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Exhibit 10.38
CONTINGENT OPTION AGREEMENT
CONTINGENT OPTION AGREEMENT, dated as of ______________, 1997,
between Global Decisions Group LLC, a Delaware limited liability company (the
"Parent"), and [insert name of Stockholder or GS LP] (the "Grantee").
W I T N E S S E T H:
WHEREAS, pursuant to a Plan of Merger and Exchange Agreement,
dated as of August 1, 1997 (the "Merger and Exchange Agreement"; capitalized
terms used herein without definition have the meanings specified therein), among
MCM Group, Inc., a Delaware corporation ("MGI"), the Parent, GDG Merger
Corporation, a Delaware corporation and a wholly owned subsidiary of the Parent
("Merger Sub"), the stockholders of Cambridge Energy Research Associates, Inc.,
a Massachusetts corporation ("CERA Inc."), named therein (collectively, the
"Stockholders") and The Goldman Sachs Group, L.P., a Delaware limited
partnership ("GS LP"), the Parent has agreed to acquire (i) all of the
outstanding capital stock of MGI, pursuant to the merger of Merger Sub with and
into MGI, with MGI as the surviving corporation, and (ii) all of the outstanding
CERA Common Stock and certain of the limited partnership interests of Cambridge
Energy Research Associates Limited Partnership, a Delaware limited partnership,
pursuant to the exchange of such common stock (the "CERA Stock Exchange") and
such partnership interests (the "GS Partnership Interest Exchange") for LLC
Units and certain contingent interests in the Parent;
WHEREAS, pursuant to the Merger and Exchange Agreement, as
part of the consideration for the [shares of CERA Common Stock] [GS Partnership
Interest] to be received by the Parent from the Grantee in the [CERA Stock
Exchange] [GS Partnership Interest Exchange], the Parent is required to grant to
the Grantee an option to purchase, in the event that the CERA CAGR shall be
equal to or greater than 20%, the number of LLC Units set forth on the signature
page hereof under the heading "Number of LLC Units Subject to Contingent
Option", at an exercise price of $34.53 per LLC Unit (the "Contingent Option");
and
WHEREAS, the Grantee and the Parent desire to enter into an
agreement to evidence and confirm the grant of
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the Contingent Option on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and the
mutual covenants and agreements set forth herein, the Parent and the Grantee
hereby agree as follows:
1. Grant of Contingent Option; Exercise Price. The Parent
hereby grants to the Grantee the Contingent Option, at an exercise price of
$34.53 per LLC Unit (the "Exercise Price").
2.(a) Exercisability; Termination. Subject to the provisions
hereof, if a Sale of the Parent or CERA Inc., a Spin-Off of CERA Inc. or a
Public Offering (a "Termination Event") shall not have occurred prior to June
30, 2000, the Contingent Option shall become exercisable on the date of the
notice from the Parent described in Section 2(b) if the Board of Directors of
the Parent shall determine in accordance with Section 2(b) that the CERA CAGR
was equal to or greater than 20%. In the event that the Board of Directors of
the Parent shall determine in accordance with Section 2(b) that the CERA CAGR
was less than 20%, the Contingent Option shall not be exercisable for any LLC
Units and shall terminate on the date of such determination. In addition, if a
Termination Event shall occur prior to June 30, 2000, the Contingent Option
shall not be exercisable for any LLC Units and shall terminate on the date of
the closing of such Termination Event. The Grantee may exercise the Contingent
Option with respect to all or any portion of the LLC Units for which the
Contingent Option has become exercisable, at any time and from time to time
after the applicable time set forth in the first sentence of this Section 2(a)
and until the fifth anniversary of the date on which the Contingent Option first
became exercisable.
(b) Notice from the Parent. Not later than 15 days after the
audited financial statements of CERA Inc. for the fiscal year ending June 30,
2000 shall have been completed and delivered to the Parent, the Board of
Directors of the Parent shall determine in good faith the CERA CAGR, and the
Parent shall send a written notice to the Grantee, setting forth (i) the
Qualifying Revenues for such fiscal year, as determined for purposes of
calculating the CERA CAGR, (ii) the CERA CAGR and (iii) whether the Contingent
Option shall be exercisable pursuant to Section 2(a). The determination by the
Parent, as set forth in such notice, whether the Contingent Option shall be
exercisable
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shall, in the absence of manifest error, be final, conclusive and binding on the
parties hereto.
3. Restrictions on Exercise; Non-Transferability of
Contingent Option; Payment In Lieu of Delivery.
