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As filed with the Securities and Exchange Commission on February 12, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
GLOBAL DECISIONS GROUP LLC
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 13-3963605
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
C/O MCCARTHY, CRISANTI & MAFFEI, INC.
590 MADISON AVENUE, NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices) (Zip Code)
CAMBRIDGE ENERGY RESEARCH ASSOCIATES, INC. LLC UNIT GRANT PLAN
CAMBRIDGE ENERGY RESEARCH ASSOCIATES, INC. LLC UNIT OPTION PLAN
MCM GROUP, INC. LLC UNIT OPTION PLAN
MCM GROUP, INC. STOCK OPTION PLAN
(Full Titles of the Plans)
GORDON MCMAHON
VICE PRESIDENT AND SECRETARY
GLOBAL DECISIONS GROUP LLC
C/O MCCARTHY, CRISANTI & MAFFEI, INC.
590 MADISON AVENUE
NEW YORK, NEW YORK 10022
(Name and Address of Agent for Service)
(212) 835-1350
(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
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Proposed
Title Of Maximum Proposed Maximum
Securities Offering Aggregate Amount Of
To Be Amount Price Per Offering Registration
Registered To Be Registered Share Price Fee
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<S> <C> <C> <C> <C>
Units pursuant to
Cambridge Energy Research
Associates, Inc. LLC Unit
Grant Plan............... 167,715 (1) (2) $1,670,442(3) $493
Units pursuant to
Cambridge Energy Research
Associates, Inc. LLC Unit 231,500 (5) $18.31 $4,238,765(4) $1,251
Option Plan.............. 231,199 (6) (2) $2,302,743(3) $680
Units pursuant to MCM
Group, Inc. LLC Unit
Option Plan.............. 154,233 (7) (2) $1,536,161(3) $454
Units pursuant to MCM 192,524 (9) $10.46 $2,013,802(4) $595
Group, Inc. Stock Option 192,524(10) $15.03 $2,893,637(4) $854
Plan(8).................. 83,175(11) (2) $828,423(3) $245
TOTAL.................... 1,252,870 $15,483,970 $4,572
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<S> <C>
(1) Represents the number of units of capital representing limited
liability company interests in the Registrant ("Units") issuable
pursuant to the Cambridge Energy Research Associates, Inc. Unit Grant
Plan, and includes an aggregate of 60,840 Units issuable upon the
attainment of certain revenue growth rates by Cambridge Energy Research
Associates, Inc. ("CERA").
(2) The securities are not being offered on a price per Unit basis and,
therefore, there is no proposed maximum offering price per share.
(3) Calculated pursuant to Rule 457(h)(1) under the Securities Act of 1933,
as amended (the "Securities Act") based on the book value of $9.96 per
Unit, as of December 31, 1997, the most recent practicable date, of the
Units.
(4) Calculated pursuant to Rule 457(h)(1) under the Securities Act based on
the price at which the options may be exercised.
(5) Represents the number of Units issuable upon the exercise of options to be
awarded under the Cambridge Energy Research Associates, Inc. LLC Unit Option
Plan with an exercise price of $18.31 per Unit.
(6) Represents the number of Units issuable upon the exercise of options to be
awarded under the Cambridge Energy Research Associates, Inc. LLC Unit Option
Plan.
(7) Represents the number of Units issuable upon the exercise of options granted
pursuant to the MCM Group, Inc. LLC Unit Option Plan.
(8) Pursuant to the Plan of Merger and Exchange Agreement, dated as of
August 1, 1997, by and among the Registrant, MCM Group, Inc. ("MGI"),
GDG Merger Corporation, the stockholders of CERA and The Goldman Sachs
Group, L.P. (the "Merger Agreement"), among other things, each
outstanding option to purchase common stock of MGI granted under the
MGI Stock Option Plan shall cease to be outstanding and shall be
converted into and exchanged for an equivalent option to purchase
9.55555 Units.
(9) Represents the number of Units issuable upon the exercise of
outstanding options awarded under the MCM Group, Inc. Stock Option Plan
with an exercise price of $10.46 per Unit.
(10) Represents the number of Units issuable upon the exercise of
outstanding options awarded under the MCM Group, Inc. Stock Option Plan
with an exercise price of $15.03 per Unit.
(11) Represents the number of Units issuable upon the exercise of options to be
awarded under the MCM Group, Inc. Stock Option Plan.
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PART I. INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The information required by Part I of Form S-8 is included in documents
sent or given to participants in the Cambridge Energy Research Associates,
Inc. LLC Unit Grant Plan, the Cambridge Energy Research Associates, Inc. LLC
Unit Option Plan, the MCM Group, Inc. LLC Unit Option Plan, and the MCM Group,
Inc. Stock Option Plan pursuant to Rule 428(b)(1) of the Securities Act of
1933, as amended (the "Securities Act"). Cambridge Energy Research
Associates, Inc. ("CERA") and MCM Group, Inc. ("MGI") are wholly owned
subsidiaries of Global Decisions Group LLC (the "Registrant").
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which are filed with the Securities and
Exchange Commission (the "Commission"), are incorporated in this Registration
Statement by reference:
(1) The Registrant's Prospectus filed with Commission pursuant to Rule
424(b)(3) of the Securities Act, dated January 29, 1998, which contains audited
financial statements for the Registrant's latest fiscal year.
(2) All other reports filed pursuant to Sections 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the Prospectus referred
to in (1) above.
All other documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all units of capital
representing limited liability company interests in the Registrant ("Units")
offered hereby have been sold or which deregisters all Units then remaining
unsold, shall be deemed to be incorporated by reference herein and to be part
hereof from the date of the filing of such documents.
Item 4. DESCRIPTION OF SECURITIES
The following summary of certain provisions of the Units does not
purport to be complete and is subject to, and qualified in its entirety by the
provisions of, applicable law and the provisions of the Registrant's Amended and
Restated Limited Liability Company Agreement (the "LLC Agreement") which is
filed herewith as Exhibit 4.2. Capitalized terms used in this Registration
Statement and not defined herein have the meaning ascribed to them in the
Registrant's Prospectus filed with Commission pursuant to Rule 424(b)(3) of the
Securities Act, dated January 29, 1998.
RIGHTS TO DISTRIBUTIONS AND ALLOCATIONS. The LLC Agreement authorizes
the issuance of Units for such consideration and on such terms and conditions as
shall be established by the Board of Directors of the Registrant (the "Board")
in its sole discretion without approval of the members of the Registrant (the
"Members"). Members (i) will be entitled to receive, to the extent of available
cash and cash equivalent assets of the Registrant, cash distributions in amounts
intended to enable Members and certain other persons or entities to discharge
their United States federal, state and local income tax liabilities arising from
certain allocations made with respect to the Units as described below, (ii)
other than with respect to certain distributions relating to specified
disposition transactions (as described below), will be entitled on a pro rata
basis to such distributions, if any, prior to the dissolution and liquidation of
the Registrant as may be determined by the Board in its sole discretion, (iii)
will be allocated income, gains, losses, credits and deductions of the
Registrant in accordance with the respective Units owned by the Members, subject
to certain variations for income tax purposes called for by applicable
provisions of the Internal Revenue Code and regulations promulgated thereunder,
and (iv) will be entitled on a pro rata basis, upon dissolution and liquidation
of the Registrant, to
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all remaining assets after satisfaction of the Registrant's liabilities to
creditors.
With respect to distributions to Members (i) of any capital stock of
MGI or less than all of the capital stock of CERA prior to the earlier of the
issuance of the Contingent Units and June 30, 2000, or (ii) of the net proceeds
of any sale or other disposition (other than in a distribution to Members of
capital stock of MGI or CERA), prior to the earlier of the issuance of the
Contingent Units and June 30, 2000, of capital stock of MGI, more than 50% of
the assets of MGI, or capital stock or assets of CERA in a transaction that does
not constitute a Termination Event, Members will be entitled to receive each
such distribution on a pro rata basis, except that each Member who, at the time
of determination, has a right to receive Contingent Units will be treated,
solely for the purposes of such distribution, as if such Member owned the number
of Contingent Units that would have been issuable to such Member if the closing
of a Termination Event (other than an underwritten public offering) that did not
constitute a Qualifying Sale had occurred at such time of determination.
VOTING AND CERTAIN OTHER RIGHTS. Except with respect to non-voting
Units (the "Non-Voting Units"), which will be issuable by the Registrant only in
limited circumstances and only to those holders of Units subject to certain
legal or regulatory constraints on their ability to possess voting power with
respect to any single entity in excess of certain thresholds, and except with
respect to certain rights and obligations applicable, pursuant to the LLC
Agreement, to certain holders of Units with respect to (i) nomination, election
and/or appointment of members of the Board, (ii) rights and obligations relating
to transferability of Units and rights to request registration of Units under
the applicable securities laws, (iii) Contingent Units and (iv) certain other
matters, each Unit will be identical in all respects to each other Unit. Units
other than Non-Voting Units ("Voting Units") will be the only class of equity
interests in the Registrant outstanding immediately following the closing of the
Merger and the Exchange.
Holders of record of Voting Units will be entitled to notice of, and to
vote at, meetings of the Members and to act with respect to matters as to which
approval of the Members may be solicited. There will be an annual meeting of the
Members starting in 1998, and special meetings of the Members may be called by
the Board, the Chairman or the Vice Chairman of the Board, the Registrant's
chief executive officer, or shall be called by the chairman or secretary upon
written request of Members holding not less than 20% of the outstanding Units.
Holders of Voting Units will be entitled to one vote per Voting Unit on matters
submitted to a vote or consent of holders of Units. The LLC Agreement provides
that, except as otherwise required by law, the vote of a majority of Voting
Units represented at a meeting of Members at which a quorum is present will be
sufficient for the transaction of business at such meeting, except that, upon
the recommendation of the Board that the Members give such approval, the
approval of at least two-thirds of the Members (by number of Units) then
entitled to vote at a meeting of Members will be required for (i) with certain
limited exceptions, any merger, consolidation, conversion or reorganization of
the Registrant, (ii) dissolution of the Registrant and (iii) the sale or other
disposition of all or substantially all of the assets of the Registrant or the
sale or other disposition of all of the capital stock of MGI or CERA owned by
the Registrant, other than in a spin-off of all of the capital stock of MGI or
CERA. Pursuant to the LLC Agreement, prior to the IPO Date, the Members will be
required to vote all of their respective Units for the election as directors of
the nominees described in the Registrant's Prospectus filed with Commission
pursuant to Rule 424(b)(3) of the Securities Act, dated January 29, 1998.
APPRAISAL RIGHTS. Pursuant to the terms of the LLC Agreement, holders
of Units will not be entitled to any appraisal or dissenters' rights.
RESTRICTIONS ON TRANSFER. The LLC Agreement will provide that, during
the period ending on the earlier of three years after the Closing Date and one
year after the IPO Date, each Member who, together with certain related trusts,
if any, owned, as of the Closing Date, 5% or more of the then
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outstanding Units (each such Member a "Restricted Holder"), each such trust and
each of such Restricted Holder's and such trust's Permitted Transferees (as
defined below) may transfer Units only (i) to an unaffiliated third party (A) in
a sale of all of the Units pursuant to an exercise of the take-along rights,
described in the LLC Agreement and under the heading "--Take-Along Rights,"
below, or (B) pursuant to a merger, conversion, consolidation or reorganization
of the Registrant, other than in a transaction described in the following clause
(ii), (ii) pursuant to certain transactions where the organizational form of the
Registrant is changed (for example, from a limited liability company to a
corporation) but the owners and proportional ownership of voting securities or
other equity interests before and after such change generally are unchanged,
(iii) in a public offering of Units pursuant to an effective registration
statement under the Securities Act, (iv) to a Permitted Transferee or (v) to the
Registrant or any subsidiary of the Registrant.
In addition, prior to the IPO Date, each Member other than a Member
subject to the transfer restrictions described in the immediately preceding
paragraph, and, after the expiration of the period described in the immediately
preceding paragraph, each Member, may transfer such Member's Units only (i) in
any of the transactions described in clause (i) through (v) of the immediately
preceding paragraph, (ii) to a Member who was a Member as of the Closing Date or
(iii) subject to compliance with the participation rights, rights of first offer
and take-along rights, described in the LLC Agreement and under the headings
"--Rights of First Offer" and "--Take-Along Rights," below, to Restricted
Holders or third parties who are "accredited investors," for cash in
transactions that are exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof. After the IPO Date, in addition
to transfers in any of the transactions described in the immediately preceding
sentence, each such Member will also be entitled to transfer such Member's Units
to any third party, subject to compliance with such participation rights and
with Rule 144 or Rule 145 under the Securities Act, if applicable.
A "Permitted Transferee" will be defined in the LLC Agreement to mean
(i) any transferee by bequest or the laws of descent or distribution, (ii) any
trust for employees of the Registrant and/or any of the Registrant's
subsidiaries established under a qualified employee benefit plan, (iii) in the
case of any Member that is a trust, the trust beneficiaries of such trust, (iv)
as to any Member that is a corporation, company, partnership or other entity,
certain affiliates of such Member and (v) in the case of any Member that is an
individual, any trust the only actual beneficiaries under which are such
individual and/or one or more of his brothers and sisters (whether by whole or
half blood), spouse, ancestors and lineal descendants, provided, in each case,
that the Permitted Transferee agrees in writing to be bound by the terms of the
LLC Agreement and complies with certain additional requirements.
Further, (i) any transferee of Units will, unless such requirements are
waived by the Board, be admitted as a substitute Member only upon (a) execution
by the transferee and the transferor of such instruments as the Board or any
officer of the Registrant deems reasonably necessary or desirable to effect the
substitution, (b) the agreement in writing by the transferee to be bound by the
LLC Agreement, and (c) the agreement in writing by the transferee to provide the
Registrant with such information (including the transferee's employer
identification number or social security number, as applicable, and the amount
paid for the Units) as the Registrant may request from time to time, (ii) it is
a condition to any transfer of Units that (x) the Board determines that the
proposed transfer will not cause the Registrant to violate applicable law or the
terms of any then outstanding indebtedness of the Registrant, guarantees of
indebtedness or related documents, result in the Registrant becoming subject to
certain securities, employee benefits, investment company and other specified
legal requirements, or otherwise constitute a Prohibited Transaction (as defined
in the LLC Agreement), and (y) in the case of a transfer to a Permitted
Transferee (or in a transaction described in clause (ii) or (iii) of the first
sentence of the second preceding paragraph), the transferor deliver to the
Registrant (A) an opinion of counsel reasonably satisfactory to the Registrant
relating to certain
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matters specified in the LLC Agreement, and (B) a certificate concerning
compliance with the restrictions on transfer set forth in the LLC Agreement and
certain related matters, and certain other documentation, (iii) each person or
entity obtaining Units, other than the persons and entities admitted as Members
pursuant to the Merger, the Exchange or the transfer of Units and Contingent
Units pursuant to the CERA Unit Grant Plan or exercising options to purchase
Units (provided that each such person or entity who exercised such options
executes a subscription agreement and tenders full payment of the exercise price
of such options), will be admitted as an additional Member at the time such
person or entity (A) executes a counterpart of the LLC Agreement, (B) complies
with the applicable resolution, if any, of the Board with respect to such
admission, and (C) is named as a Member in the Registrant's membership register,
and (iv) transfers of Units prior to the IPO Date are subject to certain further
restrictions designed to ensure that the Registrant is not treated as a publicly
traded partnership for tax purposes.
SECURITIES LAWS. The issuance of the Units pursuant to the Merger and
the Units issuable upon the exercise of the Brera Options and the Jordan Options
will be registered under the Securities Act and such Units (other than Units
issued to "affiliates" of MGI or the Registrant) will be freely transferable
under the Securities Act. However, there is no public trading market for the
Units and it is not expected that there will be a public trading market for the
Units in the foreseeable future. Units issued to affiliates of MGI as of August
1, 1997 may not be sold except pursuant to an effective registration statement
under the Securities Act or other applicable exemption from the registration
requirements of the Securities Act, including (in the case of such affiliates
who are not also affiliates of the Registrant) Rule 145 under the Securities
Act.
HOLDBACK AGREEMENT. Under the LLC Agreement, the Units will be subject
to a holdback provision under which such Units may not be transferred in any
public sale or distribution, including sales pursuant to Rule 144 or Rule 144A
under the Securities Act, during the 20-day period prior to and the one-year
period after the effective date of any registration statement for a public
offering filed in respect of any equity securities of the Registrant (other than
as part of such public offering).
PARTICIPATION RIGHTS. Each Member will be entitled, prior to such time
as 30% of the then outstanding Units have been sold to the public pursuant to an
effective registration statement under the Securities Act or pursuant to Rule
144 under the Securities Act (the "Establishment of a Public Market"), to
participate proportionately in certain "qualifying sales" of Units by a
Restricted Holder, certain related trusts, if any, and/or any of their Permitted
Transferees. Subject to certain qualifications, "qualifying sales" generally
will be any sales by a Restricted Holder, such trusts and/or such Permitted
Transferees to a third party in transactions not involving a distribution and/or
sale to the public (whether pursuant to a public offering registered under the
Securities Act, Rule 144, broker's transactions or otherwise, but not pursuant
to Rule 144A or any successor provision) after such Restricted Holder, trusts
and/or Permitted Transferees have sold an aggregate of 5% of the Units held by
such Restricted Holder, trusts and/or Permitted Transferees.
RIGHTS OF FIRST OFFER. Under the LLC Agreement, prior to the IPO Date,
the units will be subject to certain rights of first offer in favor of the
Registrant (whose right may be assigned to MGI or CERA) and each Restricted
Holder. If a holder of Units desires, prior to the IPO Date, to offer or to sell
Units owned by such holder in a transaction described in clause (iii) of the
first sentence of the second paragraph under the heading "--Restrictions on
Transfer," above, such holder must first make an offer to sell such Units to the
Registrant and, if the Registrant does not accept such offer within a twenty-day
period, to each Restricted Holder at a price and on the other terms specified by
such holder of Units in a notice to the Registrant. Each Restricted Holder shall
have the right during the two successive twenty-day periods following the
expiration of the first twenty-day period to purchase such Restricted Holder's
pro rata portion of the number of such Units that the
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Registrant (or, with respect to the second such twenty-day period, the other
Restricted Holders) shall not have elected to purchase, which right may be
exercised subject to such Restricted Holder securing financing for such
purchase. If the Registrant and the Restricted Holders do not elect to exercise
such rights with respect to all the Units so being offered, the holder may sell
such Units to a third party at no less than 90% of the price and on the other
terms initially offered to the Registrant and the Restricted Holders.
TAKE-ALONG RIGHTS. Under the LLC Agreement, prior to the IPO Date the
Units will be subject to certain "take-along" rights of the holders of more than
50% of the outstanding Units (the "Majority Holders"). In the event that the
Majority Holders elect to sell all of their Units to a third party, each other
holder of Units will, if requested to do so by the Majority Holders, have an
obligation to sell such holder's Units to such third party on the same terms and
at the same price as the Majority Holders.
REGISTRATION RIGHTS. Under the LLC Agreement and subject to the
limitations described therein, the Registrant agrees to grant to (i) the holder
or holders (other than the Founding Stockholders and certain related trusts) of
30% of the Registrable Securities (as such term is defined in the LLC Agreement
and which will generally include all of the Units to be issued in connection
with the transactions contemplated by the Merger Agreement) with respect to the
initial request and 10% of the Registrable Securities with respect to any
subsequent requests, and (ii) with respect to two requests only after the third
anniversary of the Closing Date, the Founding Stockholders holding a specified
percentage of Units, the right to require the Registrant to register for resale
(subject to certain minimum registration requirements), under the Securities Act
and applicable state securities laws, Units that such holders or certain of
their affiliates propose to sell. Since the requests for registration under
clause (i) of the immediately preceding sentence exclude the Founding
Stockholders and the initial request thereunder must be made by the holders of
at least 30% of the Registrable Securities, C&D Fund IV, the largest unitholder,
will effectively control the initial registration of the Units if such
registration occurs pursuant to the exercise of registration rights granted
under the LLC Agreement prior to the third anniversary of the Closing Date. The
Registrant is obligated to pay all expenses incidental to the first two
registrations requested pursuant to clause (i) of the first sentence of this
paragraph and each of the two registrations requested pursuant to clause (ii) of
such first sentence, in each case, excluding underwriting discounts and
commissions. Subject to certain limitations set forth in the LLC Agreement, all
holders of Units as of the Closing Date will be entitled to participate in any
such registration for resale, or in any registration of equity securities of the
Registrant otherwise undertaken by the Registrant.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not applicable.
Item 6. INDEMNIFICATION
Section 18-108 of the Delaware Limited Liability Company Act (the
"Delaware Act") provides that, subject to such standards and restrictions, if
any, as are set forth in its limited liability company agreement, a limited
liability company may, and shall have the power to, indemnify and hold harmless
any member or manager or other person from and against any and all claims and
demands whatsoever.
Section 11.2 of the LLC Agreement provides that no Covered Person (as
defined in the LLC Agreement) shall be liable to the Registrant or any other
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Covered Person in the good faith belief
that such action was in, or was not opposed to, the best interests of the
Registrant and in the manner believed to be within the scope of authority
conferred on such Covered Person by or pursuant to the LLC Agreement, except
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that a Covered Person shall be liable for any such loss, damage or claim
incurred by reason of such Covered Person's gross negligence or willful
misconduct.
Section 11.4 of the LLC Agreement provides that the Registrant shall
indemnify any person who was or is a party or who is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was or has agreed to become a Director, Officer, employee or agent
of the Registrant, or is or was serving or has agreed to serve at the request of
the Registrant as a director, officer, employee or agent, of another company,
partnership, joint venture, trust or other enterprise, or by reason of any
action, alleged to have been taken or omitted in such capacity, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with such
action, suit or proceeding and any appeal therefrom, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Registrant, and, with respect to any criminal action or
proceeding had no reasonable cause to believe his conduct was unlawful; except
that in the case of an action or suit by or in the right of the Registrant to
procure a judgment in its favor (1) such indemnification shall be limited to
expenses (including attorney's fees) actually and reasonably incurred by such
person in the defense or settlement of such action or suit, and (2) no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Registrant unless
and only to the extent that the Delaware Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Delaware Court of Chancery or such other court shall deem proper;
provided that any indemnity under Section 11.4 shall be provided out of and to
the extent of Registrant assets only, and no Member or Director, Officer,
employee or agent of the Registrant shall have any personal liabilities with
respect to such indemnity.
Section 11.4 of the LLC Agreement further provides that to the extent
that a Director, Officer, employee or agent of the Registrant has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 11.4 thereof or in defense of any claim, issue
or matter therein, he shall be indemnified by the Registrant against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
Section 11.4 of the LLC Agreement further provides that the Registrant
may purchase and maintain insurance, to the extent and in the amounts as the
Board shall, in its sole discretion, deem reasonable, on behalf of Covered
Persons and such other Persons as the Board shall determine, against any
liability that may be asserted against or expenses that may be incurred by any
such Person in connection with the activities of the Registrant or such
indemnities, regardless of whether the Registrant would have the power to
indemnify such Person against such liability under the provisions of the LLC
Agreement. The Registrant may enter into indemnity contracts with Covered
Persons and such other Persons as the Board shall determine and adopt written
procedures pursuant to which arrangements are made for the advancement of
expenses and the funding of obligations under the relevant provisions of the LLC
Agreement and containing such other procedures regarding indemnification as are
appropriate.
Section 10.5 of the CERA LLC Unit Option Plan, Section 10.5 of the MGI
LLC Unit Option Plan, and Section 10.5 of the MGI Stock Option Plan each
provides as follows (all capitalized terms in this paragraph not defined herein
have the meaning ascribed to them in the relevant Plan): each person who is or
shall have been a member of the Board or the LLC Board or any committee of the
Board or the LLC Board shall be indemnified and held harmless by CERA or MGI, as
the case may be (the relevant entity hereinafter referred to as the "Company"),
and its Subsidiaries to the fullest extent permitted by
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law from and against any and all losses, costs, liabilities and expenses
(including any related attorneys' fees and advances thereof) in connection with,
based upon or arising or resulting from any claim, action, suit or proceeding to
which he may be made a party or in which he may be involved by reason of any
action taken or failure to act under the Plan and from and against any and all
amounts paid by him in settlement thereof, with the Company's approval, or paid
by him in satisfaction of any judgment in any such action, suit or proceeding
against him, provided that he shall give the Company or, with the consent of the
Company, another member of the MGI/CERA Group an opportunity, at its own
expense, to defend the same before he undertakes to defend it on his own behalf.
The foregoing right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which such persons may be
entitled under the Company's or any such Subsidiary's certificate of
incorporation or by-laws, by contract, as a matter of law, or otherwise.
The Registrant carries a general liability insurance policy which
covers certain liabilities of Directors and Officers of the Registrant arising
out of claims based on acts or omissions in their capacity as Directors or
Officers.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
Item 8. EXHIBITS
The Exhibit Index immediately preceding the exhibits is incorporated
herein by reference.
Item 9. UNDERTAKINGS
1. The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually, or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of Units
offered (if the total dollar value of Units offered would not exceed that which
was registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
-7-
<PAGE> 10
2. The Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the Units offered therein, and the offering of such Units at that
time shall be deemed to be the initial bona fide offering thereof.
3. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the Units being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
-8-
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, New York on the 12th day of February, 1998.
GLOBAL DECISIONS GROUP LLC
By: /S/ GORDON MCMAHON
------------------------------------
Name: Gordon McMahon
Title: Vice President and Secretary
POWER OF ATTORNEY
We, the undersigned officers and directors of Global Decisions Group
LLC, hereby severally constitute and appoint Gordon McMahon, Alberto Cribiore,
and each of them singly, our true and lawful attorneys with full power to them,
and each of them singly, to sign for us and in our names, in the capacities
indicated below, the Registration Statement on Form S-8 filed herewith, and any
and all subsequent amendments to said Registration Statement, and generally to
do all such things in our names and on our behalf and in our capacities as
officers and directors to enable Global Decisions Group LLC to comply with the
provisions of the Securities Act of 1933, as amended, and all requirements of
the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ ALBERTO CRIBIORE President and Director February 12, 1998
- ----------------------------------- (principal executive officer)
Alberto Cribiore
/S/ RICHARD J. SCHNALL Treasurer February 12, 1998
- ----------------------------------- (principal financial and
Richard J. Schnall accounting officer)
/S/ GORDON MCMAHON Vice President and Director February 12, 1998
- -----------------------------------
Gordon McMahon
/S/ DONALD J. GOGEL Vice President and Director February 12, 1998
- -----------------------------------
Donald J. Gogel
</TABLE>
-9-
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
4.1* Certificate of Formation of the Registrant
4.2 Amended and Restated Limited Liability Company Agreement of
the Registrant
5.1 Opinion of Richards, Layton & Finger, P.A.
23.1 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.1)
23.2 Consent of Coopers & Lybrand L.L.P.
24.1 Power of Attorney (included on the signature page of this
Registration Statement)
</TABLE>
- -------------------
* Previously filed with the Commission as Exhibit 3.1 to the Registrant's
Registration Statement on Form S-4, File No. 333-34477, which was
originally filed with the Commission on August 27, 1997 and is
incorporated herein by reference.
