<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30,1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________________ to _____________________
Commission file number
001-14037
THE DUN & BRADSTREET CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3998945
(State of Incorporation) (I.R.S. Employer
Identification No.)
One Diamond Hill Road, Murray Hill, NJ 07974
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (908) 665-5000
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ___ No X
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
Shares Outstanding
Title of Class at July 31, 1998
-------------- ----------------
Common Stock,
par value $0.01 per share 170,870,278
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THE DUN & BRADSTREET CORPORATION
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Statements of Operations (Unaudited)
Three Months Ended June 30, 1998 and 1997 3
Six Months Ended June 30, 1998 and 1997 4
Consolidated Balance Sheets (Unaudited)
June 30, 1998 and December 31, 1997 5
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 1998 and 1997 6
Notes to Consolidated Financial Statements (Unaudited) 7-11
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 12-16
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17-19
SIGNATURES 20
2
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THE DUN & BRADSTREET CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
JUNE 30,
-------------------
Amounts in millions, except per share data 1998 1997
------- -------
<S> <C> <C>
OPERATING REVENUES $ 484.0 $ 440.9
------- -------
Operating Costs 145.6 123.5
Selling and Administrative Expenses 197.0 194.5
Depreciation and Amortization 35.4 33.8
Reorganization Costs 27.5 --
------- -------
OPERATING INCOME 78.5 89.1
------- -------
Interest Income 1.8 0.8
Interest Expense (4.2) (10.8)
Other Expense - Net (5.4) (6.6)
------- -------
Non-Operating Expense - Net (7.8) (16.6)
------- -------
Income from Continuing Operations before Provision for
Income Taxes 70.7 72.5
Provision for Income Taxes 31.0 24.8
------- -------
Income from Continuing Operations 39.7 47.7
Income from Discontinued Operations, Net of Income Taxes
of $14.4 and $3.5 for 1998 and 1997, respectively 21.6 6.3
------- -------
NET INCOME $ 61.3 $ 54.0
======= =======
BASIC EARNINGS PER SHARE OF COMMON STOCK:
Continuing Operations $ 0.23 $ 0.28
Discontinued Operations 0.13 0.04
======= =======
BASIC EARNINGS PER SHARE OF COMMON STOCK $ 0.36 $ 0.32
======= =======
DILUTED EARNINGS PER SHARE OF COMMON STOCK:
Continuing Operations $ 0.23 $ 0.28
Discontinued Operations 0.12 0.03
======= =======
DILUTED EARNINGS PER SHARE OF COMMON STOCK $ 0.35 $ 0.31
======= =======
DIVIDENDS PAID PER SHARE OF COMMON STOCK $ 0.22 $ 0.22
======= =======
Weighted Average Number of Shares Outstanding - Basic 171.5 171.0
======= =======
Weighted Average Number of Shares Outstanding - Diluted 174.5 172.6
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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THE DUN & BRADSTREET CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------
Amounts in millions, except per share data 1998 1997
------- -------
<S> <C> <C>
OPERATING REVENUES $ 955.1 $ 877.3
------- -------
Operating Costs 289.7 256.7
Selling and Administrative Expenses 395.2 384.6
Depreciation and Amortization 70.9 69.0
Reorganization Costs 28.0 --
------- -------
OPERATING INCOME 171.3 167.0
------- -------
Interest Income 2.6 0.9
Interest Expense (11.5) (32.0)
Other Expense - Net (11.8) (8.0)
------- -------
Non-Operating Expense - Net (20.7) (39.1)
------- -------
Income from Continuing Operations before Provision for
Income Taxes 150.6 127.9
Provision for Income Taxes 59.5 43.6
------- -------
Income from Continuing Operations 91.1 84.3
Income from Discontinued Operations, Net of Income Taxes
of $22.5 and $2.8 for 1998 and 1997, respectively 33.7 4.7
------- -------
Income before Cumulative Effect of Accounting Changes 124.8 89.0
Cumulative Effect of Accounting Changes, Net of Income Tax Benefit
of $87.8 -- (127.0)
------- -------
NET INCOME (LOSS) $ 124.8 $ (38.0)
======= =======
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
Continuing Operations $ 0.53 $ 0.49
Discontinued Operations 0.20 0.03
------- -------
Before Cumulative Effect of Accounting Changes 0.73 0.52
Cumulative Effect of Accounting Changes, Net of Income Tax Benefit -- (0.74)
======= =======
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK $ 0.73 $ (0.22)
======= =======
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK:
Continuing Operations $ 0.52 $ 0.49
Discontinued Operations 0.20 0.03
------- -------
Before Cumulative Effect of Accounting Changes 0.72 0.52
Cumulative Effect of Accounting Changes, Net of Income Tax Benefit -- (0.74)
======= =======
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK $ 0.72 $ (0.22)
======= =======
DIVIDENDS PAID PER SHARE OF COMMON STOCK $ 0.44 $ 0.44
======= =======
Weighted Average Number of Shares Outstanding - Basic 171.3 171.1
======= =======
Weighted Average Number of Shares Outstanding - Diluted 174.2 172.6
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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THE DUN & BRADSTREET CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
Dollar amounts in millions, except per share data 1998 1997
-------- --------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $ 247.9 $ 81.8
Accounts Receivable---Net of Allowance of $41.6 in 1998 and $39.4 in 1997 425.4 454.5
Other Current Assets 176.5 269.2
-------- --------
Total Current Assets 849.8 805.5
-------- --------
NON-CURRENT ASSETS
Property, Plant and Equipment 303.2 317.2
Prepaid Pension Costs 203.2 190.7
Computer Software 133.9 128.0
Goodwill 188.0 194.6
Other Non-Current Assets 138.2 153.5
-------- --------
Total Non-Current Assets 966.5 984.0
-------- --------
Net Assets of Discontinued Operations -- 296.5
-------- --------
TOTAL ASSETS $1,816.3 $2,086.0
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued and Other Current Liabilities $ 429.8 $ 472.0
Notes Payable -- 451.5
Unearned Subscription Income 565.8 573.5
-------- --------
Total Current Liabilities 995.6 1,497.0
POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS 381.4 389.0
OTHER NON-CURRENT LIABILITIES 391.2 388.3
MINORITY INTEREST 301.8 301.9
SHAREHOLDERS' EQUITY
Preferred Stock, authorized---10,000,000 shares; $0.01 par value per
share---1998, outstanding---none, $1.00 par value per share---1997,
outstanding---none
Series Common Stock, authorized---10,000,000 shares;
$0.01 par value per share---1998, outstanding---none
Common Stock, authorized---400,000,000 shares;
$0.01 par value per share, 171,291,317 shares issued---1998
$1.00 par value per share, 188,420,996 shares issued---1997 1.7 188.4
Capital Surplus 250.3 80.2
Retained Earnings (298.9) 405.2
Treasury Stock, at cost, 17,853,652 shares for 1997 -- (964.0)
Cumulative Translation Adjustment (169.4) (162.6)
Minimum Pension Liability Adjustment (37.4) (37.4)
-------- --------
TOTAL SHAREHOLDERS' EQUITY (253.7) (490.2)
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,816.3 $2,086.0
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
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THE DUN & BRADSTREET CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-------------------
Dollar amounts in millions 1998 1997
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 124.8 $ (38.0)
Less:
Income from Discontinued Operations 33.7 4.7
-------- --------
Income (Loss) from Continuing Operations 91.1 (42.7)
Reconciliation of Net Income (Loss) to Net Cash
Provided by Operating Activities:
Cumulative Effect of Accounting Change, Net of Income Tax Benefit -- 127.0
Depreciation and Amortization 70.9 69.0
Postemployment Benefit Payments (9.3) (18.5)
Net Decrease in Accounts Receivable 23.5 8.9
Deferred Income Taxes (8.4) (87.8)
Accrued Income Taxes (5.8) (39.5)
Increase in Long Term Liabilities 12.5 90.7
Net Decrease in Other Working Capital Items 70.1 56.0
Other 12.5 6.6
-------- --------
Net Cash Provided by Operating Activities:
Continuing Operations 257.1 169.7
Discontinued Operations 21.7 92.8
-------- --------
Net Cash Provided by Operating Activities 278.8 262.5
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from Sales of Marketable Securities 21.6 2.5
Payments for Marketable Securities (21.0) (3.8)
Capital Expenditures (23.5) (19.4)
Additions to Computer Software and Other Intangibles (38.0) (32.7)
Net Cash Provided by (Used In) Investing Activities of Discontinued Operations (3.1) (11.7)
Other (13.3) 12.3
-------- --------
Net Cash (Used In) Provided By Investing Activities (77.3) (52.8)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of Dividends (75.5) (75.3)
Payments for Purchase of Treasury Shares (27.9) (30.9)
Net Proceeds from Exercise of Stock Options 18.7 19.0
(Decrease) Increase in Commercial Paper Borrowings (421.6) 649.7
Increase in Minority Interest -- 300.0
Decrease in Other Short-term Borrowings (29.1) (1,067.6)
Proceeds from Debt Assumed by R.H. Donnelley 500.0 --
Other 0.4 (0.5)
-------- --------
Net Cash Used in Financing Activities (35.0) (205.6)
-------- --------
Effect of Exchange Rate Changes on Cash and Cash Equivalents (0.4) 2.6
-------- --------
(Decrease) Increase in Cash and Cash Equivalents 166.1 6.7
Cash and Cash Equivalents , Beginning of Year 81.8 127.8
-------- --------
Cash and Cash Equivalents, End of Quarter $ 247.9 $ 134.5
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE> 7
THE DUN & BRADSTREET CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Interim Consolidated Financial Statements
These interim consolidated financial statements have been prepared in accordance
with the instructions to Form 10-Q and should be read in conjunction with the
consolidated financial statements and related notes of The Dun & Bradstreet
Corporation's 1997 Financial Statements on Form 10/A-2. The consolidated results
for interim periods are not necessarily indicative of results for the full year
or any subsequent period. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation of financial position, results of operations and cash flows at the
dates and for the periods presented have been included. Certain prior-year
amounts have been reclassified to conform to the 1998 presentation.
Note 2 - Reorganization and Discontinued Operations
On June 30, 1998, The Dun & Bradstreet Corporation separated into two publicly
traded companies - The "new" Dun & Bradstreet Corporation ("New D&B" or the
"Company") and R.H. Donnelley Corporation ("Old D&B" or "Donnelley"). The
separation (the "Distribution") of the two companies was accomplished through a
tax-free dividend by Old D&B of the Company, which is a new entity comprised of
Moody's Investors Service ("Moody's") and Dun & Bradstreet, the operating
company ("D&B"). The new entity is now known as "The Dun & Bradstreet
Corporation" and the continuing entity consisting of R.H. Donnelley Inc., the
operating company and the DonTech partnership changed its name to "R.H.
Donnelley Corporation." Due to the relative significance of the new entity, the
transaction has been accounted for as a reverse spin-off, and as such Moody's
and D&B have been classified as continuing operations and Donnelley and DonTech
have been classified as discontinued operations. The Distribution was effected
on June 30, 1998 and resulted in a noncash dividend that increased shareholders'
equity by $188.5 million.
For purposes of governing certain of the ongoing relationships between the
Company and Donnelley following the Distribution, the companies entered into
various agreements, including a Distribution Agreement, Tax Allocation
Agreement, Employee Benefits Agreement, Intellectual Property Agreement, Shared
Transaction Services Agreement, Data Services Agreement and Transition Services
Agreements.
Pursuant to Accounting Principles Board Opinion No. 30, "Reporting the Results
of Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions," the
consolidated financial statements of the Company have been reclassified to
reflect Donnelley as discontinued operations.
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<PAGE> 8
For financial reporting purposes the assets and liabilities of Donnelley have
been separately classified on the balance sheet as "Net Assets of Discontinued
Operations." A summary of these assets and liabilities at December 31, 1997 was
as follows (in millions):
<TABLE>
<CAPTION>
December 31, 1997
-----------------
<S> <C>
Current assets $ 92.7
Total assets $ 362.3
Current liabilities $ 64.6
Total liabilities $ 65.8
Net assets of discontinued
operations $ 296.5
</TABLE>
The net operating results of Donnelley have been reported in the caption "Income
(Loss) from Discontinued Operations," in the consolidated statements of
operations. Summarized operating results for the Discontinued Operations were as
follows:
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
------------------- --------------------
1998 1997* 1998 1997*
------- ------- -------- -------
<S> <C> <C> <C> <C>
Operating revenues $ 66.3 $ 64.1 $ 107.8 $ 83.1
Income before provision for income taxes 36.0 9.8 56.2 7.5
Net income 21.6 6.3 33.7 4.7
</TABLE>
*1997 included the results of the East Coast proprietary operations of Donnelley
which were sold in December of 1997.
Note 3 - Capital Stock
Under the Company's Restated Certificate of Incorporation, the Company has
authority to issue 420,000,000 shares with a par value of $0.01 of which
400,000,000 represent shares of Common Stock, 10,000,000 represent shares of
Preferred Stock and 10,000,000 represent shares of Series Common Stock. The
Preferred and Series Common Stock can be issued with varying terms, as
determined by the Board of Directors.
On June 30, 1998, 171,291,317 shares of New D&B Common Stock were distributed to
the shareholders of the Old D&B. Since New D&B has been treated as the successor
entity for accounting purposes, the Company's historical financial statements
reflect the recapitalization of New D&B in connection with the Distribution,
including the elimination of treasury shares (which shares became treasury
shares of Donnelley); the adjustment of the par value of the Preferred Stock and
the Common Stock to $0.01 per share; and the authorization of the Series Common
Stock.
In connection with the Distribution, the Company entered into a Rights Agreement
designed to protect shareholders of the Company in the event of unsolicited
offers to acquire the Company and other coercive takeover tactics which, in the
opinion of the Board of Directors, could impair its ability to represent
shareholder interests. Under the Rights Agreement, each share of the Common
Stock has a right which trades with the stock until the right becomes
exercisable. Each right entitles the registered holder to purchase 1/1000 of a
share of Series A Junior Participating
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<PAGE> 9
Preferred stock, par value $0.01 per share, at a price of $150 per 1/1000 of a
share, subject to adjustment. The rights will generally not be exercisable until
a person or group ("Acquiring Person") acquires beneficial ownership of, or
commences a tender offer or exchange offer which would result in such person or
group having beneficial ownership of, 15% or more of the outstanding Common
Stock.
In the event that any person or group becomes an Acquiring Person, each right
will thereafter entitle its holder (other than the Acquiring Person) to receive,
upon exercise, shares of stock having a market value of two times the exercise
price in the form of the Company's Common Stock or, where appropriate, the
Acquiring Person's common stock. The Company may redeem the rights, which expire
in June 2008, for $.01 per right, under certain circumstances.
Note 4 - Reconciliation of Weighted Average Shares
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ------------------
June 30, June 30,
(share data in thousands) 1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
Weighted average number of shares-basic 171,470 170,994 171,313 171,091
Dilutive effect of shares issuable under stock
options, restricted stock and performance unit plans 2,855 1,505 2,693 1,398
Adjustment of shares applicable to stock options
exercised during the period and performance unit plans 153 104 180 130
------- ------- ------- -------
Weighted average number of shares-diluted 174,478 172,603 174,186 172,619
======= ======= ======= =======
</TABLE>
As required by Statement of Financial Accounting Standards ("SFAS") No. 128,
Earnings per Share," the Company has provided a reconciliation of basic weighted
average shares to diluted weighted average shares within the tables outlined
above. The conversion of diluted shares has no impact on the Company's operating
results. Options to purchase less than 50,000 shares of common stock were
outstanding at June 30, 1998 and 1997 but were not included in the computation
of diluted earnings per share because the options' exercise prices were greater
than the average market price of the Company's common stock. The Company's
options generally expire 10 years after the initial grant date.
Upon the Distribution, employees of the Company were granted substitute options,
preserving the economic value, as closely as possible, of the options that
existed immediately prior to the Distribution and any awards or options held by
them in respect of Donnelley were cancelled.
Note 5 - Comprehensive Income
Effective January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." This statement requires that all items recognized under
accounting standards as components of comprehensive earnings be reported in a
financial statement for the period in which they are recognized and displayed
with the same prominence as other financial statements. This statement also
requires that financial statements for prior periods are
9
<PAGE> 10
reclassified. The Company's total comprehensive income for the three and six
month periods ended June 30, was as follows:
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
---------------- -----------------
1998 1997 1998 1997
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net income (loss) $ 61.3 $ 54.0 $124.8 $(38.0)
Other comprehensive loss - foreign
currency translation adjustment (2.3) (5.6) (6.8) (13.1)
------ ------ ------ ------
Total comprehensive income $ 59.0 $ 48.4 $118.0 $(51.1)
====== ====== ====== ======
</TABLE>
Note 6 - Notes Payable
In connection with the Distribution, during June 1998, R.H. Donnelley Inc.
borrowed $350 million under the R.H. Donnelley Inc. Credit Facility and
issued $150 million of senior subordinated notes under the R.H. Donnelley
Indenture. This $500 million of debt remained an obligation of Old D&B and
R.H. Donnelley Inc. after the Distribution. The proceeds of this borrowing
were used by Old D&B to repay outstanding indebtedness of $287.1 million.
The remainder will be used for general corporate purposes of the Company
including the payment of costs and expenses related to the Distribution.
Note 7 - Financial Instruments with Off-Balance-Sheet Risk
In connection with the Distribution and repayment of outstanding notes payable,
Old D&B canceled all of its interest rate swap agreements (which fixed interest
rates on $300.0 million of variable rate debt through January 2005) and recorded
into income the previously unrecognized fair value loss at the time of
termination. At the time of the cancellation, the fair value of the interest
rate swaps was a loss of $12.7 million, of which $3.8 million ($.6 million in
the first quarter of 1998 and $3.2 million in 1997) had been recognized in
income relating to swaps which do not qualify for settlement accounting. The
previously unrecognized loss of $8.9 million was recorded during the quarter and
included in reorganization costs.
Note 8- Litigation
The Company and its subsidiaries are involved in legal proceedings, claims and
litigation arising in the ordinary course of business. In the opinion of
management, the outcome of such current legal proceedings, claims and litigation
could have a material effect on quarterly or annual operating results or cash
flows when resolved in a future period. However, in the opinion of management,
these matters will not materially affect the Company's consolidated financial
position.
In addition to the litigation referred to above, on July 29, 1996, Information
Resources, Inc. ("IRI") filed a complaint in the United States District Court
for the Southern District of New York, naming as defendants Old D&B, A.C.
Nielsen Company (a subsidiary of ACNielsen) and IMS International, Inc.
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<PAGE> 11
The complaint alleges various violations of United States antitrust laws,
including alleged violations of Section 1 and 2 of the Sherman Act. The
complaint also alleges a claim of tortious interference with a contract and a
claim of tortious interference with a prospective business relationship. These
claims relate to the acquisition by defendants of Survey Research Group Limited
("SRG"). IRI alleges SRG violated an alleged agreement with IRI when it agreed
to be acquired by the defendants and that the defendants induced SRG to breach
that agreement.
On October 15, 1996, defendants moved for an order dismissing all claims in the
complaint. On May 6, 1997, the United States District Court for the Southern
District of New York issued a decision dismissing IRI's claim of attempted
monopolization in the United States, with leave to replead within sixty days.
The Court denied defendants' motion with respect to the remaining claims in the
complaint. On June 3, 1997, defendants filed an answer denying the material
allegations in IRI's complaint, and A.C. Nielsen Company filed a counterclaim
alleging that IRI has made false and misleading statements about its services
and commercial activities. On July 7, 1997, IRI filed an Amended and Restated
Complaint repleading its alleged claim of monopolization in the United States
and realleging its other claims. By notice of motion dated August 18, 1997,
defendants moved for an order dismissing the amended claim. On December 1, 1997,
the Court denied the motion and, on December 16, 1997, defendants filed a
supplemental answer denying the remaining material allegations of the amended
complaint.
IRI's complaint alleges damages in excess of $350 million, which amount IRI
asked to be trebled under antitrust laws. IRI also seeks punitive damages in an
unspecified amount.
In connection with the IRI action, on October 28, 1996, Cognizant, ACNielsen and
Old D&B entered into an Indemnity and Joint Defense Agreement (the "Indemnity
and Joint Defense Agreement") pursuant to which they have agreed (i) to certain
arrangements allocating potential liabilities ("IRI Liabilities") that may arise
out of or in connection with the IRI Action and (ii) to conduct a joint defense
of such action. In particular, the Indemnity and Joint Defense Agreement
provides that ACNielsen will assume exclusive liability for IRI Liabilities up
to a maximum amount to be calculated at such time such liabilities, if any,
become payable (the "ACN Maximum Amount"), and that Old D&B and Cognizant will
share liability equally for any amounts in excess of the ACN Maximum Amount. The
ACN Maximum Amount will be determined by an investment banking firm as the
maximum amount which ACNielsen is able to pay after giving effect to (i) any
plan submitted by such investment bank which is designed to maximize the claims
paying ability of ACNielsen without impairing the investment banking firm's
ability to deliver a viability opinion (but which will not require any action
requiring stockholder approval), and (ii) payment of related fees and expenses.
For these purposes, financial viability means the ability of ACNielsen, after
giving effect to such plan, the payment of related fees and expenses, and the
payment of the ACN Maximum Amount, to pay its debts as they become due and to
finance the current and anticipated operating and capital requirements of its
business, as reconstituted by such plan, for two years from the date any such
plan is expected to be implemented.
In connection with the Distribution, the Company and Donnelley entered into an
agreement whereby the Company has assumed all potential liabilities arising from
the IRI Action and agreed to indemnify Donnelley in connection with such
potential liabilities.
Management is unable to predict at this time the final outcome of the IRI Action
or whether the resolution of this matter could materially affect the Company's
results of operations, cash flows or financial position.
11
<PAGE> 12
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
OVERVIEW
On June 30, 1998, The Dun & Bradstreet Corporation separated into two publicly
traded companies - The "new" Dun & Bradstreet Corporation ("New D&B or the
"Company") and R.H. Donnelley Corporation ("Old D&B or Donnelley"). The
separation (the "Distribution") of the two companies was accomplished through a
tax-free dividend by Old D&B of the Company, which is a new entity comprised of
Moody's Investors Service ("Moody's") and Dun & Bradstreet, the operating
company ("D&B"). The new entity is known as "The Dun & Bradstreet Corporation"
and the continuing entity consisting of R.H. Donnelley Inc., the operating
company and the DonTech partnership changed its name to "R.H. Donnelley
Corporation." The tax-free stock dividend was paid on June 30, 1998, to
shareholders of record at the close of business on June 17, 1998. Due to the
relative significance of Moody's and D&B, the transaction has been accounted for
as a reverse spin-off, and as such Moody's and D&B have been classified as
continuing operations and R.H. Donnelley Inc. and DonTech have been classified
as discontinued operations.
Pursuant to Accounting Principles Board Opinion No. 30, "Reporting the Results
of Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions," the
consolidated financial statements of the Company have been reclassified to
reflect the reorganization. Accordingly, revenues, costs and expenses, assets
and liabilities, and cash flows of R.H. Donnelley Inc. and DonTech have been
excluded from the respective captions in the Consolidated Statements of
Operations, Consolidated Balance Sheets and Consolidated Statements of Cash
Flows. The net operating results have been reported, net of applicable income
taxes, as "Income from Discontinued Operations", the net assets have been
reported as "Net Assets of Discontinued Operations" and the net cash flows have
been reported as "Net Cash Provided by Discontinued Operations."
