) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and other Liens imposed by Law,
in each case, for amounts not yet due; (c) Liens incurred or deposits made in
the ordinary course of business in connection with worker's compensation,
unemployment insurance or other types of social security and (d) minor defects
of title, easements, rights-of-way, restrictions and other similar charges or
encumbrances not interfering with the ordinary conduct of the Business.
(e) "Person" means any individual, firm, limited liability company
or partnership, joint venture, corporation, joint stock company, trust or
unincorporated organization, incorporated or unincorporated association,
government (or any department, agency or political subdivision thereof) or other
entity of any kind.
(f) "Purchaser's Disclosure Schedule" means the Schedules 3.1-3.3.
(g) "Seller's Disclosure Schedule" means the Schedules 2.1-2.3,
2.5-2.9 and 2.11.
(h) "Seller Material Adverse Effect" means an event or development
which has had, or could reasonably be expected to have in the future, a material
adverse effect, financial or otherwise, on the Business or its assets,
properties, results of operations or prospects,
22
<PAGE>
taken as a whole, but shall not include any effect arising out of or resulting
from (a) a change in general economic or financial conditions, (b) a change,
condition or circumstance in the U.S. securities markets or in the financial
services industry, (c) a change, condition or circumstance resulting or arising
from the attack on the World Trade Centers on September 11, 2001 or (d) this
Agreement or the transactions contemplated hereby or any disclosure thereof.
(i) "Taxes" means any taxes (including, without limitation, income
(net or gross), gross receipts, profits, alternative or add-on minimum, assets,
turnover, franchise, license, payroll, capital, capital stock, intangible,
services, premium, transfer, sales, use, ad-valorem, value-added, property (real
or personal), windfall profits, import, excise, custom, stamp, withholding, or
estimated taxes), fees, duties, assessments, withholdings or governmental
charges of any kind whatsoever.
9.8 Resolution of Disputes; Consent to Jurisdiction. (a) The
Purchaser and the Seller irrevocably agree to attempt to resolve any dispute
which may arise out of or in connection with this Agreement through amicable
discussions between representatives of the Seller and representatives of the
Purchaser. Subject to Section 1.6, any such dispute which is not resolved within
one hundred and twenty (120) days of the commencement of discussions between the
Purchaser and the Seller may then be submitted to the courts within the State of
New York.
(b) The Parties agree that jurisdiction and venue in any action
brought by any Party pursuant to this Amendment shall properly lie and shall be
brought in any federal or state court located in the Borough of Manhattan, City
and State of New York. By execution and delivery of this Agreement, each Party
irrevocably submits to the jurisdiction of such courts for itself and in respect
of its property with respect to such action. The Parties irrevocably agree that
venue would be proper in such court, and hereby irrevocably waive any objection
that such court is an improper or inconvenient forum for the resolution of such
action.
9.9 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original and all of which together shall
be deemed to be one and the same instrument.
9.10 Bulk Sales. The Parties agree to waive compliance with any
applicable bulk sales laws.
9.11 Disclosure Schedule. The Parties acknowledge and agree that
matters reflected in the Seller's Disclosure Schedule are not necessarily
limited to matters required by the Agreement to be reflected in the Seller's
Disclosure Schedule and that such additional matters are set forth for
informational purposes and do not necessary include other matters of a similar
nature. The Parties agree that any matter disclosed in one section of the
Seller's Disclosure Schedule or any other schedule or exhibit hereto is also
deemed disclosed for all purposes of the Seller's Disclosure Schedule to the
extent the subject matter or relevance of the disclosure is reasonably apparent.
The Parties agree that, to the extent of any inconsistency between the Seller's
Disclosure Schedule and information, disclosure or schedule heretofore delivered
to the Purchaser, the Seller's Disclosure Schedule supercedes and replaces such
other information, disclosure and schedules previously provided.
23
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed and delivered
as of the date first written above.
INSTINET GROUP INCORPORATED.
By: ____________________________________
Name:
Title:
REUTERS AMERICA INC.