<PAGE> 1
EXHIBIT 4.2
================================================================================
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT
OF
GLOBAL DECISIONS GROUP LLC
Dated as of February 12, 1998
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
<S> <C> <C>
ARTICLE I
DEFINED TERMS.........................................................4
1.1. Definitions.....................................................4
ARTICLE II
CONTINUATION AND TERM................................................21
2.1. Continuation...................................................21
2.2. Name...........................................................22
2.3. Term of Company................................................22
2.4. Registered Agent and Office....................................22
2.5. Principal Place of Business....................................23
2.6. Qualification in Other Jurisdictions...........................23
2.7. Fiscal Year; Taxable Year......................................23
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY....................................23
3.1. Purposes.......................................................23
3.2. Powers of the Company..........................................24
ARTICLE IV
MEMBERS..............................................................27
4.1. Powers of Members..............................................27
4.2. Partition......................................................27
4.3. Resignation....................................................27
4.4. Meetings of Members............................................28
4.5. Business Transactions of a Member with the Company.............30
4.6. No Cessation of Membership upon Bankruptcy.....................30
ARTICLE V
MANAGEMENT...........................................................31
i
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
5.1. Board..........................................................31
5.2. Annual and Regular Meetings....................................35
5.3. Special Meetings; Notice.......................................35
5.4. Quorum and Acts of the Board...................................35
5.5. Rules and Regulations; Manner of Acting........................36
5.6. Electronic Communications......................................36
5.7. Committees of Directors........................................36
5.8. Compensation of Directors......................................37
5.9. Reliance on Accounts and Reports, etc. ........................37
5.10. Resignation...................................................37
5.11. Directors as Agents...........................................37
ARTICLE VI
OFFICERS.............................................................38
6.1. Officers.......................................................38
6.2. Chief Executive Officer........................................38
6.3. The Chief Financial Officer....................................39
6.4. President......................................................39
6.5. Vice Presidents................................................40
6.6. The Secretary and Assistant Secretary..........................40
6.7. The Treasurer and Assistant Treasurer..........................40
6.8. Execution of Contracts.........................................41
6.9. Officers as Agents.............................................41
6.10. Reliance by Third Parties.....................................41
ARTICLE VII
AMENDMENTS...........................................................42
7.1. Amendments.....................................................42
ARTICLE VIII
CAPITAL CONTRIBUTIONS AND INTERESTS..................................43
8.1. Capital Units..................................................43
8.2. Capital Contributions of Property..............................43
8.3. Additional Capital Contributions...............................43
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
8.4. Member's Interest..............................................44
8.5. Certificates of LLC Units......................................44
8.6. Issuance of Non-Voting LLC Units...............................44
8.7. Conversion and Exchange........................................44
8.8. Certain Conversion and Exchange Procedures.....................45
8.9. Signatures; Facsimile..........................................47
8.10. Lost, Stolen or Destroyed Certificates........................47
8.11. Registration and Transfer of LLC Units........................47
8.12. Transfer Agent, Exchange Agent and Registrar..................47
ARTICLE IX
ALLOCATIONS; DISTRIBUTIONS...........................................48
9.1. Allocations....................................................48
9.2. Distributions..................................................48
9.3. Withholding....................................................50
9.4. Restricted Distributions.......................................50
ARTICLE X
BOOKS AND RECORDS; TAX MATTERS.......................................50
10.1. Books, Records and Financial Statements.......................50
10.2. Filings of Returns and Other Writings; Tax Matters Partner....51
10.3. Accounting Method.............................................52
10.4. Audits........................................................52
10.5. Other Tax Matters.............................................53
10.6. Section 754 Election..........................................53
ARTICLE XI
LIABILITY, EXCULPATION AND INDEMNIFICATION...........................53
11.1. Liability.....................................................53
11.2. Exculpation...................................................53
11.3. Fiduciary Duty................................................54
11.4. Indemnification...............................................54
11.5. Severability..................................................57
11.6. Outside Businesses............................................58
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
ARTICLE XII
ADDITIONAL MEMBERS...................................................58
12.1. Admission.....................................................58
ARTICLE XIII
TRANSFER OF INTERESTS; SUBSTITUTE MEMBERS............................59
13.1. Restrictions on LLC Unit Transfers............................59
13.2. Participation Rights..........................................62
13.3. First Offer Rights............................................65
13.4. Take-Along Rights.............................................67
13.5. Members' Rights to Purchase Additional LLC Units..............70
13.6. Registration Rights...........................................71
13.7. Substitute Members............................................72
13.8. Release of Liability..........................................72
ARTICLE XIV
DISSOLUTION, LIQUIDATION AND TERMINATION.............................73
14.1. Dissolving Events.............................................73
14.2. Dissolution and Winding-Up....................................73
14.3. Termination...................................................74
14.4. Claims of the Members.........................................74
ARTICLE XV
MISCELLANEOUS........................................................74
15.1. Notices.......................................................74
15.2. Legend on LLC Unit Certificates...............................76
15.3. Headings......................................................78
15.4. Entire Agreement..............................................78
15.5. Counterparts..................................................78
15.6. Governing Law.................................................79
15.7. Term of Certain Provisions....................................79
15.8. Binding Effect................................................79
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C> <C>
15.9. No Third-Party Beneficiaries..................................79
15.10. Consent to Jurisdiction......................................79
15.11. Waiver of Jury Trial.........................................80
15.12. Severability.................................................81
</TABLE>
SCHEDULE A
SCHEDULE B
SCHEDULE C
EXHIBIT A FORM OF LLC UNIT GRANT AGREEMENT
EXHIBIT B FORM OF BAILMENT AGREEMENT
v
<PAGE> 7
AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF
GLOBAL DECISIONS GROUP LLC
This AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of GLOBAL
DECISIONS GROUP LLC, a Delaware limited liability company (the "Company"), is
entered into as of February 12, 1998, by and among THE CLAYTON & DUBILIER
PRIVATE EQUITY FUND IV LIMITED PARTNERSHIP, a Connecticut limited partnership,
DANIEL H. YERGIN, JOSEPH A. STANISLAW, JAMES P. ROSENFIELD (Messrs. Yergin,
Stanislaw and Rosenfield, collectively, the "CERA Principals"), certain other
individuals and trusts listed on the signature pages hereto (together with the
CERA Principals, the "CERA Stockholders") and THE GOLDMAN SACHS GROUP, L.P. ("GS
LP"), as members of the Company, and any other Persons who may be or become
members of the Company in accordance with the provisions hereof, and MCM GROUP,
INC., a Delaware corporation ("MGI"), and MCCARTHY, CRISANTI & MAFFEI, INC., a
New York corporation and a wholly owned subsidiary of MGI ("MCM"), as
withdrawing members,
RECITALS:
WHEREAS, MGI and MCM formed the Company as a limited liability company
pursuant to the Delaware Limited Liability Company Act (6 Del. C. ss.18-101, et
seq., as amended from time to time and including any successor statute of
similar import, the "Delaware Act"), to be treated as a partnership for federal
income tax purposes, by filing the Certificate with the office of the Secretary
of State of the State of Delaware on June 30, 1997, and entering into a Limited
Liability Company Agreement of the Company, dated as of June 30, 1997 (the
"Original Agreement") (capitalized terms used in this Agreement without
definition have the respective meanings specified in Section 1.1.);
WHEREAS, MGI, the Company, GDG Merger Corporation, a Delaware
corporation and a wholly owned subsidiary of the Company ("Merger Sub"), the
CERA Stockholders and GS LP are party to the Merger and Exchange Agreement;
WHEREAS, the Company was formed for the purpose of acquiring (i) all of
the outstanding shares of capital stock of MGI, through a merger of Merger Sub
with and into MGI (the "Merger") and (ii) acquiring all of the outstanding
shares of
<PAGE> 8
capital stock of Cambridge Energy Research Associates, Inc., a Massachusetts
corporation ("CERA Inc." or "CERA"), and certain of the limited partnership
interests of Cambridge Energy Research Associates Limited Partnership, a
Delaware limited partnership ("CERA LP"), the general partner of which is CERA
Inc., pursuant to the terms and conditions set forth in the Merger and Exchange
Agreement;
WHEREAS, prior to the Transactions, the CERA Stockholders owned in the
aggregate, beneficially and of record, all of the outstanding shares of voting
common stock, par value $.01 per share ("CERA Voting Common Stock"), and
non-voting common stock, par value $.01 per share ("CERA Non-Voting Common
Stock" and, together with the CERA Voting Common Stock, "CERA Common Stock"), of
CERA Inc., and GS LP owned, beneficially and of record, all of the outstanding
limited partnership interests in CERA LP other than such partnership interests
that were owned by CERA Inc. (the "GS Partnership Interest");
WHEREAS, on the day immediately preceding the date hereof, MCM lent up
to $25,000,000 to CERA Inc. (the "CERA Distribution Loan") , and CERA Inc.
applied a portion of such funds, together with CERA Inc.'s available cash, to
the extent necessary, to make a distribution to the Stockholders in an aggregate
amount equal to $21,510,000 and applied the remainder of such funds and
available cash to purchase a portion of the GS Partnership Interest from GS LP
for a purchase price of $2,390,000 (such applications of such funds and
available cash, the "CERA Cash Distribution");
WHEREAS, pursuant to the terms and conditions set forth in the Merger
and Exchange Agreement, on the date hereof each of the CERA Stockholders shall
contribute to the Company all of the shares of CERA Common Stock owned by such
CERA Stockholder, in exchange (the "CERA Stock Exchange") for (i) LLC Units,
(ii) CERA Contingent Options (as such term is defined in the Merger and Exchange
Agreement) and (iii) the right to receive, under certain circumstances,
Contingent LLC Units (as such term is defined in the Merger and Exchange
Agreement);
WHEREAS, pursuant to the terms and conditions set forth in the Merger
and Exchange Agreement, on the date hereof GS LP shall contribute to the Company
all of the GS Partnership Interest owned by it following the CERA Cash
Distribution in exchange (the "GS Partnership Interest Exchange" and, together
with the Merger and the CERA Stock Exchange, the "Transactions") for (i) LLC
Units, (ii) GS Contingent Options (as defined in the Merger and Exchange
Agreement, and, together with the CERA Contingent Options, the "Contingent
Options") and (iii) the right to receive, under certain circumstances,
Contingent LLC Units, whereupon the
2
<PAGE> 9
Company shall immediately transfer or cause to be transferred to CERA Inc. such
GS Partnership Interest;
WHEREAS, on the date hereof, upon such transfer to CERA Inc. of such GS
Partnership Interest, CERA Inc. shall become the sole partner of CERA LP and
CERA LP shall be dissolved by operation of law;
WHEREAS, pursuant to the terms and conditions set forth in the Merger
and Exchange Agreement, on the date hereof the Company, Merger Sub and MGI shall
have caused Merger Sub to be merged with and into MGI, and have caused the then
outstanding shares of MGI Common Stock (as defined in the Merger and Exchange
Agreement) to be converted into LLC Units;
WHEREAS, promptly following the date hereof, (i) the Company shall
issue to CERA Inc., and CERA Inc. shall transfer to certain management employees
of CERA Inc. listed on Schedule A hereto (the "CERA Management Members"), an
aggregate of 106,875 LLC Units and (ii) the Company shall enter into an
agreement with CERA Inc., granting CERA Inc. the right to purchase, under
certain circumstances, an aggregate of 7.125% of the Contingent LLC Units, and
CERA Inc. shall grant to the CERA Management Members a right to receive their
respective pro rata portions of such Contingent LLC Units, in each case pursuant
to the Cambridge Energy Research Associates, Inc. LLC Unit Grant Plan (the "CERA
LLC Unit Grant Plan") and LLC Unit Grant Agreements to be entered into with each
CERA Management Member;
WHEREAS, the parties hereto desire to amend and restate the Original
Agreement to reflect, among other things, (i) the issuance of LLC Units to and
the admission of Fund IV, the CERA Stockholders, GS LP and the other Persons
listed on Schedule A hereto (other than the CERA Management Members) as members
of the Company, subject to Section 2.1(b) hereof, (ii) the transfer of LLC Units
to and the admission of the CERA Management Members as members of the Company
and (iii) the withdrawal of MGI and MCM from the Company as members of the
Company; and
WHEREAS, the Members desire to continue the Company as a limited
liability company under the Delaware Act without dissolution;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Members hereby agree as
follows:
3
<PAGE> 10
ARTICLE I
DEFINED TERMS
Section 1.1. Definitions. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement, have
the meanings herein specified. All references herein to a Section, Article or
Schedule are to a Section, Article or Schedule of or to this Agreement, unless
otherwise indicated.
"Additional Member" shall have the meaning set forth in Section 12.1
hereof.
"Adjustment Date" shall mean (i) the last day of each Taxable Year,
(ii) the day before the date of admission of any substituted or additional
Member, (iii) the day before the date a Member ceases to be a member of the
Company or (iv) any other date determined by the Board as appropriate for a
closing of the Company's books.
"Affiliate" shall mean, with respect to a specified Person, any Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with the specified Person, including
but not limited to a Subsidiary of the specified Person, a Person of which the
specified Person is a Subsidiary or another Subsidiary of a Person of which the
specified Person is also a Subsidiary. As used in this definition, the term
"control" (including the terms "controlled by" and "under common control with")
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract, as trustee, as executor or
otherwise.
"Agreement" shall mean this Amended and Restated Limited Liability
Company Agreement of the Company, including the Schedules hereto, as such
Agreement and Schedules may be amended, modified, supplemented or restated from
time to time.
"Allocation Period" shall mean the period beginning on the day
following any Adjustment Date (or, in the case of the first Allocation Period,
beginning on the date of formation of the Company) and ending on the next
succeeding Adjustment Date.
4
<PAGE> 11
"Applicable Federal Rate" shall mean the Federal short-term rate
publicly announced from time to time by the U.S. Internal Revenue Service
pursuant to section 1274 of the Code.
"Applicable Laws" shall mean all applicable provisions of (i)
constitutions, treaties, statutes, laws (including the common law), rules,
regulations, ordinances, codes or orders of any governmental entity, (ii) any
consents or approvals of any governmental entity and (iii) any orders,
decisions, injunctions, judgments, awards, decrees of or agreements with any
governmental entity.
"Automatic Conversion" shall have the meaning provided in Section
8.7(b).
"Available Assets" shall mean, as of any date, the excess of the cash
and cash equivalent items held by the Company over the sum of the amount of such
items determined by the Board to be reasonably necessary for the payment of the
Company's expenses, liabilities and other obligations (whether fixed or
contingent), and for the establishment of appropriate reserves for such
expenses, liabilities and obligations as may arise, including the maintenance of
adequate working capital for the continued conduct of the Company's business.
"Board" shall have the meaning provided in Section 5.1(a).
"Book Value," as of any date, shall mean the value at which the asset
is reflected on the books and records of the Company as of such date, the
initial Book Value of each asset being its original cost to the Company for
federal income tax purposes, unless such asset is contributed to the Company by
a Member in which case the initial Book Value shall be the value of such asset
determined by the Board. The initial Book Values of the CERA Common Stock, the
portion of the GS Partnership Interest contributed to the Company (the Book
Value of which shall be added to the Book Value of the CERA Common Stock as a
result of the transfer of such portion to CERA Inc.) and the MGI Common Stock
shall be the respective values set forth on Schedule B hereto, provided that the
initial Book Values of the CERA Common Stock and of the portion of the GS
Partnership Interest contributed to the Company shall be redetermined in the
event that the CERA CAGR (as such term is defined in the Merger and Exchange
Agreement) shall be equal to or greater than 16%, in accordance with the formula
set forth on Schedule B. After the Merger, upon the occurrence of (a) a
contribution of money or other property to the Company by a new or existing
Member as consideration for LLC Units or (b) a distribution of money or other
property by the Company to a retiring or continuing Member as consideration
5
<PAGE> 12
for LLC Units (including but not limited to a distribution upon the
liquidation of the Company), the Book Values of the assets of the Company shall
be adjusted to reflect a revaluation thereof, based on the fair market values of
such assets as of the date of such contribution, liquidation or distribution, to
the extent deemed appropriate in the sole discretion of the Executive Committee.
"Brera" shall mean Brera Capital Partners, LLC, a Delaware limited
liability company.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in New York or Massachusetts are authorized or
required under Applicable Law to close.
"CD&R" shall mean Clayton, Dubilier & Rice, Inc., a Delaware corpora-
tion.
"CEO Nominee" shall have the meaning provided in Section 5.1(b).
"CERA Cash Distribution" shall have the meaning provided in the fifth
recital to this Agreement.
"CERA Common Stock" shall have the meaning provided in the fourth
recital to this Agreement.
"CERA Distribution Loan" shall have the meaning provided in the fifth
recital to this Agreement.
"CERA Inc." or "CERA" shall have the meaning provided in the third
recital to this Agreement.
"CERA LLC Unit Grant Plan" shall have the meaning set forth in the
tenth recital to this Agreement.
"CERA LP" shall have the meaning provided in the third recital to this
Agreement.
"CERA Management Members" shall have the meaning provided in the tenth
recital to this Agreement.
"CERA Nominees" shall have the meaning provided in Section 5.1(b).
6
<PAGE> 13
"CERA Non-Voting Common Stock" shall have the meaning provided in the
fourth recital to this Agreement.
"CERA Principals" shall have the meaning provided in the introductory
paragraph to this Agreement.
"CERA Stock Exchange" shall have the meaning provided in the sixth
recital to this Agreement.
"CERA Stockholders" shall have the meaning provided in the introductory
paragraph to this Agreement.
"CERA Trust" shall mean, with respect to any CERA Principal, a trust
the only actual beneficiaries under which are such CERA Principal and/or his
brothers and sisters (whether by whole or half blood), spouse, ancestors and
lineal descendants.
"CERA Voting Common Stock" shall have the meaning provided in the
fourth recital to this Agreement.
"Certificate" shall mean the Certificate of Formation of the Company
and any and all amendments thereto and restatements thereof filed on behalf of
the Company with the office of the Secretary of State of the State of Delaware
pursuant to the Delaware Act.
"Closing" shall mean the consummation of the transactions contemplated
by the Merger and Exchange Agreement.
"Closing Date" shall have the meaning set forth in the Merger and
Exchange Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commission" shall mean the United States Securities and Exchange
Commission.
"Company" shall have the meaning provided in the introductory paragraph
of this Agreement.
"Consenting CERA Principal" shall mean (a) Daniel H. Yergin or (b) in
the event of his death or legal incapacity or the termination of his employment
with CERA Inc. for Cause or as a result of any Disability (as each such term is
defined in
7
<PAGE> 14
the employment agreement, dated as of the date hereof, to which he is a party),
either (i) one of the two other CERA Principals who is designated in writing by
both such CERA Principals (provided that if such CERA Principals do not make
such designation within 30 days after such death, incapacity or termination,
then the consent of a Consenting CERA Principal shall not be required
notwithstanding any such consent requirement contained in this Agreement until
such time as the Company shall have received written notice from such CERA
Principals of such designation) or (ii) in the event that one of such two other
CERA Principals shall have died or become legally incapable or his employment
with CERA Inc. shall have been terminated for Cause or as a result of any
Disability (as each such term is defined in the employment agreement, dated as
of the date hereof, to which such CERA Principal is a party), the remaining CERA
Principal (provided that if both of such two other CERA Principals shall have
died or become legally incapable or the employment thereof with CERA Inc. shall
have been so terminated, then the consent of a Consenting CERA Principal shall
not be required under this Agreement).
"Contingent Options" shall have the meaning provided in the seventh
recital to this Agreement.
"Controlling Group" shall have the meaning provided in Section 13.4(a).
"Conversion Transaction" shall mean any merger, consolidation,
conversion, reorganization, exchange of securities or liquidation of the Company
as a result of which the Persons who were Members immediately prior to such
transaction (other than such Persons who received cash payments in such
transaction in lieu of fractional interests) will, immediately thereafter, still
own (in the same proportion), directly or indirectly, all of the securities or
other equity interests representing the combined voting power of each successor
entity's then outstanding voting securities or other equity interests.
"Covered Person" shall mean a Member, a Director, any Affiliate of a
Member or a Director, any officers, directors, stockholders, partners, members,
employees, representatives or agents of a Member, a Director, the Company or
their respective Affiliates, or any Person who was, at the time of the act or
omission in question, such a Person.
"Credit Agreement" shall mean the Credit Agreement, dated February 12,
1998, among MCM, as Borrower, the Company, as Guarantor, certain lenders party
thereto, Bank of America National Trust and Saving Association, as documentation
agent and The Chase Manhattan Bank, as Administrative Agent (the "Agent"), as
amended, supplemented, waived or otherwise modified from time to time.
"Custodian" shall have the meaning provided in Section 13.4(b).
8
<PAGE> 15
"Delaware Act" shall have the meaning provided in the first recital to
this Agreement.
"Directors" shall have the meaning provided in Section 5.1(a).
"Draft Sale Agreement" shall have the meaning provided in Section
13.4(a).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Established Securities Market" shall mean (i) a national securities
exchange, (ii) a foreign securities exchange (including but not limited to the
London International Financial Futures Exchange, the Marche a Terme
International de France, the International Stock Exchange of the United Kingdom
and the Republic of Ireland, the Frankfurt Stock Exchange and the Tokyo Stock
Exchange), (iii) a regional or local exchange or (iv) an interdealer quotation
system that regularly disseminates firm buy or sell quotations by identified
brokers or dealers by electronic means or otherwise (including but not limited
to NASDAQ).
"Excess Number" shall have the meaning provided in Section 13.2(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder. Any
reference to a particular section thereof shall include a reference to the
corresponding section, if any, of any such successor Federal statute, and the
rules and regulations thereunder.
"Existing CERA Trusts" shall mean each CERA Trust existing on the date
hereof.
"Existing MGI Options" shall mean all options to purchase MGI Common
Stock (which options have been converted into options to purchase LLC Units as a
result of the consummation of the Transactions) granted by MGI and outstanding
on the date hereof.
"First Offer LLC Units" shall have the meaning provided in Section
13.3.
"Fiscal Year" shall have the meaning provided in Section 2.7.
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"Fundamental Transaction" shall have the meaning provided in Section
13.1(a).
"Fund IV" shall mean The Clayton & Dubilier Private Equity Fund IV
Limited Partnership, a Connecticut limited partnership, and any successor
investment vehicle managed by CD&R.
"Fund IV Nominees" shall have the meaning provided in Section 5.1(b).
"GS LP" shall have the meaning provided in the introductory paragraph
of this Agreement.
"GS Partnership Interest" shall have the meaning provided in the fourth
recital to this Agreement.
"GS Partnership Interest Exchange" shall have the meaning provided in
the seventh recital to this Agreement.
"Independent Nominees" shall have the meaning provided in Section
5.1(b).
"Indirect LLC Interest" shall mean a financial instrument or contract
the value of which is determined in whole or in part by reference to the Company
(including the amount of distributions from the Company, the value of the
Company's assets, or the results of the Company's operations), other than (i) an
LLC Unit, (ii) an option to acquire an LLC Unit from the Company or any of its
Subsidiaries and (iii) a financial instrument or contract that (A) is treated as
debt for federal income tax purposes and (B) is not convertible into or
exchangeable for an interest in the capital or profits of the Company and does
not provide for a payment of equivalent value.
"Initial Holding Period" shall have the meaning provided in Section
13.1(a).
"LLC Interest" shall mean any Indirect LLC Interest and any interest in
the capital or profits of the Company (including the right to receive
distributions from the Company), including but not limited to an LLC Unit and an
option to acquire an LLC Unit from the Company or any of its Subsidiaries.
"LLC Unitholder" shall have the meaning provided in the introductory
paragraph to Schedule C hereto.
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"LLC Units" shall have the meaning provided in Section 8.1.
"LLC Unit Subscription Agreements" shall mean LLC Unit subscription
agreements, LLC Unit option agreements (other than the Contingent Option
Agreements (as defined in the Merger and Exchange Agreement)), LLC Unit Grant
Agreements and any other agreements, plans or arrangements pursuant to which LLC
Units or options, warrants or other rights in respect of LLC Units are granted,
issued or sold by the Company or any of its Subsidiaries to any party.
"Loan Documents" shall have the meaning provided in Section 3.2.
"Management LLC Unitholder" shall mean an LLC Unitholder who is also an
employee of the Company or any of its Subsidiaries or who has an arrangement to
provide services to the Company or any of its Subsidiaries.
"Manager" shall mean each Director and Officer and any other Person
designated by the Members or the Board as a manager of the Company within the
meaning of the Delaware Act.
"MCM" shall have the meaning provided in the introductory paragraph of
this Agreement.
"Member" means any Person listed as a member of the Company on the
Membership Register and includes any Person admitted as an Additional Member or
a Substitute Member pursuant to the provisions of this Agreement in such
Person's capacity as a member of the Company, within the meaning of the Delaware
Act. For purposes of the Delaware Act, the Members holding Voting LLC Units
shall constitute one class or group of Members, and the Members holding
Non-Voting LLC Units shall constitute a separate class or group of Members.
"Member Offer" shall have the meaning provided in Section 13.3(a).
"Member Offering Notice" shall have the meaning provided in Section
13.3(b).
"Membership Register" shall mean the register of the Company containing
the names and addresses of the Members and the other information described in
Section 2.1(c).
"Merger" shall have the meaning provided in the third recital to this
Agreement.
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"Merger and Exchange Agreement" shall mean the Plan of Merger and
Exchange Agreement, dated as of August 1, 1997, by and among MGI, the Company,
Merger Sub, the CERA Stockholders and GS LP.
"Merger Sub" shall have the meaning provided in the second recital to
this Agreement.
"MGI" shall have the meaning provided in the introductory paragraph of
this Agreement.
"MGI/CERA Additional Options" shall mean options to be granted by MGI
or CERA, as the case may be, pursuant to the MCM Group, Inc. LLC Unit Option
Plan and the Cambridge Energy Research Associates, Inc. LLC Unit Option Plan,
respectively, in respect of a total of up to 617,418 LLC Units.
"NASD" shall mean National Association of Securities Dealers, Inc.
"NASDAQ" shall mean the NASD National Market System.
"Newco" shall have the meaning provided in Section 13.6(b).
"Nominees" shall have the meaning provided in Section 5.1(b).
"Non-Voting LLC Units" shall have the meaning provided in Section 8.1.
"Offer" shall have the meaning provided in Section 13.5(a).
"Offered Securities" shall have the meaning provided in Section
13.5(b).
"Offering Member" shall have the meaning provided in Section 13.3.
"Officers" shall have the meaning provided in Section 6.1.
"100% Buyer" shall have the meaning provided in Section 13.4(a).
"Original Agreement" shall have the meaning provided in the first
recital to this Agreement.
"Other LLC Unitholders" shall have the meaning provided in Section
13.4(a).
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"Permitted Transferee" shall mean:
(i) any transferee by bequest or the laws of descent or
distribution;
(ii) any trust for employees of the Company and/or any of the
Company's Subsidiaries established under a qualified employee benefit plan;
(iii) in the case of any Member that is a trust, the trust
beneficiaries of such trust;
(iv) as to any Member which is a corporation, company, partnership
or other entity, any Specified Affiliate of such Member; and
(v) in the case of any Member that is an individual, any trust the
only actual beneficiaries under which are such individual and/or one or
more of his brothers and sisters (whether by whole or half blood), spouse,
ancestors and lineal descendants,
provided, in each such case, that the Permitted Transferee shall agree in
writing to be bound by the terms of this Agreement in accordance with Section
13.1(c) and shall otherwise acquire the LLC Units proposed to be transferred in
compliance with this Agreement.
"Person" shall mean any individual, corporation, association,
partnership (general or limited), joint venture, trust, estate, limited
liability company, or other legal entity or organization.
"Prime Rate" shall mean the rate of interest publicly announced from
time to time by The Chase Manhattan Bank as its prime rate.
"Private Transfer" shall mean:
(i) a Transfer in which the basis, for federal income tax purposes, of
the LLC Interest that is the subject of the Transfer in the hands of the
transferee is determined, in whole or in part, by reference to its basis in
the hands of the transferor or is determined under section 732 of the Code;
(ii) a Transfer at death, including a Transfer from an estate or testa-
mentary trust;
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(iii) a Transfer between members of a family (as defined in section
267(c)(4) of the Code);
(iv) a Transfer involving the issuance of LLC Interests by (or on
behalf of) the Company in exchange for cash, property or services;
(v) a Transfer involving distributions from a retirement plan qualified
under section 401(a) of the Code or an individual retirement account;
(vi) a block transfer (as defined in section 1.7704-1(e)(2) of the
Treasury Regulations);
(vii) a Transfer pursuant to a right under a redemption or repurchase
agreement (as defined in section 1.7704-1(e)(3) of the Treasury
Regulations) that is exercisable only upon (A) the death, disability or
mental incompetence of the Member whose LLC Interest is the subject of the
Transfer or (B) the retirement or termination of the performance of
services of an individual who actively participated in the management of,
or performed services on a full-time basis for, the Company;
(viii) a Transfer pursuant to a closed end redemption plan (as defined
in section 1.7704-1(e)(4) of the Treasury Regulations); and
(ix) a Transfer or Transfers by one or more Members of LLC Interests
representing in the aggregate 50 percent or more of the total interests in
the capital and profits of the Company in one transaction or a series of
related transactions.
"Prohibited Transaction" shall mean any Transfer of LLC Units which
would (i) cause the Company to be in violation of any Applicable Laws, (ii)
result in the assets of the Company constituting assets of one or more employee
benefit plans subject to ERISA, or constitute a prohibited transaction within
the meaning of section 406 of ERISA or section 4975 of the Code, (iii) cause the
Company to be controlled by or under common control with an "investment company"
for purposes of the Investment Company Act of 1940, as amended, (iv) cause the
Company to violate, breach or default under any then outstanding indebtedness of
the Company or any guarantee by the Company of indebtedness of any Subsidiary of
the Company, including MGI or CERA Inc., or any financing or security document
relating thereto, or require the payment of any such indebtedness prior to its
scheduled maturity or (v) require the Company to register any of its securities
pursuant to the Securities Act or
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Exchange Act, except in connection with a Public Offering approved by the Board
or pursuant to Schedule C hereto.
"Proportionate Share" shall have the meaning provided in Section
13.5(b).
"Public Market" shall mean such time as 30% of the then outstanding LLC
Units have been sold to the public pursuant to an effective registration
statement under the Securities Act or pursuant to Rule 144.
"Public Offering" shall mean a public offering of LLC Units pursuant to
an effective registration statement under the Securities Act.
"Qualifying Number" shall have the meaning provided in Section 13.2(b).
"Qualifying Sale" shall have the meaning provided in Section 13.2(b).