RESULTS OF OPERATIONS
The Company's second quarter net income was $61.3 million, up 13% from the year
earlier period. Earnings per share for the second quarter were $.36 per share
basic, $.35 per share diluted compared to $.32 per share basic and $.31 per
share diluted in the same period of the prior year. The Company's second quarter
1998 income from continuing operations of $39.7 million was down 17% from the
prior year's second quarter due to the inclusion of $27.5 million pre-tax ($23.2
million after-tax) of transaction-related expenses (primarily professional fees
of $18.6 million and costs resulting from the termination of interest rate
swaps, discussed below, of $8.9 million) incurred during the quarter in
connection with the separation of Donnelley. Excluding these charges, income
from continuing operations increased 32% during the quarter from the year
earlier period.
Through the first half of the year, the Company reported net income of $124.8
million, or $.73 per share basic ($.72 per share diluted). This compares with a
1997 first half net loss of $38.0 million, $.22 per share basic and diluted. The
1997 results include a one-time, non-cash charge for the cumulative effect of
accounting changes of $127.0 million after-tax ($.74 per share basic and
diluted) with respect to certain of the Company's revenue recognition methods.
The Company's
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<PAGE> 13
first half 1998 income from continuing operations was $91.1 million, up 8% from
the first half of 1997. Excluding the transaction costs of $23.2 million
after-tax, income from continuing operations increased 36% during the first half
of 1998 from the first half of 1997.
Operating revenues for the second quarter were up 10% to $484.0 million in 1998
from $440.9 million in the second quarter of 1997. Revenues for D&B of $343.3
were up 4% from the same period of the prior year. Excluding the impact of
foreign currency fluctuations, revenue growth for D&B was up 7% over the prior
year. D&B U.S. posted an 8% increase in revenues over the second quarter of
1997, driven by strong growth in business-to-business marketing and new
products. D&B Europe's revenues decreased by 1%, driven by negative foreign
exchange, partially offset by gains in Italy, Holland and the United Kingdom.
Excluding the impact of foreign exchange, D&B Europe's revenues were up 4% from
the prior year. Revenues from D&B's other regions were up 1% from prior year.
Excluding foreign exchange impact, revenue growth from the prior year was 7%.
Moody's posted revenue of $140.7 million for the second quarter, up 26% from the
prior year. Record issuance in the high yield market, as well as continued
strong issuance of other corporate and municipal bonds drove growth. Growth in
mortgage-backed securities issuance was particularly strong, up 155% in the
second quarter over the second quarter of 1997.
On a year to date basis, operating revenues of $955.1 were up 9% from the year
earlier period. Revenues for D&B of $681.9 were up 3% over prior year. Excluding
the impact of foreign currency fluctuations, revenue growth for D&B was 6% over
the first half of 1997. D&B U.S. year to date growth of 8% was driven by strong
performance in the credit and marketing businesses. Europe's 4% decline was
mainly due to negative foreign currency fluctuations and declines in Germany,
offsetting growth in Italy, Holland and the U.K. Excluding foreign exchange,
Europe's revenue growth was 3%. D&B's other regions revenue for the first half
of 1998 was up 2% from 1997. Excluding foreign exchange, revenues were up 8%
from prior year. In the first half of 1998, Moody's revenue of $273.2 million
was up 25% from the first half of 1997 due to gains in corporate and municipal
bonds, structured ratings and commercial paper.
Operating income for the second quarter of 1998 was $78.5 million, a decline of
12% from the prior year's second quarter. However, excluding reorganization
costs of $27.5 million related to the separation of Donnelley, operating income
for the second quarter of 1998 grew 19% compared to the same period in 1997.
This growth reflects the strong revenue results for the quarter noted above. On
a year to date basis, operating income grew 3% and excluding the reorganization
costs, operating income grew 19% in the first half of 1998 compared to the same
period in 1997.
Non-operating expense-net was $7.8 million for the second quarter of 1998
compared to $16.6 million in the second quarter of 1997. This significant
decrease was a result of sharply lower interest expense ($4.2 million in the
second quarter of 1998 compared to $10.8 million in 1997), driven by lower debt
levels during April and May and the paydown of the outstanding indebtedness in
June using the proceeds from the R.H. Donnelley Inc. financing (see further
discussion below). Interest income in the quarter was $1.0 million higher than
the second quarter of 1997 and other expense-net was $1.2 million less than the
same period in 1997. On a year-to-date basis, non-operating expense-net was down
$18.4 million to $20.7 million from the first half of 1997. This significant
decrease was a result of sharply lower interest expense, driven by lower debt
and strong cash flow versus prior year.
The Company's effective tax rate for the second quarter of 1998 was 44% compared
to 34% in the second quarter of 1997. This increase resulted from an increase in
the estimated underlying effective
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<PAGE> 14
tax rate to 36% and the non-deductibility of certain transaction costs. On a
year to date basis the effective tax rate was 40% for the first half of 1998
compared to 34% for the first half of 1997, resulting from the above mentioned
factors.
Income from discontinued operations, net of income taxes, was $21.6 million for
the second quarter of 1998 compared to $6.3 million for the same period in 1997.
Revenue for Donnelley in the quarter totaled $66.3 million, an increase of $2.2
million from the second quarter of 1997. On a year to date basis, income from
discontinued operations, net of income taxes, was up $29.0 million to $33.7
million in the first half of 1998 compared to 1997. This strong increase is the
result of a one-time shift in revenues from the DonTech partnership. For a
detailed discussion of the results of R.H. Donnelley Corporation, refer to their
separate Form 10-Q to be filed with the Securities and Exchange Commission for
the second quarter and six months then ended.
ADOPTION OF STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS ("SFAS")
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS No. 131"), which revises disclosure requirements about operating segments
and establishes standards for related disclosures about products and services,
geographic areas and major customers. SFAS No. 131 requires that public business
enterprises report financial and descriptive information about their reportable
operating segments. The statement is effective for fiscal years beginning after
December 15, 1997, and requires restatement of prior years in the initial year
of application. SFAS No. 131 is expected to affect the Company's segment
disclosures, but will not affect the Company's results of operations, financial
position or cash flows. The Company is in the process of evaluating the
disclosure requirements.
In February 1998, the FASB issued SFAS No. 132, "Employers' Disclosure about
Pensions and Other Postretirement Benefits" ("SFAS No. 132"). SFAS No. 132
revises employers' disclosures about pension and other postretirement benefit
plans. SFAS No. 132 is effective for fiscal years beginning after December 15,
1997. Restatement of disclosures for earlier periods provided for comparative
purposes are required unless the information is not readily available. The
Company is in the process of evaluating the disclosure requirements. The
adoption of SFAS No. 132 will have no impact on the Company's results of
operations, financial position or cash flows.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"). This Statement establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
It requires recognition of all derivatives as either assets or liabilities on
the balance sheet and measurement of those instruments at fair value. If certain
conditions are met, a derivative may be designated specifically as (a) a hedge
of the exposure to changes in the fair value of a recognized asset or liability
or an unrecognized firm commitment (a fair value hedge), (b) a hedge of the
exposure to variable cash flows of a forecasted transaction (a cash flow hedge),
or (c) a hedge of the foreign currency exposure of a net investment in a foreign
operation, an unrecognized firm commitment, an available-for-sale security, or a
foreign-currency-denominated forecasted transaction. The Company currently
hedges foreign-currency denominated transactions and will comply with the
requirements of SFAS No. 133 when adopted. This Statement is effective for all
fiscal quarters of fiscal years beginning after June 15,
14
<PAGE> 15
1999. The Company expects to adopt SFAS No. 133 beginning January 1, 2000. The
effect of adopting SFAS No. 133 is not expected to be material.
LIQUIDITY AND FINANCIAL POSITION
At June 30, 1998, cash and cash equivalents totaled $247.9 million, an increase
of $166.1 million from $81.8 million held at December 31, 1997.
Operating activities of continuing operations generated net cash of $257.1
million during the first half of 1998 compared to $169.7 million in 1997. This
increase is consistent with the improvement in the income from continuing
operations and partially due to a tax refund received in 1998. Cash provided by
the operating activities of discontinued operations totaled $21.7 million during
the first half of 1998 compared to $92.8 million during the first half of 1997.
The absence of this source of cash will not have a material impact on future
liquidity or financial position.
Net cash used in investing activities was $77.3 million for the first half of
1998 compared to $52.8 million in 1997 including net cash used in investing
activities of discontinued operations of $3.1 million in the first half of 1998
and $11.7 million in 1997. In the first half of 1998 the Company invested $61.5
million for capital expenditures and additions to computer software and other
intangibles compared to $52.1 million in the comparable period in 1997. This
increase is largely attributable to investments being made on a new European
computer system and new systems being implemented in response to the Year 2000
program.
Net cash used in financing activities was $35.0 million during the first half of
1998 compared to $205.6 million in the first half of 1997. Payments of dividends
accounted for $75.5 million in 1998 and $75.3 million in 1997. Proceeds from the
exercise of stock options were $18.7 million for the first half of 1998 compared
to $19.0 million in 1997.
In connection with the Distribution, during June 1998, R.H. Donnelley Inc.
borrowed approximately $350 million under the R.H. Donnelley Inc. Credit
Facility and issued $150 million of senior subordinated notes under the R.H.
Donnelley Indenture. The proceeds of this borrowing were used to repay existing
indebtedness of the Old D&B of $287.1 million; the excess will be used for
general corporate purposes of the Company including the payment of costs and
expenses associated with the reorganization. This $500 million of debt is an
obligation of Donnelley. At June 30, 1998 the Company did not have any
outstanding indebtedness.
On April 1, 1997, the Company completed a $300.0 million minority interest
financing. Funds raised by this financing were used to repay a portion of the
outstanding short-term debt in April 1997. Also during the second quarter of
1997, the Company reentered the commercial paper market and used the proceeds to
repay the additional amounts outstanding on the short-term debt facility. At
June 30, 1998, the Company had $300 million of minority interest financing
outstanding.
In connection with the Distribution and repayment of outstanding notes payable,
the Old D&B canceled all of its interest rate swap agreements and recorded into
income the previously unrecognized fair value loss at the time of termination.
At the time of the cancellation, the fair value of the interest rate swaps was a
loss of $12.7 million, of which $3.8 million ($.6 million in the first quarter
of 1998 and $3.2 million in 1997) had been recognized in income relating to
swaps which did
15
<PAGE> 16
not qualify for settlement accounting. The previously unrecognized loss of $8.9
million was recorded during the second quarter of 1998 and included in
reorganization costs.
In June 1998, the Company arranged $600 million of committed bank facilities.
Each facility permits borrowings up to $300 million with one maturing in June
1999 and one maturing in June 2003. Under these facilities the Company has the
ability to borrow at prevailing short-term interest rates. At June 30, 1998 the
Company did not have any borrowings outstanding under these facilities.
In June 1998, the Company also received commercial paper ratings from Standard &
Poors of A-1 and Duff & Phelps of D-1. The Company did not have any commercial
paper outstanding at June 30, 1998.
On June 30, 1998, the Company announced that its Board of Directors had
authorized the repurchase of up to $300 million of common shares from time to
time over the next three years in the open market or in negotiated purchases. In
addition, the board has authorized the Company to repurchase shares as needed to
offset awards under the Company's incentive plans.
Year 2000
The Company relies on computer hardware, software and related technology,
together with data, in the operation of its businesses. Such technology and data
are used in creating and delivering the Company's products and services, as well
as in the Company's internal operations, such as billing and accounting. The
Company has initiated an enterprise-wide program to prepare for the year 2000.
The Company has created a Year 2000 program office, reporting to the Chief
Executive Officer and to the Chief Information Officer, to coordinate and
oversee the Company's Year 2000 program. In addition, responsible Year 2000
executives have been appointed, and Year 2000 teams have been established at
each of the Company's operating units. The Company has evaluated the technology
and data used in the creation and delivery of its products and services and in
its internal operations, has identified Year 2000 issues related thereto and
developed and has begun to implement a plan to remediate such Year 2000 issues.
The plan includes remediating the Company's Year 2000 issues that are related to
its customers, suppliers and distributors, but there can be no assurances that
such third parties will successfully remediate their own Year 2000 issues over
which the Company has no control. The Company believes that it will
substantially complete the implementation of its Year 2000 plan prior to the
commencement of the year 2000, and that upon substantial completion of such
implementation, and assuming that The Company's customers, suppliers and
distributors successfully remediate their own Year 2000 issues over which the
Company has no control, the Company will have no material business risk from
such Year 2000 issues. The total cost of the Company's Year 2000 program is
estimated to be $70 to $75 million. Of this amount, approximately $11 million
was incurred in 1997. It is estimated that approximately $40 million, $15
million to $20 million and $4 million will be incurred in 1998, 1999 and 2000,
respectively. Maintenance and modification costs are expensed as incurred, while
the costs of new hardware and software purchased by the Company are capitalized.
Dividends
On July 20, 1998, the Board of Directors approved a third quarter 1998 dividend
of $.185 per share, payable September 10, 1998 to shareholders of record at the
close of business August 20, 1998.
16
<PAGE> 17
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
3 Articles of Incorporation and By-laws
.1 Restated Certificate of Incorporation of the Registrant dated
June 15, 1998, as amended effective June 30, 1998.
4 Instruments Defining the Rights of Security Holders, Including
Indentures
.1 Multi-Year Revolving Credit and Competitive Advance Facility,
dated as of June 9, 1998, among the Registrant (p.k.a. The New
Dun & Bradstreet Corporation), the Borrowing Subsidiaries parties
thereto, the Lenders parties thereto, The Chase Manhattan Bank,
Citibank, N.A. and Morgan Guaranty Trust Company.
.2 364-Day Revolving Credit and Competitive Advance Facility, dated
as of June 9, 1998, among the Registrant (p.k.a. The New Dun &
Bradstreet Corporation), the Borrowing Subsidiaries parties
thereto, the Lenders parties thereto, The Chase Manhattan Bank,
Citibank, N.A. and Morgan Guaranty Trust Company.
.3 Specimen Common Stock certificate (incorporated by reference to
Exhibit 4.1 to Registrant's Registration No. 001-14037 on Form
10, filed June 18, 1998).
.4 Rights Agreement, dated as of June 3, 1998, between the
Registrant (p.k.a. The New Dun & Bradstreet Corporation) and
First Chicago Trust Company of New York (incorporated by
reference to Exhibit 1 to Registrant's Registration No. 001-14037
on Form 8-A, filed June 18, 1998).
10 Material Contracts
.1 Distribution Agreement dated as of June 30, 1998 between R.H.
Donnelley Corporation (p.k.a. The Dun & Bradstreet Corporation)
and the Registrant (p.k.a. The New Dun & Bradstreet Corporation).
.2 Tax Allocation Agreement dated as of June 30, 1998 between R.H.
Donnelley Corporation (p.k.a. The Dun & Bradstreet Corporation)
and the Registrant (p.k.a. The New Dun & Bradstreet Corporation).
.3 Employee Benefits Agreement dated as of June 30, 1998 between
R.H. Donnelley Corporation (p.k.a. The Dun & Bradstreet
Corporation) and the Registrant (p.k.a. The New Dun & Bradstreet
Corporation).
.4 Intellectual Property Agreement dated as of June 30, 1998 between
R.H. Donnelley Corporation (p.k.a. The Dun & Bradstreet
Corporation) and the Registrant (p.k.a. The New Dun & Bradstreet
Corporation).
.5 Shared Transaction Services Agreement dated as of June 30, 1998
between R.H. Donnelley Corporation (p.k.a. The Dun & Bradstreet
Corporation) and the Registrant (p.k.a. The New Dun & Bradstreet
Corporation).
.6 Data Services Agreement dated as of June 30, 1998 between R.H.
Donnelley Corporation (p.k.a. The Dun & Bradstreet Corporation)
and the Registrant (p.k.a. The New Dun & Bradstreet Corporation).
.7 Transition Services Agreement dated as of June 30, 1998 between
R.H. Donnelley Corporation (p.k.a. The Dun & Bradstreet
Corporation) and the Registrant (p.k.a. The New Dun & Bradstreet
Corporation).
.8 Amended and Restated Transition Services Agreement dated as of
June 30, 1998 among R.H. Donnelley Corporation (p.k.a. The Dun &
Bradstreet Corporation), the Registrant (p.k.a. The New Dun &
Bradstreet Corporation), Cognizant Corporation, IMS Health
Incorporated, ACNielsen Corporation and Garter Group, Inc.
17
<PAGE> 18
.9 Undertaking of the Registrant (p.k.a. The New Dun & Bradstreet
Corporation) dated June 29, 1998.
.10 Distribution Agreement dated as of October 28, 1996, among R.H.
Donnelley Corporation (p.k.a. The Dun & Bradstreet Corporation),
Cognizant Corporation and ACNielsen Corporation (incorporated by
reference to Exhibit 10(x) to the Annual Report on Form 10-K of
R.H. Donnelley Corporation (p.k.a. The Dun & Bradstreet
Corporation) for the year ended December 31, 1996, file number
1-7155, filed March 27, 1997).
.11 Tax Allocation Agreement dated as of October 28, 1996, among R.H.
Donnelley Corporation (p.k.a. The Dun & Bradstreet Corporation),
Cognizant Corporation and ACNielsen Corporation (incorporated by
reference to Exhibit 10(y) to the Annual Report on Form 10-K of
R.H. Donnelley Corporation (p.k.a. The Dun & Bradstreet
Corporation) for the year ended December 31, 1996, file number
1-7155, filed March 27, 1997).
.12 Employee Benefits Agreement dated as of October 28, 1996, among
R.H. Donnelley Corporation (p.k.a. The Dun & Bradstreet
Corporation), Cognizant Corporation and ACNielsen Corporation
(incorporated by reference to Exhibit 10(z) to the Annual Report
on Form 10-K of R.H. Donnelley Corporation (p.k.a. The Dun &
Bradstreet Corporation) for the year ended December 31, 1996,
file number 1-7155, filed March 27, 1997).
.13 Indemnity and Joint Defense Agreement dated as of October 28,
1996, among R.H. Donnelley Corporation (p.k.a. The Dun &
Bradstreet Corporation), Cognizant Corporation and ACNielsen
Corporation (incorporated by reference to Exhibit 10(aa) to the
Annual Report on Form 10-K of R.H. Donnelley Corporation (p.k.a.
The Dun & Bradstreet Corporation) for the year ended December 31,
1996, file number 1-7155, filed March 27, 1997).
.14 Amended and Restated Agreement of Limited Partnership of D&B
Investors L.P. dated April 1, 1997.
.15 Amendment No. 1 dated July 14, 1997 to the Amended and Restated
Agreement of Limited Partnership of D&B Investors L.P. dated
April 1, 1997.
.16 Agreement to Retire General Partner Interest dated October 21,
1996 by and between D&B Investors L.P. and IMS America, Ltd.
.17 Assignment Agreements dated as of June 15, 1998 relating to
rights and obligations in respect of D&P Investors L.P.
.18 The Dun & Bradstreet Corporation Nonfunded Deferred Compensation
Plan for Non-Employee Directors.
.19 1998 Dun & Bradstreet Replacement Plan for Certain Non-Employee
Directors Holding Dun & Bradstreet Corporation Equity-Based
Awards.
.20 1998 Dun & Bradstreet Non-Employee Directors' Stock Incentive
Plan.
.21 The Dun & Bradstreet Corporation Cash Incentive Plan.
.22 The Dun & Bradstreet Corporation Covered Employee Cash Incentive
Plan.
.23 1998 Dun & Bradstreet Replacement Plan for Certain Employees
Holding Dun & Bradstreet Corporation Equity-Based Awards.
.24 1998 Dun & Bradstreet Key Employees' Stock Incentive Plan.
.25 Form of Limited Stock Appreciation Rights Agreement.
.26 Forms of Change in Control Severance Agreements.
.27 Executive Transition Plan.
.28 Pension Benefit Equalization Plan.
.29 Supplemental Executive Benefit Plan.
.30 Profit Participation Benefit Equalization Plan.
27 Financial Data Schedule
18
<PAGE> 19
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended June 30, 1998.
19
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE DUN & BRADSTREET CORPORATION
Date: August 14, 1998 By: /s/ FRANK S. SOWINSKI
-------------------------------------
Frank S. Sowinski
Senior Vice President - Chief Financial Officer
Date: August 14, 1998 By: /s/ CHESTER J. GEVEDA
-------------------------------------
Chester J. Geveda, Jr.
Vice President and Controller
20
<PAGE> 1
Exhibit 3.1
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
THE NEW DUN & BRADSTREET CORPORATION
The undersigned, being the duly elected Senior Vice President and Chief
Legal Counsel of The New Dun & Bradstreet Corporation, a corporation organized
and existing under the laws of the State of Delaware (the "Corporation"),
pursuant to Section 228 of the General Corporation Law of the State of Delaware
(the "DGCL"), DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation by resolution
duly adopted by unanimous written consent, declared it advisable that the
Restated Certificate of Incorporation (the "Certificate") of the Corporation
filed with the Secretary of State of the State of Delaware on June 15, 1998 be
amended by amending Article FIRST to read in its entirety as follows:
"FIRST: The name of the corporation is The Dun & Bradstreet Corporation."
SECOND: That such amendment was duly adopted by the shareholders of the
Corporation entitled to vote thereon in accordance with Section 228 of the DGCL.
THIRD: That such amendment was duly adopted in accordance with the
provisions of Section 242 of the DGCL.
FOURTH: That such amendment shall be effective at 5:30 p.m., Eastern
Standard Time, on June 30, 1998.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment to be duly executed this 29th day of June, 1998.
THE NEW DUN & BRADSTREET CORPORATION
By: \s\ Nancy L. Henry
-------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Counsel
Attest: \s\ Mitchell C. Sussis
-------------------------------
Name: Mitchell C. Sussis
Title: Corporate Secretary
<PAGE> 2
RESTATED CERTIFICATE OF INCORPORATION
OF
THE NEW DUN & BRADSTREET CORPORATION
The name of the corporation is The New Dun & Bradstreet Corporation, and
the original Certificate of Incorporation of the corporation was filed with the
Secretary of State of the State of Delaware on April 8, 1998. The original
Certificate of Incorporation of the corporation is hereby amended and restated
to read in its entirety as follows:
"FIRST: The name of the corporation is The New Dun & Bradstreet
Corporation.
SECOND: The registered office of the corporation in the State of Delaware
is located at No. 1209 Orange Street, in the City of Wilmington, County of New
Castle; and the name of its registered agent at such address is The Corporation
Trust Company.
THIRD: The purposes of the corporation are to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: (1) The total number of shares of all classes of stock which the
corporation shall have authority to issue is 420,000,000, consisting of (1)
10,000,000 shares of Preferred Stock, par value $.01 per share ("Preferred
Stock"), (2) 400,000,000 shares of Common Stock, par value $.01 per share
("Common Stock"), and (3) 10,000,000 shares of Series Common Stock, par value
$.01 per share ("Series Common Stock"). The number of authorized shares of any
of the Preferred Stock, the Common Stock or the Series Common Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority in voting
power of the stock of the corporation entitled to vote thereon irrespective of
the provisions of Section 242(b)(2) of the General Corporation Law of the State
of Delaware (or any successor provision thereto), and no vote of the holders of
any of the Preferred Stock, the Common Stock or the Series Common Stock voting
separately as a class shall be required therefor.
(2) The Board of Directors is hereby expressly authorized, by resolution
or resolutions, to provide, out of the unissued shares of Preferred Stock, for
series of Preferred Stock and, with respect to each such series, to fix the
number of shares constituting such series and the designation of such series,
the voting powers (if any) of the shares of such series, and the preferences and
relative, participating, optional or other special rights, if any, and any
qualifications, limitations or restrictions thereof, of the shares of such
series. The powers, preferences and relative, participating, optional and other
special rights of each series of Preferred Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding.
