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Exhibit 10.43
DRAFT -- 1/16/98
FORM OF
OPTION AGREEMENT
OPTION AGREEMENT, dated as of _________, 1998, between, Cambridge
Energy Research Associates, Inc., a Massachusetts corporation, ("CERA INC.") and
Edward G. Jordan (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"), Global Decisions Group LLC, a Delaware
limited liability company (the "Parent"), GDG Merger Corporation, a Delaware
corporation and a wholly owned subsidiary of the Parent ("MERGER SUB"), the
stockholders of CERA, Inc., named therein (collectively, the "STOCKHOLDERS") and
The Goldman Sachs Group, L.P., a Delaware limited partnership, 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 and such partnership interests for LLC Units and certain
contingent interests in the Parent;
WHEREAS, pursuant to the Merger and Exchange Agreement, and in full
payment of any and all fees due to the Grantee in respect of the Transactions
and the other transactions contemplated in the Merger and Exchange Agreement,
CERA, Inc. desires to grant to the Grantee an option to purchase an aggregate of
11,132 LLC Units at an exercise price of $23.55 per Unit and on the other terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing, and the mutual
covenants and agreements set forth herein, CERA, Inc. and the Grantee hereby
agree as follows:
1. GRANT OF OPTION; EXERCISE PRICE. CERA, Inc. hereby grants to the
Grantee the option (the "Option") to purchase an aggregate of 11,132 LLC Units
at an exercise price of $23.55 per LLC Unit (the "EXERCISE PRICE").
2. EXERCISABILITY; EXPIRATION. Subject to the conditions set forth
in this Agreement, this option shall be exercisable by the Grantee at any time
after the date of this
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grant, but shall expire and may not be exercised after the tenth anniversary of
the date of grant.
3. RESTRICTIONS ON EXERCISE; NON-TRANSFERABILITY OF OPTION: PAYMENT
IN LIEU OF DELIVERY.
(a) RESTRICTIONS ON EXERCISE. The 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 Option may
not be exercised in whole or in part, and no certificates representing LLC Units
shall be delivered, unless (I) all requisite approvals and consents of any
governmental authority of any kind having jurisdiction over the exercise of
options shall have been secured and (II) the purchase of the LLC Units upon the
exercise of the Option shall be exempt from registration under the applicable
U.S. federal and state securities laws and non-U.S. securities laws or the LLC
Units shall have been registered under such laws and (III) and the requirements
of the Amended and Restated Limited Liability Company Agreement, dated as of
__________ 1998, of the Parent, as such agreement may be amended, supplemented
or modified from time to time (the "LLC Agreement"), shall have been met. CERA,
Inc. agrees that at any time when the Option is exercisable there shall be a
sufficient number of LLC Units available for delivery upon the exercise of the
Option which are authorized but previously unissued and not reserved for any
other purpose. CERA, Inc. 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 OPTION. The 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 expressly
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 Option without the consent of CERA, Inc. (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 CERA, Inc., to be bound by the terms and
provisions hereof, and makes the same representations and warranties as to
itself as in Section 6.
4. MANNER OF EXERCISE. To the extent that the Option shall have
become and remains exercisable as provided in Section 2, the Option may be
exercised,
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in whole or in part, by notice to CERA, Inc. 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 Option (the "EXERCISE DATE"),
specifying the number of LLC Units with respect to which the 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 CERA, Inc. full payment for the LLC Units to be issued by the
Parent and delivered by CERA, Inc. upon such exercise of the Option (the
"EXERCISE LLC UNITS") in United States dollars in cash, or cash equivalents
satisfactory to CERA, Inc., and in an amount equal to the aggregate Exercise
Price for the Exercise LLC Units and (B) on the Exercise Date, CERA, Inc. 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.
CERA, Inc. may require the Grantee or the relevant permitted transferee, as
applicable to furnish or execute such other documents as CERA, Inc. shall
reasonably deem necessary (I) to evidence such exercise and (II) to confirm that
registration is not then required under the U.S. Securities Act of 1933, as
amended (the "SECURITIES ACT") and (III) to comply with or satisfy the
requirements of 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.
(a) INVESTMENT INTENTION; RESTRICTION ON DISPOSITION. The Grantee
represents and warrants that the Option has been, and any Exercise LLC Units
will be, acquired by the Grantee solely for his own account and not with a view
to or for sale in connection with any distribution thereof in violation of the
Securities Act. 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.