(a) Restrictions on Exercise. The Contingent Option may be
exercised only with respect to whole LLC Units. No certificates for fractions of
LLC Units shall be issued. Notwithstanding any other provision of this
Agreement, the Contingent Option may not be exercised in whole or in part, and
no certificates representing LLC Units shall be delivered, unless all requisite
approvals and consents of any governmental authority of any kind having
jurisdiction over the exercise of options shall have been secured and the
requirements of the Amended and Restated Limited Liability Company Agreement,
dated as of 1997, of the Parent, as such agreement may be amended,
supplemented or modified from time to time (the "LLC Agreement"), shall have
been met. The Parent agrees that at any time when the Contingent Option is
exercisable there shall be a sufficient number of LLC Units available for
delivery upon the exercise of the Contingent Option which are authorized but
previously unissued and not reserved for any other purpose. The Parent shall use
reasonable efforts to obtain the consents and approvals referred to in the third
sentence of this Section 3(a).
(b) Non-Transferability of Contingent Option. The Contingent
Option (i) may be exercised only by the Grantee [or the Grantee's permitted
transferee], (ii) is not assignable or transferable, in whole or in part, [other
than as provided below,] and (iii) may not, directly or indirectly, be offered,
transferred, sold, pledged, assigned, alienated, hypothecated or otherwise
disposed of or encumbered (including without limitation by gift, operation of
law or otherwise), to or by any person[, provided that the Grantee may transfer
the Contingent Option without the consent of the Parent (and subject to the
terms hereof) (x) by will or the laws of descent or distribution upon the death
of the Grantee or (y) to a trust the only actual beneficiaries under which are
the Grantee and/or such Grantee's brothers and sisters (whether by whole or half
blood), spouse, ancestors and lineal descendants, but in each case only if each
transferee assumes and agrees in writing, pursuant to an agreement in form and
substance reasonably satisfactory to the Parent, to be bound by the terms and
provisions hereof, and makes the same
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representations and warranties as to itself as in Section 6*.
4. Manner of Exercise. To the extent that the Contingent
Option shall have become and remains exercisable as provided in Section 2, the
Contingent Option may be exercised, in whole or in part, by notice to the Parent
in writing, given at least five business days prior to the date on which the
Grantee [or the relevant permitted transferee, as applicable] will so exercise
the Contingent Option (the "Exercise Date"), specifying the number of LLC Units
with respect to which the Contingent Option is being exercised and the Exercise
Date. Upon such exercise, (a) on or before the Exercise Date, the Grantee [or
the relevant permitted transferee, as applicable] shall deliver to the Parent
full payment for the LLC Units to be issued and delivered by the Parent upon
such exercise of the Contingent Option (the "Exercise LLC Units") in United
States dollars in cash, or cash equivalents satisfactory to the Parent, and in
an amount equal to the aggregate Exercise Price for the Exercise LLC Units and
(b) on the Exercise Date, the Parent shall deliver to the Grantee [or the
relevant permitted transferee, as applicable] a certificate or certificates
representing the Exercise LLC Units, registered in the name of the Grantee [or
the relevant permitted transferee, as applicable]. The Parent may require the
Grantee [or the relevant permitted transferee, as applicable] to furnish or
execute such other documents as the Parent shall reasonably deem necessary (i)
to evidence such exercise and (ii) to comply with or satisfy the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), applicable state
or non-U.S. securities laws or any other law.
5. Exercise Units Subject to LLC Agreement. The Grantee [or
the relevant permitted transferee, as applicable] hereby agrees that Exercise
LLC Units shall be entitled to the benefits of and are bound by the transfer
restrictions, holdback and other provisions of the LLC Agreement (including,
without limitation, Article XIII and Section 15.2 thereof) as in effect at the
relevant time.
6. Representations, Warranties and Covenants of the Grantee.
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* Explanatory note: bracketed text shall be applicable only if the
Grantee is a natural person.
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(a) Organization; Investment Intention; Restriction on
Disposition. [The Grantee represents and warrants that it is a _________ duly
organized, validly existing and in good standing under the laws of the State of
_________.]* The Grantee agrees that he will not, directly or indirectly, offer,
transfer, sell, pledge, hypothecate or otherwise dispose of any of the Exercise
LLC Units (or solicit any offers to buy, purchase or otherwise acquire or take a
pledge of any of the Exercise LLC Units), except in compliance with the
Securities Act and the rules and regulations of the Securities and Exchange
Commission (the "Commission") thereunder, and in compliance with applicable
state securities or "blue sky" laws. The Grantee further understands,
acknowledges and agrees that none of the Exercise LLC Units may be transferred,
sold, pledged, hypothecated or otherwise disposed of unless the provisions of
the LLC Agreement shall have been complied with or have expired.