(3) The Board of Directors is hereby expressly authorized, by resolution
or resolutions, to provide, out of the unissued shares of Series Common Stock,
for series of Series Common Stock and, with respect to each such series, to fix
the number of shares constituting such series and the designation of such
series, the voting powers (if any) of the shares of such series, and the
preferences and relative, participating, optional or other special rights, if
any, and any qualifications, limitations or restrictions thereof, of the shares
of such series. The powers, preferences and relative, participating, optional
and other
<PAGE> 3
2
special rights of each series of Series Common Stock, and the qualifications,
limitations or restrictions thereof, if any, may differ from those of any and
all other series at any time outstanding.
(4) (a) Each holder of Common Stock, as such, shall be entitled to one
vote for each share of Common Stock held of record by such holder on all matters
on which stockholders generally are entitled to vote; provided, however, that,
except as otherwise required by law, holders of Common Stock, as such, shall not
be entitled to vote on any amendment to this Restated Certificate of
Incorporation (including any certificate of designations relating to any series
of Preferred Stock or Series Common Stock) that relates solely to the terms of
one or more outstanding series of Preferred Stock or Series Common Stock if the
holders of such affected series are entitled, either separately or together with
the holders of one or more other such series, to vote thereon pursuant to this
Restated Certificate of Incorporation (including any certificate of designations
relating to any series of Preferred Stock or Series Common Stock) or pursuant to
the General Corporation Law of the State of Delaware.
(b) Except as otherwise required by law, holders of a series of Preferred
Stock or Series Common Stock, as such, shall be entitled only to such voting
rights, if any, as shall expressly be granted thereto by this Restated
Certificate of Incorporation (including any certificate of designations relating
to such series).
(c) Subject to applicable law and the rights, if any, of the holders of
any outstanding series of Preferred Stock or Series Common Stock or any class or
series of stock having a preference over or the right to participate with the
Common Stock with respect to the payment of dividends, dividends may be declared
and paid on the Common Stock at such times and in such amounts as the Board of
Directors in its discretion shall determine.
(d) Upon the dissolution, liquidation or winding up of the corporation,
subject to the rights, if any, of the holders of any outstanding series of
Preferred Stock or Series Common Stock or any class or series of stock having a
preference over or the right to participate with the Common Stock with respect
to the distribution of assets of the corporation upon such dissolution,
liquidation or winding up of the corporation, the holders of the Common Stock,
as such, shall be entitled to receive the assets of the corporation available
for distribution to its stockholders ratably in proportion to the number of
shares held by them.
FIFTH: The Board of Directors shall be authorized to make, amend, alter,
change, add to or repeal the By-Laws of the corporation in any manner not
inconsistent with the laws of the State of Delaware, subject to the power of the
stockholders to amend, alter, change, add to or repeal the By-Laws made by the
Board of Directors. Notwithstanding anything contained in this Restated
Certificate of Incorporation to the contrary, the affirmative vote of the
holders of at least 80 percent in voting power of all the shares of the
corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required in order for the stockholders to
alter, amend or repeal any provision of the By-laws which is to the same effect
as Article Fifth, Article Seventh, and Article Eighth of this Restated
Certificate of Incorporation or to adopt any provision inconsistent
<PAGE> 4
3
therewith.
SIXTH: (1) To the fullest extent permitted by the laws of the State of
Delaware:
(a) The corporation shall indemnify any person (and such person's heirs,
executors or administrators) who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding
(brought in the right of the corporation or otherwise), whether civil, criminal,
administrative or investigative, and whether formal or informal, including
appeals, by reason of the fact that such person is or was a director or officer
of the corporation or, while a director or officer of the corporation, is or was
serving at the request of the corporation as a director, officer, partner,
trustee, employee or agent of another corporation, partnership, joint venture,
trust, limited liability company or other enterprise, for and against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person or such heirs,
executors or administrators in connection with such action, suit or proceeding,
including appeals. Notwithstanding the preceding sentence, the corporation shall
be required to indemnify a person described in such sentence in connection with
any action, suit or proceeding (or part thereof) commenced by such person only
if the commencement of such action, suit or proceeding (or part thereof) by such
person was authorized by the Board of Directors of the corporation. The
corporation may indemnify any person (and such person's heirs, executors or
administrators) who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding (brought in the
right of the corporation or otherwise), whether civil, criminal, administrative
or investigative, and whether formal or informal, including appeals, by reason
of the fact that such person is or was an employee or agent of the corporation
or is or was serving at the request of the corporation as a director, officer,
partner, trustee, employee or agent of another corporation, partnership, joint
venture, trust, limited liability company or other enterprise, for and against
all expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by such person or such heirs,
executors or administrators in connection with such action, suit or proceeding,
including appeals.
(b) The corporation shall promptly pay expenses incurred by any person
described in the first sentence of subsection (a) of this Article Sixth, Section
(1) in defending any action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding, including appeals, upon
presentation of appropriate documentation.
(c) The corporation may purchase and maintain insurance on behalf of any
person described in subsection (a) of this Article Sixth, Section (1) against
any liability asserted against such person, whether or not the corporation would
have the power to indemnify such person against such liability under the
provisions of this Article Sixth, Section (1) or otherwise.
(d) The provisions of this Article Sixth, Section (1) shall be applicable
to all actions, claims, suits or proceedings made or commenced after the
adoption hereof, whether arising from acts or omissions to act occurring before
or after its adoption. The provisions of this Article Sixth, Section (1) shall
be deemed to be a contract between the corporation
<PAGE> 5
4
and each director or officer who serves in such capacity at any time while this
Article Sixth, Section (1) and the relevant provisions of the laws of the State
of Delaware and other applicable law, if any, are in effect, and any repeal or
modification hereof shall not affect any rights or obligations then existing
with respect to any state of facts or any action, suit or proceeding then or
theretofore existing, or any action, suit or proceeding thereafter brought or
threatened based in whole or in part on any such state of facts. If any
provision of this Article Sixth, Section (1) shall be found to be invalid or
limited in application by reason of any law or regulation, it shall not affect
the validity of the remaining provisions hereof. The rights of indemnification
provided in this Article Sixth, Section (1) shall neither be exclusive of, nor
be deemed in limitation of, any rights to which an officer, director, employee
or agent may otherwise be entitled or permitted by contract, this Restated
Certificate of Incorporation, vote of stockholders or directors or otherwise, or
as a matter of law, both as to actions in such person's official capacity and
actions in any other capacity while holding such office, it being the policy of
the corporation that indemnification of any person whom the corporation is
obligated to indemnify pursuant to the first sentence of subsection (a) of this
Article Sixth, Section (1) shall be made to the fullest extent permitted by law.
(e) For purposes of this Article Sixth, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on a person with respect to an employee benefit plan; and
references to "serving at the request of the corporation" shall include any
service as a director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director, officer, employee, or
agent with respect to an employee benefit plan, its participants, or
beneficiaries.
(2) A director of the corporation shall not be liable to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the General Corporation Law of the State of
Delaware as the same exists or may hereafter be amended. Any amendment,
modification or repeal of the foregoing sentence shall not adversely affect any
right or protection of a director of the corporation hereunder in respect of any
act or omission occurring prior to the time of such amendment, modification or
repeal.
SEVENTH: (1) The business and affairs of the corporation shall be managed
by or under the direction of a Board of Directors consisting of not less than
three directors, the exact number of directors to be determined from time to
time by resolution adopted by affirmative vote of a majority of the Board of
Directors. The directors shall be divided into three classes designated Class I,
Class II and Class III. Each class shall consist, as nearly as possible, of
one-third of the total number of directors constituting the entire Board of
Directors. Class I directors shall be originally elected for a term expiring at
the succeeding annual meeting of stockholders, Class II directors shall be
originally elected for a term expiring at the second succeeding annual meeting
of stockholders, and Class III directors shall be originally elected for a term
expiring at the third succeeding annual meeting of stockholders. At each
succeeding annual meeting of stockholders following 1998, successors to the
class of directors whose term expires at that annual meeting shall be elected
for a term expiring at the third succeeding annual meeting. If the number of
<PAGE> 6
5
directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as nearly equal
as possible, and any additional director of any class elected to fill a newly
created directorship resulting from an increase in such class shall hold office
for a term that shall coincide with the remaining term of that class, but in no
case shall a decrease in the number of directors remove or shorten the term of
any incumbent director. A director shall hold office until the annual meeting
for the year in which his term expires and until his successor shall be elected
and shall qualify, subject, however, to prior death, resignation, retirement,
disqualification or removal from office. Any newly created directorship on the
Board of Directors that results from an increase in the number of directors and
any vacancy occurring in the Board of Directors shall be filled only by a
majority of the directors then in office, although less than a quorum, or by a
sole remaining director. If any applicable provision of the General Corporation
Law of the State of Delaware expressly confers power on stockholders to fill
such a directorship at a special meeting of stockholders, such a directorship
may be filled at such meeting only by the affirmative vote of at least 80
percent of the voting power of all shares of the corporation entitled to vote
generally in the election of directors voting as a single class. Any director
elected to fill a vacancy not resulting from an increase in the number of
directors shall have the same remaining term as that of his predecessor.
Directors may be removed only for cause, and only by the affirmative vote of at
least 80 percent in voting power of all shares of the corporation entitled to
vote generally in the election of directors, voting as a single class.
(2) Notwithstanding the foregoing, whenever the holders of any one or more
series of Preferred Stock or Series Common Stock issued by the corporation shall
have the right, voting separately as a series or separately as a class with one
or more such other series, to elect directors at an annual or special meeting of
stockholders, the election, term of office, removal, filling of vacancies and
other features of such directorships shall be governed by the terms of this
Restated Certificate of Incorporation (including any certificate of designations
relating to any series of Preferred Stock or Series Common Stock) applicable
thereto, and such directors so elected shall not be divided into classes
pursuant to this Article Seventh unless expressly provided by such terms.
EIGHTH: Any action required or permitted to be taken by the holders of the
Common Stock of the corporation must be effected at a duly called annual or
special meeting of such holders and may not be effected by any consent in
writing by such holders. Except as otherwise required by law and subject to the
rights of the holders of any series of Preferred Stock or Series Common Stock,
special meetings of stockholders of the corporation may be called only by the
Chief Executive Officer of the corporation or by the Board of Directors pursuant
to a resolution approved by the Board of Directors.
NINTH: Notwithstanding anything contained in this Restated Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
80 percent in voting power of all the shares of the corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to alter, amend or repeal Article Fifth, Article Seventh, Article
Eighth or this Article Ninth or to adopt any provision inconsistent therewith."
The New Dun & Bradstreet Corporation does hereby further certify that
this Restated Certificate of Incorporation was duly adopted by the Board of
Directors and by unanimous written consent of the stockholders in accordance
with the provisions of Sections 228, 242 and 245 of the General Corporation Law
of the State of Delaware.
<PAGE> 7
IN WITNESS WHEREOF, THE NEW DUN & BRADSTREET CORPORATION has caused its
corporate seal to be hereunto affixed and this certificate to be signed by
Nancy L. Henry, its Senior Vice President and Chief Legal Counsel this 15th day
of June, 1998.
THE NEW DUN & BRADSTREET CORPORATION
/s/ Nancy L. Henry
By: _______________________________
Name: Nancy L. Henry
Title: Senior Vice President
and Chief Legal Counsel
<PAGE> 1
Exhibit 4.1
CONFORMED COPY
================================================================================
CREDIT AGREEMENT
dated as of
June 9, 1998
among
THE NEW DUN & BRADSTREET CORPORATION
The Borrowing Subsidiaries Party Hereto
The Lenders Party Hereto
THE CHASE MANHATTAN BANK,
as Administrative Agent,
CITIBANK, N.A.,
as Syndication Agent,
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Documentation Agent
$300,000,000 REVOLVING CREDIT AND COMPETITIVE ADVANCE FACILITY
================================================================================
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 DEFINITIONS
SECTION 1.01. Defined Terms...................................................1
SECTION 1.02. Classification of Loans and Borrowings.........................24
SECTION 1.03. Terms Generally................................................24
SECTION 1.04. Accounting Terms; GAAP.........................................24
SECTION 1.05. Exchange Rates.................................................25
ARTICLE 2 THE CREDITS
SECTION 2.01. Commitments....................................................25
SECTION 2.02. Loans and Borrowings...........................................26
SECTION 2.03. Requests for Revolving Borrowings..............................27
SECTION 2.04. Competitive Bid Procedure......................................28
SECTION 2.05. Swingline Loans................................................32
SECTION 2.06. Funding of Borrowings..........................................33
SECTION 2.07. Interest Elections.............................................34
SECTION 2.08. Termination and Reduction of Commitments.......................36
SECTION 2.09. Repayment of Loans; Evidence of Debt...........................37
SECTION 2.10. Prepayment of Loans............................................38
SECTION 2.11. Fees...........................................................39
SECTION 2.12. Interest.......................................................40
SECTION 2.13. Alternate Rate of Interest.....................................41
SECTION 2.14. Increased Costs................................................42
SECTION 2.15. Break Funding Payments.........................................44
SECTION 2.16. Taxes..........................................................45
SECTION 2.17. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs..........................................46
SECTION 2.18. Mitigation Obligations; Replacement of Lenders.................48
SECTION 2.19. Borrowing Subsidiaries.........................................49
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers...........................................50
SECTION 3.02. Authorization; Enforceability..................................50
SECTION 3.03. Governmental Approvals; No Conflicts...........................50
SECTION 3.04. Financial Condition; No Material Adverse Change................51
<PAGE> 3
SECTION 3.05. Properties.....................................................52
SECTION 3.06. Litigation and Environmental Matters...........................52
SECTION 3.07. Compliance with Laws and Agreements............................53
SECTION 3.08. Investment and Holding Company Status..........................53
SECTION 3.09. Taxes..........................................................53
SECTION 3.10. ERISA..........................................................53
SECTION 3.11. Disclosure.....................................................54
SECTION 3.12. Subsidiaries...................................................54
SECTION 3.13. Use of Proceeds................................................54
SECTION 3.14. Solvency.......................................................54
SECTION 3.15. Year 2000......................................................54
ARTICLE 4 CONDITIONS
SECTION 4.01. Effective Date.................................................55
SECTION 4.02. Each Credit Event..............................................56
SECTION 4.03. Each Borrowing Subsidiary Credit Event.........................57
ARTICLE 5 AFFIRMATIVE COVENANTS
SECTION 5.01. Financial Statements and Other Information.....................58
SECTION 5.02. Notices of Material Events.....................................59
SECTION 5.03. Existence; Conduct of Business.................................60
SECTION 5.04. Payment of Obligations.........................................60
SECTION 5.05. Maintenance of Properties; Insurance...........................60
SECTION 5.06. Books and Records; Inspection Rights...........................61
SECTION 5.07. Compliance with Laws...........................................61
SECTION 5.08. Use of Proceeds................................................61
ARTICLE 6 NEGATIVE COVENANTS
SECTION 6.01. Liens..........................................................61
SECTION 6.02. Fundamental Changes............................................63
SECTION 6.03. Transactions with Affiliates...................................64
SECTION 6.04. Sale and Lease-Back Transactions...............................65
SECTION 6.05. Total Debt to EBITDA Ratio.....................................65
SECTION 6.06. Interest Coverage Ratio........................................65
ARTICLE 7 EVENTS OF DEFAULT
<PAGE> 4
ARTICLE 8 THE ADMINISTRATIVE AGENT
ARTICLE 9 GUARANTEE
ARTICLE 10 MISCELLANEOUS
SECTION 10.01. Notices.......................................................73
SECTION 10.02. Waivers; Amendments...........................................74
SECTION 10.03. Expenses; Indemnity; Damage Waiver............................75
SECTION 10.04. Successors and Assigns........................................76
SECTION 10.05. Survival......................................................80
SECTION 10.06. Counterparts; Integration; Effectiveness......................81
SECTION 10.07. Severability..................................................81
SECTION 10.08. Right of Setoff...............................................81
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of
Process.....................................................82
SECTION 10.10. Waiver of Jury Trial..........................................82
SECTION 10.11. Headings......................................................83
SECTION 10.12. Confidentiality...............................................83
SECTION 10.13. Interest Rate Limitation......................................83
SECTION 10.14. Conversion of Currencies......................................84
SECTION 10.15. European Economic and Monetary Union..........................84
<PAGE> 5
SCHEDULES:
Schedule 2.01(a) -- Lenders and Facility Commitments
Schedule 2.01(b) -- Designated Currency Lenders and Designated Currency
Commitments
Schedule 2.01(c) -- Yen Lenders and Yen Commitments
Schedule 2.17 -- Payments on Multicurrency Loans
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 6.01 -- Existing Liens
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Company's Counsel
Exhibit B-2 -- Form of Opinion of Simpson Thacher & Bartlett
Exhibit C -- Form of Opinion of Borrowing Subsidiary's Counsel
Exhibit D -- Form of Borrowing Subsidiary Agreement
Exhibit E -- Form of Borrowing Subsidiary Termination
Exhibit F -- Form of Statement Relating to Tax Status
iv
<PAGE> 6
CREDIT AGREEMENT dated as of June 9, 1998, among THE NEW DUN & BRADSTREET
CORPORATION, the BORROWING SUBSIDIARIES party hereto, the LENDERS party hereto,
THE CHASE MANHATTAN BANK, as Administrative Agent, CITIBANK, N.A., as
Syndication Agent, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Documentation Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Acceptable Insurer" means (i) Lloyd's of London, so long as it is rated
at least 3 crowns by S&P, (ii) an insurance company having an A.M. Best rating
of "A" or better and being in a financial size category of IX or larger (as such
category is defined on the date hereof) or (iii) an insurance company otherwise
reasonably acceptable to the Administrative Agent.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. No SPC of
any Lender shall be an Affiliate of such Lender.
"Agreement Currency" has the meaning assigned to such term in Section
10.14.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
<PAGE> 7
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Agent" means, (a) with respect to a Loan or Borrowing
denominated in dollars, the Administrative Agent, (b) with respect to a Loan or
Borrowing denominated in Sterling, the London Agent, or (c) with respect to any
particular Eligible Currency, such other Person as may be agreed upon by the
Company and the Administrative Agent and designated in a notice delivered to the
Lenders.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the total Available Facility Commitments represented by such Lender's
Available Facility Commitment. If the Facility Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Facility
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, with respect to any Eurocurrency
Revolving Loan, or with respect to the facility fees payable hereunder, as the
case may be, the applicable rate per annum set forth below under the caption
"Eurocurrency Spread" or "Facility Fee Rate", as the case may be, based upon the
ratings by S&P and Duff & Phelps, respectively, applicable on such date to the
LTD Index Debt or, if no LTD Index Debt is in effect, based upon the ratings by
S&P and Duff & Phelps, respectively, applicable on such date to the CP Index
Debt:
<TABLE>
<CAPTION>
=================================================================================================================
Category 1 Category 2 Category 3 Category 4 Category 5
- - -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CP Rating: A-1+ and D-1+ A-1+ or D-1+ A-1 and D-1 A-2 or D-1- Lower than A-2
and lower than
D-1-
- - -----------------------------------------------------------------------------------------------------------------
LTD Rating: A+ and A+ A and A A- and A- BBB+ and BBB+ BBB and BBB
- - -----------------------------------------------------------------------------------------------------------------
Facility Fee Rate .070% .080% .090% .110% .150%
- - -----------------------------------------------------------------------------------------------------------------
Eurocurrency .130% .145% .160% .190% .225%
Spread
=================================================================================================================
</TABLE>
For purposes of the foregoing, (i) if either S&P or Duff & Phelps shall
not have in effect a rating for the applicable Index Debt (other than by reason
of the circumstances referred to in the last sentence of this definition), then
the Applicable Rate shall be the rate set forth in the Category that is one
number
2
<PAGE> 8
higher than the Category applicable to the rating in effect; (ii) if neither S&P
nor Duff & Phelps shall have in effect a rating for any Index Debt (other than
by reason of the circumstances referred to in the last sentence of this
definition), then the Applicable Rate shall be the rate set forth in Category 5,
(iii) if the Applicable Rate is being calculated on the basis of LTD Index Debt
and if the ratings established by S&P and Duff & Phelps for the applicable LTD
Index Debt shall fall within different Categories, then the Applicable Rate
shall be based on the higher of the two ratings, unless one of the two ratings
is two or more Categories lower than the other, in which case the Applicable
Rate shall be based upon the Category next below that of the higher of the two
ratings; and (iv) if the ratings established by S&P and Duff & Phelps for the
applicable Index Debt shall be changed (other than as a result of a change in
the rating system of S&P or Duff & Phelps), such change shall be effective as of
the date on which it is first announced by the applicable rating agency. Each
change in the Applicable Rate shall apply (other than as described in the
immediately succeeding sentence) during the period commencing on the effective
date of such change and ending on the date immediately preceding the effective
date of the next such change. Notwithstanding the foregoing, from the Effective
Date until December __, 1998, the Applicable Rate shall be based upon Category
3. If the rating system of S&P or Duff & Phelps shall change, or if either such
rating agency shall cease to be in the business of rating corporate debt
obligations, the Company and the Lenders shall negotiate in good faith to amend
this definition to reflect such changed rating system or the unavailability of
ratings from such rating agency and, pending the effectiveness of any such
amendment, the Applicable Rate shall be determined by reference to the rating
most recently in effect prior to such change or cessation.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"Available Facility Commitment" means, with respect to any Lender at any
time, an amount equal to such Lender's Facility Commitment at such time minus
such Lender's Funded Revolving Credit Exposure at such time. If the Facility
Commitments have terminated or expired, the Available Facility Commitments shall
be determined based upon the Facility Commitments most recently in effect,
giving effect to any assignments.
"Availability Period" means with respect to the Facility Commitments, the
Designated Currency Commitments or the Yen Commitments, as the case may be, the
period from and including the Effective Date to but excluding the earlier of the
Maturity Date and the date of termination of the Facility Commitments, the
Designated Currency Commitments or the Yen Commitments, respectively.
3
<PAGE> 9
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Borrower" means the Company or any Borrowing Subsidiary.
"Borrowing" means (a) Revolving Loans of the same Type and currency, made,
converted or continued on the same date and, in the case of Eurocurrency Loans,
as to which a single Interest Period is in effect, (b) a Competitive Loan or
group of Competitive Loans of the same Type made on the same date and as to
which a single Interest Period is in effect or (c) a Swingline Loan.
"Borrowing Date" means any Business Day specified in a notice pursuant to
Section 2.03, 2.04 or 2.05 as a date on which the relevant Borrower requests
Loans to be made hereunder.
"Borrowing Minimum" means (a) in the case of a Borrowing denominated in
dollars, $5,000,000 and (b) in the case of a Borrowing denominated in any
Eligible Currency, the smallest amount of such Eligible Currency that (i) is an
integral multiple of 1,000,000 units (or, in the case of Pounds Sterling,
500,000 units) of such currency and (ii) has a Dollar Equivalent in excess of
$5,000,000.
"Borrowing Multiple" means (a) in the case of a Borrowing denominated in
dollars, $1,000,000 and (b) in the case of a Borrowing denominated in any
Eligible Currency, 1,000,000 units (or, in the case of Pounds Sterling, 500,000
units) of such currency.
"Borrowing Request" means a request for a Revolving Borrowing in
accordance with Section 2.03.
"Borrowing Subsidiary" means, at any time, any Subsidiary of the Company
designated as a Borrowing Subsidiary by the Company pursuant to Section 2.19
that has not ceased to be a Borrowing Subsidiary pursuant to such Section or
Article 7.
"Borrowing Subsidiary Agreement" means a Borrowing Subsidiary Agreement
substantially in the form of Exhibit D.
"Borrowing Subsidiary Termination" means a Borrowing Subsidiary
Termination substantially in the form of Exhibit E.
"Business Day" means any day that is not a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
remain closed; provided that (i) when used in connection with a Eurocurrency
Loan, the term "Business Day" shall also exclude any day on which banks are not
4
<PAGE> 10
open for dealings in deposits in the applicable currency in the London interbank
market and (ii) when used in connection with notices or payments to or from an
Applicable Agent, such term shall also exclude any day on which the Applicable
Agent is not open.
