EXHIBIT 4.5
EXULT, INC.
2.5% CONVERTIBLE SENIOR NOTES DUE OCTOBER 1, 2010
REGISTRATION RIGHTS AGREEMENT
September 30, 2003
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
Banc of America Securities LLC
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
As representatives of the several Purchasers
named in Schedule I to the Purchase Agreement
c/o Goldman, Sachs & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Exult, Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to the Purchasers (as defined herein) upon the terms set forth in the
Purchase Agreement (as defined herein) its 2.5% Convertible Senior Notes due
October 1, 2010 (the "Securities"). As an inducement to the Purchasers to enter
into the Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchasers thereunder, the Company agrees with the Purchasers
for the benefit of Holders (as defined herein) from time to time of the
Registrable Securities (as defined herein) as follows:
1. Definitions.
(a) Capitalized terms used herein without definition shall have
the meanings ascribed to them in the Purchase Agreement. As used in this
Agreement, the following defined terms shall have the following meanings:
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Closing Date" means the First Time of Delivery as defined in the
Purchase Agreement.
1
"Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.
"Common Stock" means the Company's common stock, par value $0.0001 per
share.
"DTC" means The Depository Trust Company.
"Effective Failure" has the meaning assigned thereto in Section 7(b)
hereof.
"Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.
"Effective Time" means the time at which the Commission declares the
Shelf Registration Statement effective or at which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Holder" means any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" means the Indenture, dated as of September 30, 2003,
between the Company and Bank One Trust Company, N.A., as Trustee, as amended and
supplemented from time to time in accordance with its terms.
"Liquidated Damages" has the meaning assigned thereto in Section 7(a)
hereof.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 6 hereof.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Appendix A
hereto.
The term "person" means an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Securities Act)
included in the Shelf Registration Statement, as amended or supplemented by any
prospectus supplement with respect to the terms of the offering of any portion
of the Registrable Securities covered by the Shelf Registration Statement and by
all
2
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.
"Purchase Agreement" means the purchase agreement, dated as of
September 24, 2003, between the Purchasers and the Company relating to the
Securities.
"Purchasers" means the Purchasers named in Schedule I to the Purchase
Agreement.
"Registrable Securities" means all or any portion of the Securities
issued from time to time under the Indenture in registered form and the shares
of Common Stock issuable upon conversion or repurchase of such Securities;
provided, however, that a security ceases to be a Registrable Security when it
is no longer a Restricted Security.
"Registration Default" has the meaning assigned thereto in Section 7(a)
hereof.
"Restricted Security" means any Security or share of Common Stock
issuable upon conversion thereof except any such Security or share of Common
Stock that (i) has been effectively registered under the Securities Act and sold
in a manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
such Rule 144 (or any successor provision thereto) or (iii) has otherwise been
transferred and a new Security or share of Common Stock not subject to transfer
restrictions under the Securities Act has been delivered by or on behalf of the
Company in accordance with Section 3.5 of the Indenture. If any Security has
ceased to be a Restricted Security, then any shares of Common Stock issued upon
conversion or repurchase thereof will not be a Restricted Security.
"Rules and Regulations" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Securities Act" means the United States Securities Act of 1933, as
amended.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.
3
The term "underwriter" means any underwriter of Registrable Securities
in connection with an offering thereof under a Shelf Registration Statement.
(b) Wherever there is a reference in this Agreement to a
percentage of the "principal amount" of Registrable Securities or to a
percentage of Registrable Securities, Common Stock shall be treated as
representing the principal amount of Securities that was surrendered for
conversion or exchange in order to receive such number of shares of Common
Stock.
2. Shelf Registration.
(a) The Company shall, no later than 90 calendar days following
the Closing Date, file with the Commission a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the Holders from
time to time in accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement and, thereafter,
shall use its reasonable best efforts to cause such Shelf Registration Statement
to be declared effective under the Securities Act no later than 180 calendar
days following the Closing Date; provided, however, that the Company may, upon
written notice to all Holders, postpone having the Shelf Registration Statement
declared effective for a reasonable period not to exceed 90 days if the Company
possesses material non-public information and the Board of Directors of the
Company has determined in good faith that it is in the best interests of the
Company to postpone having the Shelf Registration Statement declared effective;
provided, further, however, that no Holder shall be entitled to be named as a
selling securityholder in the Shelf Registration Statement or to use the
Prospectus forming a part thereof for resales of Registrable Securities unless
such Holder is an Electing Holder.
(b) The Company shall use its reasonable best efforts:
(i) to keep the Shelf Registration Statement continuously
effective under the Securities Act in order to permit the Prospectus
forming a part thereof to be usable by Holders until the earliest of
(1) the sale of all Registrable Securities registered under the Shelf
Registration Statement; (2) the expiration of the period referred to in
Rule 144(k) of the Securities Act with respect to all Registrable
Securities held by persons that are not Affiliates of the Company; and
(3) two years from the date of the last Time of Delivery of the
Securities (such period being referred to herein as the "Effectiveness
Period");
(ii) after the Effective Time of the Shelf Registration
Statement, promptly upon the request of any Holder of Registrable
Securities that is not then an Electing Holder, to take any action
reasonably necessary to enable such Holder to use the Prospectus
forming a part thereof for resales of Registrable Securities,
including, without limitation, any action necessary to identify such
Holder as a selling securityholder in the Shelf Registration Statement;
provided, however, that (1) nothing in this subparagraph shall relieve
such Holder of the obligation to return a completed and signed Notice
and Questionnaire to the Company in accordance with Section 3(a)(ii)
hereof, and (2) nothing in this subparagraph shall obligate the Company
to file more than one post-effective amendment to the Shelf
Registration Statement in any fiscal quarter, such timing to be
determined in the reasonable discretion of the Company; and
4
(iii) if at any time the Securities, pursuant to Article
XII of the Indenture, are convertible into securities other than Common
Stock, to cause, or to cause any successor under the Indenture to
cause, such securities to be included in the Shelf Registration
Statement (or a registration statement substantially similar to the
Shelf Registration Statement) no later than the date on which the
Securities may then be convertible into such securities.