"Registrable Securities" shall mean (a) any LLC Units issued by the
Company pursuant to the Transactions, (b) any LLC Units transferred to CERA
Management Members promptly after the date hereof as described in the tenth
recital to this Agreement, (c) any Contingent LLC Units, (d) any LLC Units
issued upon exercise of any CERA Contingent Option or GS Contingent Option, (e)
LLC Units transferred to any Person upon exercise of any Existing MGI Option,
(f) any LLC Units transferred to any Person upon exercise of any MGI/CERA
Additional Options pursuant to the applicable LLC Unit Subscription Agreement
that provides that such LLC Units shall be Registrable Securities, (g) any
additional LLC Units granted, issued or sold pursuant to any LLC Unit
Subscription Agreement that provides that such LLC Units shall be Registrable
Securities, except for any such LLC Units issued pursuant to an effective
registration statement under the Securities Act on Form S-8, Form S-4, Form S-1
or any successor form to any thereof (unless such LLC Units are held by a
Management LLC Unitholder who is an Affiliate of the Company), (h) any LLC Units
issued pursuant to the terms of, and under the circumstances set forth in,
Section 13.5, and (i) any securities issued or issuable with respect to any LLC
Units referred to in the foregoing clauses (1) upon any conversion or exchange
thereof, (2) by way of a distribution of LLC Units or a split of the LLC Units,
(3) in connection with a combination of LLC Units or a recapitalization, merger,
consolidation or other reorganization of the Company or (4) otherwise, in all
cases subject to the penultimate paragraph of Section 1.3 of Schedule C hereto.
As to any particular Registrable Securities, once issued, such securities shall
cease to be Registrable Securities when (A) a registration statement (other than
a Special Registration pursuant
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to which such securities were transferred to a Management LLC Unitholder who is
an Affiliate of the Company) with respect to the sale of such securities shall
have become effective under the Securities Act and such securities shall have
been disposed of in accordance with such registration statement, (B) such
securities shall have been distributed to the public in reliance upon Rule 144,
(C) subject to the relevant provisions of this Agreement and the LLC Unit
Subscription Agreement pursuant to which such securities shall have been
granted, issued or sold (if any), such securities shall have been otherwise
transferred, new certificates for such securities not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of such securities shall not require registration or
qualification of such securities under the Securities Act or any similar state
law then in force, (D) except for purposes of Sections 13.2 and 13.5, such
securities have been held, or deemed, by virtue of tacking holding periods as
contemplated by Rule 144, to be held for a period of two years by a Person who
is not an Affiliate of the Company, (E) such securities shall have ceased to be
outstanding, (F) except for purposes of Sections 13.2 and 13.5, with respect to
any such securities acquired by a Management LLC Unitholder pursuant to the
exemption from the registration requirements of the Securities Act contained in
Rule 701 (or any successor provision) thereunder, at any time following the date
the Company registers a class of equity securities under section 12 of the
Exchange Act or (G) the Company shall have registered LLC Units under section 12
of the Exchange Act and such securities are held by a Person who is not an
Affiliate of the Company; provided that (x) for purposes of clauses (A) and (G)
above, (1) securities held by a Person who was not an Affiliate of the Company
at the time of the event specified in such clauses but who thereafter becomes an
Affiliate of the Company shall be and remain Registrable Securities for so long
as such Person is an Affiliate of the Company and (2) securities held by a
Person who was an Affiliate of the Company at the time of the event specified in
such clauses shall remain Registrable Securities for only so long as such Person
remains an Affiliate of the Company and (y) with respect to any securities that
were formerly Registrable Securities the Board may, under such circumstances as
it deems appropriate, designate such securities as Registrable Securities for
purposes of this Agreement.
"Registration Expenses" shall mean all expenses incident to the Com-
pany's performance of its obligations under or compliance with Section 1 of
Schedule C hereto, including, but not limited to, all registration and filing
fees, all fees and expenses of complying with securities or blue sky laws, all
fees and expenses associated with listing securities on exchanges or NASDAQ,
all fees and other expenses associated with filings with the NASD (including, if
required, the fees and expenses of any "qualified independent underwriter" and
its counsel), all printing expenses, the fees and disbursements of counsel for
the Company and of its independent public accountants, and the expenses of any
special audits made by such
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accountants required by or incidental to such performance and compliance and the
fees and disbursements of one law firm (but not more than one) retained by the
holders holding a majority (by number of LLC Units) of the Registrable
Securities.
"Regulated Holder" shall mean any limited partner of Fund IV which is
not permitted, under any applicable law, regulation, order, rule or other
requirement of any governmental authority, to own, control or have the power to
vote more than a specified quantity of securities of any kind issued by the
Company.
"Regulated Securities" shall mean, with respect to any Regulated
Holder, the number of Voting LLC Units in excess of the amount such Regulated
Holder is permitted, under any applicable law, regulation, order, rule or other
requirement of any governmental authority to own, control or have the power to
vote.
"Remaining LLC Units" shall have the meaning provided in Section
13.3(b).
"Requisite Percentage of CERA Principals" shall mean, after the Initial
Holding Period, as to two requests under Section 1.1 of Schedule C, the CERA
Principals who, as of the Closing Date, held not less than 66-2/3% of the LLC
Units that all of the CERA Principals who, at the time of determination, hold
LLC Units, held on the Closing Date (including, for the purposes of calculating
the number of LLC Units held by a CERA Principal, any LLC Units held by such
CERA Principal's CERA Trusts).
"Requisite Percentage of LLC Unitholders" shall mean the holder or
holders (other than the CERA Principals and the CERA Principals' CERA Trusts) of
at least (a) as to the initial request under Section 1.1(a)(i) of Schedule C
hereto, 30% (by number of LLC Units) of the Registrable Securities held at the
time outstanding or (b) as to any other request, 10% (by number of LLC Units) of
the Registrable Securities at the time outstanding.
"Restricted Holder" shall have the meaning provided in Section 13.1(a).
"Restricted Holder Sale" shall have the meaning provided in Section
13.5(a).
"Rule 144" shall mean Rule 144 (or any successor provision) under the
Securities Act.
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"Rule 144A" shall mean Rule 144A (or any successor provision) under the
Securities Act.
"Sale Notice" shall have the meaning provided in Section 13.2(a).
"Secondary Market" shall mean a market for LLC Interests (whether
maintained by the Company or any other Person) in which (i) LLC Interests are
regularly quoted by any Person, such as a broker or dealer, making a market in
the interests, (ii) any Person regularly makes available to the public
(including customers or subscribers) bid or offer quotes with respect to LLC
Interests and stands ready to effect buy or sell transactions at the quoted
prices for itself or on behalf of others, (iii) the holder of an LLC Interest
has a readily available, regular, and ongoing opportunity to sell or exchange
the interest through a public means of obtaining or providing information of
offers to buy, sell, or exchange LLC Interests or (iv) prospective buyers and
sellers otherwise have the opportunity to buy, sell, or exchange LLC Interests
in a time frame and with the regularity and continuity that is comparable to
that described in any of the preceding clauses (i), (ii) and (iii).
"Section 13.4 Closing" shall have the meaning provided in Section
13.4(a).
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder. Any reference to a
particular section thereof shall include a reference to the corresponding
section, if any, of any such successor Federal statute, and the rules and
regulations thereunder.
"Special Distribution" shall mean a distribution to Members of (i) the
net proceeds of any sale or other disposition (other than in a Spin-Off), prior
to the earlier of the issuance of the Contingent LLC Units and June 30, 2000, of
(A) all or any portion of the capital stock of MGI held by the Company (whether
by the sale of such stock, merger or otherwise), or more than 50% of the assets
(measured by their fair market value as determined by the Board in good faith)
of MGI if the proceeds thereof are distributed to the Company, or (B) capital
stock of CERA Inc. held by the Company, or more than 50% of the assets (measured
by their fair market value as determined by the Board in good faith) of CERA
Inc. if the proceeds thereof are distributed to the Company, and sold or
otherwise disposed of in any transaction or series of related transactions not
constituting a Sale (as such term is defined in the Merger and Exchange
Agreement) of CERA Inc. or a Public Offering (as such term is defined in the
Merger and Exchange Agreement) or (ii) prior to the earlier of the issuance of
the Contingent LLC Units and June 30, 2000, all or any portion of the
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capital stock of MGI held by the Company or less than all of the capital stock
of CERA Inc. held by the Company.
"Special Registration" shall mean (a) the registration of equity
securities and/or options or other rights in respect thereof to be offered to
directors, members of management, employees, consultants or sales agents,
distributors or similar representatives of the Company or its direct or indirect
Subsidiaries or senior executives of Persons controlled by an Affiliate of the
Company or (b) the registration of equity securities and/or options or other
rights in respect thereof solely on Form S-4 or S-8 or any successor form.
"Specified Affiliate" shall mean with respect to any Person, any other
Person controlling, controlled by or under common control with such first Person
solely by virtue of having the power to direct the affairs of the Person by
reason of ownership, directly or indirectly, of at least 75% of the outstanding
voting securities or other equity interests of such Person, other than any such
Person (other than a wholly owned Subsidiary of such first Person) that was
created or used solely for the purpose of holding LLC Units.
"Specified Laws" shall mean the Securities Act, the Exchange Act, any
applicable foreign securities laws, any state securities or "blue sky laws," the
merger control laws of any foreign jurisdiction in which the Company is then
doing business, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and ERISA.
"Spin-Off" shall mean, with respect to MGI, CERA Inc. or any other
Subsidiary of the Company, as applicable, the distribution by the Company to
Members of all of the capital stock of MGI or CERA Inc., or all of the capital
stock or other voting securities or other equity interests of such Subsidiary,
as the case may be, owned by the Company.
"Subsidiary" shall mean with respect to any Person, any corporation or
other Person, a majority of the outstanding voting stock or other equity
interests of which is owned, directly or indirectly, by that Person.
"Substitute Director" shall have the meaning provided in Section
5.1(b).
"Substitute Member" shall mean a Person who is admitted to the Company
as a Member pursuant to Section 13.7 hereof and who is named as a Member in the
Membership Register.
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"Take-Along Notice" shall have the meaning provided in Section 13.4(a).
"Take-Along Offer" shall have the meaning provided in Section 13.4(a).
"Tax Liability Distribution" shall have the meaning provided in Section
9.2.
"Tax Matters Partner" shall have the meaning provided in Section
10.2(c).
"Taxable Year" shall have the meaning provided in Section 2.7.
"Third Round" shall have the meaning provided in Section 13.3(b).
"Transactions" shall have the meaning provided in the seventh recital
to this Agreement.
"Transfer" (or any variation thereof used herein) shall mean any direct
or indirect sale, assignment, mortgage, transfer, pledge, hypothecation or other
disposition.
"Treasury Regulations" shall mean the Federal income tax regulations,
including any temporary or proposed regulations, promulgated under the Code, as
such Treasury Regulations may be amended from time to time (it being understood
that all references herein to specific sections of the Treasury Regulations
shall be deemed also to refer to any corresponding provisions of succeeding
Treasury Regulations).
"Underwritten Public Offering" shall mean an underwritten Public
Offering (whether by the Company, one or more Members or any combination
thereof), conducted in accordance with the provisions of this Agreement and led
by at least one underwriter of nationally recognized standing.
"Voting LLC Units" shall have the meaning provided in Section 8.1.
"Withdrawing Director" shall have the meaning provided in Section
5.1(b).
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ARTICLE II
CONTINUATION AND TERM
Section 2.1. Continuation. (a) The Members hereby agree to continue the
Company as a limited liability company under and pursuant to the provisions of
the Delaware Act and agree that the rights, duties and liabilities of the
Members shall be as provided in the Delaware Act, except as otherwise provided
herein. Those former stockholders of MGI who have executed and delivered to the
LLC the MGI Holder Information Form, have agreed to be bound by the provisions
of this Agreement and have authorized MCM to execute this Agreement on their
behalf.
(b) (i) upon the consummation of the GS Partnership Interest Exchange
and the CERA Stock Exchange, each of GS LP and each of the CERA Stockholders
listed on Schedule A hereto shall be admitted as members of the Company, and the
Company shall promptly issue to each such Person the number of LLC Units set
forth opposite such Person's name on Schedule A hereto, (ii) at the Effective
Time (as defined in the Merger and Exchange Agreement), Fund IV and the other
former stockholders of MGI listed on Schedule A hereto shall be admitted as
members of the Company, and the Company shall promptly issue to each such Person
the number of LLC Units set forth opposite such Person's name on Schedule A
hereto; provided that any such Person who holds Dissenting Shares (as defined in
the Merger and Exchange Agreement) shall not be admitted as a member of the
Company and shall not be issued LLC Units, except that if such Person withdraws
its demand for an appraisal of shares of MGI stock or otherwise loses its right
of appraisal of shares of MGI stock, in any case pursuant to the General
Corporation Law of the State of Delaware, such Person shall be deemed to have
been admitted as a member of the Company as of the date hereof and the Company
shall promptly issue to such Person the number of LLC Units set forth opposite
such Person's name on Schedule A hereto, (iii) upon the admission of the Persons
described in the foregoing clauses (i) and (ii), MGI and MCM shall withdraw as
members of the Company, and the remaining Members shall continue the business of
the Company without dissolution, and (iv) the day after the consummation of the
Transactions, each CERA Management Member listed on Schedule A hereto who shall
have executed and delivered an LLC Unit Grant Agreement, substantially in the
form attached hereto as Exhibit A, shall be admitted as a member of the Company,
and the Company shall promptly issue to CERA Inc., and CERA Inc. shall promptly
transfer to each such Person, the number of LLC Units specified in the
applicable LLC Unit Grant Agreement.
(c) The name, mailing address, employer identification number or social
security number and the number of LLC Units owned by each Member shall be
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listed on the Membership Register of the Company kept at the Company's principal
office. The Chief Executive Officer, the President or the Secretary shall be
required to update the Membership Register from time to time as necessary to
accurately reflect the information required to be set forth therein, including
with respect to the resignation of any Member or the admission of any Additional
Member or Substitute Member. Any update or other revision to the Membership
Register made in accordance with this Agreement shall not be deemed an amendment
to this Agreement. Any reference in this Agreement to the Membership Register
shall be deemed to be a reference to the Membership Register as revised and in
effect from time to time.
(d) The Chairman, the Vice Chairman, the Chief Executive Officer, the
President or any other Officer authorized by the Board as an authorized person
within the meaning of the Delaware Act may execute, deliver and file documents
required by the Delaware Act to be filed with the Secretary of State of the
State of Delaware.
Section 2.2. Name. The name of the Company heretofore formed and
continued hereby is Global Decisions Group LLC. The business of the Company
shall be conducted under such name or such other names as the Board may from
time to time designate in accordance with the Delaware Act.
Section 2.3. Term of Company. The term of the Company shall be deemed
to have commenced on the date of the initial filing of the Certificate with the
Secretary of State of the State of Delaware. The Company shall continue
perpetually unless and until dissolved as provided in Article XIV.
Section 2.4. Registered Agent and Office. The Company's registered
agent and office in the State of Delaware shall be The Corporation Trust
Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801. The Chairman, the Vice Chairman, the Chief Executive
Officer, the President or any other Officer authorized by the Board may
designate another registered agent and/or registered office from time to time in
accordance with the then applicable provisions of the Delaware Act and any other
applicable laws.
Section 2.5. Principal Place of Business. The principal place of
business of the Company shall be located at c/o McCarthy, Crisanti & Maffei,
Inc., 590 Madison Avenue, New York, NY10022. The location of the Company's
principal place of business may be changed by the Board from time to time in
accordance with the then applicable provisions of the Delaware Act and any other
applicable laws.
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Section 2.6. Qualification in Other Jurisdictions. The Chairman, the
Chief Executive Officer, the President or any other Officer shall cause the
Company to be qualified, formed or registered under assumed or fictitious name
statutes or similar laws in any jurisdiction in which the Company transacts
business and where such qualification, formation or registration shall be
necessary or desirable. The Chief Executive Officer, the President or any other
Officer, as an authorized person within the meaning of the Delaware Act, shall
execute, deliver and file any certificates (and any amendments and/or
restatements thereof) necessary for the Company to qualify to do business in a
jurisdiction in which the Company may wish to conduct business.
Section 2.7. Fiscal Year; Taxable Year. The fiscal year of the Company
for financial accounting purposes (the "Fiscal Year") shall end on June 30. The
taxable year of the Company for federal, state and local income tax purposes
(the "Taxable Year") shall end on December 31.
ARTICLE III
PURPOSE AND POWERS OF THE COMPANY
Section 3.1. Purposes. The purposes of the Company are, and the Company
shall have the power and authority, to acquire, hold, vote, sell or otherwise
dispose of, to receive, allocate and distribute distributions on and other
proceeds of, and to manage, investments in accordance with the terms of this
Agreement, to engage in all acts or activities as the Company deems necessary,
advisable, convenient or incidental to the furtherance and accomplishment of the
foregoing, including without limitation the acts described in Section 3.2, and
to engage in any other lawful act or activity for which limited liability
companies may be formed under the Delaware Act.
Section 3.2. Powers of the Company. The Company shall have the power
and authority to take any and all actions necessary, appropriate, proper,
advisable, incidental or convenient to or for the furtherance of the purpose set
forth in Section 3.1, including, but not limited to, the power and authority:
(i) to have and exercise the powers granted to a limited liability
company by the Delaware Act in any state, territory, district or possession
of the United States, or in any foreign country, that may be necessary,
advisable, convenient or incidental to the accomplishment of the purposes
of the Company;
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(ii) to purchase, take, receive, subscribe for or otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, lend, pledge, or
otherwise dispose of, and otherwise use and deal in and with, shares or
other interests in or obligations of domestic or foreign corporations,
associations, general or limited partnerships (including, without
limitation, the power to be admitted as a partner thereof and to exercise
the rights and perform the duties created thereby), trusts, limited
liability companies (including, without limitation, the power to be
admitted as a member or appointed as a manager thereof and to exercise the
rights and perform the duties created thereof), or individuals or direct or
indirect obligations of the United States or of any government, state,
territory, governmental district or municipality or of any instrumentality
of any of them;
(iii) to enter into transactions contemplated by any financing
agreement (including without limitation, and not withstanding anything else
to the contrary in this Agreement, the Credit Agreement, the Guarantee and
Collateral Agreement, dated February 12, 1998, among the Company, MGI, MCM
and the Agent, the Trademark Security Agreement, dated February 12, 1998,
among the Company, MGI, MCM and the Agent) and related documents entered
into in connection with the Transactions or otherwise, as any such
agreement and related documents may be amended, supplemented, waived or
otherwise modified from time to time ("Loan Documents");
(iv) to own the capital stock of Merger Sub, MGI and CERA Inc., and
exercise rights and perform obligations in connection therewith;
(v) to enter into, and exercise rights and perform obligations in
respect of, or to take or omit to take such other action in connection
with, agreements of any kind, including without limitation, (A) Loan
Documents and any guarantee, surety or endorsement related to Loan
Documents to which the Company may be a party, and any other agreement to
which it is a party on the date hereof, in each case as amended,
supplemented, waived or otherwise modified from time to time, and any
refinancings, refundings, renewals or extensions thereof, (B) contracts and
agreements with officers, directors and employees of the Company or any
Subsidiary of the Company relating to their employment or directorships,
(C) insurance policies and related contracts and agreements, and (D) equity
subscription agreements, equity option agreements,
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registration rights agreements, voting and other equityholder agreements,
engagement letters, underwriting agreements and other agreements in respect
of its equity securities or any offering, issuance or sale thereof,
including but not limited to in respect of the LLC Unit Subscription
Agreements, as may be necessary or desirable to further the purposes of the
Company;
(vi) to offer, issue and sell LLC Units;
(vii) to file registration statements, and comply with applicable
reporting and other obligations, under federal, state or other securities
laws;
(viii) to list the Company's equity securities and comply with
applicable reporting and other obligations in connection therewith;
(ix) to retain transfer agents, private placement agents,
underwriters, counsel, accountants and other advisors and consultants;
(x) to perform obligations under and comply with the Company's
Certificate and this Agreement, or any applicable law, ordinance,
regulation, rule, order, judgment, decree or permit, including, without
limitation, as a result of or in connection with the activities of MGI or
CERA Inc. and their respective Subsidiaries;
(xi) to incur and pay its operating and business expenses and any
taxes for which it may be liable;
(xii) to lend money to, borrow money from (other than to finance any
acquisition of property), act as surety, guarantor or endorser for, provide
collateral for, and transact other business with third parties including
Members and Affiliates of the Company and to invest and reinvest its funds,
to take and hold real and personal property for the payment of funds so
loaned or invested;
(xiii) to establish, have, maintain or close one or more offices
within or without the State of Delaware and in connection therewith to rent
or acquire office space and to engage personnel;
(xiv) to open, maintain and close bank and brokerage accounts, in-
cluding the power to draw checks or other orders for the payment of moneys,
and to invest such funds as are temporarily not otherwise required for
Company purposes;
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(xv) to bring and defend actions and proceedings at law or in
equity or before any governmental, administrative or other regulatory
agency, body or commission, and to pay, collect, compromise, or otherwise
adjust or settle any and all other claims or demands of or against the
Company or to hold such proceeds against the payment of contingent
liabilities;
(xvi) to hire consultants, custodians, attorneys, accountants and
such other agents and employees of the Company as it may deem necessary or
advisable, to authorize each such agent and employee to act for and on
behalf of the Company and to fix the compensation of each such agent and
employee;
(xvii) to make all elections, investigations, evaluations and
decisions, binding the Company thereby, that may, in the sole judgment of
the Directors or the Officers, be necessary or appropriate for the
acquisition, holding or disposition of securities for the Company;
(xviii) to enter into, perform and carry out contracts of any kind,
including, without limitation, contracts with the Directors, the Officers,
any Manager, any Member, any Affiliate thereof, or any agent or Affiliate
of the Company necessary to, in connection with, convenient to, or
incidental to the accomplishment of the purposes of the Company;
(xvix) to indemnify any Person in accordance with the Delaware Act
and to obtain any and all types of insurance;
(xx) to merge with, or consolidate into, another Delaware limited
liability company or other business entity (as defined in section 18-209(a)
of the Delaware Act), including a corporation (pursuant to section 264 of
the Delaware General Corporation Law) in accordance with Section 4.4(f)
hereof;
(xxi) to cease its activities and cancel its Certificate;
(xxii) to enter into and perform its obligations under the Merger and
Exchange Agreement without any further act, vote or approval of any Person,
and all actions heretofore taken by the Company in connection with the
Merger and Exchange Agreement are hereby ratified (including the execution
and delivery of the Merger and Exchange Agreement on behalf of the
Company);
(xxiii) to make, execute, acknowledge and file any and all documents
or instruments, and to carry on any other activities in connection with the
fore-
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going, as may be necessary, convenient or incidental to the accomplishment
of the purpose of the Company; and
(xxiv) other activities incidental or related to the foregoing.
ARTICLE IV
MEMBERS
Section 4.1. Powers of Members. The Members shall have the power to
exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement. Except as otherwise required by law, on all
matters submitted to the Members for a vote, the holders of Non-Voting LLC Units
shall have no right to vote with respect to such LLC Units. The approval or
consent of the Members shall not be required in order to authorize the taking of
any action by the Company unless and only to the extent that (i) this Agreement
shall expressly provide therefor, (ii) such approval or consent shall be
required by non-waivable provisions of the Delaware Act or (iii) the Board shall
determine that obtaining such approval or consent would be appropriate or
desirable. The Members shall have no power to bind the Company.
Section 4.2. Partition. Each Member waives, until termination of the
Company, any and all rights that such Member may have to maintain an action for
partition of the Company's property.
Section 4.3. Resignation. A Member may not resign from the Company
prior to the dissolution and winding up of the Company pursuant to Article XIV,
provided that a Member who Transfers 100% of the LLC Units which such Member
owns to a Transferee in accordance with Section 13.1 shall automatically cease
to be a Member, and provided, further, that such Member shall not be entitled to
receive any distributions from the Company upon or after a sale, assignment,
transfer or other disposition of 100% of the LLC Units that such Member owns.
Section 4.4. Meetings of Members. (a) Annual Meetings. The annual
meeting of the Members of the Company for the election of Directors and for the
transaction of such other business as properly may come before such meeting
shall be held at such place, either within or without the State of Delaware, and
at 10:00 a.m. local time on the third Tuesday in October beginning in October
1998 (or, if such day is not a Business Day, then on the next succeeding
Business Day), or at such other
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date and hour, as may be fixed from time to time by resolution of the Board and
set forth in the notice or waiver of notice of the meeting.
(b) Special Meetings of the Members; Action by the Members. Meetings of
the Members (i) may be called by the Chairman, Vice Chairman or Chief Executive
Officer, or by the Board and (ii) shall be called by the Chairman or the
Secretary for any purpose or purposes upon the written request of a Member or
Members representing not less than 20% of the outstanding LLC Units as described
in Section 4.4(e).
(c) Notice of Meetings; Waiver of Notice. No notice of any meeting of
Members need be given to any Member who submits a signed waiver of notice,
whether before or after the meeting. Neither the business to be transacted at,
nor the purpose of, any regular or special meeting of the Members need be
specified in a written waiver of notice. The attendance of any Member at a
meeting of Members shall constitute a waiver of notice of such meeting, except
when the Member attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the ground that
the meeting is not lawfully called or convened. Notice of any such meeting shall
be given to all Members not less than five (5) Business Days nor more than
thirty (30) days prior to the date of such meeting, and shall state the location
and time of the meeting and the nature of the business of be transacted.
(d) Quorum. Except as otherwise required by law or by the Certificate,
the presence in person or by proxy of the holders of record of a majority of the
LLC Units entitled to vote at a meeting of Members shall constitute a quorum for
the transaction of business at such meeting.
(e) Voting. If the Board has fixed a record date, every holder of
record of Voting LLC Units entitled to vote at a meeting of Members or to
consent in writing in lieu of a meeting of Members shall be entitled to one vote
for each Voting LLC Unit outstanding in his name on the books of the Company at
the close of business on such record date. If no record date has been so fixed,
then every holder of record of Voting LLC Units entitled to vote at a meeting of
Members or to consent in writing in lieu of a meeting of Members shall be
entitled to one vote for each Voting LLC Unit outstanding in his name on the
books of the Company at the close of business on the day next preceding the day
on which notice of the meeting is given or the first such consent in respect of
the applicable action is executed and delivered to the Company, or, if notice is
waived, at the close of business on the day next preceding the day on which the
meeting is held. In the event that the action to be considered by the Members
shall have been determined by the Board to constitute a
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Sale (as defined in the Merger and Exchange Agreement) of the Company, MGI or
CERA Inc., solely for the purposes of determining the number of votes to which
each holder of record of Voting LLC Units shall be entitled in respect of any
action to be taken by the Members to approve such a Sale, such number of
Contingent LLC Units shall be deemed to be outstanding on the applicable record
date or day next preceding the day on which such notice is given or the first
such consent is so executed and delivered, as the case may be, and in such
names, as the Board shall determine would be issuable pursuant to Sections 1.3,
1.4, 1.5 and 1.6 of the Merger and Exchange Agreement based upon the CERA CAGR
(as defined in the Merger and Exchange Agreement) as of the most recent
available date prior to such determination. Except as otherwise required by
Applicable Law, the Certificate, Section 4.4(f) or Section 7.1, the vote of a
majority of the Voting LLC Units represented in person or by proxy at any
meeting at which a quorum is present shall be sufficient for the transaction of
any business at such meeting.
(f) Super-Majority Voting Requirements. Each of the following events
shall require the approval of at least two-thirds of the Members (by number of
LLC Units) then entitled to vote at a meeting of Members, upon the
recommendation of the Board that the Members give such approval:
(i) a merger, consolidation, conversion or reorganization of the
Company, other than a Conversion Transaction;
(ii) the dissolution of the Company pursuant to Section 14.1(a);
and
(iii) the sale or other disposition of all or substantially all of
the assets of the Company or the sale or other disposition of all of the
capital stock of MGI or CERA Inc. owned by the Company, other than in a
Spin-Off of MGI or CERA.
Members shall not be entitled to appraisal rights in respect of their LLC Units,
including in connection with actions approved by the Members in accordance with
and pursuant to this Section 4.4(f) or upon a Conversion Transaction.
(g) Proxies. Each Member may authorize any Person to act for such
Member by proxy on all matters in which a Member is entitled to participate,
including waiving notice of any meeting, or voting or participating at a
meeting. Every proxy must be signed by the Member or such Member's
attorney-in-fact. No proxy shall be valid after the expiration of three years
from the date thereof unless otherwise provided in the proxy. Every proxy shall
be revocable at the pleasure of the Member executing it unless otherwise
provided in such proxy, such revocation shall
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not invalidate or otherwise affect actions taken under such proxy prior to such
revocation.
(h) Organization. Each meeting of Members shall be conducted by the
Chairman or by such other Person as the Board may designate.
(i) Action Without a Meeting. Unless otherwise provided in this
Agreement, any action which may be taken at any meeting of the Members may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by Members having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all Members entitled to vote were
present. Prompt notice of the taking of the action without a meeting by less
than unanimous written consent shall be given to those Members who have not
consented in writing.
Section 4.5. Business Transactions of a Member with the Company. A
Member may lend money to, borrow money from, act as surety or endorser for,
guaranty or assume one or more specific obligations of, provide collateral for,
or transact any other business with the Company, provided that any such
transaction pursuant to any agreement entered into after the date hereof shall
be either (i) on terms not less favorable to the Company than those obtainable
from third parties or (ii) approved by a majority of Directors not affiliated
with, or related to, the interested Member.
Section 4.6. No Cessation of Membership upon Bankruptcy. A Person shall
not cease to be a Member of the Company upon the happening, with respect to such
Person, of any of the events specified in section 18-304 of the Delaware Act.
