Securities Purchase Agreement - NASDAQ Stock Market Inc. and Hellman & Friedman Capital Partners IV LP
SECURITIES PURCHASE AGREEMENT
dated as of
March 23, 2001
among
THE NASDAQ STOCK MARKET, INC.,
HELLMAN & FRIEDMAN CAPITAL PARTNERS IV, L.P.,
and
THE OTHER PURCHASERS LISTED ON THE SIGNATURE PAGES
HEREOF
TABLE OF CONTENTS
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PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions...............................................1
ARTICLE 2
PURCHASE AND SALE OF SECURITIES
SECTION 2.01. Commitment to Purchase....................................3
SECTION 2.02. The Closing...............................................4
SECTION 2.03. Use of Proceeds...........................................4
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
SECTION 3.01. Corporate Existence and Power.............................4
SECTION 3.02. Corporate Authorization...................................5
SECTION 3.03. Governmental Authorization................................5
SECTION 3.04. Noncontravention..........................................5
SECTION 3.05. Capitalization............................................5
SECTION 3.06. Subsidiaries..............................................6
SECTION 3.07. Financial Statements......................................7
SECTION 3.08. Absence of Certain Changes................................7
SECTION 3.09. Selling Documents.........................................8
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER
SECTION 4.01. Private Placement.........................................8
SECTION 4.02. Authority; No Other Action................................9
SECTION 4.03. Binding Effect............................................9
ARTICLE 5
COVENANTS OF THE ISSUER
SECTION 5.01. Conduct of the Company...................................9
SECTION 5.02. Access to Information....................................10
SECTION 5.03. Notices of Certain Events................................10
SECTION 5.04. Voting Rights............................................11
ARTICLE 6
COVENANTS OF THE PURCHASERS
SECTION 6.01. Confidentiality..........................................11
ARTICLE 7
COVENANTS OF THE PURCHASERS AND THE ISSUER
SECTION 7.01. Reasonable Best Efforts; Further Assurances..............12
SECTION 7.02. Certain Filings..........................................12
SECTION 7.03. Public Announcements.....................................13
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
SECTION 8.01. Conditions to Each Party's Obligations...................13
SECTION 8.02. Conditions to Each Purchaser's Obligations...............13
SECTION 8.03. Conditions to Issuer's Obligations.......................14
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices..................................................15
SECTION 9.02. No Waivers; Amendments...................................15
SECTION 9.03. Survival of Provisions...................................15
SECTION 9.04. Indemnification..........................................15
SECTION 9.05. Expenses; Documentary Taxes..............................17
SECTION 9.06. Termination..............................................17
SECTION 9.07. Successors and Assigns...................................18
SECTION 9.08. Headings.................................................19
SECTION 9.09. Severability.............................................19
SECTION 9.10. Specific Performance.....................................19
SECTION 9.11. New York Law.............................................19
SECTION 9.12. Counterparts; Effectiveness..............................19
SECTION 9.13. Entire Agreement.........................................19
EXHIBITS
Exhibit A -- Form of Convertible Subordinated Debenture
Exhibit B -- Form of Securityholders Agreement
Exhibit C -- Form of Amendment to Certificate of Incorporation
Exhibit D -- Form of Purchase and Sale Agreement
SECURITIES PURCHASE AGREEMENT
AGREEMENT dated as of March 23, 2001 among The Nasdaq Stock
Market, Inc., a Delaware corporation (the "Issuer"), Hellman & Friedman
Capital Partners IV, L.P., a Delaware limited partnership ("HFCP IV") and
the other purchasers listed on the signature pages hereof (together with
HFCP IV, the "Purchasers").
WHEREAS, the Issuer has authorized the sale and issuance of
$240,000,000 of its 4% Convertible Subordinated Debentures due 2006 in the
form attached hereto as Exhibit A (the "Securities"); and
WHEREAS, the Purchasers desire to purchase the Securities, and the
Issuer desires to issue and sell the Securities to the Purchasers, on the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used
herein, have the following meanings:
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the purposes of this definition, "control" when used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" means this agreement, as the same may be amended from
time to time.
"Balance Sheet" means the unaudited consolidated balance sheet of
the Issuer and its Subsidiaries as of the Balance Sheet Date.
"Balance Sheet Date" means December 31, 2000.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in the City of New York are authorized by law
to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $.01 per share,
of the Issuer.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Agreement, any Person shall be deemed
to own subject to Lien any asset that it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"Material Adverse Effect" means a material adverse effect on the
business, assets, condition (financial or otherwise) or results of
operations of the Issuer and its Subsidiaries, taken as a whole.
"Person" means an individual or a corporation, partnership,
association, trust, or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"Preferred Stock" means the preferred stock, par value $.01 per
share, of the Issuer.
"Regulation D" means Regulation D under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Securityholders Agreement" means the Securityholders Agreement
among the Issuer, and the Purchasers, substantially in the form attached as
Exhibit B hereto.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person.
"Transactions" means the transactions contemplated by the
Transaction Documents.
"Transaction Documents" means this Agreement, the Securityholders
Agreement, and the Securities.
(b) Each of the following terms is defined in the Section set
forth opposite such term:
Term Section
Accredited Investor 4.01
Charter Amendment 5.04
Closing 2.02
Closing Date 2.02
Damages 9.04
HFCP IV Preamble
Indemnified Person 9.04
Indemnifying Person 9.04
Issuer Preamble
Issuer Securities 3.05
NASD 2.03
PPM 3.10
Purchase and Sale Agreement 2.03
Purchasers Preamble
Subsidiary Securities 3.06
ARTICLE 2
PURCHASE AND SALE OF SECURITIES
SECTION 2.01. Commitment to Purchase. Upon the basis of the
representations and warranties herein contained of each Purchaser, but
subject to the terms and conditions hereinafter stated, the Issuer agrees
to issue and sell to each Purchaser and each Purchaser, upon the basis of
the representations and warranties herein contained of the Issuer, but
subject to the terms and conditions hereinafter stated, agrees, severally
but not jointly, to purchase from the Issuer the Securities in the amounts
and for the aggregate purchase price set forth below the name of such
Purchaser on the signature pages hereof.
SECTION 2.02. The Closing. (a) The purchase and sale of the
Securities shall take place at a closing (the "Closing") at the offices of
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York as soon as
possible, but in no event later than five Business Days, after satisfaction
of the conditions set forth in Article 8, or at such other time or location
as the Issuer and the Purchasers shall agree. The date and time of Closing
are referred to herein as the "Closing Date."
(b) At the Closing, each Purchaser shall deliver to the Issuer,
by wire transfer to an account designated by the Issuer not later than five
Business Days prior to the Closing Date, an amount, in immediately
available funds, equal to the aggregate purchase price of the Securities
being purchased by such Purchaser from the Issuer.
(c) At the Closing, the Issuer shall deliver to each Purchaser,
against payment of the purchase price, certificates evidencing the
Securities in definitive form and registered in such names as such
Purchaser shall request not later than five Business Days prior to the
Closing Date.
SECTION 2.03. Use of Proceeds. Concurrently with the Closing, the
Issuer shall apply substantially all of the proceeds of the issuance of the
Securities to repurchase shares of Common Stock held by the National
Association of Securities Dealers, Inc. (the "NASD") pursuant to the
Purchase and Sale Agreement to be entered into between the NASD and the
Issuer substantially in the form of Exhibit D hereto (the "Purchase and
Sale Agreement").
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE ISSUER
The Issuer represents and warrants to each Purchaser as follows:
SECTION 3.01. Corporate Existence and Power. The Issuer is a
corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation and has all corporate powers
and all material governmental licenses, authorizations, permits, consents
and approvals required to carry on its business as now conducted. The
Issuer is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where such qualification is necessary,
except for those jurisdictions where failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect. The
Issuer has heretofore delivered to the Purchasers true and complete copies
of the certificate of incorporation and bylaws of the Issuer as currently
in effect.
SECTION 3.02. Corporate Authorization. The execution, delivery and
performance by Issuer of this Agreement and the consummation of the
transactions contemplated hereby are within the Issuer's corporate powers
and have been duly authorized by all necessary corporate action on the part
of the Issuer. This Agreement constitutes a valid and binding agreement of
the Issuer, and the Securities when issued will constitute valid and
binding obligations of the Issuer. The shares of Common Stock issuable upon
conversion of the Securities will, when issued, be validly issued, fully
paid and nonassessable, free and clear of any Lien and free of any other
restriction or limitation (including any restriction on the right to vote,
sell or otherwise dispose of such shares of Common Stock) except as
provided under applicable securities laws or as set forth in the
Securityholders Agreement and the Issuer's certificate of incorporation and
bylaws.
SECTION 3.03. Governmental Authorization. The execution, delivery
and performance by the Issuer of this Agreement and the consummation of the
transactions contemplated hereby require no action by or in respect of, or
filing with, any governmental body, agency or official other than (i)
compliance with any applicable requirements of the HSR Act; (ii) approval
of the Charter Amendment by the Commission; and (iii) such other actions or
filings which have been taken or made or shall be taken or made on or prior
to the Closing Date.
SECTION 3.04. Noncontravention. The execution, delivery and
performance by the Issuer of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) violate the
certificate of incorporation or bylaws of the Issuer or any of its
Subsidiaries, (ii) assuming compliance with the matters referred to in
Section 3.03, violate any applicable law, rule, regulation, judgment,
injunction, order or decree, (iii) require any consent or other action by
any Person under, constitute a default under, or give rise to any right of
termination, cancellation or acceleration of any right or obligation of the
Issuer or any of its Subsidiaries or to a loss of any benefit to which the
Issuer or any of its Subsidiaries is entitled under any provision of any
material agreement or other instrument binding upon the Issuer or any of
its Subsidiaries or (iv) result in the creation or imposition of any Lien
on any asset of the Issuer or any of its Subsidiaries.
SECTION 3.05. Capitalization. (a) The authorized capital stock of
the Issuer consists of (i) 300,000,000 shares of Common Stock and (ii)
30,000,000 shares of Preferred Stock. As of the date hereof, there are (i)
128,692,543 shares of Common Stock outstanding, all of which were validly
issued, fully paid and nonassessable and were issued free of preemptive
rights; (ii) no shares of Preferred Stock outstanding; (iii) 22,000,000
shares reserved for issuance pursuant to the Issuer's equity incentive plan
and employee stock purchase plan; and (iv) 10,165,040 shares of Common
Stock (including shares underlying options to purchase shares of Common
Stock) granted under the Issuer's equity incentive plan. As of the date
hereof, the NASD owns 95,454,209 shares of Common Stock and assuming the
full exercise of all outstanding warrants issued by the NASD to purchase
outstanding shares of Common Stock owned by it, the NASD owns approximately
40.6% of the Issuer.
(b) Except as set forth in this Section 3.05, there are no
outstanding (i) shares of capital stock or voting securities of the Issuer,
(ii) securities of the Issuer convertible into or exchangeable for shares
of capital stock or voting securities of the Issuer or (iii) options or
other rights to acquire from the Issuer, or any other obligation of the
Issuer to issue, any capital stock, voting securities or securities
convertible into or exchangeable for capital stock or voting securities of
the Issuer (the items in clauses 3.05(b)(i), 3.05(b)(ii) and 3.05(b)(iii)
being referred to collectively as the "Issuer Securities"). Except for the
Purchase and Sale Agreement, there are no outstanding obligations of the
Issuer or any of its Subsidiaries to repurchase, redeem or otherwise
acquire any Issuer Securities.
SECTION 3.06. Subsidiaries. (a) Each Subsidiary of the Issuer is a
corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation, has all corporate powers and
all material governmental licenses, authorizations, permits, consents and
approvals required to carry on its business as now conducted. Each
Subsidiary of the Issuer is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to
be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect. All Subsidiaries of the Issuer as of the date
hereof and their respective jurisdictions of incorporation are identified
on Schedule 3.06.
(b) Except as disclosed on Schedule 3.06, all of the outstanding
capital stock or other voting securities of each Subsidiary of the Issuer
(except for any directors' qualifying shares) is owned by the Issuer,
directly or indirectly, free and clear of any Lien and free of any other
limitation or restriction (including any restriction on the right to vote,
sell or otherwise dispose of such capital stock or other voting
securities). There are no outstanding (i) securities of the Issuer or any
Subsidiary of the Issuer convertible into or exchangeable for shares of
capital stock or voting securities of any Subsidiary of the Issuer or (ii)
options or other rights to acquire from the Issuer or any Subsidiary of the
Issuer, or other obligation of the Issuer or any Subsidiary of the Issuer
to issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of any
Subsidiary of the Issuer (the items in clauses 3.06(b)(i) and 3.06(b)(ii)
being referred to collectively as the "Subsidiary Securities"). There are
no outstanding obligations of the Issuer or any Subsidiary of the Issuer to
repurchase, redeem or otherwise acquire any outstanding Subsidiary
Securities.
(c) Except as set forth on Schedule 3.06, the Issuer has no
ownership interest or other investment convertible into or exchangeable for
an ownership interest in any Person.
SECTION 3.07. Financial Statements. The audited consolidated
balance sheets as of December 31, 1998 and 1999 and the related audited
consolidated statements of income and cash flows for each of the years
ended December 31, 1998 and 1999 and the unaudited consolidated balance
sheet for the nine months ended September 30, 2000 and the related
unaudited consolidated statements of income and cash flows for the nine
months ended September 30, 2000 as well as the unaudited consolidated
balance sheet as of December 31, 2000 and the related unaudited
consolidated statements of income and cashflows for the year ended December
31, 2000 of the Issuer and the Subsidiaries of the Issuer have been
delivered by the Issuer to the Purchasers. Such financial statements fairly
present, in all material respects, in conformity with generally accepted
accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto and except in the case of unaudited
financials for the absence of footnotes and subject to normal year-end
adjustments), the consolidated financial position of the Issuer and the
Subsidiaries as of the dates thereof and their consolidated results of
operations and cash flows for the periods then ended.
SECTION 3.08. Absence of Certain Changes. Except as set forth on
Schedule 3.08, (x) since the Balance Sheet Date, the business of the Issuer
and its Subsidiaries has been conducted in the ordinary course consistent
with past practices and (y) there has not been:
(a) any event, occurrence or facts which, individually or in the
aggregate, has had or would reasonably be expected to have a Material
Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of
the Issuer, or any repurchase, redemption or other acquisition by
the Issuer or any of its Subsidiaries of any outstanding shares of
capital stock or other securities of the Issuer or any of its
Subsidiaries;
(c) any amendment of any material term of any outstanding
security of the Issuer or any of its Subsidiaries;
(d) any incurrence, assumption or guarantee by the Issuer or any
of its Subsidiaries of any indebtedness for borrowed money other
than in the ordinary course of business and in amounts and on
terms consistent with past practices;
(e) any creation or other incurrence by the Issuer or any of its
Subsidiaries of any Lien on any material asset other than in the
ordinary course of business consistent with past practices;
(f) any making of any loan, advance or capital contributions to
or investment in any Person other than loans, advances or capital
contributions to or investments in Subsidiaries of the Issuer set
forth on Schedule 3.06 made in the ordinary course of business
consistent with past practices; or
(g) any change in any method of accounting or accounting practice
by the Issuer or any of its Subsidiaries except for any such
change after the date hereof required by reason of a concurrent
change in generally accepted accounting principles.