"Calculation Date" means the last Business Day of each calendar month and
such other Business Days during such calendar month as may be notified by the
Company to the Administrative Agent, provided that there shall be no more than
three Calculation Dates in any calendar month.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 30% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Company; or (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Company by Persons who were not (i) nominated by the board of directors of the
Company, (ii) appointed in connection with the Spin-off or (iii) appointed by
directors so nominated.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.14(c), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Dollar
Loans, Revolving Designated Currency Loans, Revolving Yen Loans, Competitive
Loans or Swingline Loans.
5
<PAGE> 11
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means a Facility Commitment, a Designated Currency Commitment
or a Yen Commitment.
"Company" means The New Dun & Bradstreet Corporation, a Delaware
corporation.
"Competitive Bid" means an offer by a Lender to make a Competitive Loan in
accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any Competitive Bid, the
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" means a request for Competitive Bids in
accordance with Section 2.04.
"Competitive Loan" means a Loan made pursuant to Section 2.04.
"Competitive Loan Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Competitive Loans
(or the Dollar Equivalent thereof in the case of a Competitive Loan in an
Eligible Currency) at such time.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"CP Index Debt" means unsecured commercial paper of the Company that is
not guaranteed by any other Person or subject to any other credit enhancement.
"D&B" means The Dun & Bradstreet Corporation, a Delaware corporation
(which will be renamed R. H. Donnelley Corporation in connection with the
Spin-off), and its successors.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Designated Currency" means Pounds Sterling, Euros (after their adoption
by participating members of the European Union) and any other Eligible Currency
that shall be designated by the Company in a notice delivered to the
Administrative
6
<PAGE> 12
Agent and approved by the Administrative Agent and all the Designated Currency
Lenders as a Designated Currency. The Company may specify in any notice
delivered to the Administrative Agent with respect to the designation of any
Eligible Currency one or more locations from which a Borrower may make payments
of principal of or interest on any Multicurrency Loans in such Eligible
Currency. Subject to the approval of the Administrative Agent and all the
Designated Currency Lenders, Schedule 2.17 shall be deemed to have been amended
to add each such location for payments with respect to Multicurrency Loans in
such Eligible Currency (but not any other Loans).
"Designated Currency Commitment" means, with respect to each Designated
Currency Lender, the commitment of such Designated Currency Lender to make
Revolving Designated Currency Loans, expressed as an amount representing the
maximum aggregate Dollar Equivalents of the principal amounts of such Designated
Currency Lender's outstanding Revolving Designated Currency Loans that may be
outstanding after giving effect to any such Revolving Designated Currency Loans,
as such commitment may be (a) reduced from time to time pursuant to Section 2.08
and (b) reduced or increased from time to time pursuant to assignments by or to
such Designated Currency Lender pursuant to Section 10.04. The initial amount of
each Designated Currency Lender's Designated Currency Commitment is set forth on
Schedule 2.01(b), in the Assignment and Acceptance pursuant to which such
Designated Currency Lender shall have assumed its Designated Currency
Commitment, as applicable.
"Designated Currency Lenders" means the Persons listed on Schedule 2.01(b)
and any other Person that shall have become a Designated Currency Lender
pursuant to any Assignment and Acceptance, other than a Person that ceases to be
a Designated Currency Lender pursuant to an Assignment and Acceptance.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Discontinued Companies" means The Reuben H. Donnelley Corporation and
Financial Information Services, and their respective subsidiaries.
"Distribution Agreement" means the Distribution Agreement between D&B and
the Company, substantially in the form set forth as Exhibit __ to the
Information Statement, as in effect on May 22, 1998.
"dollars" or "$" refers to lawful money of the United States of America.
"Dollar Equivalent" means, on any date of determination, with respect to
any amount in any Eligible Currency, the equivalent in dollars of such amount,
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<PAGE> 13
determined by the Administrative Agent pursuant to Section 1.05(a) using the
Exchange Rate with respect to such Eligible Currency then in effect.
"Domestic Borrowing Subsidiary" means any Borrowing Subsidiary organized
under the laws of any jurisdiction in the United States.
"Duff & Phelps" means Duff & Phelps Inc.
"EBITDA" means, for any period, the consolidated net income of the Company
and its consolidated Subsidiaries for such period plus, to the extent deducted
in computing such consolidated net income for such period, the sum (without
duplication) of (a) income tax expense, (b) Interest Expense, (c) depreciation
and amortization expense, (d) extraordinary losses, (e) non-cash charges
relating to the change in the Company's revenue recognition policy, which change
was adopted in the fourth fiscal quarter of the 1997 fiscal year, (regardless of
when such charges are recorded or recognized) in an aggregate amount not to
exceed $254,700,000, (f) losses (net of income taxes) resulting from the
operations of the Discontinued Companies (assuming that the Discontinued
Companies owned such operations during such period), but only to the extent such
operations are designated as discontinued operations and continue to be
designated as discontinued operations in the Company's financial statements and
(g) transaction costs recorded in the fiscal year 1998 as a result of the
Spin-off in an aggregate amount not to exceed $30,000,000, and minus, to the
extent added in computing such consolidated net income for such period the sum
(without duplication) of (i) interest income, (ii) extraordinary gains and (iii)
income (net of income taxes) resulting from the operations of the Discontinued
Companies (assuming that the Discontinued Companies owned such operations during
such period), but only to the extent such operations are designated as
discontinued operations and continue to be designated as discontinued operations
in the Company's financial statements.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 10.02).
"Eligible Currency" means at any time any Designated Currency, Yen or any
other currency (other than dollars) that is freely tradeable and exchangeable
into dollars in the London market and for which the Administrative Agent can
determine an Exchange Rate.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material.
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<PAGE> 14
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Company or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Company or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Euro" has the meaning assigned to the term "euro" in Section 10.15(a).
"Eurocurrency", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the LIBO Rate.
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<PAGE> 15
"Event of Default" has the meaning assigned to such term in Article 7.
"Exchange Rate" means, on any day, with respect to any Eligible Currency,
the rate at which such Eligible Currency may be exchanged into dollars (and, for
purposes of any provision of this Agreement requiring or permitting the
conversion of Multicurrency Loans to dollar Loans, the rate at which dollars may
be exchanged into the applicable Eligible Currency), as set forth at or about
9:00 a.m., New York City time, or at or about 11:00 a.m., London time, on such
date on the Reuters World Currency Page for such currency. In the event that
such rate does not appear on any Reuters World Currency Page, the Exchange Rate
shall be determined by reference to such other publicly available service for
displaying exchange rates as may be agreed upon by the Applicable Agent and the
Company, or, in the absence of such agreement, such Exchange Rate shall instead
be the arithmetic average of the spot rates of exchange of the Applicable Agent
in the market where its foreign currency exchange operations in respect of such
currency are then being conducted, on or about 11:00 a.m., New York City time,
or on or about 11:00 a.m., London time, on such date for the purchase of dollars
(or such foreign currency, as the case may be) for delivery two Business Days
later; provided that if at the time of any such determination, for any reason,
no such spot rate is being quoted, the Applicable Agent, after consultation with
the Company, may use any reasonable method it deems appropriate to determine
such rate, and such determination shall be presumed correct absent manifest
error.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income (including branch profits or similar taxes)
imposed as a result of a present or former connection between such Lender or the
Administrative Agent and the Governmental Authority imposing such tax (other
than any such connection arising solely from such Lender or the Administrative
Agent having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement) and (b) in the case of a Foreign
Lender, any withholding tax that is imposed on amounts payable to such Foreign
Lender to the extent they are in effect and would apply as of the date such
Foreign Lender becomes a party to this Agreement or designates a new lending
office (including withholding taxes that would be imposed on payments made by a
Borrowing Subsidiary the Relevant Jurisdiction with respect to which is the
United Kingdom, regardless of whether the Company has designated such a
Borrowing Subsidiary) (other than with respect to any Foreign Lender that is a
Foreign Lender with respect to any Borrowing Subsidiary that is designated after
the date of this Agreement (other than a Borrowing Subsidiary the Relevant
Jurisdiction with respect to which is United Kingdom)), or that is attributable
to such Foreign Lender's failure to comply with Section 2.16(e), except to the
extent that such
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<PAGE> 16
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from the applicable Borrower with respect to such withholding tax
pursuant to Section 2.16(a).
"Existing Credit Agreements" means the Multi-Year Revolving Credit and
Competitive Advance Facility and the 364-Day Revolving Credit and Competitive
Advance Facility, each dated as of August 30, 1996 and among D&B, the borrowing
subsidiaries party thereto, the lenders party thereto, The Chase Manhattan Bank,
as administrative agent, Citibank, N.A., as syndication agent, and Morgan
Guaranty Trust Company of New York, as documentation agent, each as in effect
immediately prior to the Effective Date.
"Facility Commitment" means, with respect to each Lender, the commitment
of such Lender to make Revolving Loans and to acquire participations in
Swingline Loans hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 10.04. The initial amount of each Lender's Facility
Commitment is set forth on Schedule 2.01(a), or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Facility Commitment, as
applicable. The initial aggregate amount of the Facility Commitments is
$300,000,000.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" of any Person means the chief financial officer,
principal accounting officer, treasurer or controller of such Person.
"Fixed Rate" means, with respect to any Competitive Loan (other than a
Eurocurrency Competitive Loan), the fixed rate of interest per annum specified
by the Lender making such Competitive Loan in its related Competitive Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at a Fixed
Rate.
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<PAGE> 17
"Foreign Lender" means, with respect to any Loan, any Lender making such
Loan that is organized under the laws of a jurisdiction other than the Relevant
Jurisdiction.
"Funded Revolving Credit Exposure" means, with respect to any Lender at
any time, the sum at such time, without duplication, of (a) the aggregate
principal amount at such time of the outstanding Revolving Dollar Loans of such
Lender, (b) the Dollar Equivalent of the aggregate principal amount of the
outstanding Revolving Yen Loans of such Lender, (c) the aggregate amount of the
Dollar Equivalents of the principal amounts of the outstanding Revolving
Designated Currency Loans of such Lender and (d) that portion of such Lender's
Swingline Exposure attributable to Swingline Loans in respect of which such
Lender has made (or is required to have made) payments to the Swingline Lender
pursuant to Section 2.05(c).
"GAAP" means generally accepted accounting principles in the United States
of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "primary
obligor"), whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials,
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<PAGE> 18
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing unconditional right to be secured by) any Lien
on property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed (the amount of any Indebtedness resulting from
this clause (e) shall be equal to the lesser of (i) the amount secured by such
Lien and (ii) the fair market value of the property subject to such Lien as
determined in good faith by such Person), (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty issued by banks or other
financial institutions and (i) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances created for the account of such
Person. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Index Debt" means LTD Index Debt or CP Index Debt.
"Information Memorandum" means the Confidential Information Memorandum
dated May, 1998 relating to the Company and the Transactions.
"Information Statement" means the Information Statement of D&B and the
Company dated May __, 1998, as amended or supplemented from time to time;
provided that no such material amendment or supplement of any term thereof shall
be effective for purposes of references thereto in this Agreement unless
approved in writing by the Required Lenders.
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<PAGE> 19
"Interest Coverage Ratio" means, for any period, the ratio of (a) EBITDA
for such period to (b) Interest Expense for such period. For purposes of
determining the "Interest Coverage Ratio" for any period ended prior to June 30,
1999, "Interest Expense" shall be calculated by giving effect to the Spin-off as
if it had occurred on the first day of such period.
"Interest Election Request" means a request by the relevant Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.07.
"Interest Expense" means, for any period, the interest expense of the
Company and its consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP and including (i) the amortization of
debt discounts to the extent included in interest expense in accordance with
GAAP, (ii) the amortization of all fees (including fees with respect to Hedging
Agreements) payable in connection with the incurrence of Indebtedness to the
extent included in interest expense in accordance with GAAP, (iii) the portion
of any rents payable under capital leases allocable to interest expense in
accordance with GAAP and (iv) minority interest financing expense of D&B
Investors, L.P. and Duns Licensing Associates, L.P.
"Interest Payment Date" means (a) with respect to any ABR Loan (other than
a Swingline Loan), the last day of each March, June, September and December, (b)
with respect to any Eurocurrency Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Eurocurrency Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
(c) with respect to any Fixed Rate Loan, the last day of the Interest Period
applicable to the Borrowing of which such Loan is a part and, in the case of a
Fixed Rate Borrowing with an Interest Period of more than 90 days' duration
(unless otherwise specified in the applicable Competitive Bid Request), each day
prior to the last day of such Interest Period that occurs at intervals of 90
days' duration after the first day of such Interest Period, and any other dates
that are specified in the applicable Competitive Bid Request as Interest Payment
Dates with respect to such Borrowing and (d) with respect to any Swingline Loan,
the day that such Loan is required to be repaid.
"Interest Period" means (a) with respect to any Eurocurrency Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the relevant Borrower may elect and (b) with respect
to any Fixed Rate Borrowing, the period (which shall not be less than one day or
more than 360 days) commencing on the date of such Borrowing and ending on
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<PAGE> 20
the date specified in the applicable Competitive Bid Request; provided, that (i)
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of a Eurocurrency Borrowing only, such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day and (ii) any Interest Period pertaining
to a Eurocurrency Borrowing that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be
the effective date of the most recent conversion or continuation of such
Borrowing.
"IRS Ruling" has the meaning set forth in Section 4.01(h).
"Judgment Currency" has the meaning assigned to such term in Section
10.14.
"Lenders" means the Persons listed on Schedule 2.01(a) and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance. Unless the context otherwise requires, the term
"Lenders" includes the Swingline Lender.
"LIBO Rate" means, with respect to any Eurocurrency Borrowing for any
Interest Period, the rate appearing on Page 3750 (or, in the case of a
Multicurrency Borrowing, the rate appearing on the Page for the applicable
Eligible Currency) of the Dow Jones Markets Service (or on any successor or
substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits (or, in the case of a Multicurrency Borrowing, deposits in the
applicable Eligible Currency) in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits (or the applicable Eligible
Currency) with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurocurrency Borrowing for such Interest Period shall be
the rate at which the Administrative Agent is offered dollar deposits of
$5,000,000 (or, in the case of a Multicurrency Borrowing, deposits in the
applicable Eligible Currency in an amount the Dollar Equivalent of which is
approximately equal to $5,000,000) and for a maturity
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<PAGE> 21
comparable to such Interest Period in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset of any Person, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset of any Person, for the purpose of securing any
obligation of such Person or any other Person, and (b) the interest of a vendor
or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset.
"Loans" means the loans made by the Lenders to the Borrowers pursuant to
this Agreement.
"London Agent" means Chase Manhattan International Limited.
"LTD Index Debt" means senior, unsecured, long-term indebtedness for
borrowed money of the Company that is not guaranteed by any other Person or
subject to any other credit enhancement.
"Margin" means, with respect to any Competitive Loan bearing interest at a
rate based on the LIBO Rate, the marginal rate of interest, if any, to be added
to or subtracted from the LIBO Rate to determine the rate of interest applicable
to such Loan, as specified by the Lender making such Loan in its related
Competitive Bid.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or financial condition of the Company and the
Subsidiaries taken as a whole, (b) the ability of the Company to perform any of
its payment obligations under this Agreement or (c) the rights of or benefits
available to the Lenders under this Agreement.
"Material Indebtedness" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of the Company and its
Subsidiaries in an aggregate principal amount exceeding $50,000,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Company or any Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Company or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.
"Material Subsidiary" means any Borrowing Subsidiary and any Subsidiary
(a) the Total Assets of which exceed 10% of the Total Assets of the Company and
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its consolidated Subsidiaries as of the end of the most recently completed
fiscal year or (b) the Net Revenue of which exceeds 10% of the Net Revenue of
the Company and its consolidated Subsidiaries as of the end of the most recently
completed fiscal year provided, that (i) any Subsidiary that directly or
indirectly owns a Material Subsidiary shall itself be a Material Subsidiary and
(ii) in the event Subsidiaries that would otherwise not be Material Subsidiaries
shall in the aggregate account for a percentage in excess of 15% of the Total
Assets or 15% of the Net Revenue, then one or more of such Subsidiaries
designated by the Company (or, if the Company shall make no designation, one or
more of such Subsidiaries in descending order based on their respective
contributions to Total Assets), shall be included as Material Subsidiaries to
the extent necessary to eliminate such excess.
"Maturity Date" means June 9, 2003 (or, if such day if not a Business Day,
the next succeeding Business Day).
"Multicurrency Borrowing" means a Borrowing comprised of Multicurrency
Loans.
"Multicurrency Loan" means a Revolving Loan denominated in Yen or in a
Designated Currency or a Competitive Loan in an Eligible Currency.
"Multicurrency Lender" means any Lender of a Multicurrency Loan.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Revenue" means, with respect to any Person for any period, the net
revenue of such Person and its consolidated subsidiaries, determined on a
consolidated basis in accordance with GAAP for such period.
"New D&B Assets" has the meaning set forth in the Distribution Agreement.
"Obligations" means the obligations of each of the Borrowing Subsidiaries
under this Agreement and the Borrowing Subsidiary Agreements with respect to the
payment of (i) the principal of and interest on the Loans to each such Borrowing
Subsidiary when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary
obligations of each of the Borrowing Subsidiaries hereunder and thereunder.
"Other Credit Agreement" means the 364-Day Revolving Credit and
Competitive Advance Facility dated as of June 9, 1998 among the Company, the
borrowing subsidiaries party thereto, the lenders party thereto, The Chase
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Manhattan Bank, as administrative agent, Citibank, N.A., as syndication agent,
and Morgan Guaranty Trust Company of New York, as documentation agent, as
amended from time to time.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means: (a) Liens imposed by law for taxes that
are not yet delinquent or are being contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's, landlords',
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 60 days
or are being contested in compliance with Section 5.04; (c) pledges and deposits
made in the ordinary course of business in compliance with workers'
compensation, unemployment insurance and other social security laws or
regulations; (d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business and deposits securing liabilities to insurance carriers under insurance
or self-insurance arrangements; and (e) easements, zoning restrictions,
rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected
property or interfere with the ordinary conduct of business of the Company or
any Subsidiary; provided that the term "Permitted Encumbrances" shall not
include any Lien securing Indebtedness.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Company or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by The Chase Manhattan Bank as its prime rate in effect at its
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principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning set forth in Section 10.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Relevant Jurisdiction" means (i) in the case of any Loan to the Company
or any Domestic Borrowing Subsidiary, the United States of America, and (ii) in
the case of any Loan to any other Borrowing Subsidiary, the jurisdiction
imposing (or having the power to impose) withholding tax on payments by such
Borrowing Subsidiary under this Agreement.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing at least 51% of the sum of the
total Revolving Credit Exposures and unused Commitments at such time; provided
that, for purposes of declaring the Loans to be due and payable pursuant to
Article 7, and for all purposes after the Loans become due and payable pursuant
to Article 7 or the Commitments expire or terminate, the total Competitive Loan
Exposures of the Lenders shall be included in their respective Revolving Credit
Exposures in determining the Required Lenders.
"Reset Date" has the meaning set forth in Section 1.05(a).
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans (or
the Dollar Equivalent thereof, in the case of Multicurrency Loans) and its
Swingline Exposure at such time.
"Revolving Designated Currency Borrowing" means a Borrowing comprised of
Revolving Designated Currency Loans.
"Revolving Designated Currency Loans" means the Loans made pursuant to
Section 2.01(b) that are denominated in Designated Currencies.
"Revolving Dollar Borrowing" means a Borrowing comprised of Revolving
Dollar Loans.
"Revolving Dollar Loans" means Loans denominated in dollars and made
pursuant to Section 2.01(a). Each Revolving Dollar Loan shall be a Eurocurrency
Loan or an ABR Loan.
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"Revolving Loans" means Revolving Dollar Loans, Revolving Yen Loans and
Revolving Designated Currency Loans.
"Revolving Yen Borrowing" means a Borrowing comprised of Revolving Yen
Loans.
"Revolving Yen Loans" means the Loans made pursuant to Section 2.01(c)
that are denominated in Yen.
"S&P" means Standard & Poor's.
"SPC" has the meaning set forth in Section 10.04(h).
"Spin-off" means all of the transactions contemplated by the Information
Statement and Article 2 of the Distribution Agreement to be consummated on or
prior to the Distribution Date (as defined therein), including without
limitation (i) the transfer by D&B to the Company of all of D&B's and its
subsidiaries' right, title and interest in the New D&B Assets, (ii) the transfer
by the Company and its subsidiaries to D&B, The Reuben H. Donnelley Corporation
and its subsidiaries of all of the Company's and its subsidiaries' right, title
and interest in the RHD Assets (as defined in the Distribution Agreement), (iii)
the execution, delivery and performance by each party thereto of each Spin-off
Document (other than the Information Statement) and (iv) the Distribution (as
defined in the Distribution Agreement).
"Spin-off Date" means the date of consummation of the Spin-off.
"Spin-off Documents" means (i) the Information Statement, (ii) the
Distribution Agreement and (iii) each Ancillary Agreement (as defined in the
Distribution Agreement) substantially in the form provided to the Lenders on
June 8, 1998.
"Statutory Reserve Rate" means, with respect to any Eligible Currency, a
fraction (expressed as a decimal), the numerator of which is the number one and
the denominator of which is the number one minus the aggregate of the maximum
reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by any Governmental Authority of
the jurisdiction of such currency (or any other jurisdiction in which the
funding operations of any Lender shall be conducted with respect to any Eligible
Currency) to which banks in such jurisdiction are subject for any category of
deposits or liabilities customarily used to fund loans in such currency or by
reference to which interest rates applicable to Loans in such Eligible Currency
are determined. Such reserve, liquid asset or similar percentages shall, in the
case of dollars, include those imposed pursuant to Regulation D of the Board.
Eurocurrency Loans shall
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be deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Sterling" or "(pound)" means the lawful money of the United Kingdom.
"subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Company.
"Successor Corporation" has the meaning set forth in Section 6.02(c).
"Swingline Exposure" means, at any time, the aggregate principal amount of
all Swingline Loans outstanding at such time. The Swingline Exposure of any
Lender at any time shall be its Applicable Percentage of the total Swingline
Exposures at such time.
"Swingline Lender" means The Chase Manhattan Bank, in its capacity as
lender of Swingline Loans hereunder.
"Swingline Loan" means a Loan in dollars made pursuant to Section 2.05.
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Assets" means, at any date as to any Person, the total assets of
such Person and its consolidated subsidiaries at such date, determined on a
consolidated basis in accordance with GAAP.
"Total Debt" means, at any date all indebtedness of the Company and its
consolidated Subsidiaries at such date to the extent such items should be
reflected
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on the consolidated balance sheet of the Company (excluding any such items which
appear only in the notes to such consolidated balance sheet) at such date in
accordance with GAAP.
"Total Debt to EBITDA Ratio" means, at any time, the ratio of (a) Total
Debt at such time to (b) EBITDA for the most recent period of four consecutive
fiscal quarters of the Company ended at or prior to such time. Solely for
purposes of this definition, (i) if the Company or any of its consolidated
subsidiaries shall have completed an acquisition of all or a substantial part of
the assets, or a going concern business or division, of any Person, or (ii) if
the Company shall have merged with any Person during such period or (iii) the
Company or any of its consolidated subsidiaries shall have disposed of all or a
substantial part of its assets or a going concern business or division, in each
case, EBITDA for the relevant period shall be determined on a pro forma basis as
if such acquisition, disposition or merger, and the incurrence of any related
Indebtedness, had occurred on the first day of such period. "Total Debt" for
purposes of the "Total Debt to EBITDA Ratio" at any date prior to the Spin-off
Date shall be calculated by giving effect to the Spin-off as if it had occurred
on such date.