By: ____________________________________
Name:
Title:
24
<PAGE>
SCHEDULE 1.1(a)(ii) - CONTRACTS
FIRM NAME DATE RETURNED
--------- -------------
Bankers Trust 4/21/1993
Lehman Brothers Inc. 11/19/1993
Ahtram Associates 12/6/1993
Pacific Stock Exchange 1/31/1994
American Stock Exchange 3/4/1994
Aim Advisors, Inc. 3/11/1994
George D. Bjurman & Associates 4/11/1994
J. Streicher & Company 6/7/1994
Cranmer & Cranmer 6/27/1994
Merrill Lynch Pierce Fenner & Smith, Inc. 7/14/1994
Trinity Investment Management Corporation 9/22/1994
D.A. Davidson & Company 9/28/1994
Kalb, Voorhis & Co. 10/12/1994
Morgan Stanley DW Inc. 11/4/1994
Pershing/DLJ 11/29/1994
Nicholas-Applegate Capital Management, Inc. 12/7/1994
Janus Capital Corporation 1/17/1995
Charles Schwab & Co., Inc. 2/10/1995
Northwestern Mutual Life Insurance
Company, The 2/16/1995
Peak Investment Limited Partnership 5/9/1995
AGS Specialist Partners 5/15/1995
Kingdon Capital Management 7/7/1995
Artisan Partners, L.P. 8/14/1995
Apex Limited Partnership, L.P. 4/23/1996
Alpine Associates 5/17/1996
Numeric Investors, L.P. 6/10/1996
McKinley Capital Partners Limited 11/12/1996
Adams Harkness & Hill, Inc. 12/12/1996
Rosenberg Institutional Equity Management 2/10/1997
S.D.F. Capital 3/26/1997
ABN AMRO Incorporated 5/12/1997
Oscar Capital Management, L.L.C. 6/3/1997
National Financial Services 6/10/1997
Twin Capital Management 8/6/1997
Bloom Staloff Corporation 9/15/1997
Tradition Asiel Securities Inc. 9/30/1997
Regal Asset Management 11/20/1997
Gilford Securities Inc. 2/11/1998
Highlander Management 2/25/1998
Astoria Capital Management, Inc. 3/2/1998
BCS Brokerage, Inc. 3/5/1998
Alexander, Wescott & Co., Inc. 4/1/1998
Friess Associates of Delaware, Inc. 4/2/1998
JDS Capital Management, Inc. 5/4/1998
Robb Peck, McCooey Clearing Corp. 5/11/1998
Alexandra Investment Management, Ltd. 5/14/1998
IPO Financial Network 6/18/1998
First Options of Chicago 7/1/1998
Appaloosa Management, L.P. 8/6/1998
Gerber Asset Management, L.L.C. 9/29/1998
Mellon Equity Associates 1/6/1999
Resnick Capital Management, LLC 2/15/1999
Andover Brokerage Corp. 3/8/1999
Astrum Capital, L.P. 5/27/1999
25
<PAGE>
Taconic Capital Advisors LLC 8/4/1999
Kensington Management Group, LLC 2/3/2000
Unicom Capital 3/2/2000
Graham Partners, L.P. 3/20/2000
Coastal Securities, Ltd. 3/30/2000
Ironhorse Securities, Inc. 4/5/2000
FSIP LLC 4/6/2000
McKinley Capital Management 4/26/2000
CapitalWorks Investment Partners, LLC 5/10/2000
Third Millenium Trading L.L.P. 5/15/2000
Cambridge Investments Limited 5/23/2000
Rali Capital 5/24/2000
Island Capital Management, LLC 5/30/2000
American Century Investment Management,
Inc. 6/7/2000
Thomas Weisel Partners LLC 6/7/2000
Aesop Capital Partners, LLC 6/7/2000
Hoenig Group, Inc. 6/12/2000
Schonfeld Securities, LLC 6/12/2000
Lord Abbett & Company 6/27/2000
F.K. Capital Partners, L.L.C. 7/6/2000
Knight Capital Markets, Inc. 7/7/2000
Hoffman Capital Partners, LLC 7/13/2000
Blue Chip Trading, LLC 7/14/2000
SAC Capital 7/19/2000
Security Investment Company of Kansas City 7/19/2000
Morgan Wilshire Securities, Inc. 7/19/2000
Service Asset Management Company 7/20/2000