SECTION 3.09. Selling Documents. As of January 18, 2001, except as
set forth in Schedule 3.09, the Private Placement Memorandum, dated
November 15, 2000 of the Issuer (the "PPM") did not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained therein not misleading.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF EACH PURCHASER
Each Purchaser hereby represents and warrants to the Issuer as
follows:
SECTION 4.01. Private Placement. (a) Such Purchaser understands
that the offering and sale of the Securities is intended to be exempt from
registration under the Securities Act pursuant to Section 4(2) of the
Securities Act.
(b) The Securities to be acquired by such Purchaser pursuant to
this Agreement are being acquired for its own account and without a view to
the resale or distribution of such Securities or any interest therein other
than in a transaction exempt from registration under the Securities Act.
(c) Such Purchaser is an "Accredited Investor" as such term is
defined in Regulation D.
(d) Such Purchaser has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits
and risks of its investment in the Securities and such Purchaser is capable
of bearing the economic risks of such investment, including a complete loss
of its investment in the Securities.
(e) Such Purchaser has been given the opportunity to ask
questions of, and receive answers from, the Issuer concerning the terms and
conditions of the Securities and other related matters. Such Purchaser
further represents and warrants that the Issuer has made available to such
Purchaser or its agents all documents and information relating to an
investment in the Securities requested by or on behalf of such Purchaser.
In evaluating the suitability of an investment in the Securities, such
Purchaser has not relied upon any other representations or other
information (whether oral or written) made by or on behalf of the Issuer
other than as set forth in this Agreement.
SECTION 4.02. Authority; No Other Action. (a) The execution,
delivery and performance of this Agreement and the Securityholders
Agreement are within such Purchaser's powers and have been duly authorized
on its part by all requisite corporate or partnership action.
(b) No action by or in respect of, or filing with, any
governmental authority, agency or official is required for the execution,
delivery and performance by such Purchaser of this Agreement and the
Securityholders Agreement other than compliance with the applicable
requirements of the HSR Act.
SECTION 4.03. Binding Effect. Each of this Agreement and the
Securityholders Agreement has been duly executed by such Purchaser and
consti tutes a valid and binding agreement of such Purchaser.
ARTICLE 5
COVENANTS OF THE ISSUER
The Issuer agrees that:
SECTION 5.01. Conduct of the Company. Except as set forth in
Schedule 5.01, from the date hereof until the Closing Date, the Issuer and
each of its Subsidiaries shall conduct its businesses in the ordinary
course consistent with past practice and to use its best efforts to
preserve intact its business organizations and relationships with third
parties and to keep available the services of its present officers and
employees. Without limiting the generality of the foregoing, except as set
forth in Schedule 5.01, from the date hereof until the Closing Date,
neither Issuer nor any of its Subsidiaries will, without the prior written
consent of the Purchasers:
(a) except for the Charter Amendment, adopt or propose any change
in its certificate of incorporation or bylaws;
(b) merge or consolidate with any other Person, sell, transfer or
otherwise dispose of all or substantially all of its assets, or acquire a
material amount of assets from any other Person outside the ordinary course
of business; or
(c) agree or commit to do any of the foregoing.
The Issuer will not, and will not permit any of its Subsidiaries to (i)
take or agree or commit to take any action that would make any
representation or warranty of the Issuer hereunder inaccurate in any
material respect at, or as of any time prior to, the Closing Date or (ii)
omit or agree or commit to omit to take any action necessary to prevent any
such representation or warranty from being inaccurate in any material
respect at any such time.
SECTION 5.02. Access to Information. (a) From the date hereof
until the Closing Date, the Issuer will (i) give, and will cause each of
its Subsidiaries to give, the Purchasers, their counsel, financial
advisors, auditors and other authorized representatives reasonable access
during normal business hours to the offices, properties, books and records
of the Issuer and its Subsidiaries, (ii) furnish, and will cause the Issuer
and each of its Subsidiaries to furnish, to the Purchasers, their counsel,
financial advisors, auditors and other authorized representatives such
financial and operating data and other information relating to the Issuer
or any of its Subsidiaries as such Persons may reasonably request and (iii)
instruct the employees, counsel and financial advisors of the Issuer or any
of its Subsidiaries to cooperate with the Purchasers in their investigation
of the Issuer or any of its Subsidiaries. Any investigation pursuant to
this Section shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the Issuer.
SECTION 5.03. Notices of Certain Events. The Issuer shall promptly
notify the Purchasers of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with
the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge threatened against, relating to or involving
or otherwise affecting the Issuer or any of its Subsidiaries that, if
determined or resolved adversely in accordance with the plaintiff's
demands, would reasonably be expected to have a Material Adverse Effect or
that relate to the transactions contemplated by this Agreement.
SECTION 5.04. Voting Rights. At the 2001 annual meeting of
stockholders of the Issuer, the Issuer shall present for stockholder
approval, and shall recommend the approval and adoption of, an amendment to
its certificate of incorporation substantially in the form of Exhibit C,
with such changes as may be required by the Commission that are reasonably
acceptable to the Issuer and the Purchasers (the "Charter Amendment"). The
Issuer shall use all reasonable best efforts to achieve the adoption of the
Charter Amendment.
ARTICLE 6
COVENANTS OF THE PURCHASERS
The Purchasers agrees that:
SECTION 6.01. Confidentiality. The Purchasers and their Affiliates
will hold, and will use their reasonable best efforts to cause their
respective officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence, unless compelled
to disclose by judicial or administrative process or by other requirements
of law, all confidential documents and information concerning the Issuer or
any of its Subsidiaries furnished to the Purchasers or their Affiliates in
connection with the transactions contemplated by this Agreement or the
Securityholders Agreement, except to the extent that such information can
be shown to have been (i) previously known on a nonconfidential basis by
the Purchasers, (ii) in the public domain through no fault of the
Purchasers or (iii) acquired by the Purchasers from sources other than the
Issuer or any of its Subsidiaries which sources, to the Purchasers'
knowledge lawfully acquired such information; provided that the Purchasers
may disclose such information to its officers, directors, employees,
accountants, counsel, consultants, advisors and agents in connection with
the transactions contemplated by this Agreement so long as such Persons are
informed by the Purchasers of the confidential nature of such information
and are directed by the Purchasers to treat such information
confidentially. The Purchasers will be responsible for the breach by any
such persons of this Section 6.01. If this Agreement is terminated, the
Purchasers and its Affiliates will, and will use their reasonable best
efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to, destroy or
deliver to the Issuer, upon request, all documents and other materials, and
all copies thereof, obtained by the Purchasers or its Affiliates or on
their behalf from the Issuer or any of its Subsidiaries in connection with
this Agreement that are subject to such confidence.
ARTICLE 7
COVENANTS OF THE PURCHASERS AND THE ISSUER
The Purchasers and the Issuer agree that:
SECTION 7.01. Reasonable Best Efforts; Further Assurances. Subject
to the terms and conditions of this Agreement, the Purchasers and the
Issuer will use their reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement. The Issuer and the Purchasers
agree, and the Issuer, prior to the Closing, and the Purchasers, after the
Closing, agree to cause the Issuer and each of its Subsidiaries, to execute
and deliver such other documents, certificates, agreements and other
writings and to take such other actions as may be necessary or desirable in
order to consummate or implement expeditiously the transactions
contemplated by this Agreement.
SECTION 7.02. Certain Filings. The Purchasers and the Issuer shall
cooperate with one another (i) in determining whether any action by or in
respect of, or filing with, any governmental body, agency, official or
authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in
connection with the consummation of the transactions contemplated by this
Agreement and (ii) in taking such actions or making any such filings,
furnishing information required in connection therewith and seeking timely
to obtain any such actions, consents, approvals or waivers.
SECTION 7.03. Public Announcements. The parties agree to consult
with each other before issuing any press release or making any public
statement with respect to this Agreement or the transactions contemplated
hereby and, except for any press releases and public statements the making
of which may be required by applicable law or any listing agreement with
any national securities exchange, will not issue any such press release or
make any such public statement prior to such consultation. Notwithstanding
the foregoing, the parties agree to issue a joint press release upon the
Closing.
ARTICLE 8
CONDITIONS PRECEDENT TO CLOSING
SECTION 8.01. Conditions to Each Party's Obligations. The
obligations of each party hereto to consummate the transactions
contemplated hereby is subject to the satisfaction, at or prior to the
Closing Date, of the following conditions:
(a) Any applicable waiting period under the HSR Act relating to
the transaction contemplated hereby shall have expired or been terminated;
and
(b) The purchase and sale of the Securities shall not be
prohibited by any applicable law, court order or governmental regulation;
and
SECTION 8.02. Conditions to Each Purchaser's Obligations. The
obligation of each Purchaser to purchase the Securities to be purchased by
it hereunder is subject to the satisfaction, at or prior to the Closing
Date, of the following conditions:
(a) The representations and warranties of the Issuer contained
herein shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of such date; the Issuer shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by
it at or prior to the Closing Date; and such Purchaser shall have received
a certificate dated the Closing Date signed by an authorized officer of the
Issuer to the foregoing effect;
(b) The Securityholders Agreement shall have been executed and
delivered by the Issuer;
(c) Such Purchaser shall have received duly executed certificates
representing the Securities being purchased by such Purchaser pursuant
hereto;
(d) Such Purchaser shall have received all documents reasonably
requested by it relating to the existence of the Issuer, the corporate
authority for entering into, and the validity of, this Agreement, the
Securityholders Agreement and the Securities, all in form and substance
reasonably satisfactory to it;
(e) The consents and approvals identified in Section 3.03 shall
have been received and not withdrawn;
(f) F. Warren Hellman shall have been appointed to the Board of
Directors of the Issuer effective as of the Closing; and
(g) The Issuer and the NASD shall have entered into the Purchase
and Sale Agreement, the Purchase and Sale Agreement shall not have been
amended in any manner adverse to the Purchasers, and concurrently with the
Closing hereunder the Issuer shall apply all or substantially all of the
proceeds of the issuance and sale of the Securities to repurchase shares of
Common Stock held by the NASD on the terms and conditions set forth in the
Purchase and Sale Agreement.
SECTION 8.03. Conditions to Issuer's Obligations. The obligations
of the Issuer to issue and sell the Securities to the Purchasers pursuant
to this Agreement are subject to the satisfaction, at or prior to the
Closing Date, of the following conditions:
(a) The representations and warranties of each Purchaser contained
herein shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of such date; and each Purchaser shall
have performed and complied in all material respects with all agreements
required by this Agreement to be performed or complied with by such
Purchaser at or prior to the Closing Date and the Issuer shall have
received a certificate dated the Closing Date signed by an authorized
officer of each of the Purchasers to the foregoing effect; and
(b) The Issuer shall have received all documents reasonably
requested by it relating to the existence of the Purchasers, the authority
for entering into, and the validity of this Agreement and the
Securityholders Agreement, all in form and substance reasonably
satisfactory to it.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including
telecopier or similar writing) and shall be given to such party at its
address or telecopier number set forth on the signature page hereof, or
such other address or telecopier number as such party may hereinafter
specify for the purpose to the party giving such notice. Each such notice,
request or other communication shall be effective (i) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified pursuant
to this Section 9.01 and confirmation of receipt is received or, (ii) if
given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid, addressed as aforesaid or, (iii) if given
by any other means, when delivered at the address specified in this Section
9.01.
SECTION 9.02. No Waivers; Amendments. (a) No failure or delay on
the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of
any other right, power or privilege.
(b) Any provision of this Agreement may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by all
parties hereto.
SECTION 9.03. Survival of Provisions. The representations and
warranties contained in this Agreement shall survive and remain in full
force and effect in accordance with their terms until the date which is
three months after the date on which the Issuer delivers to the Purchasers
full audited financial statements of the Issuer and its Subsidiaries for
fiscal year 2001; provided that the representations and warranties
contained in Section 3.02 and Article 4 shall survive indefinitely.
SECTION 9.04. Indemnification. (a) The Issuer hereby agrees to
indemnify and hold harmless each Purchaser, any Affiliate of any Purchaser,
any Person controlling any Purchaser or such Affiliate and their respective
directors, officers, agents and employees from and against any losses,
claims, damages, expenses and liabilities (including, without limitation,
reasonable expenses of investigation and reasonable attorneys' fees and
expenses in connection with any action, suit or proceeding) ("Damages") to
which such person may become subject as the result of any breach of
representation, warranty or covenant made or to be performed on the part of
the Issuer under this Agreement, the Securityholders Agreement, or the
Securities or any third-party action, claim or proceeding directly
resulting from the matters or transactions which are the subject of or
contemplated by this Agreement or the Securityholders Agreement or the
Securities (or any use made or proposed to be made by the Issuer of the
proceeds from the sale of the Securities) and will reimburse any such
person for all reasonable expenses (including reasonable counsel fees and
expenses) as they are incurred by any such person in connection with any
such breach of representation, warranty or covenant or investigating,
preparing or defending any such action or proceeding, pending or
threatened, whether or not such person is a party thereto; provided that
with respect to indemnification or reimbursement by the Issuer pursuant to
this Section, (i) the Issuer shall not be liable unless the aggregate
amount of Damages exceeds $1,000,000, and the Issuer shall only be liable
for Damages in excess of such amount, and (ii) the Issuer's maximum
liability shall not exceed the purchase price of the Securities.
(b) Each Purchaser hereby agrees to indemnify, defend and hold
harmless the Issuer and its Affiliates, any Person controlling the Issuer
or its Affiliates and their respective directors, officers, agent and
employees from and against any Damages to which such person may become
subject as a result of any breach of any representation, warranty or
covenant made or to be performed on the part of such Purchaser under this
Agreement or the Securityholders Agreement and will reimburse any such
person for all reasonable expenses (including reasonable counsel fees and
expenses) as they are incurred by any such person in connection with any
such breach of representation, warranty or covenant or investigating,
preparing or defending any such action or proceeding, pending or
threatened, whether or not such person is a party thereto; provided that
with respect to indemnification or reimbursement by the Purchasers pursuant
to this Section, (i) the Purchasers shall not be liable unless the
aggregate amount of Damages exceeds $1,000,000, and the Purchasers shall
only be liable for Damages in excess of such amount, and (ii) the
Purchaser's maximum liability shall not exceed the purchase price of the
Securities.