The Company shall be deemed not to have used its reasonable best efforts to keep
the Shelf Registration Statement effective during the requisite period if the
Company voluntarily takes any action that would result in Holders of Registrable
Securities covered thereby not being able to offer and sell any of such
Registrable Securities during that period, unless such action is (A) required by
applicable law and, to the extent applicable, the Company thereafter promptly
complies with the requirements of paragraph 3(j) below or (B) permitted pursuant
to Section 2(c) below.
(c) The Company may suspend the use of the Prospectus for a period
not to exceed 30 days in any 90-day period or an aggregate of 90 days in any
12-month period if the Board of Directors of the Company shall have determined
in good faith that because of valid business reasons (not including avoidance of
the Company's obligations hereunder), including the acquisition or divestiture
of assets, pending corporate developments and similar events, it is in the best
interests of the Company to suspend such use, and prior to suspending such use
the Company provides the Holders with written notice of such suspension, which
notice need not specify the nature of the event giving rise to such suspension.
3. Registration Procedures. In connection with the Shelf
Registration Statement, the following provisions shall apply:
(a) (i) Not less than 30 calendar days prior to the time the Company
intends in good faith to have the Shelf Registration Statement declared
effective, the Company shall mail the Notice and Questionnaire to the Holders of
Registrable Securities. No Holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement as of the Effective Time, and
no Holder shall be entitled to use the Prospectus forming a part thereof for
resales of Registrable Securities at any time, unless such Holder has returned a
completed and signed Notice and Questionnaire to the Company by the deadline for
response set forth therein; provided, however, Holders of Registrable Securities
shall have at least 28 calendar days from the date on which the Notice and
Questionnaire is first mailed to such Holders to return a completed and signed
Notice and Questionnaire to the Company.
(ii) After the Effective Time of the Shelf Registration Statement,
the Company shall, upon the request of any Holder of Registrable Securities that
is not then an Electing Holder, promptly send a Notice and Questionnaire to such
Holder. The Company shall not be required to take any action to name such Holder
as a selling securityholder in the Shelf Registration Statement or to enable
such Holder to use the Prospectus forming a part thereof for resales of
Registrable Securities until such Holder has returned a completed and signed
Notice and Questionnaire to the Company. Notwithstanding the foregoing, the
Company shall only be
5
required to file one post-effective amendment to the Shelf Registration
Statement in any fiscal quarter, such timing to be determined in the reasonable
discretion of the Company.
(iii) The term "Electing Holder" shall mean any Holder of
Registrable Securities that has returned a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a)(i) or 3(a)(ii)
hereof and who has not notified the Company that such Holder has transferred
such Registrable Securities.
(b) The Company shall promptly furnish to each Electing Holder,
prior to the Effective Time, a copy of the Shelf Registration Statement
initially filed with the Commission, and shall furnish to each such Electing
Holder, prior to the filing thereof with the Commission, an electronic or paper
copy of each amendment thereto and each amendment or supplement, if any, to the
Prospectus included therein, and shall use its reasonable best efforts to
reflect in each such document, at the Effective Time or when so filed with the
Commission, as the case may be, such comments as such Holders and their
respective counsel reasonably may propose.
(c) The Company shall promptly take such action as may be
necessary so that (i) each of the Shelf Registration Statement and any amendment
thereto and the Prospectus forming a part thereof and any amendment or
supplement thereto (and each report or other document incorporated therein by
reference in each case) complies in all material respects with the Securities
Act and the Exchange Act and the respective rules and regulations thereunder,
(ii) each of the Shelf Registration Statement and any amendment thereto does
not, when it becomes effective, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) each of the Prospectus
forming a part of the Shelf Registration Statement, and any amendment or
supplement to such Prospectus, does not at any time during the Effectiveness
Period include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(d) The Company shall promptly advise each Electing Holder, and
shall confirm such advice in writing (which may be by electronic mail) if so
requested by any such Electing Holder:
(i) when a Shelf Registration Statement has been filed
with the Commission and when a Shelf Registration Statement or any
post-effective amendment thereto has become effective, in each case
making a public announcement thereof by release made through any two of
the following news services: Reuters Economic Services, Bloomberg
Business News and Dow ▇▇▇▇▇ & Company Inc. (or any comparable news
service if one or more of the foregoing are not then available);
provided, however, if the Company files a post-effective amendment only
to add or change Holders, the Company shall only be required to notify
the Holders affected by such amendment and furnish such Holders with a
copy of the most current Prospectus;
(ii) during the Effectiveness Period, of any request by
the Commission for amendments or supplements to the Shelf Registration
Statement or the Prospectus included therein or for additional
information;
6
(iii) during the Effectiveness Period, of the issuance by
the Commission of any stop order suspending the effectiveness of the
Shelf Registration Statement or the initiation of any proceedings for
such purpose;
(iv) during the Effectiveness Period, of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the securities included in the Shelf Registration
Statement for sale in any jurisdiction or the initiation of any
proceeding for such purpose; and
(v) during the Effectiveness Period, of the occurrence of
any event or the existence of any state of facts that requires the
making of any changes in the Shelf Registration Statement or the
Prospectus included therein so that, as of such date, such Shelf
Registration Statement and Prospectus do not contain an untrue
statement of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances
under which they were made) not misleading (which advice shall be
accompanied by an instruction to such Holders to suspend the use of the
Prospectus until the requisite changes have been made).