Lancer Management Group, LLC 7/20/2000
Roi Partners, L.P. 7/21/2000
Heights Partners 7/21/2000
Wilson-Davis & Co., Inc. 7/28/2000
Rudick Asset Management 7/31/2000
Duquesne Capital Management, L.L.C. 8/1/2000
L.M. Capital Management, L.P. 8/4/2000
Electronic Trading Group, LLC 8/7/2000
Greenville Capital Management, Inc. 8/14/2000
Unity Management 8/16/2000
DeMatteo Monness LLC 8/21/2000
Sandler O'Neill & Partners 8/25/2000
G.B. Capital Group, LLC 8/25/2000
Investment Advisers, Inc. 8/30/2000
Scottrade, Inc. 8/30/2000
C. Blair Capital, L.L.C 8/30/2000
First Union Capital Markets Corp. 8/30/2000
Globalt, Inc. 9/7/2000
Daruma Asset Management 9/14/2000
Argos Partners, Ltd. 9/15/2000
TCM Partners, L.P. 9/15/2000
ABT Group, Inc. 9/15/2000
Canadian Imperial Holdings, Inc. 9/20/2000
Azure Capital Partners, L.P. 9/20/2000
Parker Financial Corp. 9/22/2000
Boston Company Institutional Investors, The 9/25/2000
Neptune Capital Management, L.L.C. 9/28/2000
NAV Capital Management LLC 9/28/2000
033 Asset Management, LLC 10/3/2000
VanWagoner Funds Inc. 10/4/2000
26
<PAGE>
Colorado Public Employees Retirement Assoc. 10/6/2000
Victor Dandridge 10/10/2000
Geewax, Terker & Co. 10/16/2000
Glenview Capital Management, LLC 10/18/2000
Rom-Bo Trading Company 10/23/2000
Sawgrass Asset Management, L.L.C. 10/23/2000
Saldutti Capital Management, L.P. 10/24/2000
Focus Capital Corporation 10/24/2000
Firsthand Capital Management, Inc. 10/26/2000
RS Investment Management Co., LLC 10/30/2000
Amerindo Advisers Ltd. 10/30/2000
SMC Capital, Inc. 11/1/2000
Rock Solid Capital 11/1/2000
Fiduciary Asset Management Company 11/2/2000
Travelers Group Investment 11/2/2000
Thomas Weisel Capital Partners, LLC 11/3/2000
Cabot Money Management 11/7/2000
Forza Capital Management 11/16/2000
Lazard Freres & Company 11/20/2000
Strong Capital Management, Inc. 11/20/2000
T. Rowe Price 11/28/2000
Glocap Management 11/28/2000
Wien Securities 11/29/2000
Morse, Williams & Company, Inc. 11/30/2000
D.E. Shaw Securities, L.P. 12/4/2000
C.E. Unterberg, Towbin 12/6/2000
C.E. Unterberg, Towbin Advisors, L.P. 12/6/2000
Portfolio Advisory 12/7/2000
Tudor Investment Corporation 12/7/2000
Maverick Capital 12/18/2000
Bayview Partners, Inc. 12/18/2000
Melvin Specialists, L.L.C. 12/18/2000
Becker Capital Management, Inc. 12/19/2000
Harvest Capital, L.P. 12/20/2000
Third Market Corp., The 1/4/2001
Dempsey & Company 1/8/2001
Dain Rauscher Incorporated 1/8/2001
Omega Advisors, Inc. 1/19/2001
Midwood Securities, Inc. 1/23/2001
Legg Mason Wood Walker, Inc. 6/14/2001
Direct Access Brokerage Services, Inc. 6/28/2001
MPM Bio Equities Adviser, LLC 6/14/2004
27
<PAGE>
SCHEDULE 1.1(a)(iv) - INTELLECTUAL PROPERTY
PROGRAM OWNER FUNCTION
------- ----- --------
212992about* INET Configuration viewer
196608aim_profile* INET Global shell config script
892928alertmgr* INET Price limit alert server
606208appendmdb* INET TTS load generation tool
532480buildmonfile* INET Build monitor list for testing (testing tool)
835584cc_fsp* INET Customer coments fsp (feed specific processor)
344064cc_inj* INET Injector for cc_fsp
229376cfg_gettable* INET Config tool