"Transactions" means the execution, delivery and performance by the
Borrowers of this Agreement and the Borrowing Subsidiary Agreements, the
borrowing of Loans, the use of the proceeds thereof and the Spin-off.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the LIBO Rate, the Alternate Base Rate or, in the
case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.
"Yen" or "(Y)" refers to the lawful money of Japan.
"Yen Commitment" means, with respect to each Yen Lender, the commitment of
such Yen Lender to make Revolving Yen Loans, expressed as an amount representing
the maximum aggregate Dollar Equivalent of the principal amount of such Yen
Lender's outstanding Revolving Yen Loans that may be outstanding after giving
effect to any such Revolving Yen Loan, as such commitment may be (a) reduced
from time to time pursuant to Section 2.08 and (b) reduced or increased from
time to time pursuant to assignments by or to such Yen Lender pursuant to
Section 10.04. The initial amount of each Yen Lender's Yen Commitment is set
forth on Schedule 2.01(c) or in the Assignment and Acceptance pursuant to which
such Yen Lender shall have assumed its Yen Commitment, as applicable.
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"Yen Lenders" shall mean the Persons listed on Schedule 2.01(c) and any
other Person that shall become a Yen Lender pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a Yen Lender pursuant
to an Assignment and Acceptance.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurocurrency Loan") or by Class and Type (e.g., a
"Eurocurrency Revolving Loan"). Borrowings also may be classified and referred
to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurocurrency
Borrowing") or by Class and Type (e.g., a "Eurocurrency Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring
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after the date hereof in GAAP or in the application thereof on the operation of
such provision (or if the Administrative Agent notifies the Company that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
SECTION 1.05. Exchange Rates. (a) Not later than 1:00 p.m., New York City
time, on each Calculation Date, the Administrative Agent shall (i) determine the
Exchange Rate as of such Calculation Date with respect to each Eligible Currency
(A) in which any Lender or Lenders shall have extended a commitment to make
Loans or (B) in which any Loan or Loans shall be outstanding and (ii) give
notice thereof to the Lenders and the Company. The Exchange Rates so determined
shall become effective on the first Business Day immediately following the
relevant Calculation Date (a "Reset Date"), shall remain effective until the
next succeeding Reset Date, and shall for all purposes of this Agreement (other
than clause (i) of Section 2.13, Section 10.14 or any other provision expressly
requiring the use of a current Exchange Rate) be the Exchange Rates employed in
converting any amounts between dollars and Eligible Currencies.
(b) Not later than 5:00 p.m., New York City time, on each Reset Date and
each Borrowing Date with respect to Multicurrency Loans, the Administrative
Agent shall (iii) determine the Dollar Equivalent of the aggregate principal
amount of the Multicurrency Loans then outstanding (after giving effect to any
Multicurrency Loans to be made or repaid on such date) and (iv) notify the
Lenders and the Company of the results of such determination.
ARTICLE 2
THE CREDIT
Section 2.01. Commitments. (a) Subject to the terms and conditions set
forth herein, each Lender, severally and not jointly, agrees to make Revolving
Loans, denominated in dollars, to any Borrower from time to time during the
Availability Period for the Facility Commitments in an aggregate principal
amount that will not result in (i) such
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Lender's Revolving Credit Exposure exceeding such Lender's Facility Commitment
or (ii) the sum of the total Revolving Credit Exposures plus the total
Competitive Loan Exposures exceeding the total Facility Commitments.
(b) Subject to the terms and conditions set forth herein, each Designated
Currency Lender agrees to make Loans denominated in any Designated Currency to
any Borrower from time to time during the Availability Period for the Designated
Currency Commitments in an aggregate principal amount that, after giving effect
to any requested Loan, will not result in (i) the aggregate amount of the Dollar
Equivalents of the principal amounts of the Revolving Designated Currency Loans
of any Designated Currency Lender exceeding such Lender's Designated Currency
Commitment, (ii) the aggregate amount of the Dollar Equivalents of the principal
amounts of all outstanding Revolving Designated Currency Loans and Revolving Yen
Loans exceeding $200,000,000, (iii) any Lender's Revolving Credit Exposure
exceeding such Lender's Facility Commitment or (iv) the sum of the total
Revolving Credit Exposures plus the total Competitive Loan Exposures exceeding
the total Facility Commitments.
(c) Subject to the terms and conditions set forth herein, each Yen Lender
agrees to make Loans denominated in Yen to any Borrower from time to time during
the Availability Period for the Yen Commitments in an aggregate principal amount
that, after giving effect to any requested Loan, will not result in (i) the
Dollar Equivalent of the aggregate principal amount of the Revolving Yen Loans
of any Yen Lender exceeding such Lender's Yen Commitment, (ii) the aggregate
amount of the Dollar Equivalents of the principal amounts of all outstanding
Revolving Designated Currency Loans and Revolving Yen Loans exceeding
$200,000,000, (iii) any Lender's Revolving Credit Exposure exceeding such
Lender's Facility Commitment or (iv) the sum of the total Revolving Credit
Exposures plus the total Competitive Loan Exposures exceeding the total Facility
Commitments.
(d) Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Dollar Loan shall
be made as part of a Borrowing consisting of Revolving Loans denominated in
dollars and made by the Lenders ratably in accordance with their respective
Available Facility Commitments. Each Revolving Designated Currency Loan shall be
made as part of a Borrowing consisting of Revolving Loans denominated in the
same Designated Currency made by the Designated Currency Lenders ratably in
accordance with their respective Designated Currency Commitments. Each Revolving
Yen Loan shall be made as part of a Borrowing consisting of Revolving Loans
denominated in Yen
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and made by the Yen Lenders ratably in accordance with their respective Yen
Commitments. Each Competitive Loan shall be made in accordance with the
procedures set forth in Section 2.04. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments and Competitive Bids of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.13, (v) each Revolving Dollar Borrowing shall be
comprised entirely of ABR Loans or Eurocurrency Loans as the applicable Borrower
may request in accordance herewith, (vi) each Revolving Designated Currency
Borrowing shall be comprised entirely of Eurocurrency Loans, (iii) each
Revolving Yen Borrowing shall be comprised entirely of Eurocurrency Loans and
(iv) each Competitive Borrowing shall be comprised entirely of Eurocurrency
Competitive Loans or Fixed Rate Loans as the applicable Borrower may request in
accordance herewith. Each Swingline Loan shall be an ABR Loan. Each Lender at
its option may make any Eurocurrency Loan by causing any domestic or foreign
branch or Affiliate of such Lender to make such Loan; provided that (i) any
exercise of such option shall not affect the obligation of any Borrower to repay
such Loan in accordance with the terms of this Agreement and (ii) unless any
Borrower shall request that an Affiliate of a Lender make a Loan, a Lender may
not recover for any increased costs under Sections 2.14 or 2.16 incurred solely
as a result of an Affiliate of such Lender, rather than such Lender, making a
Loan, if, without economic disadvantage to, and consistent with the policies and
practices of, such Lender, such Loan could have been made in a manner that would
have avoided such increased costs under Section 2.14 or 2.16.
(c) At the commencement of each Interest Period for any Borrowing (other
than a Swingline Loan), such Borrowing shall be in an aggregate amount that is
at least equal to the Borrowing Minimum and an integral multiple equal to the
Borrowing Multiple; provided that (i) a Eurocurrency Revolving Borrowing that is
a Multicurrency Borrowing may be continued into a new Interest Period pursuant
to Section 2.07 without regard to the foregoing and (ii) an ABR Revolving Dollar
Borrowing may be in an aggregate amount that is equal to the aggregate Available
Facility Commitments. Each Swingline Loan shall be in an amount that is an
integral multiple of $100,000 and not less than $500,000. Borrowings of more
than one Type and Class may be outstanding at the same time; provided that there
shall not at any time be more than a total of twenty (but no more than ten in
any one currency) Eurocurrency Revolving Borrowings outstanding.
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(d) Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request, or to elect to convert or continue, any Borrowing
if the Interest Period requested with respect thereto would end after the
Maturity Date.
SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving
Borrowing, a Borrower shall notify the Applicable Agent of such request by
telephone (a) in the case of a Eurocurrency Borrowing denominated in dollars,
not later than 11:00 a.m., New York City time, three Business Days before the
date of the proposed Borrowing, (b) in the case of an ABR Borrowing, not later
than 11:00 a.m., New York City time, one Business Day before the date of the
proposed Borrowing and (c) in the case of a Revolving Designated Currency
Borrowing or a Revolving Yen Borrowing, not later than 10:00 a.m., London time,
three Business Days before the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Applicable Agent of a written
Borrowing Request in a form approved by the Applicable Agent and signed by the
applicable Borrower. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurocurrency Borrowing;
(iv) in the case of a Eurocurrency Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period", and the currency of such
Borrowing, which shall be dollars, Yen or a Designated Currency; and
(v) the location and number of the relevant Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.06; and
(vi) in the case of a Borrowing in Yen or a Designated Currency, the
location from which payments of the principal and interest on such
Borrowing will be made, which will comply with the requirements of Section
2.17.
If no election as to the Type of Revolving Dollar Borrowing is specified, then
the requested Revolving Dollar Borrowing shall be an ABR Borrowing. If no
currency is specified with respect to any requested Eurocurrency Revolving
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Borrowing, then the relevant Borrower shall be deemed to have selected dollars.
If no Interest Period is specified with respect to any requested Eurocurrency
Revolving Borrowing, then the relevant Borrower shall be deemed to have selected
an Interest Period of one month's duration. Promptly following receipt of a
Borrowing Request in accordance with this Section, the Applicable Agent shall
advise each Lender of the details thereof and of the amount of such Lender's
Loan to be made as part of the requested Borrowing.
SECTION 2.04. Competitive Bid Procedure. (a) Subject to the terms and
conditions set forth herein, from time to time during the Availability Period
any Borrower may request Competitive Bids and may (but shall not have any
obligation to) accept Competitive Bids and borrow Competitive Loans; provided
that the sum of the total Revolving Credit Exposures plus the total Competitive
Loan Exposures at any time shall not exceed the total Facility Commitments. To
request Competitive Bids, a Borrower shall notify the Applicable Agent of such
request by telephone, (i) in the case of a Eurocurrency Borrowing denominated in
dollars, not later than 11:00 a.m., New York City time, four Business Days
before the date of the proposed Borrowing, (ii) in the case of a Eurocurrency
Borrowing denominated in an Eligible Currency, not later than 10:00 a.m., London
time, four Business Days before the date of the proposed Borrowing, (iii) in the
case of a Fixed Rate Borrowing denominated in dollars, not later than 10:00
a.m., New York City time, one Business Day before the date of the proposed
Borrowing and (iv) in the case of a Fixed Rate Borrowing denominated in an
Eligible Currency, not later than 10:00 a.m., London time, four Business Days
before the date of the proposed Borrowing; provided that the Borrowers may
submit jointly up to (but not more than) three Competitive Bid Requests on the
same day, but a Competitive Bid Request shall not be made within five Business
Days after the date of any previous Competitive Bid Request, unless any and all
such previous Competitive Bid Requests shall have been withdrawn or all
Competitive Bids received in response thereto rejected. Each such telephonic
Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy
to the Applicable Agent of a written Competitive Bid Request in a form approved
by the Applicable Agent and signed by the applicable Borrower. Each such
telephonic and written Competitive Bid Request shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a Eurocurrency Borrowing or a
Fixed Rate Borrowing;
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(iv) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term "Interest
Period", and the currency of such Borrowing which shall be dollars or an
Eligible Currency; and
(v) the location and number of the relevant Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.06; and
(vi) in the case of a Borrowing in Yen or a Designated Currency,
the location from which payments of the principal and interest on such
Borrowing will be made, which will comply with the requirements of Section
2.17.
If no currency is specified with respect to any Competitive Bid Request, the
relevant Borrower shall be deemed to have selected dollars. Promptly following
receipt of a Competitive Bid Request in accordance with this Section, the
Applicable Agent shall notify the Lenders of the details thereof by telecopy,
inviting the Lenders to submit Competitive Bids.
(b) Each Lender may (but shall not have any obligation to) make one or
more Competitive Bids to any Borrower in response to a Competitive Bid Request.
Each Competitive Bid by a Lender must be in a form reasonably approved by the
Applicable Agent and must be received by the Applicable Agent by telecopy, (i)
in the case of a Eurocurrency Competitive Borrowing denominated in dollars, not
later than 9:30 a.m., New York City time, three Business Days before the
proposed date of such Competitive Borrowing, (ii) in the case of a Eurocurrency
Competitive Borrowing denominated in an Eligible Currency, not later than 10:30
a.m., London time, three Business Days before the date of the proposed
Competitive Borrowing, (iii) in the case of a Fixed Rate Borrowing denominated
in dollars, not later than 9:30 a.m., New York City time, on the proposed date
of such Competitive Borrowing and (iv) in the case of a Fixed Rate Borrowing
denominated in an Eligible Currency, not later than 10:30 a.m., London time,
three Business Days before the date of the proposed Competitive Borrowing.
Competitive Bids that do not conform substantially to the form approved by the
Applicable Agent may be rejected by the Applicable Agent, and the Applicable
Agent shall notify the applicable Lender as promptly as practicable. Each
Competitive Bid shall specify (i) the principal amount (which shall be in an
amount that is at least equal to the Borrowing Minimum and an integral multiple
equal to the Borrowing Multiple, and which may equal the entire principal amount
of the Competitive Borrowing requested by the applicable Borrower) of the
Competitive Loan or Loans that the Lender is willing to make, (ii the
Competitive Bid Rate or
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Rates at which the Lender is prepared to make such Loan or Loans (expressed as a
percentage rate per annum in the form of a decimal to no more than four decimal
places), (iii) the Interest Period applicable to each such Loan and the last day
thereof and (iv) the currency of the Competitive Borrowing.
(c) The Applicable Agent shall promptly notify the relevant Borrower by
telecopy of the Competitive Bid Rate and the principal amount specified in each
Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, a Borrower may
accept or reject any Competitive Bid. The relevant Borrower shall notify the
Applicable Agent by telephone, confirmed by telecopy in a form reasonably
approved by the Applicable Agent, whether and to what extent it has decided to
accept or reject each Competitive Bid, (i) in the case of a Eurocurrency
Competitive Borrowing denominated in dollars, not later than 10:30 a.m., New
York City time, three Business Days before the date of the proposed Competitive
Borrowing, (ii) in the case of a Eurocurrency Competitive Borrowing denominated
in an Eligible Currency, not later than 10:30 a.m., London time, three Business
Days before the date of the proposed Competitive Borrowing, (iii) in the case of
a Fixed Rate Borrowing denominated in dollars, not later than 10:30 a.m., New
York City time, on the proposed date of the Competitive Borrowing and (iv) in
the case of a Fixed Rate Borrowing denominated in an Eligible Currency, not
later than 10:30 a.m., London time, three Business Days before the date of the
proposed Competitive Borrowing; provided that (i) the failure of such Borrower
to give such notice shall be deemed to be a rejection of each Competitive Bid,
(ii) such Borrower shall not accept a Competitive Bid made at a particular
Competitive Bid Rate if such Borrower rejects a Competitive Bid made at a lower
Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids
accepted by such Borrower shall not exceed the aggregate amount of the requested
Competitive Borrowing specified in the related Competitive Bid Request, (iv)
to the extent necessary to comply with clause (iii) above, such Borrower may
accept Competitive Bids at the same Competitive Bid Rate in part, which
acceptance, in the case of multiple Competitive Bids at such Competitive Bid
Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive
Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in
a minimum principal amount of at least the Borrowing Minimum and an integral
multiple equal to the Borrowing Multiple; provided further that if a Competitive
Loan must be in an amount less than the Borrowing Minimum because of the
provisions of clause (iv) above, such Competitive Loan may be for a minimum of
$1,000,000 (or the Dollar Equivalent thereof), and in calculating the pro rata
allocation of acceptances of portions of multiple Competitive Bids at a
particular
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Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to
integral multiples of the Borrowing Multiple in a manner determined by such
Borrower. A notice given by any Borrower pursuant to this paragraph shall be
irrevocable.
(e) The Applicable Agent shall promptly notify each bidding Lender by
telecopy whether or not its Competitive Bid has been accepted (and, if so, the
amount and Competitive Bid Rate so accepted), and each successful bidder will
thereupon become bound, subject to the terms and conditions hereof, to make the
Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such Competitive Bid directly to the
relevant Borrower at least one quarter of an hour earlier than the time by which
the other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) of this Section.
SECTION 2.05. Swingline Loans. (a) Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans in dollars
to any Borrower from time to time during the Availability Period, in an
aggregate principal amount at any time outstanding that will not result in (ix)
the aggregate principal amount of outstanding Swingline Loans exceeding
$20,000,000 or (x) the sum of the total Revolving Credit Exposures plus the
total Competitive Loan Exposures exceeding the total Facility Commitments;
provided that the Swingline Lender shall not be required to make a Swingline
Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and
subject to the terms and conditions set forth herein, any Borrower may borrow,
prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, a Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 1:00 p.m., New York City time, on the day of a proposed Swingline
Loan. Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from any Borrower. The Swingline Lender shall make each
Swingline Loan available to the relevant Borrower by means of a credit to the
general deposit account of the Company with the Swingline Lender by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan (and if the
applicable Borrower is a Borrowing Subsidiary, the Company shall make such funds
available to such Borrowing Subsidiary) or to such other account as may be
specified in the applicable Borrowing Request.
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(c) The Swingline Lender may by written notice given to the Administrative
Agent not later than 10:00 a.m., New York City time, on any Business Day require
the Lenders to acquire participations on such Business Day in all or a portion
of the Swingline Loans outstanding. Such notice shall specify the aggregate
amount of Swingline Loans in which Lenders will participate. Promptly upon
receipt of such notice, the Administrative Agent will give notice thereof to
each Lender, specifying in such notice such Lender's Applicable Percentage of
such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally
agrees, upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of the Swingline Lender, such Lender's Applicable
Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment shall
be made without any offset, abatement, withholding or reduction whatsoever. Each
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Lenders. The Administrative Agent shall notify the relevant Borrower of
any participations in any Swingline Loan acquired pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from any Borrower (or other party on behalf of such
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Lenders that
shall have made their payments pursuant to this paragraph and to the Swingline
Lender, as their interests may appear. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve the relevant
Borrower of any default in the payment thereof.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by (i) 12:00 noon, New York City time, in case of a
Loan denominated in dollars, (ii) 11:00 a.m., London time, in the case of a
Revolving Designated Currency Loan,
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(iii) 11:00 a.m., Tokyo time, in the case of a Revolving Yen Loan or (iv) 11:00
a.m., local time, in the case of a Competitive Loan denominated in an Eligible
Currency, in each case to the account of the Applicable Agent most recently
designated by it for such purpose for Loans of such Class by notice to the
applicable Lenders; provided that Swingline Loans shall be made as provided in
Section 2.05. The Applicable Agent will make such Loans available to the
relevant Borrower (i) in case of a Loan denominated in dollars, promptly (but in
no event later than 1:00 p.m., New York City time), by crediting the amounts so
received by 12:00 noon, New York City time, in like funds, to an account of the
Company maintained with the Administrative Agent in New York City, (ii) in the
case of Revolving Designated Currency Loans, promptly (but in no event later
than 12:00 noon, London time), by crediting the amounts so received by 11:00
a.m., London time, in like funds, to an account of the Company maintained with
the Applicable Agent in London, (iii) in the case of Revolving Yen Loans,
promptly (but in no event later than 12:00 noon, Tokyo time), by crediting the
amounts so received by 11:00 a.m., Tokyo time, in like funds, to an account of
the Company maintained with the Applicable Agent in London (in each case as
designated by such Borrower in the applicable Borrowing Request or Competitive
Bid Request (and, if the applicable Borrower is a Borrowing Subsidiary, the
Company shall make such funds available to such Borrowing Subsidiary)), or (iv)
to such other account as may be specified in the applicable Borrowing Request or
Competitive Bid Request.
(b) Unless the Applicable Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Applicable Agent such Lender's share of such Borrowing, the
Applicable Agent may assume that such Lender has made such share available on
such date in accordance with paragraph (a) of this Section and may, in reliance
upon such assumption, make available to the relevant Borrower a corresponding
amount. In such event, if a Lender has not in fact made its share of the
applicable Borrowing available to the Applicable Agent, then the applicable
Lender and each Borrower severally agree to pay to the Applicable Agent
forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the relevant
Borrower to but excluding the date of payment to the Applicable Agent, at (i)
in the case of such Lender, (x) the Federal Funds Effective Rate (in the case of
a Borrowing in dollars) and (y) the rate reasonably determined by the Applicable
Agent to be the cost to it of funding such amount (in the case of a Borrowing in
an Eligible Currency) or (ii) in the case of such Borrower, the interest rate
applicable to the subject Loan. If such Lender pays such amount to the
Applicable Agent, then such amount shall constitute such Lender's Loan included
in such Borrowing and the Applicable Agent shall return to such Borrower any
amount (including interest) paid by the
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Borrower to the Applicable Agent pursuant to this paragraph with respect to such
amount.
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurocurrency Revolving Borrowing, shall have an initial Interest
Period as specified in such Borrowing Request. Thereafter, the relevant Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurocurrency Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. A Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Competitive Borrowings or Swingline Borrowings, which may not be converted or
continued. Notwithstanding any contrary provision herein, this Section shall not
be construed to permit any Borrower to (i) change the currency of any Borrowing
or (ii) convert any Multicurrency Borrowing to an ABR Borrowing, subject to
clause (iii) of subsection (e) below.
(b) To make an election pursuant to this Section, a Borrower shall notify
the Administrative Agent of such election by telephone by the time and at the
office at which a Borrowing Request would be required to be delivered under
Section 2.03 if such Borrower were requesting a Revolving Borrowing of the Type
resulting from such election to be made on the effective date of such election.
Each such telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Interest Election Request in a form reasonably approved by the
Administrative Agent and signed by the relevant Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
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(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or
a Eurocurrency Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurocurrency Borrowing but does
not specify an Interest Period, then such Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the relevant Borrower fails to deliver a timely Interest Election
Request with respect to a Eurocurrency Revolving Borrowing prior to the end of
the Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing (unless such Borrowing is a Multicurrency
Borrowing, in which case such Borrowing shall be continued at the end of the
Interest Period applicable thereto as a Eurocurrency Revolving Borrowing with an
Interest Period of a duration of one month). Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Applicable Agent, at the request of the Required Lenders, so notifies the
Company, then, so long as an Event of Default is continuing (i) no outstanding
Revolving Borrowing may be converted to or continued as a Eurocurrency Borrowing
(except as set forth in clause (ii)(y)) and (ii) unless repaid (x) each
Eurocurrency Revolving Borrowing (other than a Multicurrency Borrowing) shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto and (y) each Multicurrency Borrowing shall be continued at the end of
the Interest Period applicable thereto as a Multicurrency Borrowing with an
Interest Period of a duration of one month.
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
previously terminated, the Facility Commitments, the Designated Currency
Commitments and the Yen Commitments shall each terminate on the Maturity Date.
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(b) The Company may at any time terminate, or from time to time reduce,
the Facility Commitments, the Designated Currency Commitments or the Yen
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000
and (ii) the Company shall not terminate or reduce (A) the Facility Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.10, the sum of the Revolving Credit Exposures plus the total
Competitive Loan Exposures would exceed the total Facility Commitments, (B0 the
Designated Currency Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.10, the aggregate principal
amount of the outstanding Revolving Designated Currency Loans would exceed the
total Designated Currency Commitments, or (C) the Yen Commitments if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.10, the aggregate principal amount of the outstanding Revolving Yen
Loans would exceed the total Yen Commitments.