(e) During the Effectiveness Period, the Company shall use its
reasonable best efforts to prevent the issuance, and if issued to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Shelf Registration Statement.
(f) The Company shall furnish to each Electing Holder, without
charge, at least one copy of the Shelf Registration Statement and all
post-effective amendments thereto (other than a post-effective amendment filed
only to add or change Holders, which shall only be required to be furnished to
the Holders affected by such amendment), including financial statements and
schedules, and, if such Electing Holder so requests in writing, all reports,
other documents and exhibits that are filed with or incorporated by reference in
the Shelf Registration Statement.
(g) The Company shall, during the Effectiveness Period, deliver to
each Electing Holder, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such Electing Holder may
reasonably request; and the Company consents (except during the periods
specified in Section 2(c) above or during the continuance of any event or the
existence of any state of facts described in Section 3(d)(v) above) to the use
of the Prospectus and any amendment or supplement thereto by each of the
Electing Holders in connection with the offering and sale of the Registrable
Securities covered by the Prospectus and any amendment or supplement thereto
during the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to
the Shelf Registration Statement, the Company shall (i) register or qualify or
cooperate with the Electing Holders and their respective counsel in connection
with the registration or qualification of such Registrable Securities for offer
and sale under the securities or "blue sky" laws of such jurisdictions within
the United States as any Electing Holder may reasonably request, (ii) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers and
7
sales in such jurisdictions for so long as may be necessary to enable any
Electing Holder or underwriter, if any, to complete its distribution of
Registrable Securities pursuant to the Shelf Registration Statement, and (iii)
take any and all other actions necessary or advisable to enable the disposition
in such jurisdictions of such Registrable Securities; provided, however, that in
no event shall the Company be obligated to (A) qualify as a foreign corporation
or as a dealer in securities in any jurisdiction where it would not otherwise be
required to so qualify but for this Section 3(h) or (B) file any general consent
to service of process in any jurisdiction where it is not as of the date hereof
so subject.
(i) Unless any Registrable Securities shall be in book-entry only
form, the Company shall cooperate with the Electing Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to the Shelf Registration Statement, which
certificates, if so required by any securities exchange upon which any
Registrable Securities are listed, shall be penned, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders, and
which certificates shall be free of any restrictive legends and in such
permitted denominations and registered in such names as Electing Holders may
request in connection with the sale of Registrable Securities pursuant to the
Shelf Registration Statement.
(j) Upon the occurrence of any event or the existence of any state
of facts contemplated by paragraph 3(d)(v) above, the Company shall promptly
prepare a post-effective amendment to any Shelf Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If the Company notifies the Electing Holders of the
occurrence of any event or the existence of any state of facts contemplated by
paragraph 3(d)(v) above, the Electing Holders shall suspend the use of the
Prospectus until the requisite changes to the Prospectus have been made.
(k) Not later than the Effective Time of the Shelf Registration
Statement, the Company shall provide a CUSIP number for the Registrable
Securities that are debt securities.
(l) The Company shall use its reasonable best efforts to comply
with all applicable Rules and Regulations, and to make generally available to
its securityholders as soon as practicable, but in any event not later than
eighteen months after (i) the effective date (as defined in Rule 158(c) under
the Securities Act) of the Shelf Registration Statement, (ii) the effective date
of each post-effective amendment to the Shelf Registration Statement, and (iii)
the date of each filing by the Company with the Commission of an Annual Report
on Form 10-K that is incorporated by reference in the Shelf Registration
Statement, an earning statement of the Company and its subsidiaries complying
with Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder (including, at the option of the Company, Rule 158).
(m) Not later than the Effective Time of the Shelf Registration
Statement, the Company shall cause the Indenture to be qualified under the Trust
Indenture Act; in connection with such qualification, the Company shall
cooperate with the Trustee under the Indenture and
8
the Holders (as defined in the Indenture) to effect such changes to the
Indenture as may be required for such Indenture to be so qualified in accordance
with the terms of the Trust Indenture Act; and the Company shall execute, and
shall use all reasonable efforts to cause the Trustee to execute, all documents
that may be required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Indenture to be so
qualified in a timely manner. In the event that any such amendment or
modification referred to in this Section 3(m) involves the appointment of a new
trustee under the Indenture, the Company shall appoint a new trustee thereunder
pursuant to the applicable provisions of the Indenture.
(n) In the event of an underwritten offering conducted pursuant to
Section 6 hereof, the Company shall, if requested, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the Shelf
Registration Statement such information as the Managing Underwriters reasonably
agree should be included therein and to which the Company does not reasonably
object and shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment.
(o) The Company shall enter into such customary agreements
(including an underwriting agreement in customary form in the event of an
underwritten offering conducted pursuant to Section 6 hereof) and take all other
reasonable and appropriate action in order to expedite and facilitate the
registration and disposition of the Registrable Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification provisions and procedures substantially identical to
those set forth in Section 5 hereof with respect to all parties to be
indemnified pursuant to Section 5 hereof.