(c) Promptly after receipt by any person (the "Indemnified
Person") of notice of any demand, claim or circumstances which would or
might give rise to a claim or the commencement of any action, proceeding or
investigation in respect of which indemnity may be sought pursuant to
Section 9.04(a) or (b), such Indemnified Person shall give notice thereof
to the person against whom such indemnity may be sought (the "Indemnifying
Person"). Notwithstanding the foregoing, the failure so to give prompt
notice to such person will not relieve such Indemnifying Person from
liability, except to the extent such failure or delay materially prejudices
such Indemnifying Person. The Indemnifying Person shall be entitled to
participate in any such action and to assume the defense thereof, at the
Indemnifying Person's expense and with counsel reasonably satisfactory to
the Indemnified Person. After notice from the Indemnifying Person to such
Indemnified Person of its election so to assume the defense thereof, the
Indemnified Person shall have the right to participate in such action and
to retain its own counsel, but the Indemnifying Person shall not be liable
to such Indemnified Person hereunder for any legal expenses of other
counsel or any other expenses, in each case, subsequently incurred by such
Indemnified Person, in connection with the defense thereof other than
reasonable costs of investigation, unless (i) the Indemnifying Person has
agreed to pay such fees and expenses, (ii) the Indemnifying Person shall
have failed to employ counsel reasonably satisfactory to the Indemnified
Person in a timely manner or (iii) the Indemnified Person shall have been
advised by outside counsel that representation of the Indemnified Person by
counsel provided by the Indemnifying Person pursuant to the foregoing would
be inappropriate due to an actual or potential conflicting interest between
the Indemnifying Person and the Indemnified Person, including situations in
which there are one or more legal defenses available to the Indemnified
Person that are different from or additional to those available to the
Indemnifying Person; provided however, that the Indemnifying Person shall
not, in connection with any one such action or proceeding or separate but
substantially similar actions or proceedings arising out of the same
general allegations, be liable for the fees and expenses of more than one
firm of attorneys at one time for the Indemnified Person.
(d) Except in the case of fraud, or with respect to matters for
which the remedy of specific performance or injunctive relief or other
equitable remedies are appropriate or available, the respective rights to
indemnification as provided for in this Section 9.04, shall constitute each
party's sole remedy and no party shall have any other liability or damages
to the other party; provided, however, that nothing contained herein shall
prevent the Indemnified Person from pursuing remedies as may be available
to such party under applicable law in the event of an Indemnifying Person's
failure to comply with its indemnification obligations hereunder.
SECTION 9.05. Expenses; Documentary Taxes. The Issuer shall
reimburse the Purchasers at Closing for all of their respective documented
out-of-pocket reasonable expenses, including reasonable fees and
disbursements of counsel, accountants and other consultants, in connection
with their investigation of the Issuer, their evaluation of the
transactions contemplated hereby, and the preparation of this Agreement,
the Securityholders Agreement and the Securities and any amendments
thereto, up to a maximum of $1,000,000. The Issuer shall pay any and all
stamp, transfer and other similar taxes payable or determined to be payable
in connection with the execution and delivery of this Agreement or the
Securityholders Agreement, or the issuance of the Securities.
SECTION 9.06. Termination. (a) This Agreement may be terminated at
any time prior to the Closing:
(i) by mutual written agreement of the Issuer and the Purchasers;
(ii) by the Issuer or the Purchasers if the Closing shall not have
been consummated on or before May 31, 2001;
(iii) by the Issuer or the Purchasers if there shall be any law or
regulation that makes consummation of the transactions
contemplated hereby illegal or otherwise prohibited or if
consummation of the transactions contemplated hereby would violate
any nonappealable final order, decree or judgment of any court or
governmental body having competent jurisdiction;
(iv) by the Issuer or the Purchasers, if there has been a material
misrepresentation, breach of warranty or breach of covenant or
other obligation hereunder on the part of the Purchasers (in the
case of termination by the Issuer) or the Issuer (in the case of
termination by the Purchasers); or if any condition to such
party's obligations hereunder becomes incapable of fulfillment
through no fault of such party; or
(v) by the Issuer or the Purchasers, if the Purchase and Sale
Agreement is terminated for any reason.
The party desiring to terminate this Agreement pursuant to clauses
9.06(a)(ii), (iii), (iv) or (v) shall give notice of such termination to
the other parties.
(b) If this Agreement is terminated as permitted by Section
9.06(a), such termination shall be without liability of either party (or
any stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other parties to this Agreement;
provided that if such termination shall result from the willful (i) failure
of any party to fulfill a condition to the performance of the obligations
of the other parties, (ii) failure to perform a covenant of this Agreement
or (iii) breach by any party hereto of any representation or warranty or
agreement contained herein, such party shall be liable for damages incurred
or suffered by the other party as a result of such failure or breach.
SECTION 9.07. Successors and Assigns. The Issuer may not assign
any of its rights and obligations hereunder without the prior written
consent of the Purchasers. No Purchaser may assign its rights and
obligations hereunder without the consent of the Issuer, except to any
Affiliate of the Purchaser. This Agreement shall be binding upon the Issuer
and the Purchasers and their respective successors and assigns. Neither
this Agreement nor any provision hereof shall be construed so as to confer
any right or benefit upon any Person other than parties to this Agreement
and their respective successors and permitted assigns.
SECTION 9.08. Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
SECTION 9.09. Severability. The invalidity or unenforceability of
any provisions of this Agreement in any jurisdiction shall not affect the
validity, legality or enforceability of the remainder of this Agreement in
such jurisdiction or the validity, legality or enforceability of this
Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder
shall be enforceable to the fullest extent permitted by law.
SECTION 9.10. Specific Performance. The parties hereto agree that
if any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached, irreparable damage
would occur, no adequate remedy at law would exist and damages would be
difficult to determine, and that the parties shall be entitled to specific
performance of the terms hereof and immediate injunctive relief, without
the necessity of proving the inadequacy of money damages as a remedy, in
addition to any other remedy at law or equity.
SECTION 9.11. New York Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York without
giving effect to conflicts of laws principles thereof.
SECTION 9.12. Counterparts; Effectiveness. This Agreement may be
executed in any number of counterparts each of which shall be an original
with the same effect as if the signatures thereto and hereto were upon the
same instrument.
SECTION 9.13. Entire Agreement. This Agreement constitutes the
entire agreement and understanding among the parties hereto and supersedes
any and all prior agreements and understandings, written or oral, relating
to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective authorized signatories as of the
date first above written.
THE NASDAQ STOCK MARKET, INC.
By /s/Frank G. Zarb
-------------------------------------
Name: Frank G. Zarb
Title: Chairman
33 Whitehall Street
New York, NY 10004
Telephone: 212-858-4750
Telecopier: 212-858-5150
HELLMAN & FRIEDMAN CAPITAL
PARTNERS IV, L.P.
by its General Partner, H&F Investors IV, LLC
by its Managing Member, H&F Investors III, Inc.
By/s/Patrick J. Healy
----------------------------------------
Name: Patrick J. Healy
Title: Vice President
Address: c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, California 94111
Attention: Richard M. Levine
Telephone: (415) 788-5111
Telecopier: (415) 391-4648
Aggregate
Purchase
Principal Amount Price
---------------- ---------
$193,463,369 $193,463,369
H & F EXECUTIVE FUND IV, L.P.
by its General Partner, H&F Investors IV, LLC
by its Managing Member, H&F Investors III, Inc.
By /s/Patrick J. Healy
----------------------------------------------
Name: Patrick J. Healy
Title: Vice President
Address: c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, California 94111
Attention: Richard M. Levine
Telephone: (415) 788-5111
Telecopier: (415) 391-4648
Aggregate
Purchase
Principal Amount Price
---------------- ---------
$4,302,898 $4,302,898
H & F INTERNATIONAL PARTNERS IV-A, L.P.
by its General Partner, H&F Investors IV, LLC
by its Managing Member, H&F Investors III, Inc.
By /s/Patrick J. Healy
----------------------------------------------
Name: Patrick J. Healy
Title: Vice President
Address: c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, California 94111
Attention: Richard M. Levine
Telephone: (415) 788-5111
Telecopier: (415) 391-4648
Aggregate
Purchase
Principal Amount Price
---------------- ----------
$31,757,949 $31,757,949
H & F INTERNATIONAL PARTNERS IV-B, L.P.
by its General Partner, H&F Investors IV, LLC
by its Managing Member, H&F Investors III, Inc.
By /s/Patrick J. Healy
---------------------------------------------
Name: Patrick J. Healy
Title: Vice President
Address: c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, California 94111
Attention: Richard M. Levine
Telephone: (415) 788-5111
Telecopier: (415) 391-4648
Aggregate
Purchase
Principal Amount Price
---------------- ---------
$10,475,784 $10,475,784
Exhibit A
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR FOREIGN JURISDICTION
AND MAY NOT BE OFFERED OR SOLD WITHOUT COMPLIANCE WITH APPLICABLE FEDERAL,
STATE OR FOREIGN SECURITIES LAWS. THIS SECURITY IS ALSO SUBJECT TO
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE SECURITYHOLDERS AGREEMENT,
DATED AS OF [ ], 2001, A COPY OF WHICH MAY BE OBTAINED FROM THE NASDAQ
STOCK MARKET, INC.
No. [ ]
$ [ ]
THE NASDAQ STOCK MARKET, INC.
4.0% Convertible Subordinated Note due 2006
The Nasdaq Stock Market, Inc., a Delaware corporation (together
with its successors and assigns, the "Issuer"), for value received hereby
promises to pay to [ ] (together with its successors, transferees and
assigns, the "Holder") the principal sum of [AMOUNT IN WORDS] Dollars ($[
]) (the "Principal Amount") by wire transfer of immediately available funds
to the Holder's account (the "Bank Account") at a bank in the United States
specified by the Holder from time to time, in lawful money of the United
States together with interest thereon calculated from the date hereof in
accordance with the provisions of this Note.
This Note was issued pursuant to the Securities Purchase Agreement
(the "Agreement"), dated as of o, 2001 among the Issuer, Hellman & Friedman
Capital Partners IV, L.P. and certain other parties listed on the signature
pages thereto. Unless the context otherwise requires, as used herein,
"Note" means any of the 4.0% Convertible Subordinated Notes issued pursuant
to the Agreement and any other similar Convertible Subordinated Notes
issued by the Issuer in exchange for, or to effect a transfer of, any Note
and "Notes" means all such Notes in the aggregate.
This Note shall bear interest, commencing [ ], 2001, at a rate per
annum (the "Interest Rate") equal to 4.0%. Further, the Issuer shall pay
interest on any overdue Principal Amount at a rate per annum equal to 6.0%
(the "Overdue Rate"), and interest on overdue installments of interest, to
the extent lawful, at the Overdue Rate. Interest on this Note will be
calculated on the basis of a 360-day year of twelve 30-day months.
Notwithstanding anything herein to the contrary, the interest or
any amount deemed to be interest payable by the Issuer with respect to this
Note shall not exceed the maximum amount permitted by applicable law and,
to the extent that any payments in excess of such permitted amount are
received by the Holder, such excess shall be considered payments in respect
of the principal amount of this Note. All sums paid or agreed to be paid to
the Holder for the use, forbearance or retention of the indebtedness of the
Issuer to the Holder shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full of the principal so that the interest on
account of such indebtedness shall not exceed the maximum amount permitted
by applicable law.
Section 1.1. Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly
requires) for all purposes of this Note shall have the respective meanings
specified below. All accounting terms used herein and not expressly defined
shall have the meanings given to them in accordance with U.S. generally
accepted accounting principles, and the term "generally accepted accounting
principles" shall mean such accounting principles which are generally
accepted as of the date hereof. The terms defined in this Section 1.1
include the plural as well as the singular.
"Acceleration Notice" shall have the meaning set forth in Section
4.1.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control"
when used with respect to any Person means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in the City of New York are authorized by law
to close.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated)
of such Person's capital stock whether now outstanding or issued after the
date of this Note, including without limitation, with respect to the
Issuer, the Common Stock and the Preferred Stock.
"Common Stock" means any and all shares of common stock, par value
$0.01 per share, of the Issuer.
"Debt" of any Person means at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes, or other similar
instruments, (iii) all obligations of such Person in respect of letters of
credit or other similar instruments (or reimbursement obligations with
respect thereto), except letters of credit or other similar instruments
issued to secure payment of Trade Payables, (iv) all obligations of such
Person to pay the deferred purchase price of property or services, except
Trade Payables, (v) all obligations of such Person as lessee under capital
leases, (vi) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person and (vii) all
Debt of others Guaranteed by such Person.
"Default" means any condition or event which constitutes an Event
of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Default Notice" shall have the meaning set forth in Section 7.2.
"Event of Default" means any event or condition specified as such
in Section 4.1 which shall have continued for the period of time, if any,
therein designated.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation of such
other Person (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services,
to take-or-pay, or to maintain financial statement conditions or otherwise)
or (ii) entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation for the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Holders" shall have the meaning set forth in Section 9.2.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of
such asset. For the purposes of this Note, the Issuer shall be deemed to
own subject to a Lien any asset which it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement,
capitalized lease or other title retention agreement relating to such
asset.
"NASD" means the National Association of Securities Dealers, Inc.,
and its successors.
"Notice of Default" shall have the meaning set forth in Section
4.1(d).
"Person" means any individual or a corporation, partnership,
association, trust, or any other entity or organization including a
government or political subdivision or an agency or instrumentality
thereof.
"Preferred Stock" means any and all shares of preferred stock, par
value $.01 per share, of the Issuer.
"Securityholders Agreement" means the Securityholders Agreement
dated as of o, 2001 among the Issuer, Hellman & Friedman Capital Partners
IV, L.P. and the other parties listed on the signature pages thereto, as
amended from time to time.
"Senior Debt" means (i) the Senior Notes and (ii) any Debt of the
Issuer which, by its terms or the terms of any instrument or agreement
pursuant to which such Debt is issued, is expressly made senior in right of
payment to the Notes.
"Senior Notes" means the Issuer's 7.41% Senior Notes due March
2007 issued in May 1997.
"Trade Payables" means accounts payable or any other indebtedness
or monetary obligations to trade creditors created or assumed by the Issuer
in the ordinary course of business in connection with the obtaining of
materials or services.
Section 2. Payment of Principal and Interest.