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(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 _______,
1998, 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.
THE LLC UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR UNDER ANY STATE OR FOREIGN SECURITIES LAWS
AND MAY NOT BE TRANSFERRED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
DISPOSED OF UNLESS (I) (A) SUCH DISPOSITION IS PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
(B) SUCH DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF SUCH
ACT AND, EXCEPT UNDER CERTAIN CIRCUMSTANCES REFERRED TO IN THE
SUBSCRIPTION AGREEMENT, THE HOLDER HEREOF SHALL HAVE DELIVERED TO THE
PARENT AN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL SHALL BE
REASONABLY SATISFACTORY TO THE PARENT, TO THAT EFFECT, OR (C) A
NO-ACTION LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION,
REASONABLY SATISFACTORY TO COUNSEL FOR THE PARENT, SHALL HAVE BEEN
OBTAINED WITH RESPECT TO SUCH DISPOSITION AND (II) SUCH DISPOSITION IS
PURSUANT TO REGISTRATION UNDER ANY APPLICABLE STATE SECURITIES LAWS OR
AN EXEMPTION THEREFROM."
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(c) SECURITIES LAW MATTERS. The Grantee acknowledges receipt of
advice from CERA, Inc. that (I) the Exercise LLC Units will not be registered
under the Securities Act or under any state securities or "blue sky" laws, (II)
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, (III) the Exercise LLC Units must be held indefinitely and
the Grantee must continue to bear the economic risk of the investment in the
Exercise LLC Units until the Exercise LLC Units are subsequently registered
under the Securities Act and any applicable state securities laws or any
exemption from registration is available, (IV) it is not anticipated that there
will be any public market for the Exercise LLC Units, (V) 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, (VI) CERA, Inc.
has made no covenant to make Rule 144 available with respect to sales of
securities of the Parent, (VII) neither the Parent nor CERA, Inc. plans 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, (VIII) 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, (IX) a restrictive legend in the form
heretofore set forth shall be placed on the certificates representing the
Exercise LLC Units and (X) a notation shall be made in the appropriate records
of CERA, Inc. and 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) ABILITY TO BEAR RISK. The Grantee covenants that he will not
exercise all or any portion of the Option unless (i) the financial situation of
the Grantee is such that he can afford to bear the economic risk of holding the
Exercise LLC Units for an indefinite period and (ii) he can afford to suffer the
complete loss of his investment in the Exercise LLC Units.
(f) REGISTRATION; RESTRICTIONS ON SALE UPON PUBLIC OFFERING. The
Exercise LLC Units shall constitute "Registrable Securities" under the LLC
Agreement.
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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.
7. REPRESENTATIONS AND WARRANTIES OF CERA, INC.. CERA, Inc.
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 CERA, Inc. and constitutes a valid and legally binding
obligation of CERA, Inc., enforceable against CERA, Inc. 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 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 Option until the exercise of the 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 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
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LLC Units shall have been converted or for which the Exercise LLC Units shall
have been exchanged.
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 CERA, Inc.,
the Parent or the Grantee, as the case may be, shall specify by notice to the
others:
(i) if to CERA, Inc., to:
Cambridge Energy Research Associates, Inc.
20 University Road
Cambridge, Massachusetts 02138
Facsimile: (617) 497-0423
Telephone: (617) 497-6446
Attention: President
(i) if to the Parent, to:
Global Decisions Group LLC
c/o McCarthy, Crisanti & Maffei, Inc.
One Chase Manhattan Plaza
New York, New York 10005
Facsimile: (212) 908-4346
Telephone: (212) 509-5800
Attention: President
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(ii) if to the Grantee, to:
Edward G. Jordan
26162 Ladera Drive
Carmel, California 93923
Facsimile: (408) 625-3745
Telephone: (408) 625-0858
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
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.
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(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 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
CERA, Inc.
(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 CERA, Inc. 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.
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(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.
IN WITNESS WHEREOF, CERA, Inc. and the Grantee have executed this
Agreement as of the date first above written.
CAMBRIDGE ENERGY RESEARCH
ASSOCIATES, INC.
By: _________________________________________
Name:
Title:
EDWARD G. JORDAN
By:
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Name: Edward G. Jordan
Number of LLC Units Subject to Option: 11,132
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