(p) The Company shall:
(i)(A) make reasonably available for inspection by the
Electing Holders, any underwriter participating in any disposition
pursuant to the Shelf Registration Statement, and any attorney,
accountant or other agent retained by such Electing Holders or any such
underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries
reasonably requested by such persons, and (B) cause the Company's
officers, directors and employees to supply all information reasonably
requested by such Electing Holders or any such underwriter, attorney,
accountant or agent in connection with the Shelf Registration
Statement, in each case, as is customary for similar due diligence
examinations; provided, however, that all records, information and
documents that are designated by the Company, in good faith, as
confidential shall be kept confidential by such Electing Holders and
any such underwriter, attorney, accountant or agent, unless such
disclosure is made in connection with a court proceeding or required by
law, or such records, information or documents become available to the
public generally or through a third party without an accompanying
obligation of confidentiality; and provided further that, if the
foregoing inspection and information gathering would otherwise disrupt
the Company's conduct of its business, such inspection and information
gathering shall, to the greatest extent possible, be coordinated on
behalf of the Electing Holders and the other parties entitled
9
thereto by one counsel designated by and on behalf of the Electing
Holders and other parties;
(ii) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, make such representations and
warranties to the Electing Holders participating in such underwritten
offering and to the Managing Underwriters, in form, substance and scope
as are customarily made by the Company to underwriters in comparable
primary underwritten offerings and covering matters including, but not
limited to, those set forth in the Purchase Agreement;
(iii) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, obtain opinions of counsel to
the Company (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters)
addressed to each Electing Holder participating in such underwritten
offering and the underwriters, covering such matters as are customarily
covered in opinions requested in primary underwritten offerings of
equity and convertible debt securities and such other matters as may be
reasonably requested by such Electing Holders and underwriters (it
being agreed that the matters to be covered by such opinions shall
include, without limitation, as of the date of the opinion and as of
the Effective Time of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, that no facts
have come to such counsel's attention that would lead them to believe
that the Shelf Registration Statement and the Prospectus, including the
documents incorporated by reference therein, contained an untrue
statement of a material fact or omitted a material fact required to be
stated therein or necessary to make the statements therein not
misleading;
(iv) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, obtain "cold comfort" letters
and updates thereof from the independent public accountants of the
Company (and, if necessary, from the independent public accountants of
any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are
required to be, included in the Shelf Registration Statement),
addressed to each Electing Holder participating in such underwritten
offering (if such Electing Holder has provided such letter,
representations or documentation, if any, required for such cold
comfort letter to be so addressed) and the underwriters, in customary
form and covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten offerings;
(v) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, deliver such documents and
certificates as may be reasonably requested by any Electing Holders
participating in such underwritten offering and the Managing
Underwriters, if any, including, without limitation, certificates (X)
to evidence that the Prospectus does not include an untrue statement of
a material fact or omit to state any material fact necessary to make
the statements therein, in the light of the circumstances under which
they were made, not misleading and (Y) compliance with
10
any conditions contained in the underwriting agreement or other
agreements entered into by the Company in connection with such
underwritten offering.
(q) The Company will use its reasonable best efforts to cause the
Common Stock issuable upon conversion of the Securities to be listed for
quotation on the Nasdaq National Market or other stock exchange or trading
system on which the Common Stock primarily trades on or prior to the Effective
Time of the Shelf Registration Statement hereunder.
(r) In the event that any broker-dealer registered under the
Exchange Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD
Rules (or any successor provision thereto)) of the Company or has a "conflict of
interest" (as defined in Rule 2720(b)(7) of the NASD Rules (or any successor
provision thereto)) and such broker-dealer shall underwrite, participate as a
member of an underwriting syndicate or selling group or assist in the
distribution of any Registrable Securities covered by the Shelf Registration
Statement, whether as a Holder of such Registrable Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall provide to such broker-dealer
reasonable cooperation and assistance (not including payment of fees or
expenditures of funds other than as may result from providing indemnity as
described below) in complying with the requirements of the NASD Rules,
including, without limitation, by (A) helping engage a "qualified independent
underwriter" (as defined in Rule 2720(b)(15) of the NASD Rules (or any successor
provision thereto)) to participate in the preparation of the registration
statement relating to such Registrable Securities, to exercise usual standards
of due diligence in respect thereto and to recommend the public offering price
of such Registrable Securities, (B) indemnifying such qualified independent
underwriter to the extent of the indemnification of underwriters provided in
Section 5 hereof, and (C) providing such information to such broker-dealer as
may be required in order for such broker-dealer to comply with the requirements
of the NASD Rules.
(s) The Company shall use its reasonable best efforts to take all
other steps necessary to effect the registration, offering and sale of the
Registrable Securities covered by the Shelf Registration Statement contemplated
hereby.
4. Registration Expenses. Except as otherwise provided herein,
the Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2, 3 and 6 hereof and shall bear
or reimburse the Electing Holders for the reasonable fees and disbursements of a
single counsel (which shall not exceed $15,000 in the aggregate) selected by a
plurality of all Electing Holders who own an aggregate of not less than 25% of
the Registrable Securities covered by the Shelf Registration Statement to act as
counsel therefore in connection therewith. Each Electing Holder shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Electing Holder's Registrable Securities
pursuant to the Shelf Registration Statement.