ARTICLE V
MANAGEMENT
Section 5.1. Board. (a) Generally. The business and affairs of the
Company shall be managed by or under the direction of a committee of the Company
(the "Board") consisting of at least three (3) natural persons ("Directors"),
which persons are either named in the first sentence of Section 5.1(b)(i) or
elected as provided in Section 5.1(b). The Board shall have full, exclusive and
complete discretion to manage and control the business and affairs of the
Company, to make all decisions affecting the business and affairs of the Company
and to take all such actions as it deems necessary or appropriate to accomplish
the purposes of the
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Company as set forth herein, including, without limitation, to exercise all of
the powers of the Company set forth in Section 3.2.
(b) Voting Agreement.
(i) Election and Term of the Company's Board; Number of Directors. Upon
consummation of the Transactions, the Directors will be [list names of initial
Directors], and Mr. Cribiore shall be the Chairman and Mr. Yergin shall be the
Vice Chairman. Except as provided in the preceding sentence, the Directors shall
be elected at each annual meeting of the Members. Each person named in the first
sentence of this Section 5.1(b)(i) or hereafter elected a Director, by such
naming or election, as the case may be, shall be deemed to have been designated
as a Manager for purposes of the Delaware Act. Subject to this Section 5.1(b),
the number of Directors may be modified from time to time by resolution of the
Board. Each Director shall hold office until a successor is elected as provided
herein or until such Director's earlier death, resignation or removal. Except as
otherwise provided in this Section 5.1(b), at each meeting of the Members for
the election of Directors, provided a quorum is present, the Directors shall be
elected by a majority of the votes validly cast in such election. If any
vacancies shall occur in the Board, by reason of death, resignation, removal or
otherwise, the Directors then in office shall continue to act, and such
vacancies may be filled by the Members, subject to the provisions of paragraph
(b)(ii) of this Section 5.1, or, following the settlement date of the first
Underwritten Public Offering after the date hereof, by a majority vote of the
Directors then in office (even if less than a quorum). If the authorized number
of Directors shall be increased, newly created directorships may be elected at a
meeting of the Members, subject to this Section 5.1(b).
Directors need not be Members. Each of the Members agrees that such
Member will, at all times after the date of this Agreement and until the
settlement date of the first Underwritten Public Offering after the date hereof,
vote all LLC Units now or hereafter owned by such Member at any meeting of
Members and in whatever other manner is necessary to ensure that (x) the Board
will at all times consist of at least (A) two nominees who shall be any two of
the CERA Principals nominated by the CERA Principals (the "CERA Nominees"), (B)
one nominee who shall be the chief executive officer of MCM (the "MCM Nominee"),
(C) one nominee who shall be the Chief Executive Officer, if any, of the Company
(the "CEO Nominee"), (D) three nominees who shall be such employees of CD&R,
Brera or other Affiliates of Fund IV as shall be nominated by Fund IV and such
of its Permitted Transferees who hereafter become owners of LLC Units (the "Fund
IV Nominees") and (E) up to six additional nominees, who shall be persons not
affiliated with CD&R, Fund IV, Brera or any of the CERA Principals, as may be
nominated by Fund IV with the written consent of the
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Consenting CERA Principal, whose consent shall not be unreasonably withheld (the
"Independent Nominees" and, together with the CERA Nominees, the MCM Nominee,
the CEO Nominee and the Fund IV Nominees, the "Nominees") and (y) all such
Nominees shall be duly elected. Of the Directors on the date hereof, Messrs.
Yergin and Stanislaw shall be the CERA Nominees, Mr. David D. Nixon shall be the
MCM Nominee, Messrs. Cribiore, Gordon McMahon and Donald J. Gogel shall be the
Fund IV Nominees and Messrs. Peter Derow, Edward Jordan, Martin D. Payson,
Dennis J. McDonnell, Wallace M. Mathai-Davis and Max C. Chapman shall be the
Independent Nominees. Until the settlement date of the first Underwritten Public
Offering after the date hereof, the Chairman shall always be a Fund IV Nominee
and the Vice Chairman shall always be a CERA Nominee.
(ii) Replacement Nominees. If, prior to his or her election to the
Board pursuant to Section 5.1(b)(i), any Nominee shall be unable or unwilling to
serve as a Director, the Member or Members who nominated such Nominee in
accordance with Section 5.1(b)(i) or, following the settlement date of the first
Underwritten Public Offering after the date hereof, the Board shall be entitled
to nominate a replacement who shall then be a Nominee for purposes of this
Section 5.1. If, following election to the Board pursuant to Section 5.1(b)(i),
any Nominee shall resign or be removed or be unable to serve for any reason
prior to the expiration of his or her term as a Director (a "Withdrawing
Director"), the Member or Members who nominated such Withdrawing Director shall
appoint a replacement Nominee (a "Substitute Director") to fill the unexpired
term of the Withdrawing Director whom such Substitute Director is replacing,
provided that any Independent Nominee shall be replaced with the written consent
of the Consenting CERA Principal, whose consent shall not be unreasonably
withheld. If a Member or Members shall fail to so appoint a Substitute Director
in the manner provided above, the seat of such Substitute Director shall remain
vacant. Notwithstanding the preceding sentences of this paragraph (ii), if,
following the settlement date of the first Underwritten Public Offering after
the date hereof, any vacancies shall occur in the Board or if the authorized
number of Directors shall be increased, the Directors then in office shall
continue to act, and such vacancies and newly created directorships may be
filled by a majority of the Directors then in office, although less than a
quorum, and any such vacancy or newly created directorship may also be filled at
any time by vote of the Members.
(iii) Removal. Members shall have the right to remove any Director at
any time for cause upon the affirmative vote of the holders of a majority of
outstanding LLC Units entitled to vote for the election of such Director. The
Member or Members that nominate any Director pursuant to Section 5.1(b) or,
following the settlement date of the first Underwritten Public Offering after
the date hereof, the holders of a majority of the outstanding LLC Units entitled
to vote for the election of
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Directors shall have the right to remove such Director at any time, with or
without cause, by delivery of written notice to the Board or by action taken at
any meeting of Members, and shall, upon any such removal, appoint a Substitute
Director, in accordance with Section 5.1(b)(ii). A majority of the Directors
then in office shall have the right to remove a Director for cause. Upon taking
such action, the Director shall cease to be a Director. In the event that a
Director is removed by the Board for cause, until the settlement date of the
first Underwritten Public Offering after the date hereof, only the Member or
Members who nominated or appointed such removed Director shall be entitled to
appoint his replacement. Until the settlement date of the first Underwritten
Public Offering after the date hereof, no Director shall be removed without
cause without the consent of the Member or Members that nominated or appointed
such Director.
(iv) Special Voting Provisions. (w) Until the earlier of (a) the
settlement date of the first Underwritten Public Offering after the date hereof
and (b) the issuance of the Contingent LLC Units, action to approve any of the
following events shall require the approval of at least 75% of the Directors
then in office:
(A) An acquisition or disposition by the Company of a business or of
assets having a value in excess of $15,000,000 individually or when
aggregated with all other transactions related to the same specific
business or asset;
(B) A capital expenditure by the Company or contractual commitment
therefor involving more than $15,000,000 individually or when aggregated
with all other transactions related to the same specific asset;
(C) The issuance by the Company in a single transaction or a series of
related transactions of LLC Units, or securities convertible into or
exchangeable for LLC Units or options, warrants or other rights to acquire
LLC Units or such securities, for aggregate consideration in excess of
$15,000,000, other than the Contingent LLC Units, the CERA Contingent
Options, the GS Contingent Options, the Existing MGI Options, the MGI/CERA
Additional Options and the LLC Units issuable upon exercise thereof;
(D) The entry by the Company into new lines of business;
(E) The dissolution of the Company pursuant to Section 14.1(a);
(F) A Public Offering by the Company; or
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(G) Incurring any indebtedness for borrowed money, or any guarantee in
respect of the same, in excess of $15,000,000, other than (1) any guarantee
of indebtedness under the Credit Agreement or under any renewal, extension,
refinancing or refunding of any such indebtedness or (2) the renewal,
extension, refinancing or refunding of any other indebtedness, or any
guarantee in respect of the same, that may have previously been approved by
the Board pursuant to this subclause (G);
(x) until the settlement date of the first Underwritten Public Offering after
the date hereof, the appointment or replacement of the Chief Executive Officer
of the Company shall require (i) the approval of the Fund IV Nominees then in
office and (ii) the written consent of the Consenting CERA Principal, whose
consent shall not be unreasonably withheld; (y) until the settlement date of the
first Underwritten Public Offering after the date hereof, the Company shall
cause each of and only the Directors then in office to be elected as directors
of each of MGI and CERA Inc., and each Director shall vote in favor of the
nomination and election of such Directors as the directors of MGI and CERA Inc.
whenever such matters are considered by the Board; and (z) until the earlier of
(a) the settlement date of the first Underwritten Public Offering after the date
hereof and (b) the issuance of the Contingent LLC Units, the Sale (as defined in
the Merger and Exchange Agreement) or Spin-Off of CERA Inc. shall require the
written approval of the Consenting CERA Principal.
Section 5.2. Annual and Regular Meetings. The annual meeting of the
Board for the purpose of electing Officers and for the transaction of such other
business as may come before the meeting shall be held as soon as possible
following adjournment of the annual meeting of the Members at the place of such
annual meeting of the Members. Notice of such annual meeting of the Board need
not be given. The Board from time to time may by resolution provide for the
holding of regular meetings and fix the place (which may be within or without
the State of Delaware) and the date and hour of such meetings. Notice of regular
meetings need not be given, provided that if the Board shall fix or change the
time or place of any regular meeting, notice of such action shall be mailed
promptly, or sent by telegram, radio or cable, to each Director who shall not
have been present at the meeting at which such action was taken, addressed to
him at his usual place of business, or shall be delivered to him personally.
Notice of such action need not be given to any Director who attends the first
regular meeting after such action is taken without protesting the lack of notice
to him, prior to or at the commencement of such meeting, or to any Director who
submits a signed waiver of notice, whether before or after such meeting.
Section 5.3. Special Meetings; Notice. Special meetings of the Board
shall be held whenever called by the Chairman, the Vice Chairman or the Chief
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Executive Officer, or by the Board, at such place (within or without the State
of Delaware), date and hour as may be specified in the respective notices or
waivers of notice of such meetings. Special meetings of the Board may be called
on 24 hours' notice, if notice is given to each Director personally or by
telephone or telegram, or on at least three days' notice, if notice is mailed to
each Director, addressed to him at his usual place of business. Notice of any
special meeting need not be given to any Director who attends such meeting
without protesting the lack of notice to him, prior to or at the commencement of
such meeting, or to any Director who submits a signed waiver of notice, whether
before or after such meeting, and any business may be transacted thereat.
Section 5.4. Quorum and Acts of the Board. At all meetings of the Board
the presence of a majority of the Directors then in office shall constitute a
quorum for the transaction of business and, except as otherwise provided in this
Agreement, the vote of a majority of the Directors present at any meeting at
which there is a quorum shall be the act of the Board. If a quorum shall not be
present at any meeting of the Board, the Directors present thereat may adjourn
the meeting to another time or place, without notice other than announcement at
the meeting, until a quorum shall be present. Any action required or permitted
to be taken at any meeting of the Board or of any committee thereof may be taken
without a meeting, if all of the members of the Board or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board or committee.
Section 5.5. Rules and Regulations; Manner of Acting. To the extent
consistent with applicable law, the Certificate and this Agreement, the Board
may adopt such rules and regulations for the conduct of meetings of the Board
and for the management of the property, affairs and business of the Company as
the Board may deem appropriate.
Section 5.6. Electronic Communications. Members of the Board, or any
committee designated by the Board, may participate in a meeting of the Board, or
any committee, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and such participation in a meeting shall constitute presence in
person at the meeting.
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Section 5.7. Committees of Directors. (a) The Board may, by resolution,
designate one or more committees of the Board, which resolution shall specify
the duties, members and quorum requirements of such committee, each such
committee to consist of one or more of the Directors, provided that the
Consenting CERA Principal shall be entitled to be a member of any committee of
the Board having substantially the same powers as the Board or the Executive
Committee that has a member who is not an Independent Nominee. The Board may
designate one or more Directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member or alternate member of a committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not such members constitute a quorum, may unanimously appoint
another member of the Board to act at the meeting in the place of any such
absent or disqualified member. Any such committee, to the extent provided in the
resolution of the Board, shall have and may exercise all the powers and
authority of the Board in the management of the property, business and affairs
of the Company, but no such committee shall have the power or authority to take
any action hereunder requiring (i) a vote greater than a majority of Directors
present as set forth in Section 5.4 or (ii) the consent or approval of the
Consenting CERA Principal or any one or more of the Fund IV Nominees, or
authorizing any distribution by the Company to Members. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board. Each committee shall keep regular minutes of
its meetings and report the same to the Board when required.
(b) The Board shall have a committee of the Board designated as the
Executive Committee, which shall consist of the Chairman, the Consenting CERA
Principal, the CEO Nominee (if any), the MCM Nominee (if any) and such other
Directors as may be designated by the Board. During the intervals between
meetings of the Board, the Executive Committee shall have and may exercise all
the powers and authority of the Board in the management of the property,
business and affairs of the Company, except that the Executive Committee shall
not have the power or authority to take any action hereunder requiring (i) a
vote greater than a majority of Directors present as set forth in Section 5.4 or
(ii) the consent or approval of the Consenting CERA Principal or any one or more
of the Fund IV Nominees listed in Section 5.1(b)(iv) or authorizing any
distribution by the Company to Members.
Section 5.8. Compensation of Directors. The Board shall have the
authority to fix the compensation of Directors. The Directors may be paid their
expenses, if any, of attendance at such meeting of the Board and may be paid a
fixed sum for attendance at each meeting of the Board or a stated salary as
Director. No such payment shall preclude any Director from serving the Company
in any other
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capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
Section 5.9. Reliance on Accounts and Reports, etc. A Director, or a
member of any Committee designated by the Board, shall, in the performance of
his duties, be fully protected in relying in good faith upon the records of the
Company and upon information, opinions, reports or statements presented to the
Company by any of the Company's Officers or employees, or Committees designated
by the Board, or by any other person as to the matters the member reasonably
believes are within such other Person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Company.
Section 5.10. Resignation. Any Director may resign at any time by
delivering a written notice of resignation to the Chief Executive Officer or the
Secretary. The resignation of any Director shall take effect upon receipt of
such notice or at such later time as shall be specified in the notice; and,
unless otherwise specified in the notice, the acceptance of the resignation by
the Company, the Members or the remaining Directors shall not be necessary to
make such resignation effective.
Section 5.11. Directors as Agents. The Directors, to the extent of
their powers set forth in this Agreement, are agents of the Company for the
purpose of the Company's business, and the actions of the Directors taken in
accordance with such powers shall bind the Company. Except as otherwise provided
in this Agreement, no single Director shall have the power to bind the Company,
and the Board shall have the power to act only collectively in the manner
specified herein.
ARTICLE VI
OFFICERS
Section 6.1. Officers. The Board may select natural persons who are
employees of the Company to be designated as officers of the Company
("Officers"), with such titles as the Board shall determine. Any number of
offices may be held by the same person. The Board may appoint a Chief Executive
Officer, a President, a Chief Financial Officer, a Secretary and a Treasurer and
one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers as
the Board may determine, provided that until the settlement date of the first
Underwritten Public Offering after the date hereof, the Fund IV Nominees shall
appoint, with the written consent of the Consenting CERA Principal (whose
consent shall not be unreasonably withheld), the
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Chief Executive Officer. The Board may appoint such other Officers as it shall
deem necessary or advisable who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board. The salaries (if any) of all Officers shall be fixed
by or in the manner prescribed by the Board. The Officers shall hold office
until their successors are chosen and qualified. Any Officer may resign at any
time upon written notice to the Company. Any Officer may be removed at any time
by the affirmative vote of a majority of the Board. Any vacancy occurring in any
office of the Company shall be filled by the Board. The Officers shall have such
powers and duties in the management of the Company as may be delegated to them
in this Agreement or by the Board, except that in any event each Officer shall
exercise such powers and perform such duties as may be required by law. The
Board may require any Officer or agent to give security for the faithful
performance of his or her duties. Each person elected or appointed as an
Officer, by such election or appointment, as the case may be, shall be deemed to
have been designated as a Manager for purposes of the Delaware Act.
Section 6.2. Chief Executive Officer. The Chief Executive Officer of
the Company shall have general charge of the business, affairs and property of
the Company and general supervision over its other Officers and agents. In
general, the Chief Executive Officer shall perform all duties incident to the
office of the chief executive officer of such a company and shall see that all
orders and resolutions of the Board are carried into effect. The Chief Executive
Officer shall have the authority to sign, in the name and on behalf of the
Company, checks, orders, contracts, leases, notes, drafts and other documents
and instruments in connection with the business of the Company, and together
with the Secretary or an Assistant Secretary, conveyances of real estate and
other documents and instruments. The Chief Executive Officer shall have the
authority to cause the employment or appointment of such employees and agents of
the Company as the conduct of the business of the Company may require, to fix
the compensation of such employees and agents and, subject to the direction of,
and subject to general or specific resolutions approved by the Board, of such
Officers as the Board may determine, and to remove or suspend any employee
(other than a CERA Principal) or agent of the Company elected or appointed by
the Chief Executive Officer or the Board. The Chief Executive Officer shall
perform such other duties and have such other powers as the Board may from time
to time prescribe. The Board from time to time may confer like powers upon any
other Person or Persons.
Section 6.3. The Chief Financial Officer. The Chief Financial Officer
shall have charge and supervision over and be responsible for the moneys,
securities, receipts and disbursements of the Company, and shall keep or cause
to be kept full and accurate records of all receipts of the Company. The Chief
Financial Officer shall render to the Board, whenever requested, a statement of
the financial condition of the
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Company and of all his transactions as Chief Financial Officer, and render a
full financial report at the annual meeting of the Members, if called upon to do
so. The Chief Financial Officer shall be empowered from time to time to require
from all officers or agents of the Company reports or statements giving such
information as he may desire with respect to any and all financial transactions
of the Company. The Chief Financial Officer shall perform, in general, all
duties incident to the office of chief financial officer of a Delaware
corporation and such other duties as may be specified in this Agreement or as
may be assigned to him from time to time by the Board or the Chairman and the
Vice Chairman. The Chief Financial Officer shall report to the Chairman and the
Vice Chairman.
Section 6.4. President. The President, subject to the authority of the
Chief Executive Officer, shall have primary responsibility for, and authority
with respect to, the management of the day-to-day business and affairs of the
Company. The President shall have the authority to sign, in the name and on
behalf of the Company, checks, orders, contracts, leases, notes, drafts and
other documents and instruments. Except as otherwise performed by the Board or
the Chief Executive Officer, the President shall have the authority to cause the
employment or appointment of such employees and agents of the Company as the
conduct of the business of the Company may require, to fix their compensation,
and to remove or suspend any employee or agent elected or appointed by the
President.
Section 6.5. Vice Presidents. In the absence of the Chief Executive
Officer and the President or in the event of the Chief Executive Officer and the
President's inability to act, the Vice President, if any (or in the event there
be more than one Vice President, the Vice Presidents in the order designated by
the Board, or in the absence of any designation, then in the order of their
election) shall perform the duties of the Chief Executive Officer and the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. The Vice Presidents, if any, shall
perform such other duties and have such other powers as the Board or the Chief
Executive Officer or President may from time to time prescribe.
Section 6.6. The Secretary and Assistant Secretary. The Secretary shall
attend all meetings of the Board and all meetings of the Members and record all
the proceedings of the meetings of the Members and of the Board in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. The Secretary shall give, or cause to be given, notice of all
meetings of the Members and special meetings of the Board, and shall perform
such other duties as may be prescribed by the Board or Chief Executive Officer
or President, under whose supervision the Secretary shall be. The Secretary
shall properly maintain and file all books, reports, statements, certificates
and all other documents and records required by
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law, the Certificate or by this Agreement. The Assistant Secretary, or if there
be more than one, the Assistant Secretaries in the order determined by the Board
(or if there be no such determination, then in order of their election) shall,
in the absence of the Secretary or in the event of the Secretary's inability to
act, perform the duties and exercise the powers of the Secretary and shall
perform such other duties and have such other powers as the Board, the Chief
Executive Officer or the President may from time to time prescribe.
Section 6.7. The Treasurer and Assistant Treasurer. The Treasurer shall
cause the moneys and other valuable effects of the Company to be deposited in
the name and to the credit of the Company in such banks or trust companies or
with such bankers or other depositaries of the Company. The Treasurer shall
cause the moneys of the Company to be disbursed by checks or drafts upon the
authorized depositaries of the Company and cause to be taken and preserved
proper vouchers for all moneys disbursed. The Treasurer may sign (unless an
Assistant Treasurer or the Secretary or an Assistant Secretary shall have
signed) certificates representing LLC Units the issuance of which shall have
been authorized by the Board. The Treasurer shall perform, in general, all
duties incident to the office of treasurer of a Delaware corporation and such
other duties as may be specified in this Agreement or as may be assigned to him
from time to time by the Board or the Chief Financial Officer, to whom he shall
report. The Assistant Treasurer, or if there shall be more than one, the
Assistant Treasurers in the order determined by the Board (or if there be no
such determination, then in the order of their election), shall, in the absence
of the Treasurer or in the event of the Treasurer's inability to act, perform
the duties and exercise the powers of the Treasurer and shall perform such other
duties and have such other powers as the Board or the Chief Financial Officer or
the Chairman and the Vice Chairman may from time to time prescribe.
Section 6.8. Execution of Contracts. In addition to the authority
afforded to the Chief Executive Officer and President pursuant to Sections 6.3
and 6.5, respectively, contracts, documents or instruments in writing that
require the signature of the Company and that have been authorized under this
Agreement or by the Board may be signed by any Officer authorized to sign
pursuant to a resolution of the Board. The term "contracts, documents or
instruments in writing" as used in this Agreement shall include deeds, pledges,
mortgages, hypothecations, charges, conveyances, leases, licenses, transfers and
assignments of property, real or personal, immoveable or moveable, agreements,
releases, receipts and discharges for the payment of money or other obligations,
conveyances, transfers and assignments of shares, warrants, bonds, notes,
debentures or other securities and any instrument in writing.
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Section 6.9. Officers as Agents. The Officers, to the extent of their
powers set forth in this Agreement or in a resolution of the Board, are agents
of the Company for the purpose of the Company's business, and the actions of the
Officers taken in accordance with such powers shall bind the Company.
Section 6.10. Reliance by Third Parties. Any Person dealing with the
Company or any Officer may rely upon a certificate signed by the Chief Executive
Officer, the President, any Vice President, the Secretary or any Assistant
Secretary as to:
(a) the identity of the Chief Executive Officer, the President or any
Member or other Officer;
(b) the existence or non-existence of any fact or facts which
constitute a condition precedent to acts by the Chief Executive Officer,
the President or in any other manner germane to the affairs of the Company;
(c) the Persons who are authorized to execute and deliver any
instrument or document of or on behalf of the Company; or
(d) any act or failure to act by the Company or as to any other matter
whatsoever involving the Company or any Member.
ARTICLE VII
AMENDMENTS
Section 7.1. Amendments. This Agreement may not be modified or amended
except by a written agreement signed by the Company and a majority of the
Members (by number of Voting LLC Units); provided that (i) any amendment or
modification of any provision hereof requiring, or providing for, (x) the
affirmative vote of a greater percentage than a majority of the Directors then
in office, or (y) the consent or approval of the Consenting CERA Principal or
any one or more Fund IV Nominees, shall also require an affirmative vote of such
greater percentage of such Directors or the consent or approval of the
applicable person or persons specified in subclause (y) above, as the case may
be, (ii) any amendment or modification of any provision hereof requiring, or
providing for, the affirmative vote of a specified percentage or proportion of
the Members or holders of LLC Units shall require the affirmative vote of such
percentage or proportion of the Members or such holders, as the case may be,
(iii) any amendment or modification of any provision hereof
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providing for, or resulting in, the direct reduction or elimination of any
right, preference or benefit granted hereunder to any particular Person or group
of specified Persons (including, without limitation, any right to nominate or
appoint, or consent to or approve any nomination or appointment of, any
Director, to grant or withhold consent or approval with respect to any matter,
to require registration of LLC Units held by such Person, or to receive
distributions of cash or other property with respect to the LLC Units held by
such Person) shall require the consent of such Person or group of specified
Persons, (iv) any amendment or modification of the definition of Requisite
Percentage of LLC Unitholders shall require the affirmative vote of two-thirds
of the Members (by number of Voting LLC Units), and (v) any modification or
amendment of any other provision of this Agreement (A) to satisfy any
requirements, conditions, guidelines or opinions contained in any opinion,
directive, order, ruling or regulation of the Commission, the Internal Revenue
Service or any other United States federal or state agency, or in any United
States federal or state statute, compliance with which the Board deems in good
faith to be in the best interests of the Company and (B) to cure any ambiguity
or mistake or correct or supplement any provision of this Agreement that may be
incomplete or inconsistent with any other provision contained herein, may be
signed by the Company only, without any approval of the Members being required,
if such modification or amendment shall have been authorized by the Board.
Anything in this Agreement to the contrary notwithstanding, any modification or
amendment of this Agreement by a written agreement signed by, or binding upon, a
Member shall be valid and binding upon any and all Persons who may, at any time,
have or claim any rights under or pursuant to this Agreement in respect of the
LLC Units originally acquired by such Member.
ARTICLE VIII
CAPITAL CONTRIBUTIONS AND INTERESTS
Section 8.1. Capital Units. The limited liability company interests of
the Company shall be represented by two classes of units of capital of the
Company, which shall consist of voting limited liability company interests
("Voting LLC Units") and non-voting limited liability company interests
("Non-Voting LLC Units" and, together with Voting LLC Units, the "LLC Units").
The Company shall have authority to issue (a) LLC Units to the Members (other
than the CERA Management Members) listed on Schedule A hereto, in the amounts
set forth thereon, and to CERA Inc. for transfer to the CERA Management Members,
in accordance with Section 2.1(b), (b) the Contingent LLC Units, (c) the LLC
Units issuable upon the exercise of CERA Contingent Options and GS Contingent
Options, (d) the LLC Units to be transferred upon the exercise of Existing MGI
Options and MGI/CERA Additional
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Options and (e) such additional LLC Units as may be authorized from time to time
by the Board.
Section 8.2. Capital Contributions of Property. On the Closing Date,
each Member listed on Schedule A hereto other than the CERA Management Members
shall be deemed to have contributed to the capital of the Company property
having the value set forth opposite such Member's name as such Member's capital
contribution on Schedule A hereto. Any contributions of property after the
Closing Date (including contributions in exchange for the issuance of LLC Units
by the Company) shall have the value determined by the Board.
Section 8.3. Additional Capital Contributions. No Member shall be
required to make any additional capital contribution to the Company in respect
of the LLC Units then owned by such Member. However, a Member may make such
additional capital contributions to the Company, but only with the written
consent of the Board. The provisions of this Section 8.3 are intended solely to
benefit the Members and, to the fullest extent permitted by applicable law,
shall not be construed as conferring any benefit upon any creditor of the
Company (and no such creditor shall be a third party beneficiary of this
Agreement), and no Member shall have any duty or obligation to any creditor of
the Company to make any additional capital contributions or to cause the Board
to consent to the making of additional capital contributions. Members shall be
deemed to have contributed such additional capital upon issuance of additional
LLC Units equal to the cash purchase price for such LLC Units or, if no cash is
paid or there is non-cash consideration, in the amount of the fair market value
of such non-cash consideration as determined by the Board in good faith at or
prior to issuance of such LLC Units.
Section 8.4. Member's Interest. A Member's LLC Units shall for all
purposes be personal property. A Member has no interest in specific Company
property.
Section 8.5. Certificates of LLC Units. The LLC Units shall be
represented by certificates, provided that the Board may provide by resolution
or resolutions that some or all of any or all classes or groups of the LLC Units
shall be uncertificated LLC Units. Any such resolution shall not apply to LLC
Units represented by a certificate until such certificate is surrendered to the
Company. Notwithstanding the adoption of such a resolution by the Board, upon
request a holder of uncertificated LLC Units shall be entitled to have a
certificate signed by or in the name of the Company, by the Chief Executive
Officer or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, representing the number of LLC Units held
by such holder. Such certificate shall be in such form
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as the Board may determine, to the extent consistent with applicable law, the
Certificate and this Agreement.
Section 8.6. Issuance of Non-Voting LLC Units. The Company shall not
issue or sell any Non-Voting LLC Units except in connection with an exchange of
Voting LLC Units as provided in Section 8.7.
Section 8.7. Conversion and Exchange. (a) Special Exchange of Voting
LLC Units for Non-Voting LLC Units. Voting LLC Units held by Fund IV may be
exchanged for the same number of Non-Voting LLC Units for the sole purpose of a
distribution by Fund IV to one or more of its limited partners which is a
Regulated Holder, provided that the number of Voting LLC Units so exchanged does
not exceed the number of Regulated Securities required for any such Regulated
Holder. The subsequent transfer of any Non-Voting LLC Units by any such
Regulated Holder shall be subject to the provisions of Section 8.7(b)(ii), and
such Regulated Holder shall be permitted to convert Non-Voting LLC Units into
Voting LLC Units to the extent set forth in Section 8.7(b)(i).