Section 2.1. Scheduled Payment of Principal. The Issuer shall pay
the Principal Amount, together with all accrued and unpaid interest
thereon, if any, in cash to the Holder of this Note on [ ], 2006.
Section 2.2. Payment of Interest. The Issuer shall pay interest on
this Note quarterly in arrears, on March 15, June 15, September 15, and
December 15 (unless such day is not a Business Day, in which event on the
next succeeding Business Day) (each an "Interest Payment Date") of each
year in which this Note remains outstanding, commencing with June 15, 2001,
on the unpaid Principal Amount outstanding in lawful money of the United
States at the Interest Rate, or Overdue Rate, as the case may be, as set
forth above, by wire transfer of immediately available funds, to the Bank
Account, from the most recent Interest Payment Date to which interest has
been paid in full on this Note, or if no interest has been paid on this
Note, from [ ], 2001, until payment in full of the Principal Amount has
been made.
Section 2.3. Payment Obligations Absolute and Unconditional. No
provision of this Note shall alter or impair the obligations of the Issuer,
which are absolute and unconditional, to pay the Principal Amount of and
interest on this Note at the place, times, and rate, and in the currency,
herein prescribed.
Section 2.4. Pro Rata Payment. The Issuer agrees that any payments
to the Holders of the Notes (whether for principal, interest or otherwise)
shall be made pro rata among all such Holders based upon the aggregate
unpaid Principal Amount of the Notes held by each such Holder. If any
Holder of a Note obtains any payment (whether voluntary, involuntary, by
application of offset or otherwise) of principal or interest on such Note
in excess of such Holder's pro rata share of payments obtained by all
Holders of the Notes, such Holder shall make such payments to the other
Holders of the Notes as is necessary to cause such Holders to share the
excess payment ratably among each of them as provided in this Section.
Section 3. Covenants.
The Issuer agrees that, so long as any amount payable under this
Note remains unpaid:
Section 3.1. Information. The Issuer will deliver to the Holder,
subject to appropriate confidentiality arrangements in the cases of (a) and
(b) below:
(a) as soon as available and in any event within 90 days after
the end of each fiscal year of the Issuer, a balance sheet of the Issuer as
of the end of such fiscal year and the related statements of profit and
loss for such fiscal year, setting forth in each case in comparative form
the figures for the previous fiscal year, and accompanied by a report
thereon of Ernst and Young LLP or other independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 45 days after
the end of each of the first three quarters of each fiscal year of the
Issuer, a balance sheet of the Issuer as of the end of such quarter and the
related statements of profit and loss for such quarter and for the portion
of the Issuer's fiscal year then ended, setting forth in each case in
comparative form the figures for the corresponding quarter and the
corresponding portion of the Issuer's previous fiscal year, all certified
(subject to normal year-end adjustments) as to fairness of presentation,
consistency and, except for the absence of footnotes, generally accepted
accounting principles by the chief financial officer or the chief
accounting officer of the Issuer;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of the Issuer
stating whether any Default exists on the date of such certificate and, if
any Default then exists, setting forth the details thereof and the action
which the Issuer is taking or proposes to take with respect thereto; and
(d) within ten days after any executive officer of the Issuer
obtains knowledge of any Default, if such Default is then continuing, a
certificate of the chief financial officer or the chief accounting officer
of the Issuer setting forth the details thereof and the action which the
Issuer is taking or proposes to take with respect thereto.
Section 3.2 Conduct of Business and Maintenance of Existence. The
Issuer will preserve, renew and keep in full force and effect its corporate
existence and its rights, privileges and franchises necessary or desirable
in the normal conduct of its business; provided that the foregoing shall
not prevent the Issuer from, directly or indirectly, (a) consolidating or
merging with or into another Person (whether or not the Issuer is the
surviving entity in such transaction) or (b) selling, assigning, leasing,
transferring, conveying or otherwise disposing of all or substantially all
of its properties or assets, in one or more related transactions, to
another Person, if either (A) the Issuer is the surviving entity in any
such consolidation or merger, or (B) the Person formed by or surviving any
such consolidation or merger or to which such sale, assignment, lease,
transfer, conveyance or other disposition shall have been made is a
corporation, limited liability company or other entity organized or
existing under the laws of the United States, any state thereof or the
District of Columbia and such Person assumes all of the obligations of the
Issuer under this Note pursuant to agreements reasonably satisfactory to
the Holder.
Section 4. Events of Default and Remedies.
Section 4.1. Event of Default Defined; Acceleration of Maturity;
Waiver of Default. In case one or more of the following events ("Events of
Default") (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body) shall have
occurred and be continuing:
(a) default in the payment of any interest upon any of the Notes
as and when the same shall become due and payable, and continuance of such
default for a period of 30 days; or
(b) default in the payment of all or any part of the principal of
any of the Notes as and when the same shall become due and payable; or
(c) failure on the part of the Issuer duly to observe or perform
any other of the covenants or agreements on the part of the Issuer
contained in the Notes (other than those covered by clauses (a) through (b)
above) for a period of 60 days after the date on which written notice
specifying such failure, stating that such notice is a "Notice of Default"
hereunder and demanding that the Issuer remedy the same, shall have been
given by registered or certified mail, return receipt requested, to the
Issuer; or
(d) any acceleration of the maturity of any Debt of the Issuer or
any of its subsidiaries having a principal amount greater than $50,000,000;
or
(e) a final and non-appealable judgment or order (not covered by
insurance) for the payment of money shall be rendered against the Issuer or
any of its subsidiaries in excess of $50,000,000 in the aggregate for all
such judgments or orders (treating any deductibles, self insurance or
retention as not so covered), and such judgment or order shall continue
unsatisfied for a period of 60 days; or
(f) a court having jurisdiction shall enter a decree or order for
relief in respect of the Issuer in an involuntary case under applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Issuer or for any substantial
part of the property of the Issuer or ordering the winding up or
liquidation of the affairs of the Issuer, and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(g) the Issuer shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or consent to the entry of an order for relief in an involuntary
case under any such law, or consent to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Issuer or for any substantial part of the property
of the Issuer, or the Issuer shall make any general assignment for the
benefit of creditors.
then, and in each and every such case (other than an Event of
Default specified in Sections 4.1(f) or 4.1(g) hereof), the Holders of at
least a majority in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Issuer (the "Acceleration
Notice"), may declare the entire principal amount of the Notes and the
interest accrued thereon to be due and payable immediately, and upon any
such declaration the same shall become immediately due and payable;
provided that if an Event of Default specified in Section 4.1(f) or 4.1(g)
occurs, the principal amount of and accrued interest on the Notes shall
become and be immediately due and payable without any declaration or other
act on the part of any Holder.
Section 4.2. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. No right or remedy herein conferred upon or reserved to
any Holder is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate
right or remedy.
No delay or omission of any Holder to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power or shall be construed to be a waiver
of any such Event of Default or an acquiescence therein; and every power
and remedy given by the Notes or by law may be exercised from time to time,
and as often as shall be deemed expedient, by any Holder.
Section 4.3. Waiver of Past Defaults. The Holders of the Notes may
waive, in accordance with Section 8.1, any past Default or Event of Default
hereunder and its consequences. In the case of any such waiver, the Issuer
and the Holders of the Notes shall be restored to their former positions
and rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of
Default arising therefrom shall be deemed to have been cured, and not to
have occurred for every purpose of the Notes; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
Section 5.1 Conversion Rights. (a) Subject to the provisions of
this Section 5, the Holders of the Notes shall have the right, at any time
and from time to time, at such Holder's option, to convert the Principal
Amount of this Note, in whole or part (the "Conversion Amount"), into fully
paid and non-assessable shares of Common Stock at the then effective
Conversion Ratio (as such term is defined below). The number of shares of
Common Stock deliverable upon conversion of each $1,000 Conversion Amount
of the Notes, adjusted as hereinafter provided, is referred to herein as
the "Conversion Ratio". The Conversion Ratio, as of the date of issue of
the Notes is 50.0000, subject to adjustment from time to time pursuant to
Section 5.1(f) hereof.
(b)(i) In order to exercise the conversion privilege, the Holder of
the Note to be converted shall surrender the Note, with a written notice to
the Issuer that such Holder elects to exercise its conversion privilege,
and stating the Conversion Amount of Notes which the Holder seeks to
convert. The date of receipt of the Note or Notes by the Issuer shall be
the conversion date (the "Conversion Date").
(ii) As promptly as practicable (but no later than two days) after
the Conversion Date, the Issuer shall issue and shall deliver to
such Holder, or on the Holder's written order to the Holder's
permitted transferee in accordance with the terms of the
Securityholders Agreement, a certificate or certificates for the
whole number of shares of Common Stock issuable upon the
conversion of such Note or Notes in accordance with the provisions
of this Section 5.1.
(iii) In the case where only part of a Note is converted, the
Issuer shall execute and deliver (at its own expense) a new Note
of any authorized denomination as requested by a Holder in an
aggregate principal amount equal to and in exchange for the
unconverted portion of the Principal Amount of the Note so
surrendered.
(iv) The Issuer shall made a cash payment equal to all accrued and
unpaid interest on the Principal Amount so surrendered for
conversion (other than interest payments payable to a holder of
record on a prior Interest Payment Date) to the Conversion Date.
(v) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which
the Notes to be converted shall have been surrendered, and the
person in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder of record of the shares
of Common Stock represented thereby on such date and such
conversion shall be into a number of shares of Common Stock
resulting from applying the Conversion Ratio in effect at such
time on such date. All shares of Common Stock delivered upon
conversion of the Notes will upon delivery be duly and validly
issued and fully paid and non-assessable, free of all Liens and
charges and not subject to any preemptive rights. Upon the
surrender of any Notes for conversion, such Notes or part thereof
so converted shall no longer be deemed to be outstanding and all
rights of a Holder with respect to such Notes or part thereof so
converted including the rights, if any, to receive interest,
notices and consent rights shall immediately terminate on the
Conversion Date except the right to receive the Common Stock and
other amounts payable pursuant to this Section 5.1. Any Notes or
part thereof so converted shall be retired and cancelled.
(c) (i) The Issuer covenants that it will at all times during
which the Notes shall be outstanding reserve and keep available, free from
preemptive rights, such number of its authorized but unissued shares of
Common Stock as shall from time to time be required for the purpose of
effecting conversions of outstanding Notes. Before taking any action which
would cause an adjustment increasing the Conversion Ratio such that the
amount resulting from dividing $1,000 by the Conversion Ratio in effect at
such time on such date would be below the then par value of the shares of
Common Stock issuable upon conversion of the Notes, the Issuer will take
any corporate action which may, in the opinion of counsel, be necessary in
order that the Issuer may validly and legally issue fully paid and
nonassessible shares of Common Stock at such adjusted Conversion Ratio.
(ii) Prior to the delivery of any securities which the Issuer
shall be obligated to deliver upon conversion of the Notes, the
Issuer shall comply with all applicable federal and state laws and
regulations which require action to be taken by the Issuer.
(d) The Issuer will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock on conversion of the Notes pursuant hereto; provided
that the Issuer shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issue or delivery of shares of
Common Stock in a name other than that of the holder of the Notes to be
converted and no such issue or delivery shall be made unless and until the
person requesting such issue or delivery has paid to the Issuer the amount
of any such tax or has established, to the satisfaction of the Issuer, that
such tax has been paid.
(e) If the conversion is in connection with an underwritten
offering of securities registered pursuant to the Securities Act of 1933,
as amended, the conversion may, at the option of any Holder tendering Notes
for conversion, be conditioned upon the closing with the underwriter of the
sale of securities pursuant to such offering, in which event the Holders
entitled to receive the Common Stock issuable upon such conversion of the
Notes shall not be deemed to have converted such Notes until immediately
prior to the closing of the sale of securities in such offering.
(f) (i) In case the Issuer shall at any time after the date of
issue of the Notes (A) declare a dividend or make a distribution on Common
Stock payable in Common Stock, (B) subdivide or split the outstanding
Common Stock, (C) combine or reclassify the outstanding Common Stock into a
smaller number of shares, (D) issue any shares of its Capital Stock in a
reclassification of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Issuer is the
continuing corporation), or (E) consolidate with, or merge with or into,
any other Person, the Conversion Ratio in effect at the time of the record
date for any such dividend or distribution or of the effective date of any
such subdivision, split, combination, consolidation, merger or
reclassification shall be proportionately adjusted so that the conversion
of the Note after such time shall entitle the Holder to receive the
aggregate number of shares of Common Stock or other securities of the
Issuer (or shares of any security into which such shares of Common Stock
have been combined, consolidated, merged, converted or reclassified
pursuant to clause (C), (D) or (E) above) which, if this Note had been
converted immediately prior to such time, such Holder would have owned upon
such conversion and been entitled to receive by virtue of such dividend,
distribution, subdivision, split, combination, consolidation, merger or
reclassification, assuming for purposes of this subsection (f) that such
Holder (x) is not a Person with which the Issuer consolidated or into which
the Issuer merged or which merged into the Issuer or to which such
recapitalization, sale or transfer was made, as the case may be
("constituent person") and (y) failed to exercise any rights of election as
to the kind or amount of securities, cash and other property receivable
upon such reclassification, change, consolidation, merger,
recapitalization, sale or transfer (provided, that if the kind or amount of
securities, cash and other property receivable upon such reclassification,
change, consolidation, merger, recapitalization, sale or transfer is not
the same for each share of Common Stock of the Issuer held immediately
prior to such reclassification, change, consolidation, merger,
recapitalization, sale or transfer by other than a constituent person and
in respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section 5.1(f) the
kind and amount of securities, cash and other property receivable upon such
reclassification, change, consolidation, merger, recapitalization, sale or
transfer by each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares).
Such adjustment shall be made successively whenever any event listed above
shall occur.
(ii) For purposes of any computation under this Section 5.1(f),
the number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of
the Issuer. All calculations under this Section 5.1(f) shall be
made to the nearest four decimal points.
(iii) In the event that, at any time as a result of the provisions
of this Section 5.1(f), the holder of this Note upon subsequent
conversion shall become entitled to receive any shares of Capital
Stock of the Issuer other than Common Stock, the number of such
other shares so receivable upon conversion of this Note shall
thereafter be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the provisions
contained herein.