5. Indemnification and Contribution.
(a) Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify
and hold harmless each Electing Holder and each underwriter, selling agent or
other securities professional, if any,
11
which facilitates the disposition of Registrable Securities, and each of their
respective officers and directors and each person who controls such Electing
Holder, underwriter, selling agent or other securities professional within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each such person being sometimes referred to as an "Indemnified Person")
against any losses, claims, damages or liabilities, joint or several, to which
such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration
Statement under which such Registrable Securities are registered under the
Securities Act, or any Prospectus contained therein or furnished by the Company
to any Indemnified Person, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company hereby agrees to reimburse such
Indemnified Person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
to any such Indemnified Person in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Shelf Registration Statement or Prospectus, or amendment or supplement, in
reliance upon and in conformity with written information furnished to the
Company by such Indemnified Person expressly for use therein.
(b) Indemnification by the Electing Holders and any Agents and
Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of
any of such Electing Holder's Registrable Securities in such Shelf Registration
Statement, and each underwriter, selling agent or other securities professional,
if any, which facilitates the disposition of Registrable Securities shall agree,
as a consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign any Shelf Registration Statement 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, against any losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus, or any amendment
or supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Electing
Holder, underwriter, selling agent or other securities professional expressly
for use therein, and (ii) reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Notices of Claims, Etc. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this
12
Section 5, notify such indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under the indemnification provisions of or contemplated by subsection (a) or (b)
above. In case any such action shall be brought against any indemnified party
and it shall notify an indemnifying party of the commencement thereof, such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, such indemnifying party shall not be liable to such
indemnified party under this Section 5 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. In no event shall any indemnifying party be liable for fees and
expenses of more than one counsel (in addition to local counsel), separate from
their own counsel, for all indemnified parties in connection with any one or
separate but substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) Contribution. If the indemnification provided for in this
Section 5 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters, selling
agents or other securities professionals or all of them 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 this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with
13
investigating or defending any such action or claim. 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. The obligations of the Electing
Holders and any underwriters, selling agents or other securities professionals
in this Section 5(d) to contribute shall be several in proportion to the
percentage of principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.
(e) Notwithstanding any other provision of this Section 5, in no
event will any (i) Electing Holder be required to undertake liability to any
person under this Section 5 for any amounts in excess of the dollar amount of
the proceeds to be received by such Holder from the sale of such Holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement under which
such Registrable Securities are to be registered under the Securities Act and
(ii) underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.
(f) The obligations of the Company under this Section 5 shall be
in addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 5 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.
6. Underwritten Offering. During the Effectiveness Period, any
Holder of Registrable Securities who desires to do so may sell Registrable
Securities (in whole or in part) in an underwritten offering; provided that (i)
the Electing Holders of at least 33-1/3% in aggregate principal amount of the
Registrable Securities then covered by the Shelf Registration Statement shall
request such an offering and (ii) at least such aggregate principal amount of
such Registrable Securities shall be included in such offering (but in no event
shall the Company be required to undertake an underwritten offering of
Registrable Securities having an aggregate public offering price of less than
$10,000,000); and provided further that the Company shall not be obligated to
cooperate with more than one underwritten offering (whether or not completed).
Upon receipt of such a request, the Company shall provide all Holders of
Registrable Securities written notice of the request, which notice shall inform
such Holders that they have the opportunity to participate in the offering. In
any such underwritten offering, the investment banker or bankers and manager or
managers that will administer the offering will be selected by, and the
underwriting arrangements with respect thereto (including the size of the
offering) will be approved by, the holders of a majority of the Registrable
Securities to be included in such offering; provided, however, that such
investment bankers and managers and underwriting arrangements must be reasonably
satisfactory to the Company. The Company is not obligated to any undertakings
not specifically referred to herein. No Holder may participate in any
underwritten offering contemplated hereby unless (a) such Holder agrees to sell
such Holder's Registrable Securities to be included in the underwritten offering
in accordance with any approved underwriting arrangements, (b) such Holder
completes and executes all
14
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
approved underwriting arrangements, and (c) if such Holder is not then an
Electing Holder, such Holder returns a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a)(ii) hereof within a
reasonable amount of time before such underwritten offering. The Holders
participating in any underwritten offering shall be responsible for any
underwriting discounts and commissions and fees and, subject to Section 4
hereof, expenses of their own counsel. The Company shall be entitled to select
and manage the printer for such offering and any other vendors whose expenses
the Company pays. The Company shall pay all expenses customarily borne by
issuers in an underwritten offering, including but not limited to filing fees,
the fees and disbursements of its counsel and independent public accountants and
any printing expenses incurred in connection with such underwritten offering
(which expenses shall not exceed $150,000 in the aggregate). Notwithstanding the
foregoing or the provisions of Section 3(n) hereof, upon receipt of a request
from the Managing Underwriter or a representative of holders of a majority of
the Registrable Securities to be included in an underwritten offering to prepare
and file an amendment or supplement to the Shelf Registration Statement and
Prospectus in connection with an underwritten offering, the Company may delay
its participation in the underwritten offering, including, without limitation,
the filing of any such amendment or supplement for up to 90 days if the Board of
Directors of the Company shall have determined in good faith that the Company
has a bona fide business reason for such delay.