(c) The Company shall notify the Administrative Agent of any election to
terminate or reduce the Facility Commitments, the Designated Currency
Commitments or the Yen Commitments under paragraph (b) of this Section at least
one Business Day (or, to the extent a concurrent prepayment of Loans is required
in accordance with Section 2.10, upon the minimum advance notice required in
connection with such prepayment under such Section) prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Facility Commitments, the Designated Currency Commitments or
the Yen Commitments delivered by the Company may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Company (by notice to the Administrative Agent
on or prior to the specified effective date) if such condition is not satisfied.
Any termination or reduction of the Facility Commitments, the Designated
Currency Commitments or the Yen Commitments shall be permanent. Each reduction
of the Facility Commitments, the Designated Currency Commitments or the Yen
Commitments shall be made ratably among the Lenders, the Designated Currency
Lenders or the Yen Lenders, as the case may be, in accordance with their
respective Facility Commitments, Designated Currency Commitments or Yen
Commitments, as applicable.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) Each Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal
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amount of each Revolving Loan of such Borrower on the Maturity Date, (ii) to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Competitive Loan of such Borrower on the last day of the Interest
Period applicable to such Loan and (iii) to the Swingline Lender the then unpaid
principal amount of each Swingline Loan of such Borrower on the earlier of the
Maturity Date and the first date after such Swingline Loan is made that is the
15th or last day of a calendar month and is at least two Business Days after
such Swingline Loan is made.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type (and, in
the case of a Multicurrency Loan, the currency) thereof and the Interest Period
(if any) applicable thereto, (ii) the amount of any principal or interest due
and payable or to become due and payable from each Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of any Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, each Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent and the Company. Thereafter, the Loans
evidenced by each such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.10. Prepayment of Loans. (a) Any Borrower shall have the right
at any time and from time to time to prepay any Borrowing of such Borrower in
whole or in part, subject to prior notice in accordance with paragraph (d) of
this Section; provided that no Borrower shall have the right to prepay any
Competitive Loan without the prior consent of the Lender thereof.
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(b) If, on the last day of any Interest Period for any Borrowing, the sum
of the total Revolving Credit Exposures plus the total Competitive Loan
Exposures exceeds the total Facility Commitments, the relevant Borrower shall,
on such day, prepay Revolving Loans in an amount equal to the lesser of (i) such
excess and (ii) the amount of such Borrowing. If, on any Reset Date, the sum of
the total Revolving Credit Exposures plus the total Competitive Loan Exposures
exceeds 105% of the total Facility Commitments, then the Borrowers shall, on the
next Reset Date, prepay one or more Revolving Borrowings in an aggregate
principal amount equal to the excess, if any, of the sum of the total Revolving
Credit Exposures plus the total Competitive Loan Exposures (in each case as of
such next Reset Date) over the total Facility Commitments.
(c) If, on the last day of any Interest Period for any Multicurrency
Borrowing, the Dollar Equivalent of the aggregate principal amount of
outstanding Multicurrency Loans exceeds $200,000,000, the relevant Borrower
shall, on such day, prepay such Multicurrency Borrowing in an amount equal to
the lesser of (i) such excess and (ii) the amount of such Borrowing. If, on any
Reset Date, the Dollar Equivalent of the aggregate principal amount of
outstanding Multicurrency Loans exceed 105% of $200,000,000, then the Borrowers
shall, on the next Reset Date, prepay one or more Multicurrency Borrowings in an
aggregate principal amount equal to the excess, if any, of the Dollar Equivalent
of the aggregate principal amount of outstanding Multicurrency Loans (as of such
next Reset Date) over $200,000,000.
(d) The relevant Borrower shall notify the Applicable Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurocurrency Revolving Dollar Borrowing, not later than 11:00
a.m., New York City time, three Business Days before the date of prepayment,
(ii) in the case of prepayment of a Eurocurrency Designated Currency Borrowing
or a Eurocurrency Yen Borrowing, not later than 10:00 a.m., London time, three
Business Days before the date of prepayment, (iii) in the case of prepayment of
an ABR Revolving Borrowing, not later than 11:00 a.m., New York City time, one
Business Day before the date of prepayment, or (iv) in the case of prepayment of
a Swingline Loan, not later than 12:00 noon, New York City time, on the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
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be prepaid; provided that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Facility Commitments, the Designated
Currency Commitments or the Yen Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any such
notice relating to a Revolving Borrowing, the Administrative Agent shall advise
the Lenders of the contents thereof. Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Revolving Borrowing of the same Type as provided in Section 2.02
(other than any partial prepayment made concurrently with a reduction of the
commitments permitted by Section 2.08(b), which may be in the amount necessary
to comply with the condition to such reduction set forth in such Section). Each
prepayment of a Revolving Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.12.
SECTION 2.11. Fees. (a) The Company agrees to pay to the Administrative
Agent for the account of each Lender a facility fee, which shall accrue at the
Applicable Rate on the daily amount of the Facility Commitment of such Lender
(whether used or unused) during the period from and including the date hereof to
but excluding the date on which such Facility Commitment terminates; provided
that, if such Lender continues to have any Revolving Credit Exposure or
Competitive Loan Exposure after its Facility Commitment terminates, then such
facility fee shall continue to accrue on the daily amount of such Lender's
Revolving Credit Exposure or Competitive Loan Exposure from and including the
date on which its Facility Commitment terminates to but excluding the date on
which such Lender ceases to have any Revolving Credit Exposure or Competitive
Loan Exposure. Accrued facility fees shall be payable in arrears on the last day
of March, June, September and December of each year and on the date on which the
Facility Commitments terminate, commencing on the first such date to occur after
the date hereof; provided that any facility fees accruing after the date on
which the Facility Commitments terminate shall be payable on demand. All
facility fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).
(b) The Company agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Company and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the
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case of facility fees, to the Lenders. Fees paid shall not be refundable under
any circumstances.
SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at a rate per annum equal to
the Alternate Base Rate.
(b) The Loans comprising each Eurocurrency Borrowing shall bear interest
at a rate per annum equal to (i) in the case of a Eurocurrency Revolving Loan,
the LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate, or (ii) in the case of a Eurocurrency Competitive Loan, the
LIBO Rate for the Interest Period in effect for such Borrowing plus (or minus,
as applicable) the Margin applicable to such Loan.
(c) Each Fixed Rate Loan shall bear interest at a rate per annum equal to
the Fixed Rate applicable to such Loan.
(d) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by any Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Loans as provided above.
(e) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to paragraph (d) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Availability Period for the Facility
Commitments), accrued interest on the principal amount repaid or prepaid shall
be payable on the date of such repayment or prepayment, (iii) in the event of
any conversion of any Eurocurrency Revolving Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be payable
on the effective date of such conversion and (iv) all accrued interest shall be
payable upon termination of the Facility Commitments.
(f) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but
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excluding the last day). The applicable Alternate Base Rate or LIBO Rate shall
be determined by the Administrative Agent, and such determination shall be
presumed correct absent manifest error.
SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurocurrency Borrowing:
(a) the Administrative Agent determines (which determination shall be
presumed correct absent manifest error) that adequate and reasonable means do
not exist for ascertaining the LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders (or, (i)
in the case of a Eurocurrency Competitive Loan, the Lender that is required to
make such Loan or (ii) in the case of a Revolving Designated Currency Loan or
Revolving Yen Loan, as the case may be, Designated Currency Lenders or Yen
Lenders, as applicable, having Designated Currency Commitments or Yen
Commitments, as applicable, representing at least 51% of the Designated Currency
Commitments or Yen Commitments, as applicable, at such time) that the LIBO Rate
for such Interest Period will not adequately and fairly reflect the cost to such
Lenders (or Lender) of making or maintaining their Loans (or its Loan) included
in such Borrowing for such Interest Period; or
(c) in the case of a Multicurrency Borrowing, the Administrative Agent
determines (which determination shall be presumed correct absent manifest error)
that deposits in the applicable currency are not generally available, or cannot
be obtained by the Multicurrency Lenders in the applicable market;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders or the applicable Multicurrency Lenders by telephone or telecopy as
promptly as practicable thereafter and, until the Administrative Agent notifies
the Company and the Lenders or the applicable Multicurrency Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurocurrency Borrowing shall be
ineffective, and any Eurocurrency Borrowing so requested to be continued shall,
at the option of the Company, be repaid in full on the last day of the Interest
Period applicable thereto, or be converted to an ABR Borrowing denominated in
dollars (and in the case of a Multicurrency Borrowing, such conversion shall be
made at the Exchange Rate determined by the Administrative Agent on the last day
of the then current Interest Period with respect thereto), (ii) if any Borrowing
Request requests a Eurocurrency Revolving Borrowing (other than a Multicurrency
Borrowing), such Borrowing shall be made as an ABR Borrowing and (iii) any
request by any Borrower for a Eurocurrency Competitive Borrowing or a
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Multicurrency Borrowing shall be ineffective; provided that if the circumstances
giving rise to such notice do not affect all the Lenders, then requests for
Eurocurrency Competitive Borrowings may be made to Lenders that are not affected
thereby and, if the circumstances giving rise to such notice do not affect all
applicable currencies, then requests for Eurocurrency Borrowings may be made in
the currencies that are not affected thereby and, if the circumstances giving
rise to such notice only affect one Type of Borrowing, then the other Type of
Borrowing shall not be affected.
SECTION 2.14. Increased Costs. (a) If any Governmental Authority shall
have in effect any reserve, liquid asset or similar requirement with respect to
any category of deposits or liabilities customarily used to fund Loans, or by
reference to which interest rates applicable to Loans are determined, and the
result of such requirement shall be to increase the cost to such Lender of
making or maintaining any Loan, and such Lender shall deliver to the Company a
notice requesting compensation under this paragraph and setting forth the
applicable Statutory Reserve Rate, then the Company shall pay to such Lender on
each Interest Payment Date with respect to each affected Loan additional
interest at a rate per annum up to but not exceeding the excess of (i) the rate
otherwise applicable to such Loan (the "Applicable Interest Rate") divided by
one minus the applicable Statutory Reserve Rate over (ii) the Applicable
Interest Rate.
(b) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
covered by subsection (a) above); or
(ii) impose on any Lender or the London interbank market (or any
other market in which the funding operations of such Lender shall be
conducted with respect to any Eligible Currency) any other condition
affecting this Agreement or Eurocurrency Loans or Fixed Rate Loans made by
such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurocurrency Loan or Fixed Rate Loan (or of
maintaining its obligation to make any such Loan) or to reduce the amount of any
sum received or receivable by such Lender in respect thereof hereunder (whether
of principal, interest or otherwise), then the Company will pay to such Lender
such
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additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.
(c) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Company will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(d) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a), (b) or (c) of this Section shall be delivered to
the Company and shall be presumed correct absent manifest error. The Company
shall pay such Lender the amount due under this Section within 10 days after
receipt of the relevant certificate.
(e) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Company shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than six months prior to the date that such Lender
notifies the Company of the Change in Law giving rise to such increased costs or
reductions and of such Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof.
(f) Notwithstanding the foregoing provisions of this Section, a Lender
shall not be entitled to compensation pursuant to this Section in respect of any
Competitive Loan if the Change in Law that would otherwise entitle it to such
compensation shall have been publicly announced or be otherwise known to it
prior to submission of the Competitive Bid pursuant to which such Loan was made.
SECTION 2.15. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurocurrency Loan or Fixed Rate Loan other than on the last
day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurocurrency Loan other than on the last
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day of the Interest Period applicable thereto, (c) the conversion of any
Multicurrency Loan to a dollar denominated Loan pursuant to any Section of this
Agreement, (d) the failure to borrow, convert, continue or prepay any
Eurocurrency Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether such notice is permitted to be revocable under Section
2.10(d) and is revoked in accordance herewith), (e) the failure to borrow any
Eurocurrency Competitive Loan after accepting the Competitive Bid to make such
Loan, or (f) the assignment of any Eurocurrency Loan or Fixed Rate Loan other
than on the last day of the Interest Period applicable thereto as a result of a
request by the Company pursuant to Section 2.18, then, in any such event, the
Company shall compensate each Lender for the loss, cost and expense attributable
to such event (and in the case of any conversion of Multicurrency Loans to
dollar Loans, such loss, cost or expense shall also include any loss, cost or
expense sustained by a Multicurrency Lender as a result of such conversion). In
the case of a Eurocurrency Loan, the loss to any Lender attributable to any such
event shall be deemed to include an amount determined by such Lender to be
equal, except as otherwise provided in the final parenthetical in the preceding
sentence, to the excess, if any, of (i) the amount of interest that such Lender
would pay for a deposit equal to the principal amount of such Loan (and in the
same currency as such Loan) for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, convert or
continue, the duration of the Interest Period that would have resulted from such
borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the LIBO Rate for such Interest Period, over (ii) the
amount of interest that such Lender would earn on such principal amount for such
period if such Lender were to invest such principal amount for such period at
the interest rate that would be bid by such Lender (or an affiliate of such
Lender) for deposits in the same currency from other banks in the eurodollar
market at the commencement of such period. A certificate of any Lender setting
forth any amount or amounts that such Lender is entitled to receive pursuant to
this Section shall be delivered to the Company and shall be presumed correct
absent manifest error. The Company shall pay such Lender the amount due under
this Section within 10 days after receipt of the relevant certificate.
SECTION 2.16. Taxes. (a) Any and all payments by or an account of any
obligation of any Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if any
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an
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amount equal to the sum it would have received had no such deductions been made,
(ii) such Borrower shall make such deductions and (iii) such Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The relevant Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of any Borrower hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section), and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Company by a Lender, or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by any Borrower to a Governmental Authority, such Borrower shall deliver
to the Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Each Lender that is not a United States person as defined in section
7701(a)(30) of the Code shall, if legally able to do so, prior to the
immediately following due date of any payment by the Borrower under this
Agreement, deliver to the Borrower Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Lender claiming exemption from U.S. federal
withholding tax with respect to payments under this Agreement under section
871(h) or 881(c) of the code relating to payments of "portfolio interest", a
statement substantially in the form of Exhibit F, and any other certificate or
statement of exemption or any subsequent version thereof or successors thereto,
properly completed and duly executed by such Lender claiming complete exemption
or a reduced rate of United States federal withholding tax. Any Foreign Lender
that is entitled to an exemption from or reduction of withholding tax with
respect to payments under this Agreement pursuant to the law of a Relevant
Jurisdiction, other than the United States of America, or under any treaty to
which a Relevant Jurisdiction is a party shall deliver to the Borrower (with a
copy to the Administrative Agent), at
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the time or times prescribed by applicable law, such properly completed and
executed documentation prescribed by applicable law or reasonably requested by
the Borrower as will permit such payments to be made without withholding or at a
reduced rate.
If the Company determines in good faith that a reasonable basis exists for
contesting an Indemnified Tax or Other Tax, the relevant Lender or the
Administrative Agent, as applicable, shall cooperate with the Company in
challenging such Tax at the Company's expense if requested by the Company. If
any Lender or the Administrative Agent, as applicable, shall become aware that
it is entitled to receive a refund in respect of Indemnified Taxes or Other
Taxes pursuant to section 2.16, it shall promptly notify the Borrower of the
availability of such refund and shall, within 30 days after receipt of a request
by the Borrower, apply for such refund if it is not otherwise disadvantageous to
such Lender or the Administrative Agent. If any Lender or the Administrative
Agent, as applicable, receives a refund (whether by way of a direct payment or
by offset) of any Indemnified Tax or Other Tax for which a payment has been made
pursuant to Section 2.16 or realizes any credit or other tax benefit as a result
of the payment of such Tax by any Borrower, which refund, credit or tax benefit
in the good faith judgment of such Lender or the Administrative Agent, as the
case may be, is allocable to such payment made under Section 2.16, the amount of
such refund, credit or tax benefit (together with any interest received from the
applicable Governmental Authority thereon) shall be paid to such Borrower.
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Except as set forth with respect to payments of principal of or interest on
Multicurrency Loans in Schedule 2.17, each Borrower shall make each payment
required to be made by it hereunder (whether of principal, interest or fees
under Section 2.09, 2.11, 2,12, 2.14, 2.15 or 2.16) from a payment location in
the United States prior to 1:00 p.m., New York City time (in the case of
payments with respect to Revolving Designated Currency Loans, prior to 11:00
a.m., London time, or in the case of payments with respect to Revolving Yen
Loans, prior to 11:00 a.m., Tokyo time), on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received after
such time (or any other applicable time set forth with respect to Multicurrency
Loans in Schedule 2.17) on any date may, in the discretion of the Applicable
Agent (or in the case of a Competitive Loan, the applicable Lender), be deemed
to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made (i) in the case of
amounts due in dollars, to the Applicable Agent at its offices at 270 Park
Avenue, New York, New York and (ii) in the case of amounts due in any Eligible
Currency, to the Applicable Agent at its
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offices at Trinity Tower, 9 Thomas Moore Street, London, England E19YT, or at
such other office as shall be specified for such currency by the Applicable
Agent, except that payments to be made directly to the Swingline Lender as
expressly provided herein and payments pursuant to Sections 2.14, 2.15, 2.16 and
10.03 shall be made directly to the Persons entitled thereto. The Applicable
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder (whether of principal, interest
or otherwise) shall be made in the applicable currency specified elsewhere
herein or, if no currency is specified, in dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, to pay interest and
fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, to pay principal then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal then due to such
parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in Swingline Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans and participations in
Swingline Loans of other Lenders to the extent necessary so that the benefit of
all such payments shall be shared by the Lenders ratably in accordance with the
aggregate amount of principal of and accrued interest on their respective
Revolving Loans and participations in Swingline Loans; provided that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by any Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans to any assignee
or participant, other than to any Borrower or any Subsidiary or Affiliate
thereof (as to which the provisions of this paragraph shall apply). Each
Borrower consents to the foregoing and agrees, to the extent it may
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effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of such Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Company or the relevant Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders hereunder that such
Borrower will not make such payment, the Administrative Agent may assume that
such Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute (or cause the Applicable Agent to
distribute) to the Lenders the amount due. In such event, if such Borrower has
not in fact made such payment, then each of the Lenders severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender with interest thereon, for each day from and including the date
such amount is distributed to it to but excluding the date of payment to the
Administrative Agent, (i) in the case of a Borrowing in dollars, at the Federal
Funds Effective Rate and (ii) in the case of a Borrowing in an Eligible
Currency, at the rate reasonably determined by the Administrative Agent to be
the cost to it of funding such amount.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.05(c), 2.06(b) or 2.17(d), then the Administrative Agent
may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Administrative Agent for the account of
such Lender to satisfy such Lender's obligations under such Sections until all
such unsatisfied obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.14, or if any Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Company hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.
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(b) If any Lender requests compensation under Section 2.14, or if any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, or if any
Lender fails to approve any waiver or amendment to this Agreement which has been
approved by the Required Lenders, then the Company may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 10.04), all its interests, rights and
obligations under this Agreement (other than any outstanding Competitive Loans
held by it) to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
the Company shall have received the prior written consent of the Administrative
Agent (and, if a Commitment is being assigned, the Swingline Lender), which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans (other than
Competitive Loans) and participations in Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Company (in the case of all other amounts) and (iii) in the case of
any such assignment resulting from a claim for compensation under Section 2.14
or payments required to be made pursuant to Section 2.16, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling such
Borrower to require such assignment and delegation cease to apply.
SECTION 2.19. Borrowing Subsidiaries. On or after the Effective Date, the
Company may designate any Subsidiary of the Company as a Borrowing Subsidiary by
delivery to the Administrative Agent of a Borrowing Subsidiary Agreement
executed by such Subsidiary and the Company, and upon such delivery such
Subsidiary shall for all purposes of this Agreement be a Borrowing Subsidiary
and a party to this Agreement until the Company shall have executed and
delivered to the Administrative Agent a Borrowing Subsidiary Termination with
respect to such Subsidiary, whereupon such Subsidiary shall cease to be a
Borrowing Subsidiary and a party to this Agreement. Notwithstanding the
preceding sentence, no Borrowing Subsidiary Termination will become effective as
to any Borrowing Subsidiary at a time when any principal of or interest on any
Loan to such Borrowing Subsidiary shall be outstanding hereunder, provided that
such Borrowing Subsidiary Termination shall be effective to terminate such
Borrowing Subsidiary's right to make further Borrowings under this Agreement.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Company and its Material
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions are within
the Company's (and, as applicable, each Borrowing Subsidiary's) corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
and each Borrowing Subsidiary Agreement with respect to any Borrowing Subsidiary
(as to which a Borrowing Subsidiary Termination has not become effective) has
been duly executed and delivered by the Company and such Borrowing Subsidiary
and constitutes a legal, valid and binding obligation of the Borrowing
Subsidiary thereunder, in each case enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transaction (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and except for such consents,
approvals, registrations, filings and other actions the failure to obtain or
make could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the
Company or any of its Subsidiaries or any order of any Governmental Authority,
except for such violations which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding the Company or any of its Subsidiaries or its assets, or give
rise to a right thereunder to require any payment to be made by the Company or
any of its Subsidiaries, except for such violations and defaults which,
individually or in the aggregate, could not
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reasonably be expected to result in a Material Adverse Effect, and (d) will not
result in the creation or imposition of any Lien on any asset of the Company or
any of its Material Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
Company has heretofore furnished to the Lenders (i) the consolidated balance
sheet of D&B at December 31, 1996 and December 31, 1997 and the related
consolidated statements of income, shareholders' equity and cash flows of D&B
for the fiscal years ended December 31, 1995, December 31, 1996 and December 31,
1997, in each case reported on by Coopers & Lybrand L.L.P., independent public
accountants, and (ii) the consolidated balance sheet of D&B at March 31, 1998
and the related consolidated statements of income and cash flows for the fiscal
quarter and the portion of the fiscal year ended March 31, 1998, certified by a
Financial Officer of D&B. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of D&B and its consolidated Subsidiaries as of such dates and for such
periods in accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in clause (ii)
above.
(b) The Company has heretofore furnished to the Lenders (i) its unaudited
pro forma condensed balance sheet and unaudited pro forma condensed statement of
operations, each prepared giving effect to the Transactions as if the
Transactions had occurred on December 31, 1997, in the case of such balance
sheet and January 1, 1997, in the case of such statement of operations and (ii)
its unaudited pro forma condensed balance sheet and unaudited pro forma
condensed statement of operations, each prepared giving effect to the
Transactions as if the Transactions had occurred on March 31, 1998, in the case
of such balance sheet and January 1, 1998, in the case of such statement of
operations. Such pro forma financial statements (i) have been prepared in good
faith based on the same assumptions used to prepare the pro forma financial
statements included in the Information Memorandum (which assumptions are
believed by the Company to be reasonable), (ii) are based on the best
information available to the Company after due inquiry, (iii) accurately reflect
all adjustments necessary to give effect to the Transactions and (iv) present
fairly, in all material respects (x) in the case of such pro forma balance
sheets, the financial position of the Company and its consolidated Subsidiaries
as of December 31, 1997 and March 31, 1998, respectively, as if the Transactions
had occurred on such dates and (y) in the case of such pro forma statements of
operations, the results of operations of the Company and its consolidated
Subsidiaries for the fiscal year ended December 31, 1997 (as if the Transactions
had occurred on January 1, 1997) and for the fiscal quarter ended March 31, 1998
(as if the Transactions had occurred on January 1, 1998), respectively.
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(c) Since December 31, 1997, there has been no material adverse change in
the business, assets, operations, prospects or financial condition, of the
Company and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Company and its Material
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to the business of the Company and its
Subsidiaries, taken as a whole, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes. There are no Liens on any
such property other than Liens permitted under Section 6.01.
(b) Each of the Company and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to the business of the Company and its Subsidiaries taken as a whole,
and the use thereof by the Company and its Subsidiaries does not infringe upon
the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement, any Borrowing Subsidiary Agreement
or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Company nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
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(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the Company and
its Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property (including without
limitation any "margin" rules or regulations promulgated by the Board) and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the Company
nor any of its Material Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Company and each of its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan by an amount that could reasonably be
expected to result in a Material Adverse Effect, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans by an amount that could reasonably be expected to result in a Material
Adverse Effect.