(b) Conversion of Non-Voting LLC Units into Voting LLC Units. (i)
Optional Conversion of Non-Voting LLC Units. Each record holder of Non-Voting
LLC Units shall be entitled to convert any or all of such holder's Non-Voting
LLC Units into the same number of Voting LLC Units, provided that no holder of
Non-Voting LLC Units shall be entitled to convert any Non-Voting LLC Units to
the extent that, as a result of such conversion, such holder or the Affiliates
thereof would directly or indirectly own, control or have power to vote a
greater quantity of securities of any kind issued by the Company than such
holder and the Affiliates thereof permitted to own, control or have power to
vote under any law, regulation, order, rule or other requirement of any
governmental authority at any time applicable to such holder and the Affiliates
thereof.
(ii) Automatic Conversion of Non-Voting LLC Units. Upon the sale or
transfer of any Non-Voting LLC Units by the holder thereof to any Person who is
not an Affiliate of such holder (but including, without limitation, any sale or
transfer to an underwriter in connection with a Public Offering of Voting LLC
Units regardless of whether such underwriter is an Affiliate of such holder),
such Non-Voting LLC Units shall automatically be converted without further
action (an "Automatic Conversion") into an equal number of Voting LLC Units,
provided that a distribution of Non-Voting LLC Units by Fund IV to a Regulated
Holder shall not result in an Automatic Conversion.
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Section 8.8. Certain Conversion and Exchange Procedures. (a) Each
conversion of Non-Voting LLC Units into Voting LLC Units (other than an
Automatic Conversion contemplated by Section 8.7(b)(ii)) and each exchange of
Voting LLC Units for Non-Voting LLC Units will be effected by the surrender of
the certificate or certificates representing the LLC Units to be converted or
exchanged, as the case may be, at the principal office of the Company or the
transfer agent designated by the Company, if any, at any time during normal
business hours, together with a written notice by the holder of such LLC Units
stating either (i) the number of Non-Voting LLC Units that such holder desires
to convert into Voting LLC Units (and such statement will obligate the Company
to issue such Voting LLC Units), or (ii) the number of Voting LLC Units that
such holder desires to exchange for Non-Voting LLC Units and that such exchange
is required in order for such holder to make a distribution of LLC Units to a
proposed distributee that is a Regulated Holder (and such statement will
obligate the Company to issue such Non-Voting LLC Units). Such conversion or
exchange will be deemed to have been effected as of the close of business on the
date on which such certificate or certificates have been surrendered and such
notice has been received, and at such time the rights of any such holder with
respect to the converted Non-Voting LLC Units or exchanged Voting LLC Units, as
the case may be, will cease and the person or persons in whose name or names the
certificate or certificates for Voting LLC Units or Non-Voting LLC Units, as the
case may be, are to be issued upon such conversion or exchange will be deemed to
have become the holder or holders of record of the Voting LLC Units or
Non-Voting LLC Units, as the case may be, represented thereby.
(b) Promptly after such surrender and the receipt of the written notice
referred to in Section 8.8(a), the Company will issue and deliver in accordance
with the surrendering holder's instructions the certificate or certificates for
the Voting LLC Units or Non-Voting LLC Units, as the case may be, issuable upon
such conversion or exchange and a certificate representing any Voting LLC Units
or Non-Voting LLC Units, as the case may be, which was represented by the
certificate or certificates delivered to the Company in connection with such
conversion or exchange but which was not converted or exchanged. The Company
shall be entitled to rely upon any written notice delivered pursuant to Section
8.8(a) and such notice shall, in the absence of manifest error, be binding and
conclusive upon the Company.
(c) From and after an Automatic Conversion pursuant to Section
8.7(b)(ii), (i) each certificate formerly representing Non-Voting LLC Units
which NonVoting LLC Units were held by the holder thereof or any Affiliate
thereof and which were converted pursuant to such Automatic Conversion shall
thereafter be deemed to represent (A) only the like number of Voting LLC Units
into which such Non-Voting LLC Units have been converted pursuant to such
Automatic Conversion (and no
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Person shall thereafter have any rights in respect of such Non-Voting LLC
Units), plus (B) if all the Non-Voting LLC Units represented by such certificate
were not converted pursuant to such Automatic Conversion, such number of
Non-Voting LLC Units which were not so converted and (ii) upon any surrender for
transfer of any such certificate accompanied by a written notice certifying that
an Automatic Conversion has occurred and specifying the number of LLC Units so
converted, the Company will issue and deliver (A) a certificate or certificates
representing the Voting LLC Units into which such Non-Voting LLC Units have been
converted pursuant to such Automatic Conversion and (B) if all the Non-Voting
LLC Units represented by such certificate or certificates were not converted
pursuant to such Automatic Conversion, a certificate or certificates
representing such number of Non-Voting LLC Units which were not so converted.
The Company shall be entitled to rely on any written notice delivered to the
effect that an Automatic Conversion has occurred and such notice shall, in the
absence of manifest error, be binding and conclusive upon the Company.
Section 8.9. Signatures; Facsimile. Any or all of such signatures on
the certificate representing LLC Units may be a facsimile, engraved or printed,
to the extent permitted by law. In case any Officer, transfer or exchange agent
or registrar who has signed, or whose facsimile signature has been placed upon,
such a certificate shall have ceased to be such officer, transfer or exchange
agent or registrar before such certificate is issued, it may be issued by the
Company with the same effect as if he were such Officer, transfer agent or
registrar at the date of issue.
Section 8.10. Lost, Stolen or Destroyed Certificates. The Board may
direct that a new certificate representing LLC Units be issued in place of any
certificate theretofore issued by the Company alleged to have been lost, stolen
or destroyed, upon delivery to the Board of an affidavit of the owner or owners
of such certificate, setting forth such allegation. The Board may require the
owner of such lost, stolen or destroyed certificate, or his legal
representative, to give the Company a bond sufficient to indemnify it against
any claim that may be made against it on account of the alleged loss, theft or
destruction of any such certificate or the issuance of any such new certificate.
Section 8.11. Registration and Transfer of LLC Units. Upon surrender to
the Company or the transfer agent of the Company, if any, of a certificate for
LLC Units, duly endorsed or accompanied by appropriate evidence of succession,
assignment or authority to transfer, in compliance with the provisions hereof,
the Company shall issue a new certificate representing LLC Units to the person
entitled thereto, cancel the old certificate and record the transaction upon its
books. Subject to the provisions of the Certificate and this Agreement, the
Board may prescribe such
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additional rules and regulations as it may deem appropriate relating to the
issue, transfer and registration of LLC Units.
Section 8.12. Transfer Agent, Exchange Agent and Registrar. The Board
may appoint one or more transfer agents, one or more exchange agents and one or
more registrars, and may require all certificates representing LLC Units to bear
the signature of any such transfer agents, exchange agents or registrars.
ARTICLE IX
ALLOCATIONS; DISTRIBUTIONS
Section 9.1. Allocations. (a) Except as provided in Section 9.1(b), the
income, gains, losses, credits and deductions of the Company for each Allocation
Period shall be determined as of the end of such Allocation Period and shall be
allocated for federal, state and local income tax purposes, to the extent
permitted under the Code and the Treasury Regulations, among the Members in
accordance with the respective LLC Units owned by the Members (as set forth on
the Membership Register) during such Allocation Period, or, in the case of any
such income, gains, losses, credits and deductions arising out of any sale or
other disposition described in clause (i) of the definition of Special
Distribution, in accordance with such LLC Units and the number of Contingent LLC
Units treated as owned by the Members pursuant to the second sentence of Section
9.2. Allocations of income, gains, losses and expenses of the Company for all
other purposes shall be made consistently with the allocations made pursuant to
the immediately preceding sentence.
(b) In accordance with section 704(c) of the Code and the Treasury
Regulations thereunder, any income, gain, loss, credit and deduction with
respect to any asset contributed to the capital of the Company by any Member
shall, solely for income tax purposes, be allocated among the Members so as to
take account of any variation between the adjusted basis of such asset to the
Company for income tax purposes and its initial Book Value (determined in
accordance with the definition of Book Value set forth in Article I). The method
of allocating such income, gain, loss, credit and deduction shall be such method
set forth in section 1.704-3(b) of the Treasury Regulations. In the event the
Book Value of any asset of the Company is subsequently adjusted in accordance
with the last sentence of such definition of Book Value, subsequent allocations
of any income, gain, loss, credit and deduction with respect to such asset shall
be determined using the principles specified in section 1.704-1(b)(2)(iv)(g) of
the Treasury Regulations and shall take account of any variation between the
adjusted basis of the asset to the Company for income tax
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purposes and its Book Value (excluding any portion of such variation subject to
the first sentence of this Section 9.1(b)) in the manner required under section
1.704-1(b)(4)(i) of the Treasury Regulations, using the method set forth in
section 1.704-3(b) of the Treasury Regulations.
Section 9.2. Distributions. Any distribution by the Company, whether in
kind or in cash, other than a Special Distribution, shall be made in accordance
with the respective LLC Units owned by the Members (as set forth on the
Membership Register) at the time of such distribution (except that cash payments
may be made upon the occurrence of a Spin-Off in lieu of distributing fractional
interests in the Subsidiary that is the subject of such Spin-Off). Any Special
Distribution by the Company, whether in kind or in cash, shall be made in
accordance with the respective LLC Units owned by the Members (as set forth on
the Membership Register) (i) at the time of the applicable sale or other
disposition in the case of a sale or other disposition described in clause (i)
of the definition of Special Distribution, and (ii) at the time of the
applicable distribution in the case of a distribution described in clause (ii)
of the definition of Special Distribution (the applicable time described in
clause (i) or (ii) above, the "Measurement Time") (except that cash payments may
be made upon the occurrence of a distribution described in clause (ii) of the
definition of Special Distribution in lieu of distributing fractional interests
in MGI or CERA Inc., as applicable); provided that each Member who, at the
Measurement Time, had a right to receive, under certain circumstances,
Contingent LLC Units pursuant to Section 1.3, 1.4 or 1.5 of the Merger and
Exchange Agreement, shall be treated, solely for the purposes of the applicable
Special Distribution, as if such Member owned the number of Contingent LLC Units
that would have been issuable to such Member, based on the CERA CAGR (as such
term is defined in the Merger and Exchange Agreement) as of the Measurement Time
(as determined in good faith by the Board), if the closing of a Non-qualifying
Sale (as defined in the Merger and Exchange Agreement) had occurred at the
Measurement Time. The Board shall determine in good faith whether a distribution
is a Special Distribution. The Board shall, in its sole discretion, determine
the time and the amount of any distribution, provided that, for each Taxable
Year, the Company shall make a cash distribution to the Members to the extent of
Available Assets in amounts intended to enable the Members (or any Person whose
tax liability is determined by reference to the income of a Member) to discharge
their United States federal, state and local income tax liabilities arising from
the allocations made pursuant to Section 9.1 (the "Tax Liability Distribution"),
except for any such allocations arising out of any variation between the
adjusted tax basis of any asset and its Book Value, and except to the extent
that cash distributions shall have theretofore been made during such Taxable
Year. The amount of any such Tax Liability Distribution shall be determined by
the Board in its sole discretion, taking into account (a) the greater of (i) the
maximum combined tax rate for United States federal, New
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York State and New York City income tax purposes, (ii) the maximum combined tax
rate for United States federal and Massachusetts income tax purposes and (iii)
the maximum combined tax rate for United States federal income tax purposes and
for purposes of any income tax imposed by the jurisdiction in which the
principal office of the Company is located, in each case applicable to
individuals or corporations (whichever is higher) on ordinary income and net
short-term capital gain or on net long-term capital gain, as applicable, and
taking into account the deductibility of state and local income taxes for United
States federal income tax purposes and the deductibility of local income taxes
for state income tax purposes (and the assumptions described in this clause (a)
shall be applied equally to each Member regardless of such Member's place of
residence or tax status), and (b) the amounts of ordinary income, net short-term
capital gain and net long-term capital gain so allocated to the Members, and
otherwise based on such reasonable assumptions as the Board determines in good
faith to be appropriate.
Section 9.3. Withholding. The Company shall withhold and pay over, or
otherwise pay, any withholding or other taxes payable by the Company with
respect to such Member or as a result of such Member's participation in the
Company pursuant to any applicable tax law. If and to the extent that the
Company shall be required to with hold or pay any such taxes, such Member shall
be deemed for all purposes of this Agreement to have received a payment from the
Company as of the time such with holding or tax is required to be paid, which
payment shall be deemed to be a distribution to the extent that such Member is
then entitled to receive a distribution and shall reduce the amount of
distributions otherwise to be made to such Member pursuant to Section 9.2. To
the extent that the aggregate of such payments to a Member for any period
exceeds the distributions to which such Member is entitled for such period, the
amount of such excess shall be considered a loan from the Company to such Member
with interest at the Prime Rate (or the Applicable Federal Rate if the Prime
Rate is less than the Applicable Federal Rate) until discharged by such Member
by repayment, which may be made out of distributions to which such Member would
otherwise be subsequently entitled. The withholdings referred to in this Section
9.3 shall be made at the maximum applicable statutory rate under the applicable
tax law unless the Company shall have received an opinion of counsel or other
evidence, satisfactory to the Company, to the effect that a lower rate is
applicable, or that no withholding is applicable.
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Section 9.4. Restricted Distributions. Notwithstanding any provision to
the contrary contained in this Agreement, the Company shall not make a
distribution to any Member on account of such Member's interest in the Company
if such distribution would violate section 18-607 of the Delaware Act or other
applicable law.
ARTICLE X
BOOKS AND RECORDS; TAX MATTERS
Section 10.1. Books, Records and Financial Statements. (a) At all times
during the continuance of the Company, the Company shall maintain, at its
principal place of business, separate books of account for the Company that
shall show a true and accurate record of all costs and expenses incurred, all
charges made, all credits made and received and all income derived in connection
with the operation of the Company business in accordance with generally accepted
accounting principles consistently applied, and, to the extent inconsistent
therewith, in accordance with this Agreement. Such books of account, together
with an executed copy of this Agreement and of the Certificate, shall at all
times be maintained at the principal place of business of the Company, and such
books of account and such other materials as may be required to be provided to
any Member pursuant to section 18-305(a) of the Delaware Act shall be open to
inspection and examination at reasonable times during business hours by each
Member and the duly authorized representatives thereof upon reasonable written
notice for any purpose reasonably related to such Member's interest in the
Company, provided that the Directors shall have the right to withhold any such
information pursuant to section 18- 305(c) of the Delaware Act and otherwise
establish such lawful conditions for disclosure of information to the Members as
the Board may deem necessary or appropriate.
(b) The Treasurer shall prepare and maintain, or cause to be prepared
and maintained, the books of account of the Company.
(c) The Secretary shall cause to be maintained the Membership Register.
Section 10.2. Filings of Returns and Other Writings; Tax Matters
Partner. (a) The Treasurer shall cause the preparation and timely filing of all
Company tax returns and shall, on behalf of the Company, timely file all other
writings required by any governmental authority having jurisdiction to require
such filing. The Company shall use its reasonable best efforts to send, no later
than 60 days after the end of each Taxable Year, to each Person that was a
Member at any
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time during such Taxable Year copies of (i) United States Internal Revenue
Service Form 1065, "U.S. Partnership Return of Income," or any successor form,
required to be filed by the Company, together with all schedules and exhibits to
such return (including Schedule K-1, "Partner's Share of Income, Credits,
Deductions, Etc.," or any successor schedule or form, for such Person), together
with such additional information (including information with respect to
unrelated business taxable income, if any, within the meaning of section 512 of
the Code, of the Company) as may be necessary for such Person (or any other
Person whose tax liability is determined by reference to the income of such
Person that was a Member and who is identified in writing by such Person that
was a Member to the Company) to file such Person's United States federal income
tax returns and (ii) such similar returns as are required to be filed by the
Company for United States state and local income tax purposes.
(b) Each Member shall provide such information to the Company as may be
reasonably necessary for purposes of the Company's preparing any required tax
return or information return.
(c) The Board shall appoint a Member who is a Manager as the tax
matters partner (the "Tax Matters Partner") for the Company, who shall meet the
requirements set forth in section 301.6231(a)(7)-2 of the Treasury Regulations
and who shall serve as the Tax Matters Partner until such time as such Member
shall notify the Board that he, she or it is resigning as the Tax Matters
Partner or the Board shall appoint another such Member as the Tax Matters
Partner in accordance with this Section 10.2(c). Each Member hereby consents to
such designation and agrees that upon the request of the Tax Matters Partner,
such Member will execute, certify, acknowledge, deliver, swear to, file and
record at the appropriate public offices such documents as may be necessary or
appropriate to evidence such consent.
(d) Promptly following the written request of the Tax Matters Partner,
the Company shall, to the fullest extent permitted by law, reimburse and
indemnify the Tax Matters Partner for all reasonable expenses, including
reasonable legal and accounting fees, claims, liabilities, losses and damages
incurred by the Tax Matters Partner in connection with any administrative or
judicial proceeding with respect to the tax liability of the Company or the
Members, except to the extent arising from the bad faith, gross negligence,
willful violation of law, fraud or breach of this Agreement by such Tax Matters
Partner.
(e) The provisions of this Section 10.2 shall survive the termination
of the Company or the termination of any Member's interest in the Company and
shall remain binding on the Members for as long a period of time as is necessary
to resolve
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with the Internal Revenue Service any and all matters regarding the federal
income taxation of the Company or the Members.
Section 10.3. Accounting Method. For both financial and tax reporting
purposes, the books and records of the Company shall be kept on the accrual
method of accounting applied in a consistent manner and shall reflect all
Company transactions.
Section 10.4. Audits. At any time at the Board's sole discretion, but
at least annually, the financial statements of the Company may be audited by the
independent certified public accountants, with such audit to be accompanied by a
report of such accountants containing their opinion. The cost of such audits
will be an expense of the Company. A copy of any such audited financial
statements and accountant's report will be made available for inspection by the
Members.
Section 10.5. Other Tax Matters. (a) The Company shall not elect to be
treated as an association taxable as a corporation for United States federal,
state or local income tax purposes under Treasury Regulations section 301.7701-3
or under any corresponding provision of state or local law.
(b) The Company shall use its best efforts to structure its investments
and activities so as to avoid the incurrence of any income which is in the hands
of any Member (or any other Person whose tax liability is determined by
reference to the income of a Member) "unrelated business taxable income" (as
such term is defined in section 512 of the Code). The Company will generally not
invest in partnership interests in partnerships or in interests in other
entities treated as partnerships for federal income tax purposes if such
investment would cause any non-United States Person that is a Member (or any
other non-United States Person whose U.S. federal income tax liability is
determined by reference to the income of a Member) to be deemed to be engaged in
a trade or business within the United States pursuant to section 875 of the Code
or any Member (or any other Person whose U.S. federal income tax liability is
determined by reference to the income of a Member) to incur unrelated business
taxable income pursuant to section 512(c) of the Code.
Section 10.6. Section 754 Election. The Company shall elect, pursuant
to section 754 of the Code, to adjust the basis of the property of the Company
as permitted and provided in sections 734 and 743 of the Code.
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ARTICLE XI
LIABILITY, EXCULPATION AND INDEMNIFICATION
Section 11.1. Liability. Except as otherwise provided by the Delaware
Act, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Covered Person shall be obligated personally
for any such debt, obligation or liability of the Company solely by reason of
being a Covered Person.
Section 11.2. Exculpation. (a) No Covered Person shall be liable to the
Company or any other Covered Person for any loss, damage or claim incurred by
reason of any act or omission performed or omitted by such Covered Person in the
good faith belief that such action was in, or was not opposed to, the best
interests of the Company and in a manner believed to be within the scope of
authority conferred on such Covered Person by or pursuant to this Agreement,
except that a Covered Person shall be liable for any such loss, damage or claim
incurred by reason of such Covered Person's gross negligence or willful
misconduct.
(b) A Covered Person shall be fully protected in relying in good faith
upon the records of the Company and upon such information, opinions, reports or
statements presented to the Company by any Person as to matters the Covered
Person believes are within such other Person's professional or expert competence
and who has been selected with reasonable care by or on behalf of the Company,
including information, opinions, reports or statements as to the value and
amount of the assets, liabilities, profits or losses or any other facts
pertinent to the existence and amount of assets from which distributions to
Members might properly be paid.
Section 11.3. Fiduciary Duty. Subject to the provisions of Section 11.2
and Section 11.6, each Director, Officer and Member of the Company shall be
subject to the fiduciary duties of care and loyalty to the full extent that such
duties would be imposed on, or applicable to, a director, an officer or a
stockholder, respectively, of a corporation organized and existing pursuant to
the General Corporation Law of the State of Delaware (including legislative
history and judicial interpretations and applications thereof); provided that no
Covered Person acting under this Agreement shall be liable to the Company or,
with respect to any matter relating to the Company or its business, to any other
Covered Person for such Person's good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict or
modify the duties and liabilities of a Covered Person otherwise existing at law
or in equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Covered Person.
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Section 11.4. Indemnification. (a) Nature of Indemnity. The Company
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was or has agreed to become a Director, Officer, employee or agent
of the Company, or is or was serving or has agreed to serve at the request of
the Company as a director, officer, employee or agent, of another company,
partnership, joint venture, trust or other enterprise, or by reason of any
action alleged to have been taken or omitted in such capacity, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with such
action, suit or proceeding and any appeal therefrom, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal action or proceeding
had no reasonable cause to believe his conduct was unlawful; except that in the
case of an action or suit by or in the right of the Company to procure a
judgment in its favor (1) such indemnification shall be limited to expenses
(including attorneys' fees) actually and reasonably incurred by such person in
the defense or settlement of such action or suit, and (2) no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the Company unless and only to the
extent that the Delaware Court of Chancery or the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Delaware
Court of Chancery or such other court shall deem proper; provided that any
indemnity under this Section 11.4 shall be provided out of and to the extent of
Company assets only, and no Member or Director, Officer, employee or agent of
the Company shall have any personal liabilities with respect to such indemnity.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) Successful Defense. To the extent that a Director, Officer,
employee or agent of the Company has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to in Section 11.4(a)
hereof or in defense of any claim, issue or matter therein, he shall be
indemnified by the Company
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against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
(c) Determination That Indemnification Is Proper. Any indemnification
under Section 11.4(a) hereof (unless ordered by a court) shall be made by the
Company unless a determination is made that indemnification of the director,
officer, employee or agent is not proper in the circumstances because he has not
met the applicable standard of conduct set forth in Section 11.4(a) hereof. Any
such determination shall be made (1) by a majority vote of the Directors who are
not parties to such action, suit or proceeding, even though less than a quorum,
or (2) if there are no such Directors, or, if such Directors so direct, by
independent legal counsel in a written opinion, or (3) by Members holding at
least 66 2/3% of the LLC Units.
(d) Advance Payment of Expenses. To the fullest extent permitted by
Applicable Law, expenses (including attorneys' fees) incurred by a Covered
Person in defending any civil, criminal, administrative or investigative claim,
demand, action, suit or proceeding shall, from time to time, be paid by the
Company in advance of the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Company of an undertaking by or on behalf of
the Covered Person to repay such amount if it shall ultimately be determined
that the Covered Person is not entitled to be indemnified by the Company as
authorized in this Section 11.4. Such expenses (including attorneys' fees)
incurred by other employees and agents may be so paid upon such terms and
conditions, if any, as the Board deems appropriate. The Board may authorize the
Company's counsel to represent such director, officer, employee or agent in any
action, suit or proceeding, whether or not the Company is a party to such
action, suit or proceeding.
(e) Procedure for Indemnification of Directors and Officers. Any
indemnification of a person seeking indemnification under Sections 11.4(a) and
11.4(b), or advance of costs, charges and expenses to such person under Section
11.4(d) hereof, shall be made promptly, and in any event within 30 days, upon
the written request of such person. If a determination by the Company that such
person is entitled to indemnification pursuant to this Section 11.4 is required,
and the Company fails to respond within 60 days to a written request for
indemnity, the Company shall be deemed to have approved such request. If the
Company denies a written request for indemnity or advancement of expenses, in
whole or in part, or if payment in full pursuant to such request is not made
within 30 days, the right to indemnification or advances as granted by this
Section 11.4 shall be enforceable by the indemnified person in any court of
competent jurisdiction. Such person's costs and expenses incurred in connection
with successfully establishing his right to indemnification, in
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whole or in part, in any such action shall also be indemnified by the Company.
It shall be a defense to any such action (other than an action brought to
enforce a claim for the advance of costs, charges and expenses under Section
11.4(d) where the required undertaking, if any, has been received by the
Company) that the claimant has not met the standard of conduct set forth in
Section 11.4(a) of this Section 11.4, but the burden of proving such defense
shall be on the Company. Neither the failure of the Company (including its Board
and its independent legal counsel) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct set
forth in Section 11.4(a) hereof, nor the fact that there has been an actual
determination by the Company (including its Board, its independent legal
counsel, or Members holding at least 66 2/3% of the LLC Units) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
(f) Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the Company
and each director, officer, employee and agent who serves in any such capacity
at any time while these provisions are in effect and any modification thereof
shall not affect any right or obligation then existing with respect to any state
of facts then or previously existing or any action, suit or proceeding
previously or thereafter brought or threatened based in whole or in part upon
any such state of facts. Such a "contract right" may not be modified
retroactively without the consent of such director, officer, employee or agent.
The indemnification and advancement of expenses provided by this
Section 11.4 shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any provision of this Agreement, vote of
disinterested Directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
(g) Insurance. The Company may purchase and maintain insurance, to the
extent and in such amounts as the Board shall, in its sole discretion, deem
reasonable, on behalf of Covered Persons and such other Persons as the Board
shall determine, against any liability that may be asserted against or expenses
that may be incurred by any such Person in connection with the activities of the
Company or such indemnities, regardless of whether the Company would have the
power to indemnify such Person against such liability under the provisions of
this Agreement. The Company may enter into indemnity contracts with Covered
Persons and such other
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Persons as the Board shall determine and adopt written procedures pursuant to
which arrangements are made for the advancement of expenses and the funding of
obligations under Section 11.4(d) hereof and containing such other procedures
regarding indemnification as are appropriate.
Section 11.5. Severability. To the fullest extent permitted by
applicable law, if any portion of this Article shall be invalidated on any
ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify each person who is or was serving or has agreed to serve
at the request of the Company as a Director, Officer, employee or agent of the
Company, or who is or was serving or has agreed to serve at the request of the
Company as a director, officer, employee or agent of another company,
partnership, joint venture, trust or other enterprise, as to costs, charges and
expenses (including reasonable attorneys' fees), judgments, fines and amounts
paid in settlement with respect to any action, suit or proceeding, whether
civil, criminal, administrative or investigative, including an action by or in
the right of the Company, to the fullest extent permitted by any applicable
portion of this Article that shall not have been invalidated.
Section 11.6. Outside Businesses. Any Member or Affiliate thereof may
engage in or possess an interest in other business ventures of any nature or
description, independently or with others, similar or dissimilar to the business
of the Company, and the Company, the Directors and the Members shall have no
rights by virtue of this Agreement in and to such independent ventures or the
income or profits derived therefrom, and the pursuit of any such venture, even
if competitive with the business of the Company, shall not be deemed wrongful or
improper. No Member, Director or Affiliate thereof shall be obligated to present
any particular investment opportunity to the Company even if such opportunity is
of a character that, if presented to the Company, could be taken by the Company,
and any Member, Director or Affiliate thereof shall have the right to take for
such Person's own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment opportunity, provided that
this Section 11.6 shall not apply to Members who are employees of the Company or
any of its Subsidiaries.
ARTICLE XII
ADDITIONAL MEMBERS
Section 12.1. Admission. By approval of the Board, the Company
is authorized to admit any Person as an additional member of the Company (each,
an "Additional Member" and collectively, the "Additional Members"), subject to
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compliance with the provisions of Article XIII of this Agreement. With respect
to the Persons exercising options to purchase LLC Units, each such Person shall
be deemed admitted as a Member upon execution of an LLC Unit Subscription
Agreement and such other documents as may be required pursuant to such LLC Unit
Subscription Agreement and as the Board may reasonably require, and the payment
of the applicable option exercise price, if any. Each Person other than a Person
admitted pursuant to Section 2.1(b) or a Person exercising options to purchase
LLC Units shall be admitted as an Additional Member at the time such Person (i)
executes a counterpart to this Agreement, (ii) complies with the applicable
Board resolution, if any, with respect to such admission and (iii) is named as a
Member in the Membership Register.