7. Liquidated Damages.
(a) Notwithstanding any postponement of effectiveness permitted by
Section 2(a) hereof, if (i) on or prior to the 90th day following the Closing
Date, a Shelf Registration Statement has not been filed with the Commission or
(ii) on or prior to the 180th day following the Closing Date, such Shelf
Registration Statement is not declared effective by the Commission (each, a
"Registration Default"), the Company shall be required to pay liquidated damages
("Liquidated Damages"), from and including the day following such Registration
Default until such Shelf Registration Statement is either so filed, declared
effective or so filed and subsequently declared effective (in the case of
failing to meet the times set forth in both clauses (i) and (ii)), as
applicable, at a rate per annum equal to an additional one-quarter of one
percent (0.25%) of the principal amount of Registrable Securities, to and
including the 90th day following such Registration Default and one-half of one
percent (0.50%) thereof from and after the 91st day following such Registration
Default.
(b) In the event that (i) the Shelf Registration Statement ceases
to be effective, (ii) the Company suspends the use of the Prospectus pursuant to
Section 2(c) or 3(j) hereof, (iii) the Holders are not authorized to use the
Prospectus pursuant to Section 3(g) hereto or (iv) the Holders are otherwise
prevented or restricted by the Company from effecting sales pursuant to the
Shelf Registration Statement (an "Effective Failure") for more than 30 days,
whether or not consecutive, in any 90-day period, or for more than 90 days,
whether or not consecutive, during any 12-month period, then the Company shall
pay Liquidated Damages at a rate per annum equal to an additional one-half of
one percent (0.50%) of the principal amount of Registrable Securities from the
31st day of the applicable 90-day period or the 91st day of the applicable
12-month period, as the case may be, that any such Effective Failure has existed
until the earlier of
15
(1) the time the Holders of Registrable Securities are again able to make sales
under the Shelf Registration Statement or (2) the expiration of the
Effectiveness Period.
(c) Any amounts to be paid as Liquidated Damages pursuant to
paragraphs (a) or (b) of this Section 7 shall be paid in cash semi-annually in
arrears, with the first semi-annual payment due on the first Interest Payment
Date (as defined in the Indenture), as applicable, following the date of such
Registration Default or Effective Failure, as applicable. Such Liquidated
Damages will accrue (1) in respect of the Securities at the rates set forth in
paragraphs (a) or (b) of this Section 7, as applicable, on the principal amount
of the Securities and (2) in respect of the Common Stock issued upon conversion
of the Securities, at the rates set forth in paragraphs (a) or (b) of this
Section 7, as applicable, applied to the Conversion Price (as defined in the
Indenture) at that time.
(d) In no event shall the Company be required to pay Liquidated
Damages in excess of the applicable maximum amount of one-half of one percent
(0.50%) set forth above, regardless of whether one or multiple Registration
Defaults or Effective Failures exist.
8. Miscellaneous.
(a) Other Registration Rights. The Company may grant registration
rights that would permit any person that is a third party the right to
piggy-back on any Shelf Registration Statement, provided that if the Managing
Underwriter of any underwritten offering conducted pursuant to Section 6 hereof
notifies the Company and the Electing Holders that the total amount of
securities which the Electing Holders and the holders of such piggy-back rights
intend to include in any Shelf Registration Statement is so large as to
materially threaten the success of such offering (including the price at which
such securities can be sold), then the amount, number or kind of securities to
be offered for the account of holders of such piggy-back rights will be reduced
to the extent necessary to reduce the total amount of securities to be included
in such offering to the amount, number and kind recommended by the Managing
Underwriter prior to any reduction in the amount of Registrable Securities to be
included in such Shelf Registration Statement.
(b) Specific Performance. The parties hereto acknowledge that
there may be no adequate remedy at law if the Company fails to perform any of
its obligations hereunder and that the Purchasers and the Holders from time to
time may be irreparably harmed by any such failure, and accordingly agree that
the Purchasers and such Holders, in addition to any other remedy to which they
may be entitled at law or in equity and without limiting the remedies available
to the Electing Holders under Section 7 hereof, shall be entitled to seek
specific performance of the obligations of the Company under this Registration
Rights Agreement in accordance with the terms and conditions of this
Registration Rights Agreement, in any court of the United States or any State
thereof having jurisdiction.
(c) Amendments and Waivers. This Agreement, including this Section
8(c), may be amended, and waivers or consents to departures from the provisions
hereof may be given, only by a written instrument duly executed by the Company
and the holders of a majority in aggregate principal amount of Registrable
Securities then outstanding. Each Holder of Registrable Securities outstanding
at the time of any such amendment, waiver or consent or
16
thereafter shall be bound by any amendment, waiver or consent effected pursuant
to this Section 8(c), whether or not any notice, writing or marking indicating
such amendment, waiver or consent appears on the Registrable Securities or is
delivered to such Holder.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided herein or otherwise as provided
in the Indenture. In any instance in which this Agreement provides for notice to
be given to the Holders, to the extent any such Holder holds Registrable
Securities though a participant in DTC or any successor depositary, the Company
shall endeavor to deliver notice directly or indirectly to each beneficial owner
of Registrable Securities, and in no event will do less than deliver notice to
the participants in DTC listed as holders of Registrable Securities on the
records of DTC, to be forwarded to each Holder holding through such participant.
(e) Parties in Interest. The parties to this Agreement intend that
all Holders of Registrable Securities shall be entitled to receive the benefits
of this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any Holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
Holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(H) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties hereto shall be enforceable to the fullest extent permitted by law.