360448cfg_local* INET Local config server
229376cfg_master* INET Master configuration server
196608cfgdump* INET Configuration dump tool
196608cfgrefresh* INET Command line tool to refresh config
172780chaintest* INET Test the quote chains in the symbology database
581632cliwq* INET Client write queue, dumps client buffer queue peaks
630784dbload* INET MDB (Quote server) Data tool
270336decrypt_emap* INET Entitlement description tool
2158104dsftp* INET Datascope FTP transfer application
1707272dsftpgetcfg* INET Support too for above
286720encrypt_emap* INET Entitlement encryption tool
696320ents_agent* INET Local entitlement cache
524288ents_cmd* INET Entitlements tool
630784ents_fsp* INET Entitlements feed specific processor
294912ents_pdmn* INET Itrack entitlements interface daemon
1075etail* INET Log tool
253952flddict* INET Field dictionary support tool
221184fmon* INET FIS FSP
638976fspcorp* INET FSP for Corp Actions
909312fspfis* INET FIS FSP
204800fspinj* INET Utility feed injector
1531904fspqrm* INET QRM Feed specific processor (FSP)
499712fspqrmadm* INET QRM Feed specific processor (FSP) admin tool
499712fsprsf* INET Select feed FSP
303104fspserv* INET Utility feed server
729088fspsup* INET Supplemental FSP
450560fspsyn* INET Synthetics FSP
630784fullqt* INET Makes "full quote" request
540672getconfig* INET Config diag, tool
4935016hds* INET Historical distribution server and components
2758808hdsclient* INET ""
3933448hdsdump* INET ""
1833144hdsgetcfg* INET ""
2085476hdsinit* INET ""
868352histclient* INET ""
2429572histcopy* INET ""
2356080histdump* INET ""
2382232histserv* INET ""
28
<PAGE>
958464ixconfig* INET Front end to config database
573440loadmdb* INET TTS Load generation tool
5443532neweod* INET EOD (End of Day) application
778240newsdbadm* INET Raima tool
573440newsread* INET News support tool
843776newsserv* INET News server
1122304pcm* INET Page cache manager
196608pcmclean* INET ""
196608pcmdbg* INET ""
196608pcmevt* INET ""
245760pcmshm* INET ""
278528pgload* INET PCM tool
253952qam* INET Alert manager
229376qamdiag* INET Alert daemon diagnostic tool
120196qcomm_dmn* INET QCOMM (Comms abstractor) daemon
196608qcomm_stat* INET QCOMM statistics tool
204800qcomm_tpc* INET Load monitoring
204800qcomm_tps* INET Load generation tools
188416qdbclean* INET QDBS Subsystem components and tools
548864qdbdelete* INET ""
344064qdbmon* INET ""
196608qdbrdhash* INET ""
311296qdbrdshm* INET ""
321828qdbs* INET ""
1073152qdbs.dbg* INET ""
188416qdbsize* INET ""
557056qdbsymbols* INET ""
589824qrmparse* INET QRM (Quotron reference machine) interfaces and tools
1335296qrmrecap* INET ""
835584qrmSDbrowse* INET ""
286720qrmSDperuse* INET ""
679936qrmtest* INET ""
573440qsym* INET QDBS Shared memory dump tool
557056qtmon* INET News server monitor tool
958464qtserv* INET News server
679936recap* INET News server util
548864setfeedtime* INET Util
196608sg_avail* INET Symbol guide components
524288sg_ric_load* INET ""
212992sg_showconfig* INET ""
229376sgclient* INET ""
294912sgserver* INET ""
204800startfeeds* INET Starts feeds (fsp) based on config.