(g) No fractional shares of Common Stock shall be issued upon
conversion of the Notes. In lieu of fractional shares, the Issuer shall pay
cash equal to such fraction multiplied by the Closing Price for shares of
Common Stock on the trading day immediately preceding the related
Conversion Date. "Closing Price" means (1) if the shares of such class of
Common Stock then are listed and traded on the National Market of the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ"), the last reported sale price on such day; (2) if the shares of
such class of Common Stock then are not traded on the NASDAQ National
Market, the average of the highest reported bid and lowest reported asked
price on such day as reported by NASDAQ; (3) if the shares of such class of
Common Stock then are not listed and traded on the NASDAQ, the closing
price on such day as reported by the principal national securities exchange
on which the shares are listed and traded; or (4) if the shares of such
class of Common Stock are not then listed or traded on NASDAQ or a national
securities exchange, the fair market value as determined in good faith by
the Issuer's Board of Directors.
(h) Upon the occurrence of each adjustment or readjustment of the
Conversion Ratio pursuant to this Section 5.1, the Issuer at its expense
shall promptly compute such adjustment or readjustment in accordance with
the terms hereof and furnish to each Holder of Notes outstanding a
certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based and
shall file a copy of such certificate with its corporate records. The
Issuer shall, upon the reasonable written request of any Holder of Notes,
furnish or cause to be furnished to such Holders a similar certificate
setting forth (i) such adjustments and readjustments, (ii) the Conversion
Ratio then in effect, and (iii) the number of shares of Common Stock and
the amount, if any, of other property which then would be received upon the
conversion of the Notes. Despite such adjustment or readjustment, the form
of each or all Notes, if the same shall reflect the initial or any
subsequent Conversion Ratio, need not be changed in order for the
adjustments or readjustments to be valid in accordance with the provisions
of this Note, which shall control.
(i) The Issuer will not, by amendment of its certificate of
incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue of sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Issuer, but will at all times in good faith assist in the carrying out
of all the provisions of this Section 5.1 and in the taking of all such
action as may be necessary or appropriate in order to protect the
conversion rights of the Holders of the Notes against impairment to the
extent required hereunder. Nothing in this Section 5.1 shall affect the
continued accrual of interest on the outstanding Notes in accordance with
the terms of this Note.
(j) Notwithstanding any other provision of this Section 5.1, prior
to the Exchange Registration Date (as defined below), the Holders of the
Notes shall not have the right to convert the Principal Amount of this Note
plus accrued and unpaid interest thereon into shares of Common Stock to the
extent, but only to the extent, such conversion would result in The
National Association of Securities Dealers holding less than 50% of the
combined voting power in the Issuer. "Exchange Registration Date" means the
date upon which the Issuer becomes registered to operate as a national
securities exchange by the Securities and Exchange Commission.
Section 6.1. Voting Rights. (a) The Holders of this Note shall be
entitled to such voting rights as may be provided in the certificate of
incorporation of the Issuer, in this Section 6.1, and as otherwise may be
provided by law.
(b) Without the written consent of the Holders of a majority in
Principal Amount of the Notes or the vote of Holders of a majority in
Principal Amount of the Notes at a meeting of the Holders of the Notes
called for such purpose, the Issuer will not amend, alter or repeal any
provision of the Certificate of Incorporation (by merger or otherwise) so
as to adversely affect the preferences, rights or powers of the Holders of
the Notes.
Section 7. Subordination.
Section 7.1. Notes Subordinated to Senior Debt. The Issuer
covenants and agrees and each Holder, by his acceptance hereof likewise
covenants and agrees, that all Notes shall be issued subject to the
provisions of Section 7 of this Note; and each person holding any Note,
whether upon original issue or upon transfer, assignment or exchange
thereof accepts and agrees that the payment of the principal amount of and
interest on the Notes by the Issuer shall, to the extent and in the manner
herein set forth, be subordinated and junior in right of payment, to the
prior payment in full of Senior Debt.
Section 7.2. No Payment on Notes in Certain Circumstances. (a) If
any default in the payment of any principal of or interest on any Senior
Debt when due and payable, whether at maturity, upon any redemption, by
declaration or otherwise, occurs and is continuing, no payment shall be
made by the Issuer with respect to the principal of or interest on the
Notes or to acquire any of the Notes for cash or property other than
conversion of the Notes into Common Stock in accordance with Section 5.1
hereof.
(b) If any event of default (other than a default in payment of
the principal of or interest on any Senior Debt) occurs and is continuing
(or if such an event of default would occur upon any payment with respect
to the Notes) with respect to any Senior Debt, as such event of default is
defined in such Senior Debt, permitting the holders thereof to accelerate
the maturity thereof and if the holder or holders or a representative of
such holder or holders gives written notice of the event of default to the
Issuer (a "Default Notice"), then, unless and until such event of default
has been cured or waived or has ceased to exist, the Issuer shall not be
obligated to, and shall not, (x) make any payment of or with respect to the
principal of or interest on the Notes or (y) acquire any of the Notes for
cash or property or otherwise other than conversion of the Notes into
Common Stock in accordance with Section 5.1 hereof. After the event of
default in such Default Notice has been cured or waived or ceases to exist,
the Issuer shall, subject to Section 7.2(a), promptly pay to the Holders of
the Notes all sums which the Issuer would have been obligated to pay from
the date of the Default Notice but for this Section 7.2(b).
(c) Notwithstanding the foregoing, in the event that any payment
in cash shall be received by any Holder when such payment is prohibited by
Section 7.2(a) or 7.2(b), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Debt or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Senior Debt may have been
issued, as their respective interests may appear, but only to the extent of
the amounts then due and owing on the Senior Debt, if any.
Section 7.3 Payment Over of Proceeds Upon Dissolution, Etc. (a)
Upon any payment or distribution of assets of the Issuer of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or total or partial liquidation or reorganization
of the Issuer, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due or to become
due upon all Senior Debt shall first be paid in full, or such payment duly
provided for, before any payment is made on account of the principal of or
interest on the Notes, or any acquisition of the Notes for cash or property
is made, other than conversion of the Notes into Common Stock in accordance
with Section 5.1 hereof. Upon any such dissolution, winding-up, liquidation
or reorganization, any payment or distribution of assets of the Issuer of
any kind or character, whether in cash, property or securities, to which
the Holders of the Notes would be entitled, except for the provisions
hereof, other than conversion of the Notes into Common Stock in accordance
with Section 5.1 hereof, shall be paid by the Issuer or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making
such payment or distribution, or by the Holders of the Notes if received by
them, directly to the holders of Senior Debt (pro rata to such holders on
the basis of the respective amounts of Senior Debt held by such holders) or
their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Debt may have been issued,
as their respective interests may appear, for application to the payment of
Senior Debt remaining unpaid until all such Senior Debt has been paid in
full after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of Senior Debt.
(b) Notwithstanding the foregoing, in the event that any payment
or distribution of assets of the Issuer of any kind or character, whether
in cash, property or securities, other than conversion of the Notes into
Common Stock in accordance with Section 5.1 hereof, shall be received by
any Holder when such payment or distribution is prohibited by Section
7.3(a), such payment or distribution shall be held in trust for the benefit
of, and shall be paid over or delivered to, the holders of Senior Debt (pro
rata to such holders on the basis of the respective amount of Senior Debt
held by such holders) or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such
Senior Debt may have been issued, as their respective interests may appear,
for application to the payment of Senior Debt remaining unpaid until all
such Senior Debt has been paid in full, after giving effect to any
concurrent payment, distribution or provision therefor to or for the
holders of such Senior Debt.
(c) For purposes of Section 7 of this Note, the words "cash,
property or securities" shall not be deemed to include (x) shares of stock
of the Issuer as reorganized or readjusted, (y) any payment or distribution
of securities of the Issuer or any other Issuer authorized by an order or
decree giving effect, and stating in such order or decree that effect is
given, to the subordination of the Notes to the Senior Debt, and made by a
court of competent jurisdiction in a reorganization proceeding under any
applicable bankruptcy, insolvency or other similar law, or (z) securities
of the Issuer or any other Issuer provided for by a plan of reorganization
or readjustment which are subordinated, to at least the same extent as the
Notes, to the payment of all Senior Debt then outstanding; provided that
(i) if a new Issuer results from such reorganization or readjustment, such
Issuer assumes the Senior Debt and (ii) the rights of the holders of the
Senior Debt are not, without the consent of such holders, altered by such
reorganization or readjustment. Notwithstanding anything to the contrary in
this Section 7, (i) a court referred to in clause (x) above may give
effect, and state that it is giving effect to the subordination of the
Notes in an order or decree which authorizes the payment in full of Senior
Debt in assets other than cash or cash equivalents and (ii) any assets
which the holders of the Notes are permitted to receive in accordance with
the provisions of this Section 7 shall not be subject to any claim by or on
behalf of the holders of Senior Debt.
7.4. Subrogation. Subject to the payment in full of all Senior
Debt, the Holders of the Notes shall be subrogated to the rights of the
holders of Senior Debt to receive payments or distributions of cash,
property or securities of the Issuer applicable to the Senior Debt until
the principal amount of and interest on the Notes shall be paid in full;
and, for the purposes of such subrogation, (a) no payments or distributions
to the holders of the Senior Debt of any cash, property or securities to
which the Holders of the Notes would be entitled except for the provisions
of Section 7 of this Note, and no payment over pursuant to the provisions
of Section 7 of this Note to the holders of Senior Debt by the Holders of
the Notes shall, as between the Issuer, its creditors other than holders of
Senior Debt, and the Holders of the Notes, be deemed to be a payment by the
Issuer to or on account of the Senior Debt, and (b) no payment or
distributions of cash, property or securities to or for the benefit of the
holders of the Notes pursuant to the subrogation provision of Section 7,
which would otherwise have been paid to the holders of Senior Debt shall,
as between the Issuer, its creditors other than holders of Senior Debt, and
the Holders of the Notes, be deemed to be a payment by the Issuer to or for
the account of the Notes. It is understood that the provisions of this
Section are and are intended solely for the purpose of defining the
relative rights of the Holders of the Notes, on the one hand, and the
holders of the Senior Debt, on the other hand.
If any payment or distribution to which the Holders of the Notes
would otherwise have been entitled but for the provisions of this Section
7, shall have been applied, pursuant to the provisions of this Section 7,
to the payment of all amounts payable under Senior Debt, then and in such
case, the Holders of the Notes shall be entitled to receive from the
holders of such Senior Debt any payments or distributions received by such
holders of Senior Debt in excess of the amount required to make payment in
full of such Senior Debt.
Section 7.5. Obligations of Issuer Unconditional. Nothing
contained in Section 6.1 or elsewhere in the Notes is intended to or shall
impair, as between the Issuer and the Holders of the Notes, the obligation
of the Issuer, which is absolute and unconditional, to pay to the Holders
of the Notes the principal amount of and interest on the Notes as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Notes
and creditors of the Issuer other than the holders of the Senior Debt, nor
shall anything herein or therein prevent any Holder from exercising all
remedies otherwise permitted by applicable law upon default under this
Note, subject to the rights, if any, under Section 7 of the holders of the
Senior Debt in respect of cash, property or securities of the Issuer
received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in Section 7 will restrict the right of the Holders of the Notes
to take any action to declare the Notes to be due and payable prior to
their stated maturity pursuant to Section 4.1 or to pursue any rights or
remedies hereunder.
Section 7.6. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Issuer
referred to in Section 7, the Holders of the Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction
in which bankruptcy, dissolution, winding-up, liquidation or reorganization
proceedings are pending, or a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment
or distribution, delivered to the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt and other indebtedness of the Issuer, the amount
thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to Section 7 of this Note.
Section 7.7. Subordination Rights Not Impaired by Acts or
Omissions of the Issuer or Holders of Senior Debt. No right of any present
or future holders of any Senior Debt to enforce subordination as provided
herein will at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Issuer or by any act or failure to act,
in good faith, by any such holder, or by any noncompliances by the Issuer
with the terms of this Note, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with. The holders of Senior
Debt may extend, renew, modify or amend the terms of the Senior Debt or any
security therefor and release, sell or exchange such security and otherwise
deal freely with the Issuer, all without affecting the liabilities and
obligations of the Holders of the Notes.
Section 7.8. Section 7 Not to Prevent Events of Default. The
failure to make a payment on account of principal of or interest on the
Notes by reason of any provision of Section 7 will not be construed as
preventing the occurrence of an Event of Default.
Section 8.
Section 8.1. Modification of Notes. Any provision of this Note may
be amended or, subject to Section 4, waived with the written consent of the
Issuer and the Holders of at least a majority in aggregate principal amount
of the Notes then outstanding; provided that no such amendment or waiver
shall (a) extend the final maturity of any Note, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce any amount payable on the conversion thereof,
or impair or affect the rights of any Holder to institute suit for the
payment thereof or adversely affect the ranking of the Notes with respect
to the outstanding Debt of the Issuer, in each such case, without the
consent of each Holder of each Note so affected, (b) reduce the aforesaid
percentage of Notes, the consent of the Holders of the Notes of which is
required for any such amendment or waiver, without the consent of the
Holders of all Notes then outstanding, or (c) modify the terms of the Notes
so as to affect adversely the rights of any holder of Senior Debt at the
time outstanding to the benefits of subordination hereunder without the
consent of such holder. The Issuer shall promptly notify all of the Holders
of the Notes after the making of any amendment or waiver pursuant to this
Section 8.1.
Section 9. Miscellaneous
Section 9.1. Transfer Restrictions. The Note is transferable and
assignable to one or more purchasers, provided that such transfer or
assignment is made in compliance with the Securities Act of 1933, as
amended, and any applicable state and foreign securities laws and in
compliance with Article 2 of the Securityholders Agreement. The Issuer
agrees to issue from time to time a replacement Note or Notes in the form
hereof and in such denominations as the Holder may request to facilitate
such transfers and assignments. In addition, after delivery of an indemnity
in form and substance reasonably satisfactory to the Issuer, the Issuer
also agrees to issue a replacement Note if this Note has been lost, stolen,
mutilated or destroyed.
Section 9.2. Registration. The Issuer shall keep at its principal
office a register (the "Register") in which shall be entered the name and
address of the registered holder of this Note and particulars of this Note
and of all transfers of this Note. References to the "Holders" shall mean
the Persons listed in the Register as the payees of the Notes unless any
payee shall have presented a Note to the Issuer for transfer and the
transferee shall have been entered in the Register as a subsequent holder,
in which case the term shall mean such subsequent holder. The ownership of
this Note shall be proven by the Register. For the purpose of paying
interest and principal on this Note, the Issuer shall be entitled to rely
on the name and address in the Register and notwithstanding anything to the
contrary contained in this Note, no Event of Default shall occur under
Section 4.1(a) or (b) if payment of interest and principal is made in
accordance with the name and address and particulars contained in the
Register.
Section 9.3. Governing Law. This Note shall be deemed to be a
contract under the laws of the State of New York, and for all purposes
shall be construed in accordance with the laws of said State, except as may
otherwise be required by mandatory provisions of law.