(j) Survival. The respective indemnities, agreements,
representations, warranties and other provisions set forth in this Agreement or
made pursuant hereto shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof)
17
made by or on behalf of any Electing Holder, any director, officer or partner of
such Holder, any agent or underwriter, any director, officer or partner of such
agent or underwriter, or any controlling person of any of the foregoing, and
shall survive the transfer and registration of the Registrable Securities of
such Holder.
18
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
EXULT, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
BANC OF AMERICA SECURITIES LLC
BY: /s/ ▇▇▇▇▇▇▇, Sachs & Co.
-----------------------------------
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
On behalf of each of the Purchasers
19
APPENDIX A
EXULT, INC.
Notice of Registration Statement
and
Selling Securityholder Questionnaire
[DATE]
Exult, Inc. (the "Company") has filed or intends shortly to
file with the United States Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (the "Shelf Registration
Statement") for the registration and resale under Rule 415 of the United States
Securities Act of 1933, as amended (the "Securities Act"), of the Company's 2.5%
Convertible Senior Notes due October 1, 2010 (CUSIP No. 302284 AA 2) (the
"Notes"), and common stock issuable upon conversion thereof, in accordance with
the terms of the Registration Rights Agreement, dated as of the date of original
issuance of the Notes (the "Registration Rights Agreement"), between the Company
and the purchasers named therein. A copy of the Registration Rights Agreement is
attached hereto. All capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in the Registration Rights Agreement.
In order to have Registrable Securities included in the Shelf
Registration Statement (or a supplement or amendment thereto), this Notice of
Registration Statement and Selling Securityholder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the Company at the
address set forth herein for receipt ON OR BEFORE [insert date that is 28 days
from the Notice Date] (the "Questionnaire Deadline"). Unless the Company
otherwise consents, beneficial owners of the Registrable Securities who do not
complete, execute and return this Notice and Questionnaire by such date (i) will
not be named as selling securityholders in the Shelf Registration Statement and
related Prospectus as of the date the Shelf Registration Statement is declared
effective and (ii) may not sell their Registrable Securities pursuant thereto.
Beneficial owners of Registrable Securities not having returned a Notice and
Questionnaire by the Questionnaire Deadline may, however, receive another Notice
and Questionnaire from the Company upon request. Following the Company's receipt
of a completed and signed Notice and Questionnaire, the Company will include the
Registrable Securities covered thereby in the Shelf Registration Statement,
subject to certain restrictions described in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
20
The term "Registrable Securities" is defined in the
Registration Rights Agreement to mean all or any portion of the Notes issued
from time to time under the Indenture in registered form and the shares of
common stock issuable upon conversion or repurchase of such Notes; provided,
however, that a security ceases to be a Registrable Security when it is no
longer a Restricted Security.
The term "Restricted Security" is defined in the Registration
Rights Agreement to mean any Note or share of common stock issuable upon
conversion thereof except any such Note or share of common stock which (i) has
been registered pursuant to an effective registration statement under the
Securities Act and sold in a manner contemplated by the Shelf Registration
Statement, (ii) has been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or is transferable pursuant
to paragraph (k) of such Rule 144 (or any successor provision thereto), or (iii)
has otherwise been transferred and a new Note or share of common stock not
subject to transfer restrictions under the Securities Act has been delivered by
or on behalf of the Company in accordance with Section 3.5 of the Indenture. If
any Security has ceased to be a Restricted Security, then any shares of common
stock issued upon conversion or repurchase thereof will not be a Restricted
Security.
ELECTION
The undersigned holder (the "Selling Securityholder") of
Registrable Securities hereby elects to include in the Shelf Registration
Statement the Registrable Securities beneficially owned by it and listed below
in Item (3) (unless otherwise specified under Item 3). The undersigned, by
signing and returning this Notice and Questionnaire, agrees to be bound with
respect to such Registrable Securities by the terms and conditions of this
Notice and Questionnaire and the Registration Rights Agreement, including,
without limitation, Section 5 of the Registration Rights Agreement, as if the
undersigned Selling Securityholder were an original party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the Selling Securityholder will be required to deliver
to the Company and the Trustee the Notice of Transfer (completed and signed) set
forth in Exhibit 1 attached to this Notice and Questionnaire.
The Selling Securityholder hereby provides the following
information to the Company, agrees with the Company as set forth herein and
represents and warrants that such information is accurate and complete:
21
QUESTIONNAIRE
(1)(a) Full Legal Name of Selling Securityholder:
_______________________________________________________________________
(b) Full Legal Name of Registered Holder (if not the same as in (a) above)
of Registrable Securities Listed in Item (3) below:
_______________________________________________________________________
(c) Full Legal Name of DTC Participant (if applicable and if not the same
as (b) above) Through Which Registrable Securities Listed in Item (3)
below are Held:
_______________________________________________________________________
(2) Address for Notices to Selling Securityholder:
___________________________________
___________________________________
___________________________________
Telephone: ___________________________________
Fax: ___________________________________
Contact Person: ___________________________________
Note: the Company may, in its discretion, satisfy is obligations to
deliver any notices required under the Registration Rights Agreement by
delivering such notices to the email address set forth above.
(3) Beneficial Ownership of Registrable Securities:
Except as set forth below, the undersigned Selling Securityholder does
not beneficially own any Notes or common stock previously issued upon
conversion, repurchase or redemption of any Note.