ARTICLE XIII
TRANSFER OF INTERESTS; SUBSTITUTE MEMBERS
Section 13.1. Restrictions on LLC Unit Transfers. (a) Initial Holding
Period for Restricted Holders. No Member who, together with such Member's
Existing CERA Trusts (if any), owns, as of the date hereof, 5% or more of the
then outstanding LLC Units (any such Member, a "Restricted Holder"), no Existing
CERA Trust and none of such Member's or such trust's Permitted Transferees who
shall have become owners of LLC Units after the date hereof shall, for a period
ending on the earlier of three years after the Closing Date (the "Initial
Holding Period") and one year after the first Underwritten Public Offering after
the date hereof, Transfer any LLC Units (including any Transfer pursuant to
Section 13.2) except, subject to Section 13.1(c), (i) to an unaffiliated third
party (x) in a sale of all of the LLC Units pursuant to Section 13.4, or (y)
pursuant to a merger, conversion, consolidation or reorganization of the
Company, other than a Conversion Transaction (any such sale, merger, conversion,
consolidation or reorganization, a "Fundamental Transaction"), (ii) in any
Conversion Transaction, (iii) in a Public Offering, (iv) Transfers to a
Permitted Transferee or (v) Transfers to the Company or any Subsidiary of the
Company. This Section 13.1(a) shall not apply to Transfers by MGI or CERA Inc.
to the extent such Transfers are otherwise covered in Section 13.1(g).
(b) Restrictions on Other Transfers. No Member other than a Restricted
Holder, any Existing CERA Trust and any of such Restricted Holder's or such
trust's Permitted Transferees who shall have become owners of LLC Units after
the date hereof, and, after the earlier of the expiration of the Initial Holding
Period and one year after the first Underwritten Public Offering after the date
hereof, no Member, shall Transfer any LLC Units except, subject to Section
13.1(c), (i) in a Fundamental
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Transaction, (ii) in a Conversion Transaction, (iii) in a Public Offering, (iv)
for Transfers to a Permitted Transferee or to any Member who was a Member as of
the Closing Date, (v) for Transfers to the Company or any Subsidiary of the
Company, (vi) subject to compliance with Sections 13.2, 13.3 and 13.4, as
applicable, for Transfers to Restricted Holders or third parties for cash only
in transactions which would be exempt from the registration requirements of
section 5 of the Securities Act by virtue of the exemption provided by section
4(2) of the Securities Act if the transferor were the issuer of the LLC Units,
provided that, for purposes of this clause (vi), the transferee is an
"accredited investor" within the meaning of Rule 501(a) under the Securities Act
or (vii) following the first Underwritten Public Offering after the date hereof
and subject to compliance with Section 13.2 and Rule 144 or Rule 145 (or any
successor provision) under the Securities Act, if applicable, for any other
Transfers to third parties. This Section 13.1(b) shall not apply to Transfers
made by MGI or CERA Inc. to the extent such Transfers are covered in Section
13.1(g).
(c) Transfer Conditions. No Member shall Transfer any LLC Units if such
Transfer would constitute a Prohibited Transaction. The Board shall evaluate
each Transfer request, and the proposed transferor shall furnish such
information as may be requested by the Board, to determine if such Transfer
would constitute a Prohibited Transaction, which determination shall be
conclusive and binding absent manifest error. The Board shall promptly notify
the proposed transferor of the Board's determination. In addition, it shall be a
further condition of any LLC Unit Transfer pursuant to Section 13.1(a)(iv),
13.1(b)(iv) or 13.1(b)(vi) (other than pursuant to Section 13.4) that (i) the
transferee agrees in writing to be bound by the obligations and restrictions
applicable to Members and/or LLC Units under this Agreement, (ii) the
transferring Member and the transferee shall have complied with all requirements
of any applicable LLC Unit Subscription Agreement, (iii) the proposed transferee
provides to the Company the information required pursuant to Section 13.7(c),
and (iv) such transferring Member delivers to the Company (A) an opinion of
counsel, which opinion and counsel shall be reasonably satisfactory to the
Company, to the effect that (1) the Transfer does not violate and will not cause
the Company to be in violation of any Specified Laws, (2) the transferor and the
Specified Affiliate (in the case of a Transfer to a Permitted Transferee
described in clause (iv) of the definition of such term) have made all filings
and obtained all consents of any governmental entity and any other Person
required to be made or obtained by the transferor and the Specified Affiliate,
and have complied with all applicable requirements of Specified Laws in
connection with the Transfer of such LLC Units and (3) the transferring Member
and the transferee have complied with all requirements of this Agreement and any
applicable LLC Unit Subscription Agreement and (B) a certificate setting forth
the basis on which such Transfer is permitted under Section 13.1(a) or 13.1(b),
as the case
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may be, and, in the case of a Transfer of the type specified in Section
13.1(b)(vi), describing compliance with Sections 13.2, 13.3 and 13.4, as
applicable.
(d) Restrictions to Avoid Publicly Traded Partnership Status. (i)
Notwithstanding any other provision to the contrary in this Agreement, until the
settlement date of the first Underwritten Public Offering, no Member shall
Transfer any LLC Interest (other than in a Private Transfer) in any form,
including but not limited to by entering into an Indirect LLC Interest, if such
transfer is made on an Established Securities Market or a Secondary Market.
Except for Transfers of LLC Units pursuant to Section 13.1(a)(i), (ii), (iii) or
(v) or Section 13.1(b)(i), (ii), (iii) or (v), the Member proposing to make any
Transfer of an LLC Interest prior to the settlement date of the first
Underwritten Public Offering shall (A) deliver to the Company a certificate
setting forth the basis on which such Member purports that such Transfer is not
prohibited under the immediately preceding sentence and (B) furnish such
information as may be requested by the Board to determine if such Transfer would
be so prohibited.
(ii) Until the settlement date of the first Underwritten Public
Offering, the Company shall not (A) allow any LLC Interests to be listed or
traded on an Established Securities Market, (B) participate in the inclusion of
any LLC Interests on any Secondary Market or (C) recognize any Transfer of LLC
Interests (other than a Private Transfer) in any form, including but not limited
to the entering into of an Indirect LLC Interest, if such Transfer is made on an
Established Securities Market or a Secondary Market, including but not limited
to (1) by redeeming the transferor Member (in the case of a redemption or
repurchase by the Company) or (2) by admitting the transferee as a Member or
otherwise recognizing any rights of the transferee, including but not limited to
the right to receive distributions from the Company (directly or indirectly) or
to acquire an interest in the capital or profits of the Company.
(e) Custody of the LLC Unit Certificates. Unless otherwise agreed to in
writing by the Company, until the settlement date of the first Underwritten
Public Offering after the date hereof, each Member shall maintain such Member's
LLC Unit certificates in custody, pursuant to the Bailment Agreement, dated as
of the date hereof, between the Company, as bailee thereunder, Fund IV, the CERA
Principals and GS LP, substantially in the form of Exhibit B attached hereto,
the terms of which (including any amendments and supplements to such agreement
adopted in accordance with the terms thereof) are hereby acknowledged and agreed
to by, and shall be binding upon, each Member.
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(f) Distributions Following Transfers. The Company shall, from the
effective date of any Transfer permitted under this Section 13.1, thereafter pay
all further distributions on account of the LLC Units (or part thereof) so
transferred to the transferee of such LLC Units (or part thereof). Any Transfer
of LLC Units in violation of this Section 13.1 shall be null and void ab
initio, and the Company shall not register, recognize or give effect to any such
Transfer, nor shall the intended transferee acquire any rights in such LLC Units
for any purposes of this Agreement. All Transfers permitted hereunder are
subject to Section 13.7.
(g) Transfers Involving MGI or CERA. The Transfer restrictions set
forth in Sections 13.1(a) and (b) shall not apply to transfers by MGI or CERA
Inc. to any Person to whom MGI or CERA Inc., as the case may be, may be
obligated to Transfer LLC Units pursuant to any agreement existing on the date
hereof, the Merger and Exchange Agreement (including the exhibits thereto), any
of the agreements entered into in connection with the transactions contemplated
thereby, or as contemplated by this Agreement, including (but not limited to)
the following types of Transfers: the grant of LLC Units to the CERA Management
Members, the transfer of the Contingent LLC Units to the CERA Management
Members, the transfer of LLC Units in connection with the exercise of Existing
MGI Options, MGI/CERA Additional Options or any other options granted pursuant
to an LLC Unit Subscription Agreement and transfers to Restricted Holders in
connection with the purchase by MGI or CERA Inc., as the case may be, of LLC
Units pursuant to any LLC Unit Subscription Agreement.
13.2. Participation Rights. So long as any Registrable Securities
remain outstanding and a Public Market has not been established with respect to
the LLC Units, no Restricted Holder, no Existing CERA Trust and no Permitted
Transferee of any Restricted Holder or any such trust shall make any sale or
transfer of LLC Units owned by such Member, trust or Permitted Transferee which
would constitute a Qualifying Sale, except pursuant to Section 13.4 or the
following provisions of this Section 13.2:
(a) Procedures for Qualifying Sales. At least 30 days prior to making
any Qualifying Sale, the applicable Restricted Holder, Existing CERA Trust
and/or such Restricted Holder's or such trust's Permitted Transferee will send a
written notice (the "Sale Notice") to the Company and the other holders of
Registrable Securities. The Sale Notice will disclose the identity of the
prospective transferee and the material terms and conditions of the proposed
Qualifying Sale, including the number of LLC Units that the prospective
transferee is willing to purchase and the intended consummation date of such
Qualifying Sale. The Restricted Holder, each of such Restricted Holder's
Existing CERA Trusts and each of such Restricted Holder's and
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such trusts' Permitted Transferees that owns any LLC Units agrees not to
consummate any Qualifying Sale until at least 30 days after the related Sale
Notice has been sent to each holder of Registrable Securities, unless the
Restricted Holder, Existing CERA Trust or such Restricted Holder's and/or such
trust's Permitted Transferee, as the case may be, shall have received a notice
from each holder of Registrable Securities indicating whether or not such holder
has elected to participate in such Qualifying Sale and the number of LLC Units
to be sold by each such holder so electing to participate has been finally
determined pursuant hereto prior to the expiration of such 30-day period. Each
holder of Registrable Securities may elect to participate in the contemplated
Qualifying Sale by giving written notice to the applicable Restricted Holder,
Existing CERA Trust and/or such Restricted Holder's or such trust's Permitted
Transferee and the Company within 30 days after such Restricted Holder, Existing
CERA Trust or such Restricted Holder's and/or such trust's Permitted Transferee,
as the case may be, has sent the related Sale Notice to such holder. If a holder
of Registrable Securities elects to participate, such holder will be entitled to
sell in the contemplated Qualifying Sale, at the same price and on the same
terms and conditions as set forth in the related Sale Notice, an amount of
Registrable Securities equal to the product of (i) the quotient determined by
dividing (A) the percentage of Registrable Securities then held by such holder
of Registrable Securities so electing to participate by (B) the aggregate
percentage of Registrable Securities represented by the Registrable Securities
then held by the selling Restricted Holder, such Restricted Holder's Existing
CERA Trusts and such Restricted Holder's and such trusts' Permitted Transferees
and all holders of Registrable Securities so electing to participate (in each
case under this clause (i) on a partially diluted basis taking into account only
such options to purchase LLC Units as are then exercisable and held by the
selling Restricted Holder, such Existing CERA Trusts, such Permitted Transferees
or the holders of Registrable Securities so electing to participate, as
applicable) and (ii) the number of Registrable Securities such transferee has
agreed to purchase in the contemplated sale (or in the case of a "Qualifying
Sale" within the meaning of clause (ii) of Section 13.2(b), the Excess Number of
shares which such transferee has agreed to purchase). If such right to
participate in a Qualifying Sale shall not have been exercised prior to the
expiration of the 30-day period, then at any time during the 90 days following
the expiration of the 30-day period, subject to extension for not more than an
additional 90 days to the extent reasonably required to comply with Applicable
Laws in connection with such purchase, the Restricted Holder, such Restricted
Holder's Existing CERA Trusts and such Restricted Holder's and such trusts'
Permitted Transferees, as applicable, may sell to the prospective transferee the
number of LLC Units and at the price and on the terms and conditions indicated
in the Sale Notice. Upon request of the Restricted Holder, Existing CERA Trust
or such Restricted Holder's and/or such trust's Permitted Transferee, as the
case may be, in connection with any contemplated Sale Notice, the Company will
provide the Restricted Holder,
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Existing CERA Trust or such Restricted Holder's and/or such trust's Permitted
Transferee, as the case may be, with a current list of holders of Registrable
Securities and their addresses.
(b) Qualifying Sale Defined. The term "Qualifying Sale" shall mean (i)
any sale or transfer of LLC Units proposed to be made by a Restricted Holder, or
any of such Restricted Holder's Existing CERA Trusts or such Restricted Holder's
or such trust's Permitted Transferees, pursuant to Section 13.1(b)(vi) or
13.1(b)(vii) (other than any sales or transfers to other Restricted Holders
pursuant to Section 13.3 following compliance with the right of first offer
procedures set forth in Section 13.3), at any time after the Restricted Holder
and/or such Restricted Holder's Existing CERA Trusts or such Restricted Holder's
or such trust's Permitted Transferees have sold or transferred pursuant to
Section 13.1(b)(vi) or 13.1(b)(vii) in the aggregate 5% of the LLC Units owned
by such Restricted Holder and such Restricted Holder's Existing CERA Trusts, if
any, at the time of the Closing and any LLC Units acquired by such Restricted
Holder, such Existing CERA Trust or any of such Restricted Holder's or such
trust's Permitted Transferees thereafter (the "Qualifying Number") or (ii) in
the event that prior to the sale or transfer by such Restricted Holder, such
Existing CERA Trust and/or such Permitted Transferees of an aggregate of the
Qualifying Number of LLC Units, the Restricted Holder, such Existing CERA Trust
or any of such Restricted Holder's or such trust's Permitted Transferees
proposes to sell or transfer pursuant to Section 13.1(b)(vi) or 13.1(b)(vii) a
number of LLC Units which when combined with any prior such sales or transfers
of LLC Units by such Restricted Holder, such Existing CERA Trust and/or such
Permitted Transferees exceeds the Qualifying Number, the sale or transfer
pursuant to Section 13.1(b)(vi) or 13.1(b)(vii) of a number of LLC Units (the
"Excess Number") equal to the excess of (A) the sum of any LLC Units previously
so sold or transferred by such Restricted Holder, such Existing CERA Trust
and/or such Restricted Holder's or such trust's Permitted Transferees and the
aggregate number of LLC Units proposed to be sold or transferred in such
contemplated sale, over (B) the Qualifying Number of LLC Units. In determining
whether there is a "Qualifying Sale," equitable adjustments shall be made to
reflect any LLC Unit split or combination, distribution of LLC Units,
recapitalization or similar transaction.
(c) Exclusion from Qualifying Sale. The obligations of a Restricted
Holder, an Existing CERA Trust and such Restricted Holder's and such trust's
Permitted Transferees and the rights of the holders of Registrable Securities
pursuant to this Section 13.2 will not apply to any sale or transfer by the
Restricted Holder, an Existing CERA Trust or any such Permitted Transferee
pursuant to a distribution and/or sale to the public (whether pursuant to a
registered Public Offering, Rule 144, broker's transactions or otherwise (but
not pursuant to Rule 144A under the Securities Act or any successor provision)).
Any LLC Units referred to, or covered by any sale
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or transfer referred to, in the preceding sentence shall not be included in the
computation of "Qualifying Sale."
Section 13.3. First Offer Rights. In the event that any Member (such
Member, an "Offering Member") shall determine to offer to sell or to sell, prior
to the settlement date of the first Underwritten Public Offering after the date
hereof, for cash pursuant to Section 13.1(b)(vi) LLC Units owned by such
Offering Member (the "First Offer LLC Units"):
(a) Offer Required. The Offering Member shall make an offer (the
"Member Offer") of the First Offer LLC Units, in accordance with this Section
13.3, to the Company (or to MGI or CERA Inc., as applicable, if the Company
shall have assigned its right to accept the applicable Member Offer to MGI or
CERA Inc.) and (if applicable) each Restricted Holder (other than the Offering
Member if the Offering Member is a Restricted Holder).
(b) First Offer Rights; Procedures. If the Offering Member is required
to make a Member Offer pursuant to this Section 13.3, the Offering Member shall
deliver to the Company a written notice (a "Member Offering Notice") setting
forth the number of LLC Units to be offered or sold, the proposed date of offer
or sale (which shall be not less than 70 days after the date of delivery of the
Member Offering Notice), and the terms and conditions of the proposed offer or
sale. The Member Offering Notice shall include an offer to sell the First Offer
LLC Units at the price and on the terms and conditions as set forth in the
Member Offering Notice, which offer by its terms shall remain open for a period
of 60 days from the date of the Company's receipt of the Member Offering Notice.
The Company may assign to MGI or CERA Inc. its right to accept any Member Offer
by delivery of written notice of such assignment to the Offering Member and MGI
or CERA Inc., as applicable, at any time prior to the 21st day after the
delivery of the Member Offering Notice to the Company. In the event of any such
assignment, each reference to the Company in this Section 13.3(b) shall be
deemed to refer to MGI or CERA Inc., as the case may be, unless the context
otherwise requires. Prior to the 21st day after the delivery of the Member
Offering Notice to the Company, the Company may accept the offer of First Offer
LLC Units in whole or in part by delivering to the Offering Member a written
notice of acceptance setting forth the number of First Offer LLC Units which the
Company shall elect to purchase. If the Company does not elect to purchase all
of the First Offer LLC Units included in the Member Offer, the Company shall
forward the Member Offering Notice to each Restricted Holder, together with
written notice of the number of First Offer LLC Units the Company shall have
elected not to purchase (the "Remaining LLC Units"). In accordance with the
procedures set forth in this Section 13.3 and for a second successive period of
20 days, each such Restricted Holder shall
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have the right to elect to purchase such Restricted Holder's pro rata portion
(determined as of the date of the Member Offering Notice and on a partially
diluted basis taking into account only such options to purchase LLC Units as are
then exercisable and held by the applicable Restricted Holder, and including any
LLC Units held by such Restricted Holder's CERA Trusts) of the Remaining LLC
Units by delivering written notice to the Company setting forth the number of
the Remaining LLC Units such Restricted Holder has so elected to purchase. If
such Restricted Holders in the aggregate do not elect to purchase all of the
Remaining LLC Units, then the Company shall send a written notice to each
Restricted Holder who had elected to purchase all of such Restricted Holder's
pro rata portion of the Remaining LLC Units during such 20-day period, which
notice shall state the number of Remaining LLC Units as to which elections have
not been made, and for a third successive period of 20 days (the "Third Round"),
each such Restricted Holder shall have the right to purchase additional
Remaining LLC Units, in an amount equal to either (i) the product of (x) the
number of such Remaining LLC Units in respect of which offers to purchase had
not been accepted in the prior offering period and (y) a fraction, the numerator
of which shall be the number of LLC Units held by such Restricted Holder (on a
partially diluted basis taking into account only such options to purchase LLC
Units as are then exercisable and held by such Restricted Holder, and including
any LLC Units held by such Restricted Holder's CERA Trusts) as of the date of
the Member Offering Notice and the denominator of which shall be the aggregate
number of LLC Units then held by each Restricted Holder that had subscribed for
all of the Remaining LLC Units offered to such Restricted Holder in the prior
offering period (on a partially diluted basis taking into account only such
options to purchase LLC Units as are then exercisable and held by any such
Restricted Holder, and including any LLC Units held by such Restricted Holder's
CERA Trusts) or (ii) such other amount as shall be agreed upon by all such
Restricted Holders. Upon expiration of the Third Round in accordance with the
procedures set forth above, (x) if the Company and the Restricted Holders in the
aggregate have not accepted the Member Offer with respect to all of the First
Offer LLC Units, the Offering Member may proceed with the proposed offer and
sale of, and sell, all of the First Offer LLC Units (and the Company and the
Restricted Holders shall not be entitled to purchase any of the First Offer LLC
Units), at a price equal to no less than 90% of the price set forth in the
Member Offering Notice and on other terms and conditions substantially the same
as those set forth in the Member Offering Notice, at any time during a period of
30 days after the last day of the Third Round or (y) if the Company and the
Restricted Holders in the aggregate have accepted the Member Offer with respect
to all of the First Offer LLC Units, the Company and (as applicable) such
Restricted Holders shall purchase from the Offering Member, and the Offering
Member shall sell to the Company and (as applicable) such Restricted Holders,
the First Offer LLC Units, on the terms and conditions specified in the Member
Offering Notice; provided
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that any Restricted Holder may revoke such Restricted Holder's acceptance of any
Member Offering Notice by written notice to the Company and the Offering Member
at any time within 20 days following delivery of such Restricted Holder's
initial acceptance thereof if such Restricted Holder is unable to secure
financing for such purchase in an amount and on such terms and conditions as are
reasonably acceptable to such Restricted Holder, in which event the LLC Units
covered by such revoked acceptance shall thereupon be deemed Remaining LLC Units
and reoffered, for a period of 14 days, to each other Restricted Holder that
elected to purchase all of the Remaining LLC Units offered to such Restricted
Holder in any offering period, with such reoffering to be conducted as if such
LLC Units were Remaining LLC Units subject to a Third Round offering, as
provided above.
Section 13.4. Take-Along Rights. (a) Take-Along Notice. Subject to the
prior application of the provisions of Section 13.3, if, prior to the settlement
date of the first Underwritten Public Offering after the date hereof, the
holders of more than 50% (a "Controlling Group") of the LLC Units (including LLC
Units issuable upon exercise of then exercisable options to purchase LLC Units
and such number of Contingent LLC Units as the Board shall determine would be
issuable immediately prior to the Section 13.4 Closing (as defined below)
pursuant to Sections 1.3, 1.4, 1.5 and 1.6 of the Merger and Exchange Agreement
based upon the CERA CAGR (as such term is defined in the Merger and Exchange
Agreement) as of the most recent available date prior to such determination),
acting jointly, intend to effect a sale of all of their LLC Units (including
such Contingent LLC Units and, if applicable, their Contingent Options) to an
unaffiliated third party (a "100% Buyer") and elect to exercise their rights
under this Section 13.4, such Controlling Group shall deliver written notice (a
"Take-Along Notice") to the Company and the other Members (collectively, the
"Other LLC Unitholders"), which notice shall (a) state (i) that the Controlling
Group wishes to exercise its rights under this Section 13.4 with respect to such
transfer, (ii) the name and address of the 100% Buyer, (iii) the per LLC Unit
amount and form of consideration the Controlling Group proposes to receive for
its LLC Units and (iv) drafts of purchase and sale documentation setting forth
the terms and conditions of payment of such consideration and all other material
terms and conditions of such transfer (the "Draft Sale Agreement"), (b) contain
an offer (the "Take-Along Offer") by the 100% Buyer to purchase from the Other
LLC Unitholders all of their LLC Units, Contingent LLC Units and, if applicable,
their Contingent Options, on and subject to the same price, terms and conditions
offered to the Controlling Group and (c) state the anticipated time and place of
the closing of such transfer (a "Section 13.4 Closing"), which (subject to such
terms and conditions) shall occur not fewer than five days nor more than 90 days
after the date such Take-Along Notice is delivered, provided that if such
Section 13.4 Closing shall not occur prior to the expiration of such 90-day
period, the Controlling Group shall be entitled to deliver
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another Take-Along Notice with respect to such Take-Along Offer. Upon request of
a Controlling Group, the Company shall provide the Controlling Group with a
current list of the names and addresses of the Other LLC Unitholders.
(b) Conditions to Take-Along. Upon delivery of a Take-Along Notice,
each of the Other LLC Unitholders shall have the obligation to transfer all of
such LLC Unitholder's LLC Units and Contingent LLC Units and, if applicable,
such LLC Unitholder's Contingent Options pursuant to the Take-Along Offer, as
such offer may be modified from time to time, provided that the Controlling
Group transfers all of its LLC Units and Contingent LLC Units and, if
applicable, its Contingent Options to the 100% Buyer at the Section 13.4 Closing
and that all LLC Units held by the Controlling Group and the Other LLC
Unitholders are sold to the 100% Buyer at the same price, and on the same terms
and conditions. In the event that any such Other LLC Unitholder shall determine
that the transfer of such LLC Unitholder's LLC Units, Contingent LLC Units or
Contingent Options to the 100% Buyer would constitute a prohibited transaction
under ERISA or the Code, such Other LLC Unitholder shall use reasonable best
efforts to structure the transfer in a manner that would not constitute a
non-exempt prohibited transaction, including requesting an individual exemption
from the Department of Labor with respect to such transfer and any other
reasonable action. Within 10 days of receipt of the Take-Along Notice, each of
the Other LLC Unitholders shall (i) deliver or cause to be delivered to the
member or an Affiliate of the member of the Controlling Group designated in the
Take-Along Notice (the "Custodian") certificates representing such Other LLC
Unitholder's LLC Units, duly endorsed for transfer or accompanied by duly
executed instruments of transfer, and/or such agreements or other instruments as
shall be requested by the 100% Buyer to effect the transfer of the Contingent
LLC Units, and (ii) execute and deliver to the Custodian a power of attorney and
a letter of transmittal and custody agreement in favor of the Custodian, and in
form and substance reasonably satisfactory to the Controlling Group, appointing
the Custodian as the true and lawful attorney-in-fact and custodian for such
Other LLC Unitholder, with full power of substitution, and authorizing the
Custodian to execute and deliver a purchase and sale agreement substantially in
the form of the Draft Sale Agreement and to take such actions as the Custodian
may deem necessary or appropriate to effect the sale and transfer of the LLC
Units to the 100% Buyer, upon receipt of the purchase price therefor set forth
in the Take-Along Notice at the Section 13.4 Closing, free and clear of all
security interests, liens, claims, encumbrances, charges, options, restrictions
on transfer, proxies and voting and other agreements of whatever nature,
together with all other documents delivered with such Notice and required to be
executed in connection with the sale thereof pursuant to the Take-Along Offer.
The Custodian shall hold such LLC Units and other documents in trust for such
Other LLC Unitholder pending completion or abandonment of such sale. If, within
90 days after the Controlling Group delivers the
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Take-Along Notice, the Controlling Group has not completed the sale of all of
the LLC Units owned by the Controlling Group and the Other LLC Unitholders to
the 100% Buyer and another Take-Along Notice with respect to such Take-Along
Offer has not been sent to the Other LLC Unitholders, the Custodian shall return
to each Other LLC Unitholder all certificates representing the LLC Units and all
other documents that such Other LLC Unitholder delivered in connection with such
sale. The Controlling Group shall be permitted to send only two Take-Along
Notices with respect to any one Take-Along Offer. Promptly after the Section
13.4 Closing, the Custodian shall give notice thereof to the Other LLC
Unitholders, shall remit to each of the Other LLC Unitholders the total
consideration for the LLC Units of such Other LLC Unitholders sold pursuant
thereto, and shall furnish such other evidence of the completion and time of
completion of such sale and the terms thereof as may reasonably be requested by
any of the Other LLC Unitholders.
(c) Remedies. Each of the Other LLC Unitholders acknowledges that the
Controlling Group would be irreparably damaged in the event of a breach or a
threatened breach by such Other LLC Unitholder of any of such LLC Unitholder's
obligations under this Section 13.4 and each of the Other LLC Unitholders agrees
that, in the event of a breach or a threatened breach by such Other LLC
Unitholder of any such obligation, the Controlling Group shall, in addition to
any other rights and remedies available to it in respect of such breach, be
entitled to an injunction from a court of competent jurisdiction (without any
requirement to post bond) granting it specific performance by such Other LLC
Unitholder of such LLC Unitholder's obligations under this Section 13.4. In the
event that the Controlling Group shall file suit to enforce the covenants
contained in this Section 13.4 (or obtain any other remedy in respect of any
breach thereof), the prevailing party in the suit shall be entitled to recover,
in addition to all other damages to which such party may be entitled, the costs
incurred by such party in conducting the suit, including reasonable attorneys'
fees and expenses. In the event that, following a breach by any Other LLC
Unitholder of the provisions of this Section 13.4, the Controlling Group does
not obtain an injunction granting it specific performance of such LLC
Unitholder's obligations under this Section 13.4 in connection with any proposed
sale prior to the time the Controlling Group completes the sale of its LLC Units
or the Controlling Group, in its sole discretion, abandons such sale, then the
Company shall have the option to purchase the LLC Units from such Other LLC
Unitholder at a purchase price per LLC Unit equal to the price per LLC Unit at
which such LLC Units were originally purchased from the Company or, if such LLC
Units were obtained by such Other LLC Unitholder pursuant to the Transactions,
equal to the amount of such Other LLC Unitholder's deemed capital contribution
per LLC Unit pursuant to Section 8.2.
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Section 13.5. Members' Rights to Purchase Additional LLC Units. (a)
Restricted Holder Sale. If at any time after the date of this Agreement and
prior to the establishment of a Public Market with respect to the LLC Units, the
Company shall propose to issue or sell any additional LLC Units to any
Restricted Holder or any Affiliate (other than such officers or employees of or
consultants to the Company or any of its Subsidiaries who are not Restricted
Holders) of any Restricted Holder (a "Restricted Holder Sale"), the Company
shall offer to each holder of Registrable Securities that is an accredited
investor (as such term is defined in Rule 501 of Regulation D under the
Securities Act) the right to purchase that number of additional LLC Units, on
the same terms and conditions as the proposed Restricted Holder Sale, such that
such holder would have the opportunity to hold the same percentage of LLC Units
(on a partially diluted basis taking into account only such options to purchase
LLC Units as are then exercisable) after giving effect to the Restricted Holder
Sale, as such holder held immediately prior thereto (an "Offer").