Section 9.4. Waiver of Presentment, Acceptance. The parties
hereto, including all guarantors or endorsers, hereby waive presentment,
demand, notice, protest and all other demands and notices in connection
with the delivery, acceptance, performance and enforcement of this Note,
except as specifically provided herein. The Holder of this Note by
acceptance hereof agrees to be bound by the provisions of the Notes which
are expressly binding on the Holder.
Section 9.5. Section Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
duly executed under its corporate seal.
Dated: [ ], 2001
[Seal]
THE NASDAQ STOCK MARKET, INC.
By:
--------------------------------
Name:
Title:
Exhibit B
SECURITYHOLDERS AGREEMENT
dated as of
___________, 2001
among
THE NASDAQ STOCK MARKET, INC.,
HELLMAN & FRIEDMAN CAPITAL PARTNERS IV, L.P.,
and
THE OTHER SECURITYHOLDERS LISTED
ON THE SIGNATURE PAGES HEREOF
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions...............................................1
ARTICLE 2
RIGHTS AND OBLIGATIONS WITH RESPECT TO TRANSFER
SECTION 2.01. Transfer by Holders.......................................4
SECTION 2.02. Restrictive Legends.......................................5
ARTICLE 3
REGISTRATION RIGHTS
SECTION 3.01. Demand Registration.......................................6
SECTION 3.02. Piggyback Registration....................................7
SECTION 3.03. Reduction of Offering.....................................7
SECTION 3.04. Registration Procedures...................................8
SECTION 3.05. Registration Expenses....................................11
SECTION 3.06. Indemnification by the Company...........................11
SECTION 3.07. Indemnification by Selling Holders.......................12
SECTION 3.08. Conduct of Indemnification Proceedings...................12
SECTION 3.09. Contribution.............................................13
SECTION 3.10. Participation in Underwritten Registrations..............15
SECTION 3.11. Rule 144.................................................15
SECTION 3.12. Holdback Agreements......................................15
SECTION 3.13. Transfer of Registration Rights..........................16
ARTICLE 4
PRE-EMPTIVE RIGHTS
SECTION 4.01. Pre-emptive Rights.......................................16
ARTICLE 5
BOARD APPOINTMENT OBLIGATION; INFORMATION RIGHTS; VOTING RIGHTS
SECTION 5.01. Board Appointment Obligation.............................18
SECTION 5.02. Information Rights.......................................18
SECTION 5.03. Additional Rights of the Holders.........................19
SECTION 5.04. Voting Rights............................................19
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Notices..................................................20
SECTION 6.02. Amendments; Waivers......................................20
SECTION 6.03. Termination..............................................20
SECTION 6.04. Successors, Assigns, Transferees.........................20
SECTION 6.05. Headings.................................................20
SECTION 6.06. No Inconsistent Agreements...............................21
SECTION 6.07. Severability.............................................21
SECTION 6.08. Recapitalization, Etc....................................21
SECTION 6.09. Specific Performance.....................................21
SECTION 6.10. Other Agreements.........................................21
SECTION 6.11. New York Law.............................................21
SECTION 6.12. Counterparts.............................................22
SECTION 6.13. Entire Agreement.........................................22
SECURITYHOLDERS AGREEMENT
SECURITYHOLDERS AGREEMENT dated as of _____________, 2001 (this
"Agreement") among The Nasdaq Stock Market, Inc., a Delaware corporation,
(together with any successor thereto, the "Company"), Hellman & Friedman
Capital Partners IV, L.P., a Delaware limited partnership ("HFCP IV"), and
the other securityholders listed on the signature pages hereof (together
with HFCP IV and their respective successors and permitted assigns, the
"Holders").
WHEREAS, the Company and the Holders have entered into a
Securities Purchase Agreement dated as of _____________, 2001 (the
"Securities Purchase Agreement"); and
WHEREAS, it is a condition precedent to the closing of the
transactions contemplated by the Securities Purchase Agreement that the
parties hereto execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises and covenants set forth herein, the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Definitions. (a) The following terms, as used
herein, have the following meanings:
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such
Person. For the pur poses of this definition, "control" when used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. Notwithstanding the foregoing, for
purposes of this Agreement, no NASD member shall be considered an
"Affiliate" of the NASD.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in the City of New York are authorized by law
to close.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock, par value $.01 per share,
of the Company.
"Competitor" means any Person that is principally engaged in
transaction services, market information services, or issuer services
related to securities trading on an exchange or similar market.
"Equity Securities" means the Notes and the Note Shares.
"Event of Default" has the meaning set forth in Section 4.1 of the
Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Initial Public Offering" means the first underwritten public
offering by the Company under the Securities Act.
"NASD" means the National Association of Securities Dealers, Inc.
and its successors.
"Note Shares" means the shares of Common Stock issued, or to be
issued, upon conversion of the Notes in accordance with their terms, and
any shares of Common Stock issued pursuant to a stock dividend, stock
split, or recapitalization in respect of such shares.
"Notes" means the 4.0% Convertible Subordinated Notes due 2006 of
the Company.
"Person" means an individual or a corporation, partnership,
association, trust, or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
"Preferred Stock" means the preferred stock, par value $0.01 per
share, of the Company.
"Registrable Securities" means the Note Shares; provided, that
such securities shall cease to be Registrable Securities when (i) a
registration statement relating to such securities shall have been declared
effective by the Commission and such securities shall have been disposed of
pursuant to such effective registration statement or (ii) such securities
have been disposed of pursuant to Rule 144 or may be disposed of pursuant
to Rule 144(k).
"Registration Expenses" means all (i) registration and filing
fees, (ii) fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of a qualified independent
underwriter, if any, counsel in connection therewith and the reasonable
fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing expenses,
(iv) internal expenses of the Company (including, without limitation, all
salaries and expenses of officers and employees performing legal or
accounting duties), (v) fees and disbursements of counsel for the Company,
(vi) customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any comfort
letters or costs associated with the delivery by independent certified
public accountants of a comfort letter or comfort letters), (vii) fees and
expenses of any special experts retained by the Company in connection with
such registration, (viii) reasonable fees and expenses of one counsel for
the Holders, (ix) fees and expenses of listing the Registrable Securities
on a securities exchange or on the Nasdaq National Market System, (x)
rating agency fees, (xi) reasonable fees and expenses of counsel for the
Underwriter, (xii) reasonable fees and expenses of the Underwriter
(excluding discounts or commissions relating to the distribution of the
Registrable Securities) and (xiii) out-of-pocket expenses of the Company
(including the expenses of any "roadshow" or similar marketing activity
undertaken in connection with the distribution of the Registrable
Securities).
"Rule 144" means Rule 144 under the Securities Act, as such rule
may be amended from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Holder" means a Holder who proposes to Transfer
Registrable Securities pursuant to Article 3.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person.
"Third Party" means a prospective purchaser of Equity Securities
from a Holder in an arm's-length transaction where such purchaser is not
the Company, an Affiliate of the Company or an Affiliate of such Holder.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as a principal in connection with a distribution of
such Registrable Securities and not as part of such dealer's market-making
activities.
(b) Each of the following terms is defined in the Section set
forth opposite each term:
Term Section
---- -------
ATS 2.01(b)
Board 5.01(a)
Damages 3.06
Demand Registrant 3.01(a)
Demand Registration 3.01(a)
ECN 2.01(b)
H&F Designee 5.01(a)
Indemnified Party 3.08
Indemnifying Party 3.08
NASD Priority Termination Date 3.03
New Securities 4.01(a)
Piggyback Registration 3.02
Preemptive Rights 4.01(a)
Proportionate Percentage 4.01(a)
Registration Request 3.01(a)
Shelf Demand 3.01(a)
Shelf Registration 3.01(a)
Transfer 2.01(a)(ii)
ARTICLE 2
RIGHTS AND OBLIGATIONS WITH RESPECT TO TRANSFER
SECTION 2.01. Transfer by Holders. (a) Subject to Section 3.12,
until the earlier of (i) the effective date of the registration statement
filed in connection with the Company's Initial Public Offering, or (ii)
June 28, 2002, without the prior written consent of the Company, no Holder
shall transfer, sell, assign, or otherwise dispose of ("Transfer") its
Equity Securities, in whole or in part, other than to its Affiliates.
(b) Following the expiration of the period set forth in Section
2.01(a):
(i) without the prior written consent of the Company, no Holder
shall Transfer any Equity Securities (other than in a registered
public offering or in compliance with Rule 144) to another
securities exchange, alternative trading system ("ATS"),
electronic communications network ("ECN"), the NASD, any
Competitor, or any Affiliate of any of the foregoing; and
(ii) with respect to any Transfer of Equity Securities by a Holder
other than (A) a Transfer to an Affiliate or a Transfer in a
registered public offering or in compliance with Rule 144, and (B)
a Transfer in accordance with Section 2.01(b)(i), the Holder shall
consult with the Company in good faith prior to such Transfer,
taking into account the circumstances of such proposed Transfer.
(c) Subject to compliance with all applicable securities laws and
this Agreement, each Holder may Transfer its Equity Securities, in whole or
in part, without restriction; provided that, the transferee (other than in
a Transfer pursuant to a registered public offering under the Securities
Act or in compliance with Rule 144) shall have executed and delivered to
each other party hereto an instrument confirming that such transferee
agrees to be bound by the terms of this Agreement applicable to the
transferor, whereupon such transferee shall become a Holder for purposes of
this Agreement.
SECTION 2.02. Restrictive Legends. (a) Each certificate for Equity
Securities issued to any Holder or to a subsequent transferee shall (unless
otherwise permitted by the provisions of Section 2.02(b)) include a legend
in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE OR
FOREIGN JURISDICTION AND MAY NOT BE OFFERED OR SOLD EXCEPT IN
COMPLIANCE WITH APPLICABLE FEDERAL, STATE OR FOREIGN SECURITIES
LAWS. THIS SECURITY IS ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER, AS SET FORTH IN THE SECURITYHOLDERS AGREEMENT, DATED AS
OF _____________, 2001, A COPY OF WHICH MAY BE OBTAINED FROM THE
NASDAQ STOCK MARKET, INC.
(b) In connection with a proposed Transfer of any Equity
Securities permitted under Section 2.01, any Holder may, (i) upon providing
evidence reasonably satisfactory to the Company that such Equity Security
is not a "restricted security" (as defined in Rule 144) or (ii) after
expiration of the applicable holding period under Rule 144, exchange the
certificate representing such Equity Security for a new certificate that
does not bear the legend set forth in Section 2.02(a).
ARTICLE 3
REGISTRATION RIGHTS
SECTION 3.01. Demand Registration. (a) Request for Registration.
At any time beginning 180 days after the consummation of the Company's
Initial Public Offering, for so long as any Holder owns any Registrable
Securities, any Holder of Notes (a "Demand Registrant") may make a written
request (the "Registration Request") for registration under the Securities
Act of Registrable Securities having a value (based on the average closing
sale price per Common Share for 10 trading days preceding the Registration
Request) of not less than $50,000,000 (or, if less, all of the Registrable
Securities then held by the Holders) (a "Demand Registration"), unless
otherwise agreed by the Company and the Selling Holders. Notwithstanding
the foregoing, the Company shall not be required to file a registration
statement pursuant to a Registration Request within 90 days of the
effective date of any other registration statement filed by the Company
pursuant to the Securities Act, excluding registration statements filed on
Form S-4 or S-8 (or any substitute form that may be adopted by the
Commission). Any Registration Request will specify the number of
Registrable Securities proposed to be sold and the intended method of
disposition thereof. The Holders shall be entitled to request: (i) two
Demand Registrations on Form S-1 or any equivalent registration form;
provided, however, that if on or before July 1, 2002, the Company is
eligible to register securities on Form S-3, the Holders shall only be
entitled to request one Demand Registration on Form S-1 or any equivalent
registration form and (ii) unlimited Demand Registrations on Form S-3 or
any equivalent registration form (but no more than two in any twelve-month
period); and provided further, that if the NASD makes a demand to the
Company for the filing of a shelf registration statement pursuant to a
contractual right of registration, then the Company shall provide notice to
the Holders of such demand by the NASD and, if requested by the Holders (a
"Shelf Demand"), the Company shall file a shelf registration statement
pursuant to Section 415 of the Securities Act covering open market sales of
the Registrable Securities (the "Shelf Registration"), which Shelf
Registration shall be considered a Demand Registration for purposes of this
Agreement. The Holders shall be entitled to request only one Shelf Demand
pursuant to this Agreement.
(b) Effective Registration. A registration requested pursuant to
this Section 3.01 shall not be deemed to be effected (i) if a registration
statement with respect thereto shall not have become effective (other than
due to any action or inaction by a Holder), (ii) if, after it has become
effective, such registration is interfered with for any reason (other than
due to any action or inaction by a Holder) by any stop order, injunction or
other order or requirement of the Commission or any other governmental
agency or any court, and the result of such interference is to prevent the
Holder from disposing of the Registrable Securities to be sold thereunder
in accordance with the intended methods of disposition or (iii) if the
conditions to closing specified in the purchase agreement or underwriting
agreement entered into in connection with any underwritten registration
shall not be satisfied or waived with the consent of the Company, the
Demand Registrant or the lead Underwriter, as applicable (other than due to
any action or inaction by a Holder).
(c) Underwriting. The offering of Registrable Securities pursuant
to any Demand Registration shall be in the form of an underwritten
offering, a block trade or an open market transaction, as determined by the
Demand Registrant. The Demand Registrant shall, if applicable, select the
lead Underwriter and any additional investment bankers and managers in
connection with the offering from a list of nationally-recognized
investment banks reasonably agreed to between the Company and the Demand
Registrant.
SECTION 3.02. Piggyback Registration. If the Company proposes to
file a registration statement under the Securities Act with respect to an
offering of its equity securities (i) for its own account (other than a
registration statement on Form S-4 or S-8 (or any substitute form that may
be adopted by the Commission)) or (ii) for the account of any holders of
its securities, then the Company shall give written notice of such proposed
filing to the Holders as soon as practicable (but in any event not less
than 10 days before the anticipated filing date), and such notice shall
offer the Holders the opportunity to register (a "Piggyback Registration")
any or all of the Registrable Securities. If any Holder wishes to register
securities of the same class or series as covered by the applicable
Piggyback Registration, such registration shall be on the same terms and
conditions as such Piggyback Registration. If, at any time after giving
written notice of its intention to register any equity securities and prior
to the effective date of a registration statement filed in connection with
such registration, the Company shall determine for any reason not to
register such equity securities, the Company may, at its election, give
written notice of such determination to each Holder and, thereupon, shall
not be obligated to register any Registrable Securities in connection
therewith.