180224timestamp* INET Timestamping utility
573440tts_capop* INET Time and sales server (TTS)
622592tts_corpact* INET ""
557056tts_dumpwatch* INET ""
581632tts_gapmaint* INET ""
548864tts_getconfig* INET ""
532480tts_mkthours* INET ""
29
<PAGE>
614400tts_tickconv* INET ""
614400ttsaddfields* INET ""
598016ttsbombard* INET ""
647168ttsclient* INET ""
942080ttscupd* INET ""
786432ttsdbadm* INET ""
606208ttsqlcomp* INET ""
1138688ttsqp* INET ""
557056ttsqpadmin* INET ""
524288ttssynccli* INET ""
565248ttsupdadmin* INET ""
983040ttsupdater* INET ""
688128ttsvgen* INET ""
196608what* INET Support tool, displays module version
30
<PAGE>
IDW QUOTRON IX FILES DISTRIBUTED OWNER
\bin\about.exe INET
\bin\add_exceed.cmd INET
\bin\adstatus.exe INET
\bin\alertmgr.exe INET
\bin\appendmdb.exe INET
\bin\brwsenum.dll INET
\bin\cfgdump.exe INET
\bin\cfglocal.exe INET
\bin\cfgrefresh.exe INET
\bin\chaintest.exe INET
\bin\dal.exe INET
\bin\datdump.exe INET
\bin\dbcheck.exe INET
\bin\dbclrlb.exe INET
\bin\dbedit.exe INET
\bin\dbexp.exe INET
\bin\dbimp.exe INET
\bin\dbload.exe INET
\bin\dbrev.exe INET
\bin\dchain.exe INET
\bin\ddlp.exe INET
\bin\entsagent.exe INET
\bin\ents_cmd.exe INET
\bin\fspinj.exe INET
\bin\fspserv.exe INET
\bin\getconfig.exe INET
\bin\histclient.exe INET
\bin\histdump.exe INET
\bin\histserv.exe INET
\bin\id.exe INET
\bin\initdb.exe INET
\bin\keybuild.exe INET
\bin\keydump.exe INET
\bin\keypack.exe INET
\bin\lmclear.exe INET
\bin\Lmw.exe INET
\bin\newsdbadm.exe INET
\bin\newsread.exe INET
\bin\newsserv.exe INET
\bin\pcm.exe INET
\bin\pcmdbg.exe INET
\bin\pcmshm.exe INET
\bin\pgload.exe INET
31
<PAGE>
\bin\prdbd.exe INET
\bin\qam.exe INET
\bin\qamdiag.exe INET
\bin\qcomm.exe INET
\bin\qcomm_stat.exe INET
\bin\qcomm_tpc.exe INET
\bin\qcomm_tps.exe INET
\bin\qdbdelete.exe INET
\bin\qdbmon.exe INET
\bin\qdbrdshm.exe INET
\bin\qdbs.exe INET
\bin\qdbsymbols.exe INET
\bin\QSCMEXT.exe INET
\bin\QSCMEXTW.exe INET
\bin\qsym.exe INET
\bin\qtmon.exe INET
\bin\qtserv.exe INET
\bin\recap.exe INET
\bin\regadmin.exe INET
\bin\remove_exceed.cmd INET
\bin\sgclient.exe INET
\bin\sgserver.exe INET
\bin\ttsaddfields.exe INET
\bin\ttsclient.exe INET
\bin\ttscupd.exe INET
\bin\ttsdbadm.exe INET
\bin\ttslmgr.exe INET
\bin\ttsqp.exe INET
\bin\ttsqpadmin.exe INET
\bin\ttstickconv.exe INET
\bin\ttsupdadmin.exe INET
\bin\ttsupdater.exe INET
\bin\ttsvgen.exe INET
\bin\tts_capop.exe INET
\bin\tts_corpact.exe INET
\bin\tts_dumpwatch.exe INET
\bin\tts_gapmaint.exe INET
\bin\tts_getconfig.exe INET
\bin\tts_mkthours.exe INET
\bin\what.exe INET
\files\ttrestart.cmd INET
\files\ttsrevise.cmd INET
\files\ttsstart.cmd INET
\files\ttsstop.cmd INET
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SOFTWARE OWNER DESCRIPTION
\bin\aboutme.cmd INET Command-line tool
\bin\Advisor.dll INET R&A access layer
\bin\alarm.dll INET R&A Alarm app
\bin\ATPlus.exe INET Command-line tool
\bin\c4dll32.dll INET Database access
\bin\CB32.dll INET Database access
\bin\Ctlbtn.dll INET R&A control
\bin\Ctlfold.dll INET R&A control
\bin\Ctltbar.dll INET R&A control
\bin\currdate.exe INET Command-line tool
\bin\database.dll INET Database access
\bin\datareq.exe INET Command-line tool
\bin\db32.dll INET Database access
\bin\dosbupdt.exe INET Command-line tool
\bin\exlocx.ocx INET EDAX control
\bin\fundam.dll INET R&A Fundam app
\bin\FundamClient.exe INET Database replication service
\bin\FundamServer.exe INET Database replication service
\bin\grapheng.dll INET R&A Graph app
\bin\GREP.COM INET Command-line tool
\bin\iacalc.dll INET Calculation engine
\bin\iacomm.dll INET R&A Inetbook app
\bin\iadll.dll INET R&A access layer
\bin\ialogin.dll INET R&A Inetbook app
\bin\iares.dll INET R&A access layer
\bin\iarlaunch.cmd INET Command-line tool
\bin\iashell.exe INET R&A framework
\bin\inetbook.dll INET R&A Inetbook app