(b) Legend. The Grantee acknowledges that any certificate
representing the Exercise LLC Units shall bear the following legend:
"THE LLC UNITS REPRESENTED HEREBY ARE ENTITLED TO
THE BENEFITS OF AND ARE BOUND BY THE OBLIGATIONS,
AND ARE SUBJECT TO THE TRANSFER RESTRICTIONS,
HOLDBACK AND OTHER PROVISIONS OF THE AMENDED AND
RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF
THE PARENT, DATED AS OF ________, 1997, AS SUCH
AGREEMENT MAY BE AMENDED, SUPPLEMENTED OR MODIFIED
FROM TIME TO TIME (THE "LLC AGREEMENT"), AND
NEITHER THIS CERTIFICATE NOR THE LLC UNITS
REPRESENTED BY IT ARE ASSIGNABLE OR OTHERWISE
TRANSFERABLE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH LLC AGREEMENT, A COPY OF WHICH
AGREEMENT IS ON FILE WITH THE SECRETARY OF THE
PARENT.
(c) Securities Law Matters. The Grantee acknowledges receipt
of advice from the Parent that (i) the Exercise LLC Units may not be offered,
sold, assigned, transferred, pledged, hypothecated or otherwise disposed of or
encumbered except in accordance with the LLC Agreement,
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* [Applicable only if Grantee (or relevant permitted transferee, as
applicable) is not a natural person. Representation is to be made at
Exercise Date.]
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(ii) it is not anticipated that there will be any public market for the Exercise
LLC Units, (iii) the resale restrictions under Rule 144 ("Rule 144") or Rule 145
("Rule 145") promulgated under the Securities Act may be applicable to sales of
the Exercise LLC Units by the Grantee [or the relevant permitted transferee, as
applicable], (iv) the Parent has made no covenant to make Rule 144 available
with respect to sales of securities of the Parent, (v) the Parent does not plan
to file reports with the Commission or make information concerning the Parent
publicly available unless required to do so by law or by the terms of its
financing agreements, (vi) if the exemption afforded by Rule 144 is not
available, sales of the Exercise LLC Units may be difficult to effect because of
the absence of public information concerning the Parent, (vii) a restrictive
legend in the form heretofore set forth shall be placed on the certificates
representing the Exercise LLC Units and (viii) a notation shall be made in the
appropriate records of the Parent indicating that the Exercise LLC Units are
subject to restrictions on transfer set forth in the LLC Agreement and, if the
Parent should in the future engage the services of a stock transfer agent,
appropriate stop-transfer restrictions will be issued to such transfer agent
with respect to the Exercise LLC Units.
(d) Compliance with Rule 144. If any of the Exercise LLC Units
are to be disposed of in accordance with Rule 144, the Grantee shall transmit to
the Parent an executed copy of Form 144 (if required by Rule 144) no later than
the time such form is required to be transmitted to the Commission for filing
and such other documentation as the Parent may reasonably require to assure
compliance with Rule 144 in connection with such disposition.
(e) Registration; Restrictions on Sale upon Public Offering.
The Exercise LLC Units shall constitute "Registrable Securities" under the LLC
Agreement. The Grantee agrees that, in the event that the Parent files a
registration statement under the Securities Act with respect to an underwritten
public offering of any of its LLC Units, options, warrants or other rights to
purchase such LLC Units or securities convertible into such LLC Units, it will
not effect any public sale (including a sale under Rule 144) or distribution of
any LLC Units (other than as part of such underwritten public offering) during
the 20 days prior to and one year after the effective date of such registration
statement.
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7. Representations and Warranties of the Parent. The Parent
represents and warrants to the Grantee that (a) the Parent is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware, (b) this Agreement has been duly authorized,
executed and delivered by the Parent and constitutes a valid and legally binding
obligation of the Parent, enforceable against the Parent in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting creditors'
rights generally and by general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and (c) upon
exercise of the Contingent Option in accordance with the terms hereof, the
Exercise LLC Units, when issued, delivered and paid for in accordance with the
terms hereof and upon compliance with any applicable requirements of the LLC
Agreement, will be duly and validly issued, and free and clear of any liens or
encumbrances other than the restrictions on transfer set forth herein or in the
LLC Agreement.