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SECTION 3.11. Disclosure. None of the reports, financial statements,
certificates or other written information furnished by or on behalf of any
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any Borrowing Subsidiary Agreement or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished), including without limitation the Information Statement, contain any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Company represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth as of the date hereof
and the Spin-off Date a list of all Subsidiaries and the percentage ownership
interest of the Company therein. As of the Effective Date and the Spin-off Date,
the shares of capital stock of such Subsidiaries will be fully paid and
non-assessable and such shares and other ownership interests so indicated by
Schedule 3.12 will be owned by the Company, directly or indirectly, free and
clear of all Liens.
SECTION 3.13. Use of Proceeds. The proceeds of the Loans have been applied
by the Borrowers in accordance with the provisions of Section 5.08.
SECTION 3.14. Solvency. On the date which is the earlier of (i) the
Spin-off Date (after giving effect to the Spin-off) and (ii) the date of the
first Borrowing hereunder, (a) the fair value of the assets of the Company, at a
fair valuation, will exceed its debts and liabilities, subordinated, contingent
or otherwise; (b) the present fair saleable value of the property of the Company
will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c)
the Company does not intend to incur or does not believe it will incur debts and
liabilities, subordinated, contingent or otherwise, beyond its ability to pay
such debts and liabilities as they become absolute and matured; and (d) the
Company will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Effective Date and the Spin-off Date.
SECTION 3.15. Year 2000. The cost to the Company and its Subsidiaries of
any reprogramming required to permit the proper functioning, in and following
the year 2000, of the Company's and its Subsidiaries' computer systems could not
reasonably be expected to result in a Material Adverse Effect.
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ARTICLE 4
CONDITIONS
SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received favorable written
opinions (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Nancy L. Henry, Chief Legal Counsel to the Company, and
Simpson Thacher & Bartlett, special New York counsel for the Company,
substantially in the form of Exhibit B-1 and B-2, respectively, and covering
such other matters relating to the Company, this Agreement or the Transactions
as the Required Lenders shall reasonably request. The Company hereby requests
such counsel to deliver such opinion.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Company, the
authorization of the Transactions and any other legal matters relating to the
Company, this Agreement or the Transactions, all in form and substance
reasonably satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the Chairman, the President, a Vice President or a
Financial Officer of the Company, confirming compliance with the conditions set
forth in paragraphs (a) (including the representations and warranties set forth
in Section 3.04) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all reasonable out-of-pocket
expenses required to be reimbursed or paid by the Company hereunder.
(f) The Administrative Agent shall have received evidence satisfactory to
it that all commitments to extend credit under the Existing Credit Agreements
shall
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have been terminated and all amounts outstanding or payable thereunder shall
have been repaid in full.
(g) The Lenders shall have received copies of all the financial statements
referred to in Section 3.04, and all such financial statements shall be
consistent in all material respects with other information previously provided
to the Lenders.
(h) The proposed Spin-off (including without limitation the corporate and
capital structure of the Borrowers after giving effect thereto, their respective
organizational documents and any material contracts to which they are a party
described therein) shall be in all material respects as described in the
Information Statement, with only such material changes as the Required Lenders
shall have approved. All material authorizations and approvals to be obtained
from any Governmental Authority with respect to the Transactions (including
without limitation the private letter ruling from the Internal Revenue Service
(the "IRS Ruling") to the effect that the Spin-off will be tax-free to D&B and
the shareholders of D&B) as described in the Information Statement shall have
been obtained and shall be in full force and effect. The Administrative Agent
shall have received copies of each such authorization or approval (including
without limitation the IRS Ruling) and each Spin-off Document in effect on the
Effective Date.
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 10.02) at or prior to 3:00 p.m., New York City time, on or
prior to July 15, 1998 (and, in the event such conditions are not so satisfied
or waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
(a) The representations and warranties of the Company set forth in this
Agreement (other than the representations and warranties set forth in Section
3.04) and, in the case of a Borrowing by a Borrowing Subsidiary, the
representations and warranties of such Borrowing Subsidiary in its Borrowing
Subsidiary Agreement, shall be true and correct on and as of the date of such
Borrowing.
(b) At the time of and immediately after giving effect to such Borrowing,
no Default shall have occurred and be continuing.
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(c) Solely if such Borrowing is the first Borrowing under this Agreement,
the fact that (i) D&B shall have transferred to the Company substantially all of
the New D&B Assets on the terms described in the Information Statement and (ii)
the Company shall have delivered to the Lenders a certificate of a Financial
Officer of the Company so certifying.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Company and, if applicable, the relevant Borrowing Subsidiary on the date
thereof as to the matters specified in paragraphs (a) and (b) of this Section.
SECTION 4.03. Each Borrowing Subsidiary Credit Event. The obligation of
each Lender to make Loans hereunder to any Borrowing Subsidiary is subject to
the satisfaction of the following conditions:
(a) The Administrative Agent (or its counsel) shall have received from
each party thereto either (i) a counterpart of such Borrowing Subsidiary's
Borrowing Subsidiary Agreement or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page thereof) that such party has signed a counterpart of such
Borrowing Subsidiary Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion of counsel for such Borrowing Subsidiary (which counsel shall be
reasonably acceptable to the Administrative Agent), substantially in the form of
Exhibit C, and covering such other matters relating to such Borrowing Subsidiary
or its Borrowing Subsidiary Agreement as the Administrative Agent shall
reasonably request.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of such Borrowing
Subsidiary, the authorization of the Transactions relating to such Borrowing
Subsidiary and any other legal matters relating to such Borrowing Subsidiary,
its Borrowing Subsidiary Agreement or such Transactions, all in form and
substance reasonably satisfactory to the Administrative Agent and its counsel.
ARTICLE 5
AFFIRMATIVE COVENANTS
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Until the Commitments have expired or have been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Company covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Company will
furnish to the Administrative Agent (with a copy for each Lender):
(a) within 90 days after the end of each fiscal year of the Company, its
audited consolidated balance sheet and related statements of income and cash
flows as of the end of and for such year, setting forth, in the case of
statements of income and cash flows, comparative figures for the previous fiscal
year (it being understood that the comparative figures for the 1997 fiscal year
shall reflect The Reuben H. Donnelley Corporation and its consolidated
subsidiaries as a discontinued operation), all reported on by Coopers & Lybrand
L.L.P. or other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, its consolidated balance sheet and
related statements of income as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year and statements of cash flow for the
then elapsed portion of the fiscal year, setting forth, in the case of
statements of income and cash flows, comparative figures for the corresponding
period or periods of the previous fiscal year (it being understood that the
comparative figures for the relevant portions of the 1997 fiscal year shall
reflect The Reuben H. Donnelley Corporation and its consolidated subsidiaries as
a discontinued operation), all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
(c) prior to the consummation of the Spin-off, copies of the final form of
the Information Statement relating to the Spin-off and copies of the Company's
pro forma condensed balance sheet as of the most recently ended fiscal quarter
and related statement of operations for such period, prepared giving effect to
the Spin-off as if it had occurred on the first day of such period;
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(d) concurrently with any delivery of financial statements under clause
(a), (b) or (c) above, a certificate of a Financial Officer of the Company (i)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.05 and 6.06 and (iii) stating whether
any material change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 3.04 affecting
the Company and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(f) promptly after the same become publicly available, copies of all
periodic and other material reports (other than reports relating to employee
benefit matters or employment plans) and proxy statements filed by the Company
or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Company to its shareholders generally, as the case may be, and all material
amendments to any of the foregoing; and
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Company or any Subsidiary, or compliance with the terms of this Agreement or the
Spin-off Documents, as the Administrative Agent may reasonably request.
SECTION 5.02. Notices of Material Events. The Company will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the Company
or any Subsidiary thereof that could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
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liability of the Company and its Subsidiaries in an aggregate amount that could
reasonably be expected to result in a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Company will, and will
cause each of its Material Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of the business of the Company and its Subsidiaries, taken as a
whole; provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.02.
SECTION 5.04. Payment of Obligations. The Company will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The Company will, and
will cause each of its Material Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations; provided that any
such insurance may be maintained through a program of self-insurance to the
extent deemed prudent by the Company in its reasonable business judgment (which
determination shall take into account the self-insurance practices customary
among such companies, to the extent the Company has knowledge thereof without
any investigation).
SECTION 5.06. Books and Records; Inspection Rights. The Company will, and
will cause each of its Material Subsidiaries to, keep proper books of record
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and account in accordance with GAAP (or, the case of a foreign Subsidiary,
generally accepted accounting principles in the jurisdiction of organization of
such foreign Subsidiary). The Company will, and will cause each of its Material
Subsidiaries to, permit any representatives designated by the Administrative
Agent on its own initiative or at the request of the Required Lenders, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its property (including ERISA),
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only
for general corporate purposes, including without limitation back-up for the
Company's commercial paper program. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and X.
ARTICLE 6
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Company covenants and agrees with the Lenders that:
SECTION 6.01. Liens. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any Subsidiary
existing on the date hereof and set forth in Schedule 6.01; provided that (i)
such Lien shall not apply to any other property or asset of the Company or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals, refinancings and
replacements thereof that do not increase the outstanding principal amount
thereof (other than by an
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amount equal to any costs and expenses incurred in connection with such
extension, renewal, refinancing or replacement);
(c) any Lien existing on any property or asset prior to the acquisition
thereof by the Company or any Subsidiary or existing on any property or asset of
any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary or any Lien on any asset of any Person existing
at the time such Person is merged into or consolidated with the Company or a
Subsidiary; provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary or such
merger, as the case may be, (ii) such Lien shall not apply to any other property
or assets of the Company or any Subsidiary and (iii) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary or the date of such merger, as the case may be,
and extensions, renewals, refinancings and replacements thereof that do not
increase the outstanding principal amount thereof (other than by an amount equal
to any costs and expenses incurred in connection with such extension, renewal,
refinancing or replacement);
(d) any Lien on any asset (i) initially securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost of acquiring or
constructing such asset or (ii) securing Indebtedness incurred to extend, renew,
refinance or replace the Indebtedness then secured by such Lien, provided that
(x) such Lien attaches to such asset concurrently with or within 180 days after
the acquisition thereof and (y) the principal amount of Indebtedness secured by
such Lien shall not be increased in connection with any extension, renewal,
refinancing or replacement of such Indebtedness (other than by an amount equal
to any costs and expenses incurred in connection with such extension, renewal,
refinancing or replacement);
(e) any Lien arising in connection with the financing of accounts
receivable by the Company or any of its Subsidiaries, provided that the
uncollected amount of account receivables subject at any time to any such
financing shall not exceed $150,000,000;
(f) any Lien on any property sold or transferred pursuant to a transaction
permitted under Section 6.04;
(g) any Lien in favor of the Company or any Subsidiary granted by the
Company or any Subsidiary in order to secure any intercompany obligations;
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(h) any Lien granted or arising in connection with any legal proceeding to
the extent such proceeding has not resulted in an Event of Default under Section
7(k); and
(i) any Lien to secure Indebtedness and other obligations if, at any date,
immediately after the incurrence thereof, the sum (without duplication) of all
amounts secured by Liens which would not be permitted but for this clause (i)
does not exceed $150,000,000.
SECTION 6.02. Fundamental Changes.
(a) The Company will not (i) merge or consolidate with any other Person or
(ii) permit any Designated Subsidiary to merge or consolidate with any other
Person, except that (1) the Company and any Designated Subsidiaries may merge
into or consolidate with each other, (2) the Spin-off may be consummated, so
long as it is consummated in all material respects in accordance with the terms
and conditions set forth in the Information Statement, (3) the Company may merge
or consolidate with any other Person in accordance with subsection (c) and (4)
any Designated Subsidiary may merge or consolidate with any other Person so long
as the surviving entity of such merger or consolidation is a Designated
Subsidiary. The Company will not, and will not permit any Designated Subsidiary
to, liquidate or dissolve.
(b) (i) The Company will not sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all of
the assets of the Company and its consolidated Subsidiaries, taken as a whole,
or all or substantially all of the stock or other equity interests of any
Designated Subsidiary and (ii) the Company will not permit any Designated
Subsidiary to sell, transfer, lease or otherwise dispose of (in one transaction
or in a series of transactions) all or substantially all of the assets of such
Designated Subsidiary and its subsidiaries, taken as a whole, except (1) the
Company and any Designated Subsidiaries may consummate any transaction described
in clause (i) or (ii) with the Company or any other Designated Subsidiary, (2)
the Spin-off may be consummated, so long as it is consummated in all material
respects in accordance with the terms and conditions set forth in the
Information Statement, and (3) the Company may consummate any transaction
described in clause (i) in accordance with subsection (c).
(c) The Company may consummate any of the transactions described in
clauses (a)(i) and (b)(i) of this Section if (i) the surviving corporation in
any such merger or consolidation or the Person which acquires all or
substantially all of the assets of the Company and its consolidated Subsidiaries
or all or substantially all of the capital stock or other equity interests of a
Designated Subsidiary shall be a corporation organized and existing under the
laws of the United States of America,
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any state thereof or the District of Columbia (the "Successor Corporation") and
shall expressly assume, pursuant to documentation in form reasonably
satisfactory to the Required Lenders, the due and punctual payment of the
principal of and interest on the Loans and all other amounts payable under this
Agreement and the payment and performance of every covenant hereof on the part
of the Company to be performed or observed; (ii) immediately after giving effect
to such transaction, no Default shall have occurred and be continuing; and (iii)
immediately after giving effect to such transaction, (x) the Company and its
Subsidiaries are in compliance, on a pro-forma basis, with the covenants
contained in Sections 6.05 and 6.06 recomputed as of the last day of the most
recently ended fiscal quarter of the Company, as if such transaction had
occurred on the first day of each relevant period for testing such compliance
and (y) the Company shall have delivered to the Lenders, at least 10 Business
Days prior to the consummation of any such transaction, a certificate of a
Financial Officer of the Company certifying that the condition precedent set
forth in clause (iii)(x) with respect to such transaction will be complied with
and setting forth in reasonable detail the calculations required to demonstrate
such compliance and the assumptions used by the Company to make such
calculations.
(d) The Company will not permit any Borrowing Subsidiary to merge,
consolidate, liquidate or dissolve unless, in addition to the conditions set
forth in clause (a) of this Section (if applicable), the surviving entity, or
the entity into which such Borrowing Subsidiary liquidates or dissolves, is a
Borrower and assumes all Obligations of such Borrowing Subsidiary.
(e) The Company will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Company and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related or complementary thereto.
For purposes of this Section, "Designated Subsidiary" means (i) Moody's
Investors Service, Inc., a Delaware corporation, (ii) Dun & Bradstreet Inc., a
Delaware corporation and (iii) any other Subsidiary designated as a "Designated
Subsidiary" by the Company.
SECTION 6.03. Transactions with Affiliates. The Company will not, and will
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) on terms and conditions not less favorable to the Company
or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties (considering such transactions and all other related
transactions as a whole), (b) transactions between or among the Company and its
Subsidiaries and (c)
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transactions contemplated by the Spin-off Documents and consummated in
accordance therewith.
SECTION 6.04. Sale and Lease-Back Transactions. The Company will not, and
will not permit any of its Subsidiaries to, directly or indirectly, enter into
any arrangement with any Person (other than a Subsidiary) whereby it shall sell
or transfer any property used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred, except for any such arrangement or
arrangements with an aggregate sale price not exceeding at any time
$250,000,000.
SECTION 6.05. Total Debt to EBITDA Ratio. The Total Debt to EBITDA Ratio
will not exceed 4.0 to 1.0 at the end of any fiscal quarter.
SECTION 6.06. Interest Coverage Ratio. The Interest Coverage Ratio for any
period of four consecutive fiscal quarters of the Company will not be less than
3.0 to 1.0.
ARTICLE 7
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur and be
continuing:
(a) any Borrower shall fail to pay any principal of any Loan of such
Borrower when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan of such
Borrower or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable by such Borrower under this Agreement, when
and as the same shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of
the Company or any Subsidiary in or in connection with this Agreement, any
Borrowing Subsidiary Agreement or any amendment or modification hereof or
thereof, or in any certificate or other document furnished pursuant to or in
connection with this Agreement, any Borrowing Subsidiary Agreement or any
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amendment or modification hereof or thereof, shall prove to have been incorrect
in any material respect when made or deemed made;
(d) the Company shall fail to observe or perform any covenant, condition
or agreement contained in Section 5.02(a), 5.03 (with respect to the Company's
existence), 5.08 or in Article 6;
(e) the Company shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement or any Borrowing Subsidiary Agreement
(other than those specified in clause (a), (b), (c) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent (given at the request of any Lender) to
the Company;
(f) the Company or any Subsidiary shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable (after giving
effect to any grace period applicable thereto);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (g) shall not apply
to (i) secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness (so long as
such Indebtedness is paid when due (or within any applicable grace period)) or
(ii) any Indebtedness that is mandatorily prepayable prior to the scheduled
maturity thereof with the proceeds of the issuance of capital stock, the
incurrence of other Indebtedness or the sale or other disposition of any assets,
so long as such Indebtedness is so prepaid in full with such proceeds when due
(or within any applicable grace period) and such event shall not have otherwise
resulted in an event of default with respect to such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Company or any Material Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Material Subsidiary or for a substantial
part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;
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(i) the Company or any Material Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Material Subsidiary or for a substantial
part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(j) the Company or any Material Subsidiary shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount
in excess of $50,000,000 (excluding any amount of such judgment as to which an
Acceptable Insurer has acknowledged liability) shall be rendered against the
Company, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 60 consecutive days during which execution shall
not be effectively stayed, or any action, which shall not be effectively stayed,
shall be legally taken by a judgment creditor to attach or levy upon any assets
of the Company or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Company and
its Subsidiaries in an aggregate amount that could reasonably be expected to
result in a Material Adverse Effect;
(m) the Company shall fail to observe or perform any covenant, condition
or agreement contained in Article 9 or the guarantee of the Company hereunder
shall not be (or shall be claimed by any Person not to be) valid or in full
force and effect;
(n) a Change in Control shall occur;
(o) (i) the Company shall have merged or consolidated with any Person or
any Person shall have acquired all or substantially all of the assets of the
Company and its consolidated Subsidiaries, taken as a whole, or all or
substantially all of the capital stock or other equity interests of any
Designated Subsidiary, (ii) either the Company or the Person with which it is
merging or consolidating or the
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Person which is acquiring such assets or capital stock or other equity interests
shall at the time of such merger or consolidation or acquisition have been rated
by a rating agency and (iii) the Successor Corporation shall not have in effect
a rating of at least Baa1 from Moody's Investors Service, Inc. or BBB+ from
Standard & Poor's Ratings Group on the 90th day following the consummation of
such merger or consolidation or acquisition, as the case may be;
(p) the Spin-off Date shall not have occurred by the 60th day after the
Effective Date; or
(q) (i) the IRS Ruling shall cease to be in full force and effect or (ii)
the Spin-off shall for any reason cease to qualify as a tax-free distribution
under Section 355 of the Internal Revenue Code;
then, and in every such event (other than an event with respect to any Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may (with the
consent of the Required Lenders), and at the request of the Required Lenders
shall, by notice to the Company, take either or both of the following actions,
at the same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower; and in case of any event with
respect to the Company described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower; and in the case of any event
with respect to any Borrowing Subsidiary described in clause (h) or (i) of this
Article, (i) the eligibility of such Borrowing Subsidiary to borrow shall
thereupon terminate and (ii) the Loans of such Borrowing Subsidiary shall become
immediately due and payable, together with accrued interest thereon and all fees
and other obligations thereunder of such Borrowing Subsidiary accrued
thereunder, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrowing Subsidiary.
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ARTICLE 8
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Company or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Company or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or wilful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by a
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any Borrowing
Subsidiary Agreement, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any Borrowing
Subsidiary Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article 4 or
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elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for any Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all of its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Company. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Company, to
appoint a successor (and, at any time when no Default shall have occurred and is
continuing, with the prior written consent of the Company). If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on behalf
of the Lenders, appoint a successor Administrative Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Company to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Company and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 10.03 shall
continue in effect
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for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
ARTICLE 9
GUARANTEE
In order to induce the Lenders to extend credit hereunder, the Company
hereby irrevocably and unconditionally guarantees, as a primary obligor and not
merely as a surety, the Obligations. The Company further agrees that the due and
punctual payment of the Obligations may be extended or renewed, in whole or in
part, without notice to or further assent from it, and that it will remain bound
upon its Guarantee hereunder notwithstanding any such extension or renewal of
any Obligation.
The Company waives presentment to, demand of payment from and protest to
any Borrowing Subsidiary of any of the Obligations, and also waives notice of
acceptance of its obligations and notice of protest for nonpayment. The
obligations of the Company hereunder shall not be affected by (a) the failure of
any Lender or the Administrative Agent to assert any claim or demand or to
enforce any right or remedy against any Borrowing Subsidiary under the
provisions of this Agreement or otherwise; (b) any rescission, waiver, amendment
or modification of any of the terms or provisions of this Agreement, any
Borrowing Subsidiary Agreement or any other agreement; or (c) the failure of any
Lender to exercise any right or remedy against any Borrowing Subsidiary.
The Company further agrees that its agreement hereunder constitutes a
promise of payment when due (whether or not any bankruptcy or similar proceeding
shall have stayed the accrual or collection of any of the Obligations or
operated as a discharge thereof) and not merely of collection, and waives any
right to require that any resort be had by any Lender to any balance of any
deposit
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account or credit on the books of any Lender in favor of any Borrower or any
other person.
The obligations of the Company hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, and shall not
be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever, by reason of the invalidity, illegality or unenforceability of the
Obligations, any impossibility in the performance of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
the Company hereunder shall not be discharged or impaired or otherwise affected
by the failure of the Administrative Agent or any Lender to assert any claim or
demand or to enforce any remedy under this Agreement or any other agreement, by
any waiver or modification in respect of any thereof, by any default, failure or
delay, wilful or otherwise, in the performance of the Obligations, or by any
other act or omission which may or might in any manner or to any extent vary the
risk of the Company or otherwise operate as a discharge of the Company or any
other Borrower as a matter of law or equity.
The Company further agrees that its obligations hereunder shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any Obligation is rescinded or must otherwise be restored
by the Administrative Agent or any Lender upon the bankruptcy or reorganization
of any Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which the Administrative Agent or any Lender may have at law or in equity
against the Company by virtue hereof, upon the failure of any Borrowing
Subsidiary to pay any Obligation when and as the same shall become due, whether
at maturity, by acceleration, after notice of prepayment or otherwise, the
Company hereby promises to and will, upon receipt of written demand by the
Administrative Agent, forthwith pay, or cause to be paid, in cash the amount of
such unpaid Obligation. The Company further agrees that if payment in respect of
any Obligation shall be due in a currency other than dollars and/or at a place
of payment other than New York and if, by reason of any Change in Law,
disruption of currency or foreign exchange markets, war or civil disturbance or
similar event, payment of such Obligation in such currency or at such place of
payment shall be impossible or, in the judgment of any applicable Lender, not
consistent with the protection of its rights or interests, then, at the election
of any applicable Lender, the Company shall make payment of such Obligation in
dollars (based upon the applicable exchange rate in effect on the date of
payment) and/or in New York, and shall indemnify such Lender against any losses
or expenses that it shall sustain as a result of such alternative payment.
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Upon payment by the Company of any Obligation, each Lender shall, in a
reasonable manner, assign the amount of such Obligation owed to it and so paid
to the Company, such assignment to be pro tanto to the extent to which the
Obligation in question was discharged by the Company, or make such disposition
thereof as the Company shall direct (all without recourse to any Lender and
without any representation or warranty by any Lender).