\bin\Inimod.exe INET Command-line tool
\bin\IXAccess.dll INET R&A access layer
\bin\IXDaily.dll INET ""
\bin\IXFundam.dll INET ""
\bin\IXNews.dll INET ""
\bin\IXTickDll.dll INET ""
\bin\killer.exe INET Command-line tool
\bin\l2dll.dll INET R&A access layer
\bin\lineedit.dll INET R&A control
\bin\listman.dll INET R&A List Management app
\bin\msgapp32.exe INET R&A audit message app
\bin\muscroll.dll INET R&A control
\bin\Net_time.exe INET Command-line tool
\bin\news.dll INET R&A News app
\bin\newscvt.exe INET Command-line tool
\bin\options.dll INET R&A Options app
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\bin\optreqdll.dll INET ""
\bin\perfdll.dll INET R&A Performance Monitor
\bin\pfdll.dll INET Portfolio engine
\bin\QSend.exe INET Command-line tool
\bin\query.dll INET Report engine
\bin\quote.dll INET R&A Quote app
\bin\racc.dll INET R&A control
\bin\RAChart.ocx INET R&A Chart control
\bin\RAEDIT.exe INET R&A control
\bin\ragen.dll INET R&A control
\bin\RAGREP.COM INET Command-line tool
\bin\rakenny.exe INET R&A framework
\bin\ramsgdll.dll INET R&A audit message app
\bin\raphx.exe INET R&A framework
\bin\rarestart.exe INET R&A framework
\bin\RASetVer.exe INET Command-line tool
\bin\ratempl.xlt INET EDAX template
\bin\Ratmplt.xlt INET EDAX template
\bin\RaUrlMon.dll INET R&A URL interceptor
\bin\RaUtils.exe INET Command-line tool
\bin\repmerge.exe INET Command-line tool
\bin\report.dll INET R&A Report app
\bin\restore.exe INET Command-line tool
\bin\rld.exe INET Symbollogy importer
\bin\rsdfe.exe INET Command-line tool
\bin\RSDSClient.exe INET Software distribution system
\bin\RSDSServer.exe INET ""
\bin\sales.dll INET R&A Sales app
\bin\SDBTool.exe INET Command-line tool
\bin\sdbutil.exe INET Command-line tool
\bin\Service.dll INET
\bin\Service.exe INET
\bin\SERVSET.EXE INET Command-line tool
\bin\setini.exe INET Command-line tool
\bin\signal.dll INET R&A Signal app
\bin\snapshot.dll INET R&A Snapshot app
\bin\split.exe INET Command-line tool
\bin\studydef.dll INET R&A Study definer app
\bin\studypic.dll INET R&A Study picker app
\bin\studyreq.exe INET Command-line tool
\bin\stupid.dll INET R&A app template
\bin\SymTblClient.exe INET Database replication
\bin\SymTblServer.exe INET ""
\bin\SynthHistHESrv.exe INET ""
\bin\SynthHistSrv.exe INET ""
\bin\SYNTHMSG.DLL INET ""
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\bin\SynthTest.exe INET ""
\bin\TaskPlus.exe INET Command-line tool
\bin\ticker.dll INET R&A Ticker app
\bin\vectcalc.dll INET Report engine
\bin\VersionCheck.exe INET Command-line tool
\bin\vlist.dll INET R&A control
\bin\VwSymTbl.exe INET Command-line tool
\bin\WebBrowz.DLL INET R&A Web browser app
\bin\wexpress.dll INET "Express" language engine
\bin\wgraph.dll INET R&A Graph app
\etc\CSMS.exe INET Client site monitoring server
\etc\migrate.bat INET Command-line tool
\etc\phnxcopy.exe INET Command-line tool
\OLE\loadmgr.exe INET CPU capacity monitor
\OLE\RaUrlMon.dll INET R&A URL interceptor
\OLE\SC.EXE INET Command-line tool
35
<PAGE>
SCHEDULE 1.1(b) - EXCLUDED ASSETS
The Excluded Assets shall be:
1. INSTINET BookStream (Instinet's full book data feed consisting of
all U.S. market (i.e., OTC and listed) Instinet non-routed orders and trades
over a dedicated communications line);
2. INSTINET's proprietary Real-Time Trading Service;
3. the lease related to the Kansas Development Center;
4. all rights in the trademark application for the trademark "Instinet
R&A", Serial No. 76/229,417, filed March 23, 2001;
5. all rights in the trademark application for the trademark "Instinet
Research & Analytics", Serial No. 76/229,416, filed March 23, 2001;
6. all rights of the Seller related to the Raima software, Microsoft
development tools and Sun Microsystems development environment used in
connection with the R&A product.