8. No Rights as a Holder of LLC Units. The Grantee shall have
no voting or other rights as a holder of LLC Units with respect to any of the
LLC Units covered by the Contingent Option until the exercise of the Contingent
Option, the issuance of an LLC Unit certificate or certificates to the Grantee
for such LLC Units, and the admission of the Grantee to the Parent in accordance
with the LLC Agreement. No adjustment shall be made for distribution or other
rights for which the record date is prior to the issuance of such certificate or
certificates.
9. Capital Adjustments. The number and price of the LLC Units
covered by the Contingent Option shall be proportionately adjusted to reflect
any distribution in the form of LLC Units or options, warrants or other rights
to acquire LLC Units, LLC Unit split or any recapitalization of the Parent.
In the event of any merger, consolidation, reorganization,
exchange of securities, recapitalization, liquidation or similar transaction
where the Exercise LLC Units are converted into or exchanged for other
securities, all references in this Agreement to Exercise LLC Units shall be
deemed to refer to such securities into which the Exercise LLC Units shall have
been converted or for which the Exercise LLC Units shall have been exchanged.
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10. Miscellaneous.
(a) Notices. All notices, demands and other communications
made in connection with this Agreement shall be in writing. Any notice or other
communication in connection herewith shall be deemed duly given to any party (a)
three Business Days after it is sent by express, registered or certified mail,
return receipt requested, postage prepaid or (b) two Business Days after it is
sent by overnight courier guaranteeing next day delivery, in each case, to the
address of such party set forth below, or to such other address as the Parent or
the Grantee, as the case may be, shall specify by notice to the others:
(i) if to the Parent, to:
Global Decisions Group LLC
20 University Road
Cambridge, Massachusetts 02138
Facsimile:
Telephone:
Attention:
(ii) if to the Grantee, to:
All such notices and communications shall be deemed to have been received on the
date of delivery or on the third business day after the mailing thereof.
Copies of any notice or other communication given under this Agreement shall
also be given to:
Clayton, Dubilier & Rice, Inc.
375 Park Avenue, 18th Floor
New York, New York 10152
Attention: Donald J. Gogel
Brera Capital Partners, LLC
590 Madison Avenue, 18th Floor
New York, New York 10022
Attention: Alberto Cribiore
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Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Steven R. Gross, Esq.
and
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attention: Paul P. Brountas, Esq.
(b) Binding Effect; Benefits. This Agreement shall be binding
upon and inure to the benefit of the parties to this Agreement and their
respective successors and permitted assigns. Nothing in this Agreement, express
or implied, is intended or shall be construed to give any person other than the
parties to this Agreement or their respective successors or permitted assigns
any legal or equitable right, remedy or claim under or in respect of any
agreement or any provision contained herein.
(c) Waiver; Amendment.
(i) Waiver. Any party hereto may by written notice to the
other party (A) extend the time for the performance of any of
the obligations or other actions of the other party under this
Agreement, (B) waive compliance with any of the conditions or
covenants of the other party contained in this Agreement and
(C) waive or modify performance of any of the obligations of
the other party under this Agreement. Except as provided in
the preceding sentence, no action taken pursuant to this
Agreement, including, without limitation, any investigation by
or on behalf of any party, shall be deemed to constitute a
waiver by the party taking such action of any representations
or warranties contained herein, or of compliance with any
covenants or agreements contained herein. The waiver by any
party hereto of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any preceding
or succeeding breach and no failure by a party to exercise any
right or privilege hereunder shall be
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deemed a waiver of such party's rights or privileges hereunder
or shall be deemed a waiver of such party's rights to exercise
the same at any subsequent time or times hereunder.
(ii) Amendment. This Agreement may be amended, modified or
supplemented only by a written instrument executed by the Grantee and
the Parent.
(d) Assignability. Except as otherwise expressly provided
herein, neither this Agreement nor any right, remedy, obligation or liability
arising hereunder or by reason hereof shall be assignable by the Parent or the
Grantee without the prior written consent of the other party.
(e) Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE WITHOUT REFERENCE
TO ITS CONFLICTS OF LAWS PRINCIPLES.
(f) Section and Other Headings, etc. The section and other
headings of this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement. In this Agreement all
references to "dollars" or "$" are to United States dollars.
(g) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.
(h) Capitalized Terms. Capitalized terms used herein and not
otherwise defined herein have the meaning given to them in the Merger and
Exchange Agreement.
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IN WITNESS WHEREOF, the Parent and the Grantee have executed
this Agreement as of the date first above written.
GLOBAL DECISIONS GROUP LLC
By:______________________________________
Name:
Title:
[NAME OF GRANTEE]
By:______________________________________
Name:
Title:
Number of LLC Units Subject to
Contingent Option:
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