SECTION 3.03. Reduction of Offering. Notwithstanding any provision
to the contrary contained herein, if the lead Underwriter of an offering
described in Section 3.01 or 3.02 delivers a written opinion to the Company
that the offering price of the securities proposed to be included in such
offering would be materially and adversely affected by inclusion of all the
securities of each class requested to be included, the number of securities
to be registered by each holder shall be reduced to the extent recommended
by such lead Underwriter; provided, that (i) priority in a registration
initiated by a holder exercising a contractual right to demand such
registration shall be (a) first, the securities offered for the account of
such holder, (b) second, with respect to a registration for which a
registration statement is filed prior to the NASD Priority Termination Date
only, securities requested to be registered by the NASD pursuant to a
contractual right of registration, and (c) third, pro rata among any other
securities of the Company requested to be registered for its own account or
pursuant to a contractual right of registration, and (ii) priority in a
registration initiated by the Company pursuant to Section 3.02 shall be (a)
first, securities offered for the account of the Company, (b) second, with
respect to a registration for which a registration statement is filed prior
to the NASD Priority Termination Date only, securities requested to be
registered by the NASD pursuant to a contractual right of registration, and
(c) third, pro rata among other securities of the Company requested to be
registered pursuant to a contractual right of registration. For purposes of
this Section 3.03, "NASD Priority Termination Date" shall mean the earlier
of (i) the date which is six months after the date on which the Initial
Public Offering is consummated, and (ii) December 31, 2002.
SECTION 3.04. Registration Procedures. Whenever the Company is
required to effect the registration of Registrable Securities pursuant to
Section 3.01, the Company will use its reasonable best efforts to effect
the registration and the sale of such Registrable Securities in accordance
with the intended method of disposition thereof as promptly as practicable,
and in connection with any such Registration Request:
(a) The Company will as expeditiously as possible prepare and file
with the Commission a registration statement (including any necessary
amendments and supplements), subject to Section 3.01(a), on any form for
which the Company then qualifies or which counsel for the Company shall
deem appropriate and which form shall be available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and the prospectus used in
connection therewith and use its reasonable best efforts to cause such
filed registration statement to become and remain effective, in the case of
registration that is not a Shelf Registration, for a period of 90 days or
such shorter period as necessary to complete the disposition of all
securities covered by such registration statement in accordance with the
intended method or methods of disposition thereof or, in the case of a
Shelf Registration, on a continuous basis until the earlier of (i) the date
on which all of the Registrable Securities covered by such Shelf
Registration are sold and (ii) the date on which the securities covered by
the Shelf Registration cease to be Registrable Securities; provided that if
the Company shall furnish to the Demand Registrant a certificate signed by
either its Chairman, President, or a Vice-President stating that in the
good faith judgment of its Board of Directors, the filing or effectiveness
of such registration statement would materially interfere with any proposed
acquisition, disposition, financing or other transaction involving the
Company or its subsidiaries, notwithstanding anything in this Section 3.04
to the contrary, the Company may postpone for up to 120 days in any
twelve-month period the filing or effectiveness of a registration statement
pursuant to a Holder's Registration Request; however, the Company will
during any such postponement take all action reasonably necessary or
desirable in order to be able to promptly file or request effectiveness of
the registration statement, as the case may be, upon termination of any
such postponement period.
(b) The Company will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to
each Selling Holder and each Underwriter, if any, such number of copies of
such registration statement, each amendment and supplement thereto (in each
case including all exhibits thereto and documents incorporated by reference
therein), the prospectus included in such registration statement (including
each preliminary prospectus) and such other documents as the Selling Holder
or such Underwriter may reasonably request in order to facilitate the sale
of the Registrable Securities. The Company will provide the Selling Holders
and the Underwriters reasonable time to review such documents and the
Company will consider in good faith incorporating any comments or other
information in such documents as the Selling Holder or the lead Underwriter
reasonably requests.
(c) After the filing of the registration statement, the Company
will promptly notify the Selling Holder of any stop order issued or
threatened by the Commission and take all reasonable actions required to
prevent the entry of such stop order or to remove it if entered.
(d) The Company will use its reasonable best efforts to (i)
register or qualify the Registrable Securities under such other securities
or blue sky laws of such jurisdictions in the United States as the Selling
Holder reasonably requests to keep such registration or qualification in
effect for so long as such registration statement remains in effect, and to
take any other action which may be reasonably necessary or advisable to
enable the Selling Holder to consummate the disposition in such
jurisdictions of the securities owned by the Selling Holder and (ii) cause
such Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company, to enable the Selling Holder to
consummate the disposition of such Registrable Securities; provided, that
the Company will not be required to (i) qualify generally to do business in
any jurisdiction where it would not otherwise be required to qualify but
for this paragraph (d), (ii) subject itself to taxation in any such
jurisdiction other than taxation arising with respect to the registration
of securities or (iii) consent to general service of process in any such
jurisdiction.
(e) At any time when a prospectus relating to the sale of
Registrable Securities is required to be delivered under the Securities
Act, the Company will immediately notify the Selling Holder of the
occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the
Holders of such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and promptly make available to the Selling Holder and the
Underwriters any such supplement or amendment. The Selling Holder agrees
that, upon receipt of any notice from the Company of the happening of any
event of the kind described in the preceding sentence, the Selling Holder
will forthwith discontinue the offer and sale of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until receipt of the copies of such supplemented or amended prospectus and,
if so directed by the Company, the Selling Holder will deliver to the
Company all copies, other than permanent file copies then in the possession
of the Selling Holder, of the most recent prospectus covering such
Registrable Securities at the time of receipt of such notice. In the event
the Company shall give such notice, the Company shall extend the period
during which such registration statement shall be maintained effective as
provided in Section 3.04(a) by the number of days during the period from
and including the date of the giving of such notice to the date when the
Company shall make available to the Selling Holder such supplemented or
amended prospectus.
(f) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as
are reasonably required in order to expedite or facilitate the disposition
of such Registrable Securities, including without limitation furnishing the
Underwriters and Selling Holders with reasonable access to, and causing the
cooperation of, all personnel reasonably requested by the Underwriters and
the Selling Holders subject to appropriate confidentiality agreements to
assist in arranging such meetings with third parties as the Underwriters
and the Selling Holders may reasonably request, including without
limitation any "roadshow" or other similar marketing activity undertaken in
connection with the distribution of the Registrable Securities.
(g) The Company will furnish to the Selling Holder and to each
Underwriter, if any, a signed counterpart, addressed to the Selling Holder
or such Underwriter, of (i) an opinion or opinions of counsel to the
Company and (ii) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering such
matters as are customarily covered by opinions and comfort letters, as the
Selling Holder or the lead Underwriter therefor reasonably requests.
(h) The Company will otherwise use its reasonable best efforts to
comply with all applicable rules and regulations of the Commission, and
make available to its securityholders, as soon as reasonably practicable,
an earnings statement covering a period of 12 months, beginning within
three months after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
(i) The Company will provide and cause to be maintained a transfer
agent and registrar for all Registrable Securities covered by such
registration statement from and after a date not later than the effective
date of such registration statement.
(j) The Company will use its reasonable best efforts (i) to cause
all Registrable Securities covered by such registration statement to be
listed on any national securities exchange (if such Registrable Securities
are not already listed), and on each other securities exchange, on which
similar securities issued by the Company are then listed, if the listing of
such Registrable Securities is then permitted under the rules of such
exchange; or (ii) to secure the designation of all such Registrable
Securities covered by such registration statement as a Nasdaq "national
market system security" within the meaning of Rule 11Aa2-1 of the
Commission or, failing that, to secure Nasdaq authorization for such
Registrable Securities, in each case if the Registrable Securities so
qualify, and, without limiting the generality of the foregoing, to arrange
for at least two market makers to register as such with respect to such
Registrable Securities with the NASD or the Company, as applicable, if
requested by the Holder or by the lead Underwriter.
(k) Subject to the provisions of Section 3.03, the Company may
include in such registration shares of Common Stock for its own account as
well as shares of Common Stock requested to be included in such
registration by any holder of Common Stock (other than the Holders)
pursuant to a contractual right of registration.
SECTION 3.05. Registration Expenses. Registration Expenses (other
than underwriting discounts and commissions on the Holders' Registrable
Securities) incurred in connection with any registration made or requested
to be made pursuant to this Article 3 will be borne by the Company, whether
or not any such registration statement becomes effective.
SECTION 3.06. Indemnification by the Company. To the extent
permitted by applicable law, the Company agrees to indemnify and hold
harmless each Selling Holder, its officers, directors and agents, and each
Person, if any, who controls each such Selling Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages, liabilities and expenses
(collectively, "Damages") caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) or any preliminary prospectus, or caused by any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages, liabilities or
expenses are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to
the Company by or on behalf of any such Selling Holder expressly for use
therein. In addition, the indemnification provided in this Section 3.06
shall not inure to the benefit of any Selling Holder, if the Selling Holder
(or any underwriter or underwriters of the offering) failed to send or give
a copy of the final prospectus or any such amendment thereof or supplement
thereto, whichever is most recent, to the person asserting any such Damages
at or prior to the written confirmation of the sale of the securities by
such underwriter or underwriters to such person if there would have been no
liability if the final prospectus or any such amendment thereof or
supplement thereto had been delivered. The Company also agrees, to the
extent permitted by applicable law, to indemnify any Underwriters of the
Registrable Securities, their officers and directors and each Person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Selling Holders provided in this Section 3.06.
SECTION 3.07. Indemnification by Selling Holders. To the extent
permitted by applicable law, each Selling Holder agrees, severally but not
jointly, to indemnify and hold harmless the Company, its officers,
directors and agents and each Person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act, to the same extent as the foregoing indemnity from the
Company to such Selling Holder, but only with reference to information
related to such Selling Holder furnished in writing by or on behalf of such
Selling Holder expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus. Each Selling Holder also
agrees, to the extent permitted by applicable law, to indemnify and hold
harmless Underwriters of the Registrable Securities, their officers and
directors and each Person who controls such Underwriters on substantially
the same basis as that of the indemnification of the Company provided in
this Section 3.07.
SECTION 3.08. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant
to Section 3.06 or 3.07, such Person (the "Indemnified Party") shall
promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing. Notwithstanding the foregoing, the
failure so to give prompt notice to such person will not relieve such
Indemnifying Party from liability, except to the extent such failure or
delay materially prejudices such Indemnifying Party. The Indemnifying Party
shall be entitled to participate in any such action and to assume the
defense thereof, at the Indemnifying Party's expense and with counsel
reasonably satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to such Indemnified Party of its election so to assume
the defense thereof, the Indemnified Party shall have the right to
participate in such action and to retain its own counsel, but the
Indemnifying Party shall not be liable to such Indemnified Party hereunder
for any legal expenses of other counsel or any other expenses, in each
case, subsequently incurred by such Indemnified Party, in connection with
the defense thereof other than reasonable costs of investigation, unless
(i) the Indemnifying Party has agreed to pay such fees and expenses, (ii)
the Indemnifying Party shall have failed to employ counsel reasonably
satisfactory to the Indemnified Party in a timely manner or (iii) the
Indemnified Party shall have been advised by outside counsel that
representation of the Indemnified Party by counsel provided by the
Indemnifying Party pursuant to the foregoing would be inappropriate due to
an actual or potential conflicting interest between the Indemnifying Party
and the Indemnified Party, including situations in which there are one or
more legal defenses available to the Indemnified Party that are different
from or additional to those available to the Indemnifying Party; provided
however, that the Indemnifying Party shall not, in connection with any one
such action or proceeding or separate but substantially similar actions or
proceedings arising out of the same general allegations, be liable for the
fees and expenses of more than one firm of attorneys at one time for the
Indemnified Party. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its consent, but if settled
with such consent, or if there be a final judgment for the plaintiff, the
Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above)
by reason of such settlement or judgment. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such settlement (x)
includes an unconditional release of such Indemnified Party from all
liability arising out of such proceeding and (y) provides that such
Indemnified Party does not admit any fault or guilt with respect to the
subject matter of such proceeding.
SECTION 3.09. Contribution. (a) If the indemnification provided
for herein is for any reason unavailable to the Indemnified Parties in
respect of any losses, claims, damages or liabilities referred to herein,
then each such Indemnifying Party, to the extent permitted by applicable
law, in lieu of indemnifying such Indemnified Party, shall contribute to
the amount paid or payable by such Indemnified Party as a result of such
losses, claims, damages or liabilities (i) as between the Company and any
Selling Holder on the one hand and the Underwriters on the other, in such
proportion as is appropriate to reflect the relative benefits received by
the Company and such Selling Holder on the one hand and the Underwriters on
the other from the offering of the securities, or if such allocation is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits but also the relative fault of the
Company and such Selling Holder on the one hand and of the Underwriters on
the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations and (ii) as between the Company on the one hand
and any Selling Holder on the other, in such proportion as is appropriate
to reflect the relative fault of the Company and of such Selling Holder in
connection with such statements or omissions, as well as any other relevant
equitable considerations. The relative benefits received by the Company and
any Selling Holder on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before
deducting expenses) received by the Company and such Selling Holder bear to
the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of
the prospectus. The relative fault of the Company and any Selling Holder on
the one hand and of the Underwriters on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and such
Selling Holder or by the Underwriters. The relative fault of the Company on
the one hand and any Selling Holder on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party, and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(b) The Company and each Selling Holder agree that it would not be
just and equitable if contribution pursuant to this Section 3.09 were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 3.09, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Registrable Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission, and no
Selling Holder shall be required to contribute any amount in excess of the
amount by which the total price at which the Registrable Securities of such
Selling Holder were offered to the public (less underwriters' discounts and
commissions) exceeds the amount of any damages which such Selling Holder
has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. 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.
SECTION 3.10. Participation in Underwritten Registrations. No
Person may participate in any underwritten registration hereunder unless
such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such
underwriting arrangements and these registration rights.
SECTION 3.11. Rule 144. If the Company shall have filed a
registration statement pursuant to the requirements of Section 12 of the
Exchange Act or a registration statement pursuant to the requirements of
the Securities Act relating to any class of equity securities, the Company
covenants that it will file any reports required to be filed by it under
the Securities Act and the Exchange Act and will take such further action
as the Selling Holder shall reasonably request, all to the extent required
from time to time to enable the Selling Holders to sell Registrable
Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule is amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the Commission.