Notwithstanding the foregoing, none of the following transactions shall
constitute a Restricted Holder Sale: the issuance by the Company of (x) any
Contingent LLC Units or (y) any LLC Units (A) pursuant to the Transactions, (B)
in connection with the transfer to the CERA Management Members promptly
following the date hereof as described in the tenth recital hereof, (C) in
exchange for Voting LLC Units, (D) upon conversion of Non-Voting LLC Units
pursuant to Section 8.7 hereof, (E) upon or in connection with exercise of
Existing MGI Options or MGI/CERA Additional Options, (F) upon or in connection
with exercise of options granted pursuant to an LLC Unit Subscription Agreement
or (G) upon exercise of the CERA Contingent Options or the GS Contingent
Options.
(b) Offer Procedures. The Company shall make an Offer by delivering to
each holder of Registrable Securities at least 30 Business Days' prior written
notice of the proposed Restricted Holder Sale. Such notice will identify the
class and number of LLC Units (the "Offered Securities"), the proposed date of
issuance and the price and other terms of the issuance. Such notice will also
include an offer to sell to each such holder that number of the Offered
Securities such that such holder would have the opportunity to hold the same
percentage of LLC Units (on a partially diluted basis taking into account only
such options to purchase LLC Units as are then exercisable) after giving effect
to the Restricted Holder Sale, as such holder held immediately prior thereto
(such holder's "Proportionate Share"), at the same price and on the same other
terms as are proposed for such Restricted Holder Sale, which offer by its terms
shall remain open for a period of 15 Business Days from the date of receipt of
such notice, provided that in the event that the Offered Securities are
Non-Voting LLC Units, any holder not required by law to hold non-voting
securities of the Company may purchase such holder's Proportionate Share in
shares of Voting LLC Units. Each such holder shall give notice to the Company of
such holder's intention to
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accept an Offer prior to the end of the 15-Business Day period of such Offer,
setting forth such portion of the Offered Securities which such holder elects to
purchase. If any holder fails to subscribe in full for such holder's
Proportionate Share of the Offered Securities, the other subscribing holders
shall be entitled to purchase such Offered Securities as are not subscribed for
by such holder in such proportion of the Offered Securities as they shall have
theretofore agreed to purchase until there are no unmet demands of subscribing
holders or all Offered Securities shall have been subscribed for. The Company
shall notify each holder five (5) Business Days following the expiration of the
15-Business Day period described above of the amount of Offered Securities which
each such holder may purchase pursuant to the foregoing sentence, and each such
holder shall then have 10 Business Days from the delivery of such notice to
indicate such additional amount, if any, that such holder wishes to purchase.
Upon the closing of the Restricted Holder Sale as to which the Company has given
notice, such holder shall purchase from the Company, and the Company shall sell
to such holders, the Offered Securities subscribed for by such holders on the
terms specified in the Offer, which shall be the same terms at which all other
Persons acquire such securities in connection with such sale or issuance. In the
event that such holders do not subscribe for all of the Offered Securities, the
Company shall have 30 Business Days from the end of the foregoing 15-Business
Day or 30-Business Day period, whichever is applicable, to sell all or any part
of such Offered Securities as to which such holders have not accepted an Offer
to any other Persons, in all material respects on terms and conditions that are
no more favorable to such other Persons or less favorable to the Company than
those set forth in the Offer. Any Offered Securities not purchased by such
holders or other Persons in accordance with this Section 13.5 may not be sold or
otherwise disposed of by the Company until they are again offered to such
holders under the procedures specified in this Section 13.5.
Section 13.6. Registration Rights. (a) The Members shall have the
registration rights set forth in Schedule C hereto.
(b) In the event of a determination by the Company, made in accordance
with the provisions of this Agreement, to cause (i) a Transfer of all or
substantially all of (x) the assets of the Company or (y) the LLC Units to a
newly organized stock corporation or other business entity ("Newco"), (ii) a
merger of the Company into a Newco by merger or consolidation as provided under
section 18-209 of the Delaware Act or otherwise or (iii) any other restructuring
of the LLC Units, in any case in anticipation of a Public Offering, each Member
shall take such steps to effect such Transfer, merger, consolidation or other
restructuring as may be requested by the Company, including, without limitation,
Transferring such Member's LLC Units to Newco in exchange for capital stock of
Newco; provided that no Member shall be required to take any action or omit to
take any action to the extent such action or
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omission violates Applicable Law. In addition or alternatively, subject to
Section 7.1, the terms and provisions of this Agreement may be amended at any
time by the Company to permit the Company to register LLC Units under the
Securities Act, which amendments may include, without limitation, any changes in
form and structure as may be deemed by the Company to be necessary, convenient,
desirable or incidental to facilitate the public offering of LLC Units and may
cause, among other things, the Company or its successor to be taxed as a
corporation.
Section 13.7. Substitute Members. In the event any Member Transfers
such Member's LLC Units in compliance with the other provisions of this Article
XIII, the transferee thereof shall become a Substitute Member of the Company
only upon satisfaction of the following:
(a) such Member and such transferee shall execute such
instruments as the Board or any Officer deems reasonably necessary or
desirable to effect such substitution;
(b) the transferee of such Member's LLC Units accepts and
agrees in writing to be bound by all of the terms and provisions of
this Agreement; and
(c) the transferee of such Member's LLC Units accepts and
agrees in writing to provide the Company with such information,
including its employer identification number or social security number,
as applicable, and the amount paid for the LLC Units, as the Company
may in its discretion request from time to time.
The Board in its sole discretion may agree to waive any or all of the conditions
set forth in subparagraphs (a) through (c) of this Section 13.7.
Section 13.8. Release of Liability. In the event any Member shall sell
or otherwise dispose of (other than by a pledge or collateral assignment) all
the LLC Units which such Member owns, in compliance with the provisions of this
Agreement without retaining any interest therein, then the selling Member shall
cease to be a Member, and shall be relieved of any further liability arising
hereunder for events occurring from and after the date of such Transfer.
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ARTICLE XIV
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 14.1. Dissolving Events. The Company shall be dissolved in the
manner hereinafter provided upon the happening of any of the following events:
(a) the Board and the Members shall vote or agree in writing
to dissolve the Company pursuant to Section 5.1(b)(iv) or 4.4(f), as
applicable; or
(b) any event which under Applicable Law would cause the
dissolution of the Company, provided that, unless required by law, the
Company shall not be wound up as a result of any such event and the
business of the Company shall be continued.
Notwithstanding the foregoing, the death, retirement, resignation, expulsion,
bankruptcy or dissolution of any Member or the occurrence of any other event
that terminates the continued membership of any Member in the Company under the
Delaware Act shall not, in and of itself, cause the dissolution of the Company.
In such event, the remaining Member(s) shall continue the business of the
Company without dissolution.
Section 14.2. Dissolution and Winding-Up. Upon the dissolution of the
Company, the assets of the Company shall be liquidated or distributed under the
direction of and to the extent determined by the Board and the business of the
Company wound up, provided that this Agreement shall remain in full force and
effect, notwithstanding any prior dissolution of the Company, until termination
of the Company in accordance with Section 14.3. Within a reasonable time after
the effective date of dissolution of the Company, the Company's assets shall be
distributed in the following manner and order:
(a) to all creditors of the Company, to the extent otherwise
permitted by law, in satisfaction of liabilities of the Company,
including any amounts the Company may owe under the indemnity provided
in Section 11.4 hereof (whether by payment or the making of reasonable
provision for payment thereof); and
(b) with respect to any remaining proceeds, to make
distributions to the Members in accordance with Section 9.2;
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<PAGE> 79
provided that no payment or distribution in any of the foregoing categories
shall be made until all obligations in each prior category shall have been
satisfied in full, and provided, further, that if the payments due to be made in
any of the foregoing categories exceed the remaining assets available for such
purpose, such payments shall be made to the Persons within such categories
entitled to receive the same pro rata in accordance with the respective amounts
due to them.
Section 14.3. Termination. The Company shall terminate when the winding
up of the Company's affairs has been completed, all of the assets of the Company
have been distributed and the Certificate has been canceled, all in accordance
with the Delaware Act.
Section 14.4. Claims of the Members. The Members and former Members
shall look solely to the Company's assets for the return of their capital
contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such capital contributions, the Members and former
Members shall not be entitled to have such capital contributions returned to
them and shall have no recourse against the Company or any other Member.
ARTICLE XV
MISCELLANEOUS
Section 15.1. 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 in the Membership Register in the case of any
Member or as set forth below in the case of the Company, or to such other
address as such party may have designated to the Company in writing, and:
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<PAGE> 80
(a) if given to the Company, at the address set forth below:
Global Decisions Group LLC
c/o McCarthy Crisanti & Maffei, Inc.
590 Madison Avenue
New York, New York 10022
Facsimile: (212) 835-1399
Telephone: (212) 835-1350
Attention: Peter Derow
or at such other address or addresses where the Company's principal
office may be located. Copies of any notice or other communication
given under the Agreement shall also be given to:
Clayton, Dubilier & Rice, Inc.
375 Park Avenue
New York, New York 10152
Facsimile: (212) 407-5252
Telephone: (212) 407-5200
Attention: Donald J. Gogel
Brera Capital Partners, LLC
590 Madison Avenue, 18th Floor
New York, New York 10022
Facsimile: (212) 835-1399
Telephone: (212) 835-1350
Attention: Alberto Cribiore
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Facsimile: (212) 909-6836
Telephone: (212) 909-6000
Attention: Steven R. Gross, Esq.
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<PAGE> 81
(b) if given to any CERA Stockholder or CERA Trust, to such
Person at the address set forth in the Membership Register, with copies
to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Telecopy: (617) 526-5000
Telephone: (617) 526-6000
Attention: Paul P. Brountas, Esq.; and
(c) if given to any other Member, at the address set forth for
such Member in the Membership Register or at such other address as such
Member may hereafter designate by written notice to the Company.
Any party may give any notice or other communication in connection herewith
using any other means (including, but not limited to, personal delivery,
messenger service, facsimile, telex or ordinary mail), but no such notice or
other communication shall be deemed to have been duly given unless and until it
is actually received by the individual for whom it is intended.
Section 15.2. Legend on LLC Unit Certificates. A copy of this Agreement
shall be filed with the Secretary of the Company and kept with the records of
the Company. Each certificate representing LLC Units that are issued on the date
hereof or granted to the CERA Management Members on the day following the date
hereof is subject to this Agreement and 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 COMPANY, DATED AS OF
February 12, 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 COMPANY."
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<PAGE> 82
Each certificate representing LLC Units that are issued subsequent to
the date hereof (other than the Contingent LLC Units and LLC Units issued upon
exercise of the Contingent Options) shall bear a legend substantially to the
following effect in place of the legend set forth above:
"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 A [MANAGEMENT] LLC UNIT
[SUBSCRIPTION] [GRANT] AGREEMENT, DATED AS OF ______ __, ___, AS THE
SAME MAY BE AMENDED, SUPPLEMENTED OR MODIFIED FROM TIME TO TIME (THE
"[SUBSCRIPTION] [GRANT] AGREEMENT"), AND THE AMENDED AND RESTATED
LIMITED LIABILITY COMPANY AGREEMENT OF THE COMPANY, DATED AS OF
February 12, 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
SUBSCRIPTION AGREEMENT AND LLC AGREEMENT, COPIES OF WHICH AGREEMENTS
ARE ON FILE WITH THE SECRETARY OF THE COMPANY."
"THE LLC UNITS REPRESENTED HEREBY HAVE NOT BEEN REGISTERED 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) THE HOLDER HEREOF SHALL HAVE DELIVERED TO THE COMPANY
AN OPINION OF COUNSEL, WHICH OPINION AND COUNSEL SHALL BE REASONABLY
SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH DISPOSITION IS
EXEMPT FROM THE PROVISIONS OF SECTION 5 OF SUCH ACT, OR (C) A NO-ACTION
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION, REASONABLY
SATISFACTORY TO COUNSEL FOR THE COMPANY, SHALL HAVE BEEN OBTAINED WITH
RESPECT TO SUCH DISPOSITION AND (ii) SUCH DISPOSITION IS PURSUANT TO
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<PAGE> 83
REGISTRATION UNDER ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
THEREFROM."
Any LLC Unit certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon the
completion of a public distribution of securities of the Company represented
thereby or otherwise if the holder of the LLC Units represented by such
certificate shall have delivered to the Company an opinion of counsel, which
opinion and counsel shall be reasonably satisfactory to the Company, that the
Securities Act permits such certificate to be issued without such legend or with
a legend modified as set forth in such opinion) shall also bear such legend. The
provisions of this Agreement shall be binding upon, and shall inure to the
benefit of, the Members and all subsequent holders of LLC Units who acquired the
same directly or indirectly from a Member to the extent set forth herein. The
Company agrees that it will not transfer on its books any certificate
representing LLC Units in violation of the provisions of this Agreement.
In the event of any merger, consolidation, reorganization, exchange of
securities, recapitalization, liquidation or similar transaction where the LLC
Units are converted into or exchanged for other securities, all references in
this Agreement (including the Schedules hereto) to LLC Units shall be deemed to
refer to such securities into which the LLC Units shall have been converted or
for which the LLC Units shall have been exchanged.
Section 15.3. Headings. The headings contained in this Agreement are
for purposes of convenience only and shall not affect the meaning or
interpretation of this Agreement.
Section 15.4. Entire Agreement. This Agreement constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof.
Section 15.5. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all of
which shall together constitute one and the same instrument.
Section 15.6. Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL
RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE INTERNAL
LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF
CONFLICT OF LAWS.
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<PAGE> 84
Section 15.7. Term of Certain Provisions. In the event of a termination
of this Agreement pursuant to a Conversion Transaction, the provisions of
Sections 13.1 through 13.6 (including Schedule C hereto), other than Section
13.1(d), shall continue in full force and effect until the occurrence of a
Fundamental Transaction or until such provisions shall have terminated or ceased
to have any further force or effect in accordance with their terms, provided
that upon the occurrence of the first Underwritten Public Offering after the
date hereof, the provisions of Sections 13.3 and 13.4 shall terminate but the
provisions of Section 13.1, 13.2, 13.5 and 13.6 (including Schedule C hereto)
shall continue in full force and effect until such provisions shall have
terminated or ceased to have any further force or effect in accordance with
their terms.
Section 15.8. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, the other Members and their
respective successors and permitted assigns.
Section 15.9. No Third-Party Beneficiaries. Except as provided in
Section 11.4 with respect to indemnification of directors, officers, employees
or agents, nothing in this Agreement shall confer any rights upon any person
or entity other than the parties hereto and their respective successors and
permitted assigns.
Section 15.10. Consent to Jurisdiction. TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATES OF NEW YORK AND DELAWARE AND THE
FEDERAL COURTS OF THE UNITED STATES OF AMERICA LOCATED IN THE STATE, CITY AND
COUNTY OF NEW YORK OR IN THE DISTRICT OF DELAWARE, AS APPLICABLE, SOLELY IN
RESPECT OF THE INTERPRETATION AND ENFORCEMENT OF THE PROVISIONS OF THIS
AGREEMENT AND OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT, AND HEREBY AND
THEREBY WAIVE, AND AGREE NOT TO ASSERT, AS A DEFENSE IN ANY ACTION, SUIT OR
PROCEEDING FOR THE INTERPRETATION OR ENFORCEMENT HEREOF OR OF ANY SUCH DOCUMENT,
THAT THEY ARE NOT SUBJECT THERETO OR THAT SUCH ACTION, SUIT OR PROCEEDING MAY
NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SAID COURTS OR THAT THE VENUE THEREOF
MAY NOT BE APPROPRIATE OR THAT THIS AGREEMENT MAY NOT BE ENFORCED IN OR BY SUCH
COURTS, AND THE PARTIES HERETO IRREVOCABLY AGREE THAT ALL CLAIMS WITH RESPECT TO
SUCH ACTION OR PROCEEDING SHALL BE HEARD AND DETERMINED IN SUCH NEW YORK STATE,
DELAWARE STATE OR FEDERAL COURT. THE PARTIES HERETO HEREBY CONSENT TO AND
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<PAGE> 85
GRANT ANY SUCH COURT JURISDICTION OVER THE PERSON OF SUCH PARTIES AND OVER THE
SUBJECT MATTER OF ANY SUCH DISPUTE AND AGREE THAT, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, MAILING OF PROCESS OR OTHER PAPERS IN CONNECTION
WITH ANY SUCH ACTION OR PROCEEDING IN THE MANNER PROVIDED IN SECTION 15.1, OR IN
SUCH OTHER MANNER AS MAY BE PERMITTED BY LAW, SHALL BE VALID AND SUFFICIENT
SERVICE THEREOF. EACH OF THE PARTIES HERETO AGREES THAT THIS AGREEMENT INVOLVES
AT LEAST $100,000.00 AND THAT THIS AGREEMENT HAS BEEN ENTERED INTO IN EXPRESS
RELIANCE UPON 6 Del. C. Section 2708. EACH OF THE PARTIES HERETO IRREVOCABLY
AGREES, TO THE EXTENT SUCH PARTY IS NOT OTHERWISE SUBJECT TO SERVICE OF PROCESS
IN THE STATE OF DELAWARE, TO APPOINT AND MAINTAIN AN AGENT IN THE STATE OF
DELAWARE AS SUCH PARTY'S AGENT FOR ACCEPTANCE OF LEGAL PROCESS.
Section 15.11. Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES
THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE SUCH PARTY HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 15.11.
Section 15.12. Severability. If any provision of this Agreement is
inoperative or unenforceable for any reason, such circumstances shall not have
the effect of rendering the provision in question inoperative or unenforceable
in any other case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any extent
whatsoever, so long as this Agreement, taken as a whole, still expresses the
material intent of the parties hereto.
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<PAGE> 86
The invalidity of any one or more phrases, sentences, clauses, Sections or
subsections of this Agreement shall not affect the remaining portions of this
Agreement.
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<PAGE> 87
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above stated.
MEMBERS:
THE CLAYTON & DUBILIER PRIVATE
EQUITY FUND IV LIMITED PARTNERSHIP
By: Clayton & Dubilier Associates IV
Limited Partnership,
the General Partner
By: /s/ Donald J. Gogel
-----------------------------
a general partner
/s/ Daniel H. Yergin
-----------------------------
Daniel H. Yergin
/s/ Joseph A. Stanislaw
-----------------------------
Joseph A. Stanislaw
/s/ James P. Rosenfield
-----------------------------
James P. Rosenfield
/s/ Warren M. Schur
-----------------------------
Warren M. Schur, as Trustee for the James P.
Rosenfield Irrevocable Gift Trust
/s/ Augusta McC. P. Stanislaw
-----------------------------
Augusta McC. P. Stanislaw, as Trustee for
the Joseph A. Stanislaw 1994 Trust for
Louis Joseph Perkins Stanislaw
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<PAGE> 88
/s/ Augusta McC. P. Stanislaw
-----------------------------
Augusta McC. P. Stanislaw, as Trustee for
the Joseph A. Stanislaw 1994 Trust for
Katrina Augusta Perkins Stanislaw
/s/ Augusta McC. P. Stanislaw
-----------------------------
Augusta McC. P. Stanislaw, as Trustee for
the Joseph A. Stanislaw 1994 Trust for
Henry Winslow Perkins Stanislaw
/s/ I.C. Bupp
-----------------------------
I.C. Bupp
/s/ Stephen C. Aldrich
-----------------------------
Stephen C. Aldrich
THE GOLDMAN SACHS GROUP, L.P.
By: The Goldman Sachs Corporation,
as general partner of The Goldman
Sachs Group, L.P.
By: /s/ Gregory K. Palm
-----------------------------
Name: Gregory K. Palm
Title: Executive Vice President
EACH OF THE PERSONS LISTED ON SCHEDULE D
HERETO
By: McCarthy, Crisanti & Maffei, Inc.
By: /s/ David D. Nixon
-----------------------------
Name: David D. Nixon
Title: President and Chief
Executive Officer
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WITHDRAWING MEMBERS:
MCM GROUP, INC.
By: /s/ David D. Nixon
-----------------------------
Name: David D. Nixon
Title: President and Chief
Executive Officer
MCCARTHY, CRISANTI & MAFFEI, INC.
By: /s/ David D. Nixon
-----------------------------
Name: David D. Nixon
Title: President and Chief
Executive Officer
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<PAGE> 90
SCHEDULE A
<PAGE> 91
MEMBERS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
NAME MAILING ADDRESS NUMBER OF LLC VALUE OF PROPERTY DEEMED
UNITS ISSUED TO TO HAVE BEEN CONTRIBUTED
MEMBER TO COMPANY
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The Clayton & Dubilier Private 270 Greenwich Avenue
Equity Fund IV Limited Greenwich, Connecticut
Partnership 06830
- ---------------------------------------------------------------------------------------------------------------------
Daniel H. Yergin
- ---------------------------------------------------------------------------------------------------------------------
Joseph A. Stanislaw
- ---------------------------------------------------------------------------------------------------------------------
James P. Rosenfield
- ---------------------------------------------------------------------------------------------------------------------
Jamie W. Katz, as Trustee for the
James P. Rosenfield Irrevocable
Gift Trust
- ---------------------------------------------------------------------------------------------------------------------
Augusta McC. P. Stanislaw, as
Trustee for the Joseph A. Stanislaw
1994 Trust for Louis Joseph
Perkins Stanislaw
- ---------------------------------------------------------------------------------------------------------------------
Augusta McC. P. Stanislaw, as
Trustee for the Joseph A. Stanislaw
1994 Trust for Katrina Augusta
Perkins Stanislaw
- ---------------------------------------------------------------------------------------------------------------------
Augusta McC. P. Stanislaw, as
Trustee for the Joseph A. Stanislaw
1994 Trust for Henry Winslow
Perkins Stanislaw
- ---------------------------------------------------------------------------------------------------------------------
I.C. Bupp
- ---------------------------------------------------------------------------------------------------------------------
Stephen C. Aldrich
- ---------------------------------------------------------------------------------------------------------------------
The Goldman Sachs Group, L.P. c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
- ---------------------------------------------------------------------------------------------------------------------
[Former stockholders of MGI to be
listed]
- ---------------------------------------------------------------------------------------------------------------------
CERA Management Members: [To [N/A]
Come]
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
2
<PAGE> 92
SCHEDULE B
The initial Book Values of the CERA Common Stock, the portion of the GS
Partnership Interest contributed to the Company and the MGI Common Stock shall
be equal to the respective number of LLC Units received in exchange therefor
pursuant to the Merger and Exchange Agreement on the Closing Date (not including
any Contingent LLC Units), multiplied by the value per LLC Unit as of the
Closing Date set forth in (or agreed upon pursuant to the provisions of) Section
1.8 of the Merger and Exchange Agreement.
In the event that the CERA CAGR (as such term is defined in the Merger and
Exchange Agreement) shall be equal to or greater than 16%, the initial Book
Values of the CERA Common Stock and of the portion of the GS Partnership
Interest contributed to the Company shall be equal to the respective number of
LLC Units received in exchange therefor pursuant to the Merger and Exchange
Agreement on the Closing Date plus the respective number of LLC Units issued as
additional consideration therefor pursuant to Sections 1.3(c) and 1.4(c) of the
Merger and Exchange Agreement, multiplied by the value per LLC Unit as of the
Closing Date set forth in (or agreed upon pursuant to the provisions of) Section
1.8 of the Merger and Exchange Agreement.
<PAGE> 93
SCHEDULE C
This Schedule C describes certain registration rights of the holders of
Registrable Securities (collectively, the "LLC Unitholders"). Capitalized terms
used herein without definition shall have the meanings set forth in the Amended
and Restated Limited Liability Company Agreement, dated as of February 12, 1998,
(the "Agreement"), of Global Decisions Group LLC, a Delaware limited liability
company (the "Company"). In the event that, at the time any rights under Section
13.6 of the Agreement are exercised, the equity securities of the Company or its
successor are not comprised of limited liability company interests of a limited
liability company, all references herein to LLC Units shall be deemed to refer
to such equity securities and the other provisions of this Schedule C shall be
appropriately applied, with such adjustment as shall be necessary to give effect
to the intent of such provisions. The words "hereby," "herein," "hereof,"
"hereunder" and words of similar import refer to this Schedule C as a whole and
not merely to the specific section, paragraph or clause in which such word
appears. All references herein to Sections shall be deemed references to this
Schedule C unless the context shall otherwise require.
1.1 Registration Upon Request.
(a) Requests. Subject to the provisions of Section 1.6, at any time or
from time to time (i) the Requisite Percentage of LLC Unitholders shall have the
right to make one or more written requests, and (ii) the Requisite Percentage of
CERA Principals shall have the right to make two (2) written requests, that the
Company effect the registration under the Securities Act of all or part of the
Registrable Securities of the holder or holders of such securities and their
trusts making such request, which requests shall specify the intended method of
disposition thereof by such holder or holders of such securities and their
trusts.
(b) Obligation to Effect Registration. Upon receipt by the Company of
any request for registration pursuant to Section 1.1(a), the Company will
promptly give written notice of such requested registration to all holders of
Registrable Securities, and thereupon will use its best efforts to effect the
registration under the Securities Act of
(i) the Registrable Securities which the Company has been so
requested to register pursuant to Section 1.1(a), and
<PAGE> 94
(ii) all other Registrable Securities which the Company has
been requested to register by the holders thereof by written request
given to the Company within 30 days after the Company has given such
written notice (which request shall specify the intended method of
disposition of such Registrable Securities),
all to the extent required to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered. Notwithstanding the preceding sentence:
(x) the Company shall not be required to effect a registration
requested (a) pursuant to Section 1.1(a)(i) if the aggregate number of
Registrable Securities referred to in clauses (i) and (ii) of this
Section 1.1(b) included in such registration shall be less than 20% of
the Registrable Securities at the time outstanding and (b) pursuant to
Section 1.1(a)(ii) if the aggregate number of Registrable Securities
referred to in clauses (i) and (ii) of this Section 1.1(b) included in
such registration shall be, in the case of the first request, less than
50%, and in the case of the second request, less than one-third, of the
LLC Units held by the CERA Principals (including LLC Units held by CERA
Trusts) on the Closing Date; and
(y) if the Board determines in its good faith judgment, after
consultation with a firm of nationally recognized underwriters, that
there will be an adverse effect on a then contemplated initial
Underwritten Public Offering of LLC Units, then the Requisite
Percentage of LLC Unitholders or the Requisite Percentage of CERA
Principals, as the case may be, shall be given notice of such fact and
shall be deemed to have withdrawn such request and such registration
shall not be deemed to have been effected or requested pursuant to this
Section 1.1.
(c) Registration Statement Form. Each registration requested pursuant
to this Section 1.1 shall be effected by the filing of a registration statement
on Form S-1, Form S-2 or Form S-3 (or any other form which includes
substantially the same information as would be required to be included in a
registration statement on such forms as presently constituted), unless the use
of a different form is (i) required by law or (ii) permitted by law and agreed
to in writing by holders holding at least a majority (by number of LLC Units) of
the Registrable Securities as to which registration has been requested pursuant
to this Section 1.1. At any time after the date hereof that the Company shall
have issued and sold any LLC Units registered under an effective registration
statement under the Securities Act, or after the Company shall have registered
any class of equity securities pursuant to Section 12 of the Exchange
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<PAGE> 95
Act, it will use its best efforts to qualify for registration on Form S-2 or
Form S-3 (or any other comparable form hereinafter adopted).
(d) Expenses. The Company will pay all Registration Expenses in
connection with the first two registrations which are effected as requested
under Section 1.1(a) (i) and each of the two registrations which are effected as
requested under Section 1.1(a)(ii). The Registration Expenses in connection with
each other registration, if any, requested under this Section 1.1 shall be
apportioned among the holders whose Registrable Securities are then being
registered, on the basis of the respective amounts (by number of LLC Units) of
Registrable Securities then being registered by them or on their behalf.
However, in the case of all registrations requested under Section 1.1(a), the
Company shall pay all amounts in respect of (i) any allocation of salaries of
personnel of the Company and its Subsidiaries or other general overhead expenses
of the Company and its Subsidiaries or other expenses for the preparation of
financial statements or other data normally prepared by the Company and its
Subsidiaries in the ordinary course of its business, (ii) the expenses of any
officers' and directors' liability insurance, (iii) the expenses and fees for
listing the securities to be registered on each exchange on which similar
securities issued by the Company are then listed or, if no such securities are
then listed on an exchange selected by the Company and (iv) all fees associated
with filings required to be made with the NASD (including, if applicable, the
fees and expenses of any "qualified independent underwriter" and its counsel as
may be required by the rules and regulations of the NASD).
(e) Inclusion of Other Securities. The Company shall not register
securities (other than Registrable Securities) for sale for the account of any
Person other than the Company in any registration requested pursuant to Section
1.1(a) unless permitted to do so by the written consent of holders holding at
least a majority (by number of LLC Units) of the Registrable Securities
proposed to be sold in such registration.
(f) Effective Registration Statement. A registration requested pursuant
to Section 1.1(a) will not be deemed to have been effected unless it has become
effective for the period specified in Section 1.3(b). Notwithstanding the
preceding sentence, a registration requested pursuant to Section 1.1(a) which
does not become effective after the Company has filed a registration statement
with respect thereto solely by reason of the refusal to proceed of the holder or
holders of Registrable Securities requesting the registration shall be deemed to
have been effected by the Company at the request of such holder or holders.