Principal amount of Notes beneficially owned: _________________________
Number of shares of common stock beneficially owned and issued to date
upon conversion, repurchase or redemption of Notes (if any): __________
Number of shares of common stock (if any) issued upon conversion,
repurchase or redemption of Registrable Securities which are to be
included in the Shelf Registration Statement:
_______________________________________________________________________
(4) Indicate below if the undersigned is (a) a broker-dealer or (b) an
affiliate of a broker-dealer. Except as set forth below, if the
undersigned is an affiliate of a broker-dealer, the undersigned
represents and warrants that it bought the Registrable Securities in
the ordinary course of business and at the time of the purchase had no
agreements or understandings, directly or indirectly, with any person
to distribute the Registrable Securities:
_______________________________________________________________________
_______________________________________________________________________
22
If you are (a) a broker-dealer or (b) an affiliate of a broker-dealer
who did not buy Registrable Securities in the ordinary course of
business and at the time of your purchase had an agreement or
understanding, directly or indirectly, with any person to distribute
the Registrable Securities, then you will be identified as an
underwriter in the Shelf Registration Statement.
(5) Other shares of common stock or other Notes of the Company owned by the
Selling Securityholder:
Except as set forth below in this Item (5), and under Item (3) above,
the undersigned Selling Securityholder is not the beneficial or
registered owner of any shares of common stock or any other securities
of the Company.
State any exception here:
_______________________________________________________________________
_______________________________________________________________________
(6) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any
of its affiliates, officers, directors or principal equity holders (5%
or more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates)
during the past three years.
State any exceptions here:
_______________________________________________________________________
_______________________________________________________________________
(7) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item
(3) only as follows (if at all): Such Registrable Securities may be
sold from time to time directly by the undersigned Selling
Securityholder or, alternatively, through underwriters, broker-dealers
or agents. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time
of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which
may involve crosses or block transactions) (i) on any national
securities exchanges or U.S. inter-dealer quotation system of a
registered national securities association on which the Registrable
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, or (iv)
through the writing of options. In connection with sales of the
Registrable Securities or otherwise, the Selling Securityholder may
enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the Registrable Securities in the course of
hedging the positions they assume. The Selling Securityholders may also
sell Registrable Securities short and deliver
23
Registrable Securities to close out such short positions, or loan or
pledge Registrable Securities to broker-dealers that in turn may sell
such securities.
State any exceptions here:
_______________________________________________________________________
_______________________________________________________________________
Note: In no event may such method(s) of distribution take the
form of an underwritten offering of the Registrable Securities without the prior
agreement of the Company.
By signing below, the Selling Securityholder acknowledges that
it understands its obligation to comply, and agrees that it will comply, with
the prospectus delivery and other provisions of the Securities Act and Exchange
Act and the respective rules and regulations thereunder, particularly Regulation
M.
In the event that the Selling Securityholder transfers all or
any portion of the Registrable Securities listed in Item (3) above after the
date on which such information is provided to the Company, the Selling
Securityholder agrees to notify the Company and to notify the transferee(s) at
the time of the transfer of its rights and obligations under this Notice and
Questionnaire and the Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the
disclosure of the information contained herein in its answers to Items (1)
through (7) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling Securityholder
understands that such information will be relied upon by the Company in
connection with the preparation of the Shelf Registration Statement and related
Prospectus.
In accordance with the Selling Securityholder's obligation
under the Registration Rights Agreement to provide such information as may be
required by law for inclusion in the Shelf Registration Statement, the Selling
Securityholder agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein which may occur subsequent to the
date hereof until such time as the Company is no longer required to maintain the
effectiveness of the Shelf Registration Statement. All notices hereunder and
pursuant to the Registration Rights Agreement shall be made in writing, by
hand-delivery, first-class mail, or air courier guaranteeing overnight delivery
as follows:
(i) To the Company:
Exult, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company, the terms of this Notice and
Questionnaire, and the covenants, representations and warranties contained
herein, shall be binding on, shall inure to the benefit of and shall be
enforceable by the respective successors, heirs, personal representatives, and
assigns of the Company and the Selling Securityholder with respect to the
Registrable Securities beneficially owned by such Selling Securityholder and
listed in Item (3) above. This Agreement shall be governed in all respects by
the laws of the State of New York.
24
IN WITNESS WHEREOF, the undersigned, by authority duly given,
has caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated: ______________________
______________________________________________________________
Selling Securityholder
(Print/type full legal name of beneficial owner of
Registrable Securities)
By: __________________________________________________________
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE ____________________ TO THE COMPANY AT:
Exult, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
25
EXHIBIT 1
TO APPENDIX A
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Exult, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
Re: Exult, Inc. (the "Company")
2.5% Convertible Senior Notes due October 1, 2010
(the "Notes")
Ladies and Gentlemen:
Please be advised that _____________________ has transferred
$___________ aggregate principal amount of the above-referenced Notes or shares
of the Company's common stock, issued on conversion, repurchase or redemption of
Notes, pursuant to the Registration Statement Form S-3 (File No. 333-____) filed
by the Company.
We hereby certify that the prospectus delivery requirements,
if any, of the Securities Act of 1933, as amended, have been satisfied with
respect to the transfer described above and that the above-named beneficial
owner of the Notes or common stock is named as a selling securityholder in the
Prospectus dated _______, or in amendments or supplements thereto, and that the
aggregate principal amount of the Notes or number of shares of common stock
transferred are [a portion of] the Notes or shares of common stock listed in
such Prospectus as amended or supplemented opposite such owner's name.
Dated:
Very truly yours,
________________________
(Name)
By: ________________________
(Authorized Signature)
26