36
<PAGE>
SCHEDULE 1.2 - ASSUMED LIABILITIES
Assumed Liabilities shall mean the following:
(i) all Liabilities of the Seller arising from and after the Effective
Date under the Contracts,
(ii) all Liabilities of the Seller arising from and after the Effective
Date under any lease agreement for any Equipment,
(iii) all Liabilities in respect of the Transferred Employees who
accept employment with the Purchaser (and their dependents) arising or relating
to the employment of any such Transferred Employee from and after January 1,
2002,
(iv) all Liabilities for Taxes relating to the Business in connection
with the sale of the Assets that are not paid by the Purchaser to the Seller,
and
(v) subject to the last sentence of Section 1.2(a), all Liabilities for
Taxes arising or payable from and after the Effective Date relating to the
Business.
37
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SCHEDULE 2.1 - ORGANIZATION
None
38
<PAGE>
SCHEDULE 2.2 - AUTHORITY; ENFORCEABILITY
None
39
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SCHEDULE 2.3 - NO BREACH
None
40
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SCHEDULE 2.5 - CONSENTS
None
41
<PAGE>
SCHEDULE 2.6 - ACTIONS AND PROCEEDINGS
None
42
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2.7 - TITLE TO PROPERTY
None
43
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SCHEDULE 2.8 - INTELLECTUAL PROPERTY
None
44
<PAGE>
SCHEDULE 2.9 - PERMITS
None
45
<PAGE>
SCHEDULE 2.10 - SELLER PLANS
1. Rules of Reuters Group PLC International SAYE Share Option Plan 1997
2. Reuters Performance Related Share Plan (non-UK employees)
3. RIS Ravings (401(k) Plan
4. Instinet 2000 Stock Option Plan
5. Instinet Management Bonus Deferral Plan (2000)
6. Administrative Services Agreement
7. US Healthcare, Inc. d/b/a Aetna US Healthcare and Indemnity Company
Group Agreement Cover Sheet
8. Flexible Spending Account Administrative Services Agreement
9. Administrative Services Agreement, Metropolitan Life Insurance Company
10. Examiner's Confidentiality Agreement Appendix
11. Reuters Supplemental Executive Retirement Plan ("SERP") Overview
12. Amended and Restated Reuters America Inc. Employee Stock Purchase Plan
13. Reuters Group PLC Plan 2000 Share Option Plan: Rules, 21 April 1998
14. Vacation Allowances:
Continuous Service Allowance
First year(year of hire) 1.25 days for each complete month worked
First January 15 days(1.25 days per month)
Second January 20 days(1.67 days per month)
Fifth January 25 days(2.08 days per month)
Personal Days:
Less than 10 years 3 days
10 years or more 4 days
Holidays(9):
New Year's Day Independence Day
Martin Luther King, Jr. Labor Day
Washington's BD Thanksgiving Day
Good Friday Christmas Day
Memorial Day
46
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15. Short Term Disability(26 weeks)
16. Long Term Disability(after 180 days of disability-662/3 of earnings,
max 5K per month)
17. Group Life Insurance(2x base salary, max 1 million dollars)
18. Group Accidental Death & Dismemberment (2x salary, max 1 million
dollars)
19. Post Retirement Medical Coverage
20. Metlife Dental
21. Cole Vision(formally Metlife Vision)
22. Managed Health Network (EAP & LifeCare)
47
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SCHEDULE 2.11 - CONTRACTS
None
48
<PAGE>
SCHEDULE 3.1 - ORGANIZATION; AUTHORITY AND ENFORCEABILITY
None
49
<PAGE>
SCHEDULE 3.2 - NO BREACH
None
50
<PAGE>
SCHEDULE 3.3 - CONSENTS
None
51
<PAGE>
EXHIBIT A - FORM OF MUTUAL SERVICES AGREEMENT
SEE EXECUTION COPY OF THE MUTUAL SERVICES AGREEMENT
52
<PAGE>
EXHIBIT B - FORM OF INTELLECTUAL PROPERTY LICENSE
SEE EXECUTION COPY OF THE INTELLECTUAL PROPERTY LICENSE
53