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(g) Pro Rata Allocation. If the holders of a majority (by number of LLC
Units) of the Registrable Securities for which registration is being requested
pursuant to Section 1.1(a) determine, based on consultation with the managing
underwriters or, in an offering which is not underwritten, with an investment
banker, that the number of securities to be sold in any such offering should be
limited due to market conditions or otherwise, all holders of Registrable
Securities proposing to sell their securities in such registration shall share
pro rata in the number of securities being offered (as determined by the holders
holding a majority (by number of LLC Units) of the Registrable Securities for
which registration is being requested in consultation with the managing
underwriters or investment banker, as the case may be) and registered for their
account, such sharing to be based on the number of Registrable Securities as to
which registration was re quested by such holders, and any securities that the
Company shall have proposed to sell for its own account in such offering shall
be included only if all Registrable Securities as to which registration was
requested are included therein.
1.2. Incidental Registration. If the Company at any time proposes to
register any of its equity securities (as defined in the Exchange Act) under the
Securities Act (other than pursuant to Section 1.1 or pursuant to a Special
Registration), whether or not for sale for its own account, and the registration
form to be used may be used for the registration of Registrable Securities, it
will each such time give prompt written notice to all holders of Registrable
Securities of its intention to do so and of such holders' rights under this
Section and, upon the written request of any holder of Registrable Securities
given to the Company within 30 days after the Company has given any such notice
(which request shall specify the Registrable Securities intended to be disposed
of by such holder and the intended method of disposition thereof), the Company
will use its best efforts to effect the registration under the Securities Act of
all Registrable Securities which the Company has been so requested to register
by the holders thereof, to the extent required to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the Registrable
Securities so to be registered, provided that:
(a) if such registration shall be in connection with the
Underwritten Public Offering of the Common Stock, the Company shall not
include any Registrable Securities in such proposed registration if the
Board shall have determined, after consultation with the managing
underwriters for such offering, that it is not in the best interests of
the Company to include any Registrable Securities in such registration,
provided that, if the Board makes such a determination, the Company
shall not include in such registration any securities not being sold
for the account of the Company;
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(b) if, at any time after giving written notice of its
intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register such
securities, the Company may, at its election, give written notice of
such determination to each holder of Registrable Securities or other
securities that was previously notified of such registration and,
thereupon, shall not register any Registrable Securities in connection
with such registration (but shall nevertheless pay the Registration
Expenses in connection therewith), without prejudice, however, to the
rights of any holder or holders of Registrable Securities to request
that a registration be effected under Section 1.1;
(c) if the Company shall be advised in writing by the managing
underwriters (or, in connection with an offering which is not
underwritten, by an investment banker) (and the Company shall so advise
each holder of Registrable Securities requesting registration of such
advice) that in their or its opinion the number of securities requested
to be included in such registration (whether by the Company, pursuant
to this Section 1.2 or pursuant to any other rights granted by the
Company to a holder or holders of its securities to request or demand
such registration or inclusion of any such securities in any such
registration) exceeds the number of such securities which can be sold
in such offering,
(i) the Company shall include in such registration
the number (if any) of Registrable Securities so requested to
be included which in the opinion of such underwriters or
investment banker, as the case may be, can be sold and shall
not include in such registration any securities (other than
securities being sold by the Company, which shall have
priority in being included in such registration) so requested
to be included other than Registrable Securities unless all
Registrable Securities requested to be so included are
included therein, and
(ii) if in the opinion of such underwriters or
investment banker, as the case may be, some but not all of the
Registrable Securities may be so included, all holders of
Registrable Securities requested to be included therein shall
share pro rata in the number of Registrable Securities
included in such Underwritten Public Offering on the basis of
the number of Registrable Securities requested to be included
therein by such holders, provided that, in the case of a
registration initially requested or demanded by a holder or
holders of securities other than Registrable Securities, the
holders of the Registrable Securities
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requested to be included therein and the holders of such other
securities shall share pro rata (based on the number of LLC
Units if the requested or demanded registration is to cover
only LLC Units and, if not, based on the proposed offering
price of the total number of securities included in such
Underwritten Public Offering requested to be included
therein),
and the Company shall so provide in any registration agreement
hereinafter entered into with respect to any of its securities; and
(d) if prior to the effective date of the registration
statement filed in connection with such registration, the Company is
informed by the managing underwriter (or, in connection with an
offering which is not underwritten, by an investment banker) that the
price at which such securities are to be sold is a price below that
price which the requesting holders shall have indicated to be
acceptable, the Company shall promptly notify the requesting holders of
such fact, and each such requesting holder shall have the right to
withdraw its request to have its Registrable Securities included in
such registration statement.
The Company will pay all Registration Expenses in connection with each
registration of Registrable Securities requested pursuant to this Section 1.2.
No registration effected under this Section 1.2 shall relieve the Company from
its obligation to effect registrations upon request under Section 1.1.
1.3. Registration Procedures. If and whenever the Company is required
to use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 1.1 and 1.2, the Company will
promptly:
(a) subject to clauses (x) and (y) of Section 1.1(b), prepare
and file with the Commission a registration statement with respect to
such securities, make all required filings with the NASD and use best
efforts to cause such registration statement to become effective;
(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith and such other documents as may be necessary to
keep such registration statement effective and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as
all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set
forth in such registration statement, but in no event
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for a period of more than six months after such registration statement
becomes effective;
(c) furnish to counsel (if any) selected by the holders of a
majority (by number of LLC Units) of the Registrable Securities covered
by such registration statement copies of all documents proposed to be
filed with the Commission in connection with such registration, which
documents will be subject to the review of such counsel;
(d) furnish to each seller of such securities, without charge,
such number of conformed copies of such registration statement and of
each such amendment and supplement thereto (in each case, including all
exhibits and documents filed therewith (other than those filed on a
confidential basis), except that the Company shall not be obligated to
furnish any seller of securities with more than two copies of such
exhibits and documents), such number of copies of the prospectus
included in such registration statement (including each preliminary
prospectus and any summary prospectus) in conformity with the
requirements of the Securities Act, and such other documents, as such
seller may reasonably request in order to facilitate the disposition of
the securities owned by such seller;
(e) use its best efforts (x) to register or qualify the
securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as each seller shall
request, (y) to keep such registration or qualification in effect for
so long as such registration statement remains in effect and (z) to do
any and all other acts and things which may be necessary or advisable
to enable such seller to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to qualify generally
to do business as a foreign corporation in any jurisdiction wherein it
is not so qualified, subject itself to taxation in any jurisdiction
wherein it is not so subject, or take any action which would subject it
to general service of process in any jurisdiction wherein it is not so
subject;
(f) in connection with an Underwritten Public Offering only,
furnish to each seller a signed counterpart, addressed to the sellers,
of
(i) an opinion of counsel for the Company experienced
in securities law matters, dated the effective date of the
registration statement, and
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(ii) a "comfort" letter signed by the independent
public accountants who have issued an audit report on the
Company's financial statements included in the registration
statement, subject to such seller having executed and
delivered to the independent public accountants such
certificates and documents as such accountants shall
reasonably request and provided that such accountants shall be
permitted by the standards applicable to certified public
accountants to deliver a "comfort" letter to such seller,
covering substantially the same matters with respect to the
registration statement (and the prospectus included therein) and, in
the case of such accountants' letter, with respect to events subsequent
to the date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
the underwriters in Underwritten Public Offerings of securities;
(g) (i) notify each holder of Registrable Securities covered
by such registration statement if such registration statement, at the
time it or any amendment thereto became effective, (x) contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading upon discovery by the Company of such material
misstatement or omission or (y) upon discovery by the Company of the
happening of any event as a result of which the Company believes there
would be such a material misstatement or omission, and, as promptly as
practicable, prepare and file with the Commission a post-effective
amendment to such registration statement and use best efforts to cause
such post-effective amendment to become effective such that such
registration statement, as so amended, shall not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and (ii) notify each holder of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act,
if the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading upon discovery by the Company of such
material misstatement or omission or upon discovery by the Company of
the happening of any event as a result of which the Company believes
there would be a material misstatement or omission, and, as promptly as
is practicable, prepare and furnish to such holder a reasonable number
of copies of a supplement to or an amendment of such prospectus as
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may be necessary so that, as thereafter delivered to the purchasers of
such securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading;
(h) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement of the Company complying with the provisions of Section 11(a)
of the Securities Act and Rule 158 under the Securities Act;
(i) notify each seller of any securities covered by such
registration statement (i) when such registration statement, or any
post-effective amendment to such registration statement, shall have
become effective, or any amendment of or supplement to the prospectus
used in connection therewith shall have been filed, (ii) of any request
by the Commission to amend such registration statement or to amend or
supplement such prospectus or for additional information, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of such registration statement or of any order preventing
or suspending the use of any preliminary prospectus, and (iv) of the
suspension of the qualification of such securities for offering or sale
in any jurisdiction, or of the institution of any proceedings for any
of such purposes;
(j) use its best efforts (i) (A) to list such securities on
any securities exchange on which the LLC Units are then listed or, if
no LLC Units are then listed, on an exchange selected by the Company,
if such listing is then permitted under the rules of such exchange or
(B) if such listing is not practicable or the Board determines that
quotation as a NASDAQ security is preferable, to secure designation of
such securities as a NASDAQ "national market system security" within
the meaning of Rule 11Aa2-1 under the Exchange Act and (ii) to provide
and cause to be maintained a transfer agent and registrar for such
Registrable Securities not later than the effective date of such
registration statement; and
(k) use every reasonable effort to obtain the lifting of any
stop order that might be issued suspending the effectiveness of such
registration statement or of any order preventing or suspending the use
of any preliminary prospectus, provided that if the Company is unable
to obtain the lifting of any such stop order in connection with a
registration pursuant to Section 1.1(a), the request for registration
shall not be deemed exercised for purposes of determining
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whether such registration has been effected for purposes of Section
1.1(a) or (d).
The Company may require each seller of any securities as to which any
registration is being effected to furnish to the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and as shall be required by law
in connection therewith. Each such holder agrees to furnish promptly to the
Company all information required to be disclosed in order to make the
information previously furnished to the Company by such holder not materially
misleading.
The Company agrees not to file or make any amendment to any
registration statement with respect to any Registrable Securities, or any
amendment of or supplement to the prospectus used in connection therewith, which
refers to any seller of any securities covered thereby by name, or otherwise
identifies such seller as the holder of any securities of the Company, without
the consent of such seller, such consent not to be unreasonably withheld, except
that no such consent shall be required for any disclosure that is required by
law.
By acquisition of Registrable Securities, each holder of such
Registrable Securities shall be deemed to have agreed that upon receipt of any
notice from the Company pursuant to Section 1.3(g), such holder will promptly
discontinue such holder's disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until such holder
shall have received, in the case of clause (i) of Section 1.3(g), notice from
the Company that such registration statement has been amended, as contemplated
by Section 1.3(g), and, in the case of clause (ii) of Section 1.3(g), copies of
the supplemented or amended prospectus contemplated by Section 1.3(g). If so
directed by the Company, each holder of Registrable Securities will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies, in such holder's possession of the prospectus covering such Registrable
Securities at the time of receipt of such notice. In the event that the Company
shall give any such notice, the period mentioned in Section 1.3(b) shall be
extended by the number of days during the period from and including the date of
the giving of such notice to and including the date when each seller of any
Registrable Securities covered by such registration statement shall have
received the copies of the supplemented or amended prospectus contemplated by
Section 1.3(g).
Although Voting LLC Units, Non-Voting LLC Units and LLC Units issued
upon the exercise of options are included in the definition of Registrable
Securities, the Company shall, in respect of any such Registrable Securities
requested to be
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registered pursuant hereto, be required to include in any registration statement
only Voting LLC Units.
1.4. Underwritten Offerings. The provisions of this Section 1.4 do not
establish additional registration rights but instead set forth procedures
applicable, in addition to those set forth in Sections 1.1 through 1.3, to any
registration which is an underwritten offering.
(a) Underwritten Offerings Exclusive. Whenever a registration requested
pursuant to Section 1.1 is for an underwritten offering, only securities which
are to be distributed by the underwriters may be included in the registration.
(b) Underwriting Agreement. If requested by the underwriters for any
underwritten offering by holders of Registrable Securities pursuant to a
registration requested under Section 1.1(a), the Company shall enter into an
underwriting agreement with such underwriters for such offering, such agreement
to be reasonably satisfactory in substance and form to the holders of a majority
(by number of LLC Units) of the Registrable Securities to be covered by such
registration and to the underwriters and to contain such representations and
warranties by the Company and such other terms and provisions as are customarily
contained in agreements of this type, including, but not limited to, indemnities
to the effect and to the extent provided in Section 1.7, provisions for the
delivery of officers' certificates, opinions of counsel and accountants'
"comfort" letters and hold-back arrangements. The holders of Registrable
Securities to be distributed by such underwriters shall be parties to such
underwriting agreement and may, at their option, require that any or all of the
representations and warranties by, and the agreements on the part of, the
Company to and for the benefit of such underwriters be made to and for the
benefit of such holders of Registrable Securities and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement shall also be conditions precedent to the obligations of
such holders of Registrable Securities. In the event that any condition to the
obligations under any such underwriting agreement are not met or waived, and
such failure to be met or waived is not attributable to the fault of the selling
LLC Unitholders requesting a demand registration pursuant to Section 1.1(a),
such request for registration shall not be deemed exercised for purposes of
determining whether such registration has been effected for purposes of Section
1.1(a) or (d). No holder of Registrable Securities shall be required by the
Company to make any representations or warranties to, or agreements with, the
Company or the underwriters other than as set forth in Sections 1.4(e) and
1.7(b), representations, warranties or agreements regarding such holder and such
holder's intended method of distribution and any other representations required
by applicable law.
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(c) Selection of Underwriters. Whenever a registration requested
pursuant to Section 1.1(a) is for an underwritten offering, the Company will
have the right to select the managing underwriters to administer the offering
(subject to the consent (not to be unreasonably withheld) of the holders of a
majority of the LLC Units requested to be registered by CERA Principals
(including the CERA Trusts) in the case of a registration requested pursuant to
Section 1.1(a)(ii)), which managing underwriters shall be underwriters of
nationally recognized standing. If the Company at any time pro poses to register
any of its securities under the Securities Act for sale for its own account and
such securities are to be distributed by or through one or more underwriters,
the Company will have the right to select the managing underwriters to
administer the offering at least one of which shall be an underwriter of
nationally recognized standing.
(d) Incidental Underwritten Offerings. Subject to the provisions of the
proviso to the first sentence of Section 1.2, if the Company at any time
proposes to register any of its equity securities under the Securities Act
(other than pursuant to Section 1.1 or pursuant to a Special Registration),
whether or not for its own account, and such securities are to be distributed by
or through one or more underwriters, the Company will give prompt written notice
to all holders of Registrable Securities of its intention to do so and, if
requested by any holder of Registrable Securities, will use its best efforts to
arrange for such underwriters to include the Registrable Securities to be
offered and sold by such holder among those to be distributed by such
underwriters. The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the under writing agreement between the Company
and such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of the underwriters under such
underwriting agreement shall also be conditions precedent to the obligations of
such holders of Registrable Securities. No such holder of Registrable
Securities shall be required by the Company to make any representations or
warranties to, or agreements with, the Company or the underwriters other than as
set forth in Sections 1.4(e) and 1.7(b), representations, warranties or
agreements regarding such holder and such holder's intended method of
distribution and any other representations required by applicable law.
(e) Hold Back Agreements. If and whenever the Company proposes to
register any of its equity securities under the Securities Act, whether or not
for its own account (other than pursuant to a Special Registration), or is
required to use its best efforts to effect the registration of any Registrable
Securities under the Securities Act pursuant to Section 1.1 or 1.2, each holder
of Registrable Securities agrees by acquisi-
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tion of such Registrable Securities not to effect (other than pursuant to such
registration) any public sale or distribution, including, but not limited to,
any sale pursuant to Rule 144 or Rule 144A, of any Registrable Securities, any
other equity securities of the Company or any securities convertible into or
exchangeable or exercisable for any equity securities of the Company for one
year after, and during the 20 days prior to, the effective date of such
registration and the Company agrees to cause each holder of any equity security,
or of any security convertible into or exchangeable or exercisable for any
equity security, of the Company purchased from the Company at any time other
than in a Public Offering to enter into a similar agreement with the Company.
The Company further agrees not to effect (other than pursuant to such
registration or pursuant to a Special Registration) any public sale or
distribution, or to file any registration statement (other than such
registration or a Special Registration) covering any, of its equity securities,
or any securities convertible into or exchangeable or exercisable for such
securities, during the 20 days prior to, and for one year after, the effective
date of such registration if required by the managing underwriter.
1.5. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement registering Registrable
Securities under the Securities Act, the Company will give the holders of such
Registrable Securities so to be registered and their underwriters, if any, and
their respective counsel and accountants the opportunity to participate in the
preparation of such registration statement, each prospectus included therein or
filed with the Commission, and each amendment thereof or supplement thereto, and
will give each of them such access to its books and records and such
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have issued audit reports on its financial
statements as shall be necessary, in the opinion of such holders' and such
underwriters' respective counsel, to conduct a reasonable investigation within
the meaning of the Securities Act.
1.6. Other Registrations. If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act pursuant to Section 1.1 or 1.2, and if such
registration shall not have been withdrawn or abandoned, the Company shall not
be obligated to and shall not file any registration statement with respect to
any of its securities (including Registrable Securities) under the Securities
Act (other than a Special Registration), whether of its own accord or at the
request or demand of any holder or holders of such securities, until a period of
six months shall have elapsed from the effective date of such previous
registration; and the Company shall so provide in any registration rights
agreement with respect to any of its equity securities.
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1.7. Indemnification.
(a) Indemnification by the Company. In the event of any registration of
any Registrable Securities under the Securities Act pursuant to Section 1.1 or
1.2, the Company will and hereby does indemnify and hold harmless each seller of
such securities, its directors, officers, and employees, each other person who
participates as an underwriter, broker or dealer in the offering or sale of such
securities and each other person, if any, who controls such seller or any such
participating person within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, against any and all losses, claims,
damages or liabilities, joint or several, to which such seller or any such
director, officer, employee, participating person or controlling person may
become subject under the Securities Act or otherwise (including, without
limitation, the reasonable fees and expenses of legal counsel incurred in
connection with any claim for indemnity hereunder), insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue
statement of a fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein or related thereto, or
any amendment or supplement thereto, or (ii) any omission or alleged omission
to state a fact required to be stated in any such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement or necessary to make the statements therein not misleading; and the
Company will reimburse such seller and each such director, officer, employee,
participating person and controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, liability, action or proceeding, provided that the Company
shall not be liable in any such case to the extent that any such loss, claim,
dam age, liability or expense arises out of or is based upon an untrue statement
or omission made in such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such seller or participating person expressly for use in the
preparation thereof and provided, further, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission in the prospectus, if such untrue
statement or alleged untrue statement or omission or alleged omission is
completely corrected in an amendment or supplement to the prospectus and the
seller of Registrable Securities thereafter fails to deliver such prospectus as
so amended or supplemented prior to or concurrently with the sale of Registrable
Securities to the person asserting such loss, claim, damage, liability or
expense after the Company had furnished such seller with a sufficient number of
copies of the same or if the seller received notice from the Company
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of the existence of such untrue statement or alleged untrue statement or
omission or alleged omission and the seller continued to dispose of Registrable
Securities prior to the time of the receipt of either (A) an amended or
supplemented prospectus which completely corrected such untrue statement or
omission or (B) a notice from the Company that the use of the existing
prospectus may be resumed. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such seller or any such
director, officer, employee, participating person or controlling person and
shall survive the trans fer of such securities by such seller.
(b) Indemnification by the Sellers. In the event of any registration of
any Registrable Securities under the Securities Act pursuant to Section 1.1 or
1.2, each of the prospective sellers of such securities will indemnify and hold
harmless the Company, each director of the Company, each officer of the Company
who shall sign such registration statement, each other person who participates
as an underwriter, broker or dealer in the offering or sale of such securities
and each other person, if any, who controls the Company or any such
participating person within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any and all losses, claims, damages or
liabilities, joint or several, to which the Company or any such director,
officer, employee, participating person or controlling person may become subject
under the Securities Act or otherwise (including, without limitation, the
reasonable fees and expenses of legal counsel incurred in connection with any
claim for indemnity hereunder), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a fact contained
in, or any omission or alleged omission to state a fact with respect to such
seller required to be stated in, any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein or related thereto, or
any amendment or supplement thereto, if such statement or omission was made in
reliance upon and in conformity with written information furnished to the
Company by such seller expressly for use in the preparation of such registration
statement, preliminary prospectus, final prospectus, summary prospectus,
amendment or supplement; and the seller will reimburse the Company and each such
director, officer, employee, participating person and controlling person for
any legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding, provided that the liability of each such seller will be in
proportion to and limited to the net amount received by such seller (after
deducting any underwriting discount and expenses) from the sale of Registrable
Securities pursuant to such registration statement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
the Company or any such director, officer, participating person or controlling
person and shall survive the transfer of such securities by such seller.
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(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding paragraphs of this Section 1.7, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party hereunder, give written notice to the latter of the
commencement of such action, provided that the failure of any indemnified party
to give notice as provided therein shall not relieve the indemnifying party of
its obligations under the preceding paragraphs of this Section 1.7. In case any
such action is brought against an indemnified party, the indemnifying party will
be entitled to participate therein and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, provided that if such indemnified
party and the indemnifying party reasonably determine, based upon advice of
their respective independent counsel, that a conflict of interest may exist
between the indemnified party and the indemnifying party with respect to such
action and that it is advisable for such indemnified party to be represented by
separate counsel, such indemnified party may retain other counsel, reasonably
satisfactory to the indemnifying party, to represent such indemnified party, and
the indemnifying party shall pay all reasonable fees and expenses of such
counsel. No indemnifying party, in the defense of any such claim or litigation,
shall, except with the consent of such indemnified party, which consent shall
not be unreasonably withheld, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such indemnified party of a release from all
liability in respect to such claim or litigation.
(d) Other Indemnification. Indemnification similar to that specified in
the preceding paragraphs of this Section 1.7 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of such Registrable
Securities under any Federal or state law or regulation of governmental
authority other than the Securities Act.
(e) Other Remedies. If for any reason the foregoing indemnity under
Section 1.7(a) or (b) is unavailable, or is insufficient to hold harmless an
indemnified party, other than by reason of the exceptions provided therein, then
the indemnifying party and the indemnified party under Section 1.7(a) or (b)
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the
16
<PAGE> 109
relative fault of the indemnifying party on the one hand and the indemnified
party on the other or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in such proportion as is appropriate to
reflect not only the relative fault of the indemnifying party on the one hand
and the indemnified party on the other but also the relative benefits received
by the indemnifying party and the indemnified party from the offering of
Registrable Securities (taking into account the portion of the proceeds of the
offering realized by each such party) as well as any other relevant equitable
considerations. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Any party's obligation to contribute pursuant to this Section
1.7(e) is several (in proportion to the relative value of their Registrable
Securities covered by a registration statement) and not joint with the
obligations of any other party. No party shall be liable for contribution under
this Section 1.7(e) except to the extent and under such circumstances as such
party would have been liable to indemnify under this Section 1.7 if such
indemnification were enforceable under applicable law.
(f) Officers and Directors. As used in this Section 1.7, the terms
"officers" and "directors" shall include the partners of the holders of
Registrable Securities which are partnerships and the trustees of CERA trusts.
(g) Indemnification Payments. The indemnification and contribution
required by this Section 1.7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are
received or expense, loss, damage or liability is incurred; provided that in the
event it is ultimately determined that any amounts so paid were not subject to
indemnification or contribution hereunder, the recipient thereof shall promptly
return such amounts to payor thereof.
17
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SCHEDULE D
Former MGI stockholders who have executed a Holder Information Form.
18
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF RICHARDS, LAYTON AND FINGER, P.A.]
February 12, 1998
Global Decisions Group LLC
c/o McCarthy, Crisanti & Maffei, Inc.
One Chase Manhattan Plaza
New York, New York 10005
Re: Global Decisions Group LLC
Ladies and Gentlemen:
We have acted as special Delaware counsel for Global Decisions Group
LLC, a Delaware limited liability company (the "Company"), in connection with
the matters set forth herein.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of executed or
conformed counterparts, or copies otherwise proved to our satisfaction, of the
following:
(a) The Certificate of Formation of the Company, dated as of June 30,
1997 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on June 30, 1997;
(b) The Limited Liability Company Agreement of the Company, dated as of
June 30, 1997;
(c) The Registration Statement (the "Registration Statement") on Form
S-8 relating to limited liability company interests in the Company to be issued
pursuant to the (i) Cambridge Energy Research Associates, Inc. LLC Unit Grant
Plan, (ii) Cambridge Energy Research Associates, Inc. LLC Unit Option Plan,
(iii) MCM Group, Inc. LLC Unit Option Plan and (iv) MCM Group, Inc. Stock Option
Plan (each, an "LLC Unit" and collectively, the "LLC Units"), as filed by the
Company with the Securities and Exchange Commission on February 12, 1998;
<PAGE> 2
Global Decisions Group LLC
February 12, 1998
Page 2
(d) A form of Amended and Restated Limited Liability Company Agreement
of the Company, without exhibits (the "Agreement"), attached as an exhibit to
the Registration Statement;
(e) A form of Cambridge Energy Research Associates, Inc. LLC Unit Grant
Agreement;
(f) A form of Management LLC Unit Subscription Agreement relating to
the Cambridge Energy Research Associates, Inc. LLC Unit Option Plan;
(g) A form of Management LLC Unit Subscription Agreement relating to
the MCM Group, Inc. LLC Unit Option Plan;
(h) A form of Management LLC Unit Subscription Agreement relating to
the MCM Group, Inc. Stock Option Plan; and
(i) A Certificate of Good Standing for the Company, dated February 12,
1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Agreement. The documents listed in paragraphs (e) through
(h) above are hereinafter referred to each as an "LLC Unit Subscription
Agreement" and collectively as the "LLC Unit Subscription Agreements."
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (i) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (i) above) that is referred to in or incorporated by reference into
any document reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed that (i)
all signatures on documents examined by us are genuine, (ii) all documents
submitted to us as originals are authentic, and (iii) all documents submitted to
us as copies conform with the original copies of those documents.
For purposes of this opinion, we have assumed (i) that the Agreement
constitutes the entire agreement among the parties thereto with respect to the
subject matter
<PAGE> 3
Global Decisions Group LLC
February 12, 1998
Page 3
thereof, including with respect to the admission of members to, and the
creation, operation, management and termination of, the Company, and that the
Agreement and the Certificate are in full force and effect, have not been
amended and no amendment of the Agreement or the Certificate is pending or has
been proposed, (ii) that there are no proceedings pending or contemplated for
the merger, consolidation, conversion, liquidation, dissolution or termination
of the Company, (iii) except to the extent provided in paragraph 1 below, the
due organization or due formation, as the case may be, and valid existence in
good standing of each party to the documents examined by us under the laws of
the jurisdiction governing its organization or formation, (iv) the legal
capacity of natural persons who are signatories to the documents examined by us,
(v) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (vi) the due authorization, execution and delivery by all parties
thereto (other than the Company) of all documents examined by us, including the
Agreement by each Person acquiring LLC Units pursuant to the LLC Unit
Subscription Agreements (each, a "Member" and collectively, the "Members"),
(vii) that the LLC Units are issued, transferred and paid for, and the Members
are admitted to the Company as members of the Company, all in accordance with
the Agreement, the LLC Unit Subscription Agreements and the Registration
Statement, (viii) that Schedule A to the Agreement, the Membership Register and
the books and records of the Company set forth all information required by the
Agreement and the Delaware Limited Liability Company Act (6 Del.C.
Section18-101, et seq.) (the "Act"), including all information with respect to
all Persons to be admitted as Members and their contributions to the Company,
and (ix) that the Members will not engage in tortious or wrongful conduct and
will fulfill all of their obligations as set forth in the Agreement and the LLC
Unit Subscription Agreements.
We have not participated in the preparation of any offering material
relating to the Company (including the Registration Statement) and assume no
responsibility for the contents of any such material.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Company has been duly formed and is validly existing in good
standing as a limited liability company under the Act.
<PAGE> 4
Global Decisions Group LLC
February 12, 1998
Page 4
2. The LLC Units to be issued to the Members will be validly issued
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable limited liability company interests in the Company.
3. A Member shall not be obligated personally for any of the debts,
obligations or liabilities of the Company, whether arising in contract, tort or
otherwise, solely by reason of being a member of the Company, except as a Member
may be obligated to make contributions to the Company and to repay any funds
wrongfully distributed to it.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In giving the
foregoing consent, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE> 1
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of Global Decisions Group LLC of our report dated December 15, 1997, on
our audit of the balance sheet of Global Decisions Group LLC as of September 30,
1997, appearing in the registration statement on Form S-4 (Registration No. 333-
34477) of Global Decisions Group LLC filed with the Securities and Exchange
Commission pursuant to the Securities Act of 1933.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
New York, New York
February 6, 1998