SECTION 3.12. Holdback Agreements. (a) Restrictions on Public Sale
by Holders. If and to the extent requested of all shareholders of the
Company by the lead Underwriter of an underwritten public offering of
equity securities of the Company, the Holders agree not to effect, except
as part of such registration, any offer, sale, pledge, transfer or other
distribution or disposition or any agreement with respect to the foregoing,
of the issue being registered or a similar security of the Company, or any
securities convertible into or exchangeable or exercisable for such
securities, including a sale pursuant to Rule 144, during the seven day
period prior to, and during such period that the lead Underwriter may
reasonably request, no greater than 90 days (or 180 days following the
Initial Public Offering), beginning on, the effective date of such
registration statement.
(b) Restrictions on Public Sale by the Company. The Company
agrees (i) not to effect any public sale or distribution of any securities
similar to those being registered in accordance with Section 3.01 or
Section 3.02, or any securities convertible into or exchangeable or
exercisable for such securities, during the seven days prior to, and during
such period as the lead Underwriter may reasonably request, no greater than
90 days (or 180 days following the Initial Public Offering), beginning on,
the effective date of any registration statement (except as part of such
registration statement and except pursuant to registrations on Form S-4 or
S-8 or any successor or similar form thereto); and (ii) that any agreement
entered into after the date of this Agreement pursuant to which the Company
issues or agrees to issue any privately placed securities shall contain a
provision under which holders of such securities agree not to effect any
public sale or distribution of any such securities during the periods
described in (i) above, in each case including a sale pursuant to Rule 144
(except as part of any such registration, if permitted).
SECTION 3.13. Transfer of Registration Rights. The rights of each
Holder under this Article 3 are transferable to each transferee of such
Holder to whom the transferor assigns its rights pursuant to a Transfer
that complies with the terms of Section 2.01(c).
ARTICLE 4
PRE-EMPTIVE RIGHTS
SECTION 4.01. Pre-emptive Rights. (a) Prior to the Initial Public
Offering, if the Company shall propose to issue or sell New Securities (as
hereinafter defined) or enter into any contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance or sale
of any New Securities, in any such case the primary purpose of which (as
determined in good faith by the Company's Board of Directors) is for the
Company to raise capital, then the Company's Board of Directors shall
consider in good faith the desirability and appropriateness of permitting
the Holders to participate in such offerings of New Securities (the
"Preemptive Rights") including granting each Holder the right to purchase
up to that number of New Securities, at the same price and on the same
terms proposed to be issued or sold by the Company, so that each Holder
would, after the issuance or sale of all such New Securities, hold the same
proportionate interest of the issued and outstanding equity securities of
the Company (calculated a fully-diluted basis) as was held by each Holder
(on a fully-diluted basis) immediately prior to the issuance or sale of
such New Securities (the "Proportionate Percentage"). "New Securities"
means any Common Stock or options, warrants or other securities or rights
convertible or exchangeable into or exercisable for any Common Stock or any
other such equity securities; provided, however, that "New Securities"
shall not include: (i) any securities issued or issuable on conversion of
the Convertible Subordinated Notes or pursuant to the exercise of any
rights, warrants, options or other agreements outstanding on the date of
this Agreement including, without limitation, any security convertible or
exchangeable, with or without consideration, into or for any stock, options
and warrants; (ii) options and securities issued to management, directors
or employees of the Company or its Subsidiaries in the ordinary course of
business and equity securities issuable upon exercise thereof; or (iii)
securities issued in consideration for, or in connection with, any merger,
consolidation or other acquisition of all or substantially all of the
assets constituting a business.
(b) The Company shall give each Holder written notice of its
intention to issue and sell New Securities, describing the type of New
Securities, the price and the general terms and conditions upon which the
Company proposes to issue the same. If the Company's Board of Directors
decides to grant the Holders Preemptive Rights, each Holder shall have 10
days from the giving of such notice to agree to purchase all (or any part)
of its Proportionate Percentage of New Securities for the price and upon
the terms and conditions specified in the notice by giving written notice
to the Company and stating therein the quantity of New Securities to be
purchased. In the event that fewer than all Holders elect to purchase their
portion of the New Securities in the manner described above, those Holders
electing to purchase New Securities shall be offered the opportunity to
purchase the unsubscribed portion, pro rata on the basis of the number of
shares of Common Stock owned by each such Holder (on an as-converted
basis).
(c) If the Holders fail to exercise in full their Preemptive
Rights within such 10 days, the Company shall have 90 days thereafter to
enter into a binding agreement to sell the remainder of the New Securities
in respect of which such Holders' Preemptive Rights were not exercised, at
a price and upon general terms and conditions no more favorable to the
purchasers thereof than specified in the Company's notice to the Holders
pursuant to clause (b) of this Section 4.01. If the Company has not entered
into a binding agreement to sell the New Securities within such 90 days,
the Company shall not thereafter agree to issue or sell any New Securities,
without again offering each Holder the right to purchase its Proportionate
Percentage of the New Securities in the manner provided above.
(d) Notwithstanding anything in this Agreement to the contrary,
each Holder shall have the right to assign its rights under this Article 4
to one or more of its Affiliates; provided that each such Affiliate shall
have agreed to be bound by the terms of this Agreement.
ARTICLE 5
BOARD APPOINTMENT OBLIGATION; INFORMATION RIGHTS; VOTING RIGHTS
SECTION 5.01. Board Appointment Obligation. (a) For so long as the
initial Holders beneficially own Equity Securities representing at least
50% of the number of shares of Common Stock (on an as-converted basis)
initially acquired by such Holders, such Holders shall have the right to
designate one person reasonably acceptable to the Company (the "H&F
Designee") for nomination as director to the board of directors (the
"Board") of the Company. The Company hereby agrees to (i) include the H&F
Designee as one of the nominees to the Board on each slate of nominees for
election to the Board proposed by management of the Company, (ii) to
recommend the election of the H&F Designee to the shareholders of the
Company, and (iii) without limiting the foregoing, to otherwise use its
best efforts to cause the H&F Designee to be elected to the Board. The
Company hereby agrees to use its best efforts to cause the appointment of
the H&F Designee to the Finance Committee of the Board. The initial H&F
Designee shall be F. Warren Hellman.
(b) In the event that the H&F Designee for any reason ceases to
serve as a director during his term of office, to the extent Holders are
entitled to designate an H&F Designee, the resulting vacancy on the Board
shall be filled by a director designated by the initial Holders reasonably
acceptable to the Company.
SECTION 5.02. Information Rights. Subject to appropriate
confidentiality arrangements, the Company will provide HFCP IV, or such
other Holder as the Holders shall designate:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, a balance sheet of the Company as
of the end of such fiscal year and the related statements of profit and
loss and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, and accompanied
by a report thereon of Ernst & Young LLP or other independent public
accountants of nationally recognized standing;
(b) as soon as available and in any event within 45 days after the
end of each of the first three quarters of each fiscal year of the Company,
a balance sheet of the Company as of the end of such quarter and the
related statements of profit and loss and cash flows for such quarter and
for the portion of the Company's fiscal year then ended, setting forth in
each case in comparative form the figures for the corresponding quarter and
the corresponding portion of the Company's previous fiscal year, all
certified (subject to normal year-end adjustments) as to fairness of
presentation, consistency and, except for the absence of footnotes,
generally accepted accounting principles by the chief financial officer or
the chief accounting officer of the Company;
(c) to the extent prepared by the Company and provided to
management of the Company, as soon as available and in any event within 10
days after the end of each month, a balance sheet of the Company as of the
end of such month and the related statements of profit and loss and cash
flows for such month, setting forth in each case, in comparative form the
figures for the corresponding month of the Company's previous fiscal year;
and
(d) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of the Company
stating whether any Event of Default exists on the date of such certificate
and, if any Event of Default then exists, setting forth the details thereof
and the action which the Company is taking or proposes to take with respect
thereto.
SECTION 5.03. Additional Rights of the Holders. For so long as the
initial Holders beneficially own Equity Securities representing at least
25% of the number of shares of Common Stock (on an as-converted basis)
initially acquired by such Holders, promptly upon a request by any Holder
to the chief executive officer, the chief financial officer, the general
counsel or the chief information officer of the Company, the Company will,
subject to appropriate confidentiality arrangements, provide reasonable
access at reasonable times to such aforementioned officers of the Company
and the Company's public accountants to discuss such financial, operating
and other information regarding the business of the Company and its
Subsidiaries as such Holder may reasonably request.
SECTION 5.04. Voting Rights. If the Board of Directors of the
Company approves an exemption for any Person from the limitation on voting
rights set forth in Section C(2) of Article Fourth of the Company
certificate of incorporation (other than an exemption granted in connection
with the establishment of a strategic alliance with another exchange or
similar market), the Company shall simultaneously grant a similar exemption
to the holders of the Equity Securities and shall use its best efforts to
obtain the concurrence of the Securities and Exchange Commission with
respect thereto.
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. Notices. Any notice, request, instruction or other
document to be given hereunder by any party hereto to another party hereto
shall be in writing (including fax or similar writing) and shall be given
to such party at its address or telecopier number set forth on its
signature page, or to such other address as the party to whom notice is to
be given may provide in a written notice to the party giving such notice, a
copy of which written notice shall be on file with the Secretary of the
Company. Each such notice, request or other communication shall be
effective (i) if given by fax, when such fax is transmitted to the fax
number specified in this Section and confirmation of receipt is received or
(ii) if given by mail, 72 hours after such communication is deposited in
the mails with first class postage prepaid addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in
this Section 6.01.
SECTION 6.02. Amendments; Waivers. (a) No failure or delay on the
part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of
any other right, power or privilege.
(b) Neither this Agreement nor any term or provision hereof may
be amended or waived in any manner other than by instrument in writing
signed, in the case of an amendment, by the Holders and the Company, or in
the case of a waiver, by the party against whom the enforcement of such
waiver is sought.
SECTION 6.03. Termination. This Agreement shall terminate and be
of no further force or effect with respect to each Holder upon such date
that such Holder no longer holds any Equity Securities; provided, that the
rights and obligations of the Company and the Holders under Section 3.06
through 3.09 shall survive any such termination.
SECTION 6.04. Successors, Assigns, Transferees. The provisions of
this Agreement shall be binding upon and accrue to the benefit of the
parties hereto and their respective heirs, successors and assigns. Neither
this Agreement nor any provision hereof shall be construed so as to confer
any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and permitted assigns.
SECTION 6.05. Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning
or construction of any provisions hereof.
SECTION 6.06. No Inconsistent Agreements. The Company will not
hereafter enter into any agreement with respect to its securities which is
inconsistent with or grant rights superior to the rights granted to the
Holders of Equity Securities in this Agreement. The Company represents and
warrants to each Holder that it has not previously entered into any
agreement with respect to any of its debt or equity securities granting any
registration rights to any Person, except for an agreement with the NASD.
SECTION 6.07. Severability. The invalidity or unenforceability of
any provisions of this Agreement in any jurisdiction shall not affect the
validity, legality or enforceability of the remainder of this Agreement in
such jurisdiction or the validity, legality or enforceability of this
Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder
shall be enforceable to the fullest extent permitted by law.
SECTION 6.08. Recapitalization, Etc. In the event that any capital
stock or other securities are issued in respect of, in exchange for, or in
substitution of, any shares of Common Stock by reason of any
reorganization, recapitalization, reclassification, merger, consolidation,
spin-off, partial or complete liquidation, stock dividend, split-up, sale
of assets, distribution to stockholders or combination of the shares of
Common Stock or any other change in capital structure of the Company,
appropriate adjustments shall be made with respect to the relevant
provisions of this Agreement so as to fairly and equitably preserve, the
original rights and obligations of the parties hereto under this Agreement.
SECTION 6.09. Specific Performance. The parties hereto agree that
if any of the provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached, irreparable damage
would occur, no adequate remedy at law would exist and damages would be
difficult to determine, and that the parties shall be entitled to specific
performance of the terms hereof and immediate injunctive relief, without
the necessity of proving the inadequacy of money damages as a remedy, in
addition to any other remedy at law or equity.
SECTION 6.10. Other Agreements. Nothing contained in this
Agreement shall be deemed to be a waiver of, or release from, any
obligations any party hereto may have under, or any restrictions on the
transfer of shares of Common Stock or other securities of the Company or
any direct or indirect subsidiary of the Company imposed by, any other
agreement.
SECTION 6.11. New York Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
giving effect to the conflicts of laws principles thereof.
SECTION 6.12. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original with the same
effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 6.13. Entire Agreement. This Agreement, together with the
Securities Purchase Agreement, the Notes and the amendment to the Company's
certificate of incorporation, constitutes the entire agreement and
understanding of the parties hereto in respect of the subject matter
contained herein and therein, and there are no restrictions, promises,
representations, warranties, covenants, or undertakings with respect to the
subject matter hereof, other than those expressly set forth or referred to
herein or therein. This Agreement, the Securities Purchase Agreement, the
Notes and the amendment to the Company's certificate of incorporation
supersede all prior agreements and understandings between the parties
hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
THE NASDAQ STOCK MARKET, INC.
By
____________________________________
Name: Frank G. Zarb
Title: Chairman
The Nasdaq Stock Market, Inc.
33 Whitehall Street
New York, New York 10004
Telephone: 212-858-4750
Telecopier:
HELLMAN & FRIEDMAN CAPITAL
PARTNERS IV, L.P.
by its General Partner, H&F Investors IV, LLC
by its Managing Member, H&F Investors III, Inc.
By
______________________________________
Name: Patrick J. Healy
Title: Vice President
Address: c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, California 94111
Attention: Richard M. Levine
Telephone: (415) 788-5111
Telecopier: (415) 391-4648
HELLMAN & FRIEDMAN EXECUTIVE
FUND IV, L.P.
by its General Partner, H&F Investors IV, LLC
by its Managing Member, H&F Investors III, Inc.
By
______________________________________
Name: Patrick J. Healy
Title: Vice President
By______________________________________
Name:
Title:
Address: c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, California 94111
Attention: Richard M. Levine
Telephone: (415) 788-5111
Telecopier: (415) 391-4648
HELLMAN & FRIEDMAN INTERNATIONAL
FUND IV-A, L.P.
by its General Partner, H&F Investors IV, LLC
by its Managing Member, H&F Investors III, Inc.
By_______________________________________
Name:
Title:
By_____________________________________
Name:
Title:
Address: c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, California 94111
Attention: Richard M. Levine
Telephone: (415) 788-5111
Telecopier: (415) 391-4648
HELLMAN & FRIEDMAN INTERNATIONAL
FUND IV-B, L.P.
by its General Partner, H&F Investors IV, LLC
by its Managing Member, H&F Investors III, Inc.
By_______________________________________
Name:
Title:
By______________________________________
Name:
Title:
Address: c/o Hellman & Friedman LLC
One Maritime Plaza
12th Floor
San Francisco, California 94111
Attention: Richard M. Levine
Telephone: (415) 788-5111
Telecopier: (415) 391-4648