Upon payment by the Company of any sums as provided above, all rights of
Company against any Borrowing Subsidiary arising as a result thereof by way of
right of subrogation or otherwise shall in all respects be subordinated and
junior in right of payment to the prior indefeasible payment in full of all the
Obligations owed by such Borrowing Subsidiary to the Lenders.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Borrower, to it in care of the Company at One Diamond Hill
Road, Murray Hill, NJ 07974, Attention of Treasurer (Telecopy No. 908-665-5032),
with a copy to Attention of Chief Legal Officer at the same address (Telecopy
No. 908-665-5827);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, Agent
Bank Services Group, One Chase Manhattan Plaza, New York, New York 10081,
Attention of Janet Belden (Telecopy No. (212) 552-5658), with a copy to The
Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention of
Tracey Navin (Telecopy No. (212) 270-4164);
(c) if to the London Agent, to it at Chase Manhattan International
Limited, Trinity Tower, 9 Thomas More Street, London, England E19YT, Attention
of Steve Clarke (Telecopy No. 011-44-171-777-2360), with a copy to The Chase
Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention of Tracey
Navin (Telecopy No. (212) 270-4164);
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(d) if to the Swingline Lender, to The Chase Manhattan Bank, Agent Bank
Services Group, One Chase Manhattan Plaza, 8th Floor, New York, New York 10081,
Attention of Janet Belden (Telecopy No. (212) 552-5658), with a copy to The
Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention of
Tracey Navin (Telecopy No. (212) 270-4164); and
(e) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any Borrowing Subsidiary Agreement nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Company and the
Required Lenders or by the Company and the Administrative Agent with the consent
of the Required Lenders (and, in the case of a Borrowing Subsidiary Agreement,
the applicable Borrowing Subsidiary); provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan, or any interest thereon, or any
fees
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payable hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.17(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions of
this Section or the definition of "Required Lenders" or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender or (vi) release the
Company from, or limit or condition, its obligations under Article 9, without
the written consent of each Lender; provided further that no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent or the Swingline Lender hereunder without the prior written
consent of the Administrative Agent or the Swingline Lender, as the case may be.
SECTION 10.03. Expenses; Indemnity; Damage Waiver. (a) The Company shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of this Agreement or any Borrowing Subsidiary Agreement or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated) and (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the fees, charges and
disbursements of no more than one counsel for the Administrative Agent and one
counsel for the Lenders (unless representation of the Lenders by the same
counsel would be inappropriate due to actual or potential conflicts of interests
among them, in which case the Lenders shall have right to separate counsel, at
the expense of the Company) in connection with the enforcement or protection of
its rights in connection with this Agreement or any Borrowing Subsidiary
Agreement, including its rights under this Section, or in connection with the
Loans made hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof.
(b) The Company shall indemnify the Administrative Agent and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any Borrowing
Subsidiary Agreement
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or any agreement or instrument contemplated hereby or thereby, the performance
by the parties hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or the use of the proceeds therefrom, (iii)
any actual or alleged presence or release of Hazardous Materials on or from any
property owned or operated by the Company or any of its Subsidiaries, or any
Environmental Liability related in any way to the Company or any of its
Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
result from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Company fails to pay any amount required to be
paid by it to the Administrative Agent or the Swingline Lender under paragraph
(a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent or the Swingline Lender, as the case may be, such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Swingline Lender in its capacity as
such.
(d) To the extent permitted by applicable law, no Borrower shall assert,
and each Borrower hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any Borrowing Subsidiary Agreement or any agreement
or instrument contemplated hereby or thereby, the Transactions, any Loan or the
use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 10.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
(including any Borrowing Subsidiaries) and their respective successors and
assigns permitted hereby, except that no Borrower may assign or otherwise
transfer any of its rights or obligations hereunder or under any Borrowing
Subsidiary Agreement without the prior written consent of each Lender (and any
attempted assignment or transfer by any Borrower without such consent
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shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment (if any) and the Loans (if any) at the time owing to it); provided
that (i) if contemporaneously with any such proposed assignment, such Lender (or
its Affiliate) assigns to the same proposed assignee a pro rata portion of such
Lender's (or its Affiliate's) rights and obligations under the Other Credit
Agreement (such pro rata portion to be calculated (x) on any date prior to the
Revolver Termination Date, on the basis of such Lender's Commitment hereunder
and such Lender's (or its Affiliate's) commitment under the Other Credit
Agreement and (y) thereafter, on the basis of such Lender's Revolving Credit
Exposure hereunder and such Lender's (or its Affiliate's) commitment under the
Other Credit Agreement) (any such proposed assignment hereunder, a "Pro Rata
Assignment"), each of the Company and the Administrative Agent must give their
prior written consent to such Pro Rata Assignment (which consent shall not be
unreasonably withheld) unless the assignee for such assignment is a Lender or an
Affiliate of a Lender, in which case no such consent shall be required, (ii) if
such proposed assignment is not a Pro Rata Assignment, each of the Company and
the Administrative Agent must give their prior written consent to such proposed
assignment (which consent shall be given in their discretion) unless the
assignee for such assignment is an Affiliate of the assigning Lender, in which
case no such consent shall be required, (iii) except in the case of any
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $10,000,000 unless
each of the Company and the Administrative Agent otherwise consent, (iv) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement, except that
this clause (iv) shall not apply to rights in respect of outstanding Competitive
Loans, (v) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, and (vi) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided further that any consent of the Company otherwise
required under this paragraph shall not be required if an Event of Default under
clause (h) or (i) of Article 7 has occurred and is continuing with
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respect to the Company. Upon acceptance and recording pursuant to paragraph (d)
of this Section, from and after the effective date specified in each Assignment
and Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
2.14, 2.15, 2.16 and 10.03). Notwithstanding any other provision of this
Agreement, if any Lender shall assign any of its rights or obligations hereunder
to any assignee (including an Affiliate of such Lender) that, but for this
sentence, would be entitled, immediately following such assignment, to claim a
greater amount than such assigning Lender under Sections 2.14, 2.15, 2.16, such
assignee shall not have the right to claim such greater amount; provided that
nothing in this sentence shall limit the right of any such assignee to make
claims (x) for amounts not in excess of those that could have been claimed by
the assigning Lender, (y) to the extent such claims arise from one or more
Changes in Law, or from the designation of one or more Borrowing Subsidiaries,
or (z) from a change in the office, branch or other place of business from which
any payment hereunder is made by any Borrower, in each case after the date of
such assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with and subject to the limitations
set forth in, paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrowers shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Company and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of
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this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Borrower, the
Administrative Agent or the Swingline Lender, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
10.02(b) that affects such Participant. Subject to paragraph (f) of this
Section, each Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section.
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.14, 2.15 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any such pledge or assignment to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
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(h) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC")
of such Granting Lender, identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Company, the option to
provide to the Company all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to Section 2.01 or
2.04, provided that (i) nothing herein shall constitute a commitment to make any
Loan by any SPC, (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof and (iii) all credit
decisions (including without limitation any decisions with respect to amendments
and waivers) will continue to be made by the Granting Lender. The making of a
Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
(and, if such Loan is a Competitive Loan, shall be deemed to utilize the
Commitments of all the Lenders) to the same extent, and as if, such Loan were
made by the Granting Lender. Each party hereto hereby agrees that no SPC shall
be liable for any payment under this Agreement for which a Lender would
otherwise be liable, for so long as, and to the extent, the related Granting
Lender makes such payment. In furtherance of the foregoing, each party hereto
hereby agrees that, prior to the date that is one year and one day after the
payment in full of all outstanding senior indebtedness of any SPC, it will not
institute against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or similar proceedings under the laws of the United States or any State thereof.
In addition, notwithstanding anything to the contrary contained in this Section,
any SPC may (i) with notice to, but without the prior written consent of, the
Company or the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to its Granting
Lender in connection with liquidity and/or credit facilities to or for the
account of such SPC to fund such Loans and (ii) subject to the provisions of
Section 10.12, disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of a surety, guarantee or credit or liquidity enhancement to such SPC.
SECTION 10.05. Survival. All covenants, agreements, representations and
warranties made by the Borrowers herein and in the Borrowing Subsidiary
Agreements and the certificates or other instruments delivered in connection
with or pursuant to this Agreement shall be considered to have been relied upon
by the other parties hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any
Default (other than a Default which has been waived in accordance with Section
10.02) or incorrect
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representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.14, 2.15, 2.16 and 10.03 and
Article 8 shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Commitments or the termination of
this Agreement or any provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto (excluding any Borrowing
Subsidiaries), and thereafter shall be binding upon and inure to the benefit of
the parties hereto (including any Borrowing Subsidiaries) and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Borrower against any of and all the amounts then
due and owing by the Borrower under this Agreement to such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement.
The rights of
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each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement against any
Borrower or its properties in the courts of any jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement (including any Borrowing Subsidiaries)
irrevocably consents to service of process in the manner provided for notices in
Section 10.01. Nothing in this Agreement will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 10.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT
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OR ANY OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS
AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Company
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Company. For the purposes of this Section, "Information" means
all information received from the Company relating to the Company or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Company. Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 10.13. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum
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lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 10.14. Conversion of Currencies. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto (including
any Borrowing Subsidiary) agrees, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures in the relevant jurisdiction the first currency could
be purchased with such other currency on the Business Day immediately preceding
the day on which final judgment is given.
(b) The obligations of each Borrower in respect of any sum due to any
party hereto or any holder of the obligations owing hereunder (the "Applicable
Creditor") shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than the currency in which such sum is stated to be due
hereunder (the "Agreement Currency"), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 10.14 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
SECTION 10.15. European Economic and Monetary Union. (a) Definitions. In
this Section 10.15 and in each other provision of this Agreement to which
reference is made in this Section 10.15 expressly or impliedly, the following
terms have the meanings given to them in this Section 10.15:
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"commencement of the third stage of EMU" means the date of
commencement of the third stage of EMU (at the date of this Agreement
expected to be January 1, 1999) or the date on which circumstances arise
which (in the opinion of the Administrative Agent) have substantially the
same effect and result in substantially the same consequences as
commencement of the third stage of EMU as contemplated by the Treaty on
European Union.
"EMU" means economic and monetary union as contemplated in the
Treaty on European Union.
"EMU legislation" means legislative measures of the European Council
for the introduction of, changeover to or operation of a single or unified
European currency (whether known as the euro or otherwise), being in part
the implementation of the third stage of EMU;
"euro" means the single currency of participating member states of
the European Union;
"euro unit" means the currency unit of the euro;
"national currency unit" means the unit of currency (other than a
euro unit) of a participating member state;
"participating member state" means each state so described in any
EMU legislation; and
"Treaty on European Union" means the Treaty of Rome of March 25,
1957, as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on February 7, 1992, and came into force
on November 1, 1993), as amended from time to time.
(b) Effectiveness of Provisions. The provisions of paragraphs (c) to (j)
below (inclusive) shall be effective at and from the commencement of the third
stage of EMU, provided, that if and to the extent that any such provision
relates to any state (or the currency of such state) that is not a participating
member state on the commencement of the third stage of EMU, such provision shall
become effective in relation to such state (and the currency of such state) at
and from the date on which such state becomes a participating member state.
(c) Redenomination and Eligible Currencies. Each obligation under this
Agreement of a party to this Agreement which has been denominated in the
national currency unit of a participating member state shall be redenominated
into
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the euro unit in accordance with EMU legislation, provided, that if and to the
extent that any EMU legislation provides that following the commencement of the
third stage of EMU an amount denominated either in the euro or in the national
currency unit of a participating member state and payable within that
participating member state by crediting an account of the creditor can be paid
by the debtor either in the euro unit or in that national currency unit, each
party to this Agreement shall be entitled to pay or repay any such amount either
in the euro unit or in such national currency unit.
(d) Loans. Any Loan in the currency of a participating member state shall
be made in the euro unit.
(e) Business Days. With respect to any amount denominated or to be
denominated in the euro or a national currency unit, any reference to a
"Business Day" shall be construed as a reference to a day (other than a Saturday
or Sunday) on which banks are generally open for business in: (i) London and New
York City; and (ii) Frankfurt am Main, Germany (or such principal financial
center or centers in such participating member state or states as the
Administrative Agent may from time to time nominate for this purpose).
(f) Payments to the Administrative Agent. Sections 2.06 and 2.17 shall be
construed so that, in relation to the payment of any amount of euro units or
national currency units, such amount shall be made available to the
Administrative Agent in immediately available, freely transferable, cleared
funds to such account with such bank in Frankfurt am Main, Germany (or such
other principal financial center in such participating member state as the
Administrative Agent may from time to time nominate for this purpose) as the
Administrative Agent shall from time to time nominate for this purpose.
(g) Payments by the Administrative Agent to the Lenders. Any amount
payable by the Administrative Agent to the Lenders under this Agreement in the
currency of a participating member state shall be paid in the euro unit.
(h) Payments by the Administrative Agent Generally. With respect to the
payment of any amount denominated in the euro or in a national currency unit,
the Administrative Agent shall not be liable to any Borrower or any of the
Lenders in any way whatsoever for any delay, or the consequences of any delay,
in the crediting to any account of any amount required by this Agreement to be
paid by the Administrative Agent if the Administrative Agent shall have taken
all relevant steps to achieve, on the date required by this Agreement, the
payment of such amount in immediately available, freely transferable, cleared
funds (in the euro unit or, as the case may be, in a national currency unit) to
the account with the bank in the principal financial center in the participating
member state which such Borrower or, as the case may be, any Lender shall have
specified for such purpose.
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In this paragraph (h), "all relevant steps" means all such steps as may be
prescribed from time to time by the regulations or operating procedures of such
clearing or settlement system as the Administrative Agent may from time to time
determine for the purpose of clearing or settling payments of the euro.
(i) Basis of Accrual. If the basis of accrual of interest or fees
expressed in this Agreement with respect to the currency of any state that
becomes a participating state shall be inconsistent with any convention or
practice in the London Interbank Market or, as the case may be, the Paris
Interbank Market for the basis of accrual of interest or fees in respect of the
euro, such convention or practice shall replace such expressed basis effective
as of and from the date on which such state becomes a participating member
state; provided, that if any Loan in the currency of such state is outstanding
immediately prior to such date, such replacement shall take effect, with respect
to such Loan, at the end of the then current Interest Period.
(j) Rounding. Without prejudice and in addition to any method of
conversion or rounding prescribed by any EMU legislation and without prejudice
to the respective liabilities for indebtedness of any Borrower to the Lenders
and the Lenders to any Borrower under or pursuant to this Agreement, each
reference in this Agreement to a minimum amount (or an integral multiple
thereof) in a national currency unit to be paid to or by the Administrative
Agent shall be replaced by a reference to such reasonably comparable and
convenient amount (or an integral multiple thereof) in the euro unit as the
Administrative Agent may from time to time specify.
(k) Consequential Changes. Each provision of this Agreement shall be
subject to such reasonable changes of construction as the Administrative Agent
may from time to time reasonably specify to be necessary or appropriate to
reflect the introduction of or changeover to the euro in participating member
states in accordance with customary practices in the market.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Roxanne E. Parker
----------------------------------------
Title: Vice President and Treasurer
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent
By: /s/ Marian N. Schulman
----------------------------------------
Title: Vice President
CITIBANK, N.A., individually and as
Syndication Agent
By: /s/ William G. Martens III
----------------------------------------
Title: Attorney-In-Fact
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
individually and as Documentation Agent
By: /s/ John M. Mikolay
----------------------------------------
Title: Vice President
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THE BANK OF NEW YORK
By: /s/ Ernest Fung
----------------------------------------
Title: Vice President
SUNTRUST BANK, ATLANTA
By: /s/ W. David Wisdom
----------------------------------------
Title: Group Vice President
By: /s/ Laura G. Harrison
----------------------------------------
Title: Assistant Vice President
BARCLAYS BANK PLC
By: /s/ Marlene Wechselblatt
----------------------------------------
Title: Vice President
BANK OF MONTREAL
By: /s/ Brian L. Banke
----------------------------------------
Title: Director
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BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ Michael C. Irwin
----------------------------------------
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Stephen E. McDonald
----------------------------------------
Title: First Vice President
NORTHERN TRUST COMPANY
By: /s/ Eric Strickland
----------------------------------------
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By: /s/ J. R. Lents
----------------------------------------
Title: Manager Credit Administration
90
<PAGE> 1
Exhibit 4.2
CONFORMED COPY
================================================================================
CREDIT AGREEMENT
dated as of
June 9, 1998
among
THE NEW DUN & BRADSTREET CORPORATION
The Borrowing Subsidiaries Party Hereto
The Lenders Party Hereto
THE CHASE MANHATTAN BANK,
as Administrative Agent,
CITIBANK, N.A.,
as Syndication Agent,
and
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Documentation Agent
$300,000,000 REVOLVING CREDIT AND COMPETITIVE ADVANCE FACILITY
================================================================================
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 DEFINITIONS
SECTION 1.01. Defined Terms...................................................1
SECTION 1.02. Classification of Loans and Borrowings.........................18
SECTION 1.03. Terms Generally................................................18
SECTION 1.04. Accounting Terms; GAAP.........................................19
ARTICLE 2 THE CREDITS
SECTION 2.01. Commitments....................................................19
SECTION 2.02. Loans and Borrowings...........................................19
SECTION 2.03. Requests for Revolving Borrowings..............................20
SECTION 2.04. Competitive Bid Procedure......................................21
SECTION 2.05. Intentionally Omitted..........................................24
SECTION 2.06. Funding of Borrowings..........................................24
SECTION 2.07. Interest Elections.............................................24
SECTION 2.08. Termination and Reduction of Commitments.......................26
SECTION 2.09. Repayment of Loans; Evidence of Debt...........................27
SECTION 2.10. Prepayment of Loans............................................28
SECTION 2.11. Fees...........................................................28
SECTION 2.12. Interest.......................................................29
SECTION 2.13. Alternate Rate of Interest.....................................30
SECTION 2.14. Increased Costs................................................30
SECTION 2.15. Break Funding Payments.........................................32
SECTION 2.16. Taxes..........................................................33
SECTION 2.17. Payments Generally; Pro Rata Treatment;
Sharing of Set-offs..........................................34
SECTION 2.18. Mitigation Obligations; Replacement of Lenders.................36
SECTION 2.19. Borrowing Subsidiaries.........................................37
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers...........................................38
SECTION 3.02. Authorization; Enforceability..................................38
SECTION 3.03. Governmental Approvals; No Conflicts...........................38
SECTION 3.04. Financial Condition; No Material Adverse Change................39
SECTION 3.05. Properties.....................................................40
<PAGE> 3
SECTION 3.06. Litigation and Environmental Matters...........................40
SECTION 3.07. Compliance with Laws and Agreements............................41
SECTION 3.08. Investment and Holding Company Status..........................41
SECTION 3.09. Taxes..........................................................41
SECTION 3.10. ERISA..........................................................41
SECTION 3.11. Disclosure.....................................................41
SECTION 3.12. Subsidiaries...................................................42
SECTION 3.13. Use of Proceeds................................................42
SECTION 3.14. Solvency.......................................................42
SECTION 3.15. Year 2000......................................................42
ARTICLE 4 CONDITIONS
SECTION 4.01. Effective Date.................................................43
SECTION 4.02. Each Credit Event..............................................44
SECTION 4.03. Each Borrowing Subsidiary Credit Event.........................45
ARTICLE 5 AFFIRMATIVE COVENANTS
SECTION 5.01. Financial Statements and Other Information.....................46
SECTION 5.02. Notices of Material Events.....................................47
SECTION 5.03. Existence; Conduct of Business.................................48
SECTION 5.04. Payment of Obligations.........................................48
SECTION 5.05. Maintenance of Properties; Insurance...........................48
SECTION 5.06. Books and Records; Inspection Rights...........................49
SECTION 5.07. Compliance with Laws...........................................49
SECTION 5.08. Use of Proceeds................................................49
ARTICLE 6 NEGATIVE COVENANTS
SECTION 6.01. Liens..........................................................49
SECTION 6.02. Fundamental Changes............................................51
SECTION 6.03. Transactions with Affiliates...................................52
SECTION 6.04. Sale and Lease-Back Transactions...............................53
SECTION 6.05. Total Debt to EBITDA Ratio.....................................53
SECTION 6.06. Interest Coverage Ratio........................................53
<PAGE> 4
ARTICLE 7 EVENTS OF DEFAULT
ARTICLE 8 THE ADMINISTRATIVE AGENT
ARTICLE 9 GUARANTEE
ARTICLE 10 MISCELLANEOUS
SECTION 10.01. Notices.......................................................61
SECTION 10.02. Waivers; Amendments...........................................62
SECTION 10.03. Expenses; Indemnity; Damage Waiver............................63
SECTION 10.04. Successors and Assigns........................................64
SECTION 10.05. Survival......................................................68
SECTION 10.06. Counterparts; Integration; Effectiveness......................68
SECTION 10.07. Severability..................................................69
SECTION 10.08. Right of Setoff...............................................69
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of
Process.....................................................69
SECTION 10.10. Waiver of Jury Trial..........................................70
SECTION 10.11. Headings......................................................70
SECTION 10.12. Confidentiality...............................................71
SECTION 10.13. Interest Rate Limitation......................................71
SECTION 10.14. Conversion of Currencies......................................72
<PAGE> 5
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 6.01 -- Existing Liens
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B-1 -- Form of Opinion of Company's Counsel
Exhibit B-2 -- Form of Opinion of Simpson Thacher & Bartlett
Exhibit C -- Form of Opinion of Borrowing Subsidiary's Counsel
Exhibit D -- Form of Borrowing Subsidiary Agreement
Exhibit E -- Form of Borrowing Subsidiary Termination
Exhibit F -- Form of Statement Relating to Tax Status
4
<PAGE> 6
CREDIT AGREEMENT dated as of June 9, 1998, among THE NEW DUN & BRADSTREET
CORPORATION, the BORROWING SUBSIDIARIES party hereto, the LENDERS party hereto,
THE CHASE MANHATTAN BANK, as Administrative Agent, CITIBANK, N.A., as
Syndication Agent, and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Documentation Agent.
The parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Acceptable Insurer" means (i) Lloyd's of London, so long as it is rated
at least 3 crowns by S&P, (ii) an insurance company having an A.M. Best rating
of "A" or better and being in a financial size category of IX or larger (as such
category is defined on the date hereof) or (iii) an insurance company otherwise
reasonably acceptable to the Administrative Agent.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. No SPC of
any Lender shall be an Affiliate of such Lender.
"Agreement Currency" has the meaning assigned to such term in Section
10.14.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
<PAGE> 7
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Lender, the percentage
of the total Commitments represented by such Lender's Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for any day, (i) with respect to any Eurodollar
Revolving Loan, a rate per annum of 0.19%, and (ii) with respect to the facility
fees payable hereunder, a rate per annum of 0.06%.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent, in the
form of Exhibit A or any other form approved by the Administrative Agent.
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Borrower" means the Company or any Borrowing Subsidiary.
"Borrowing" means (a) Revolving Loans of the same Type made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect or (b) a Competitive Loan or group of
Competitive Loans of the same Type made on the same date and as to which a
single Interest Period is in effect.
"Borrowing Date" means any Business Day specified in a notice pursuant to
Section 2.03 or 2.04 as a date on which the relevant Borrower requests Loans to
be made hereunder.
"Borrowing Request" means a request for a Revolving Borrowing in
accordance with Section 2.03.
"Borrowing Subsidiary" means, at any time, any Subsidiary of the Company
designated as a Borrowing Subsidiary by the Company pursuant to Section 2.19
that has not ceased to be a Borrowing Subsidiary pursuant to such Section or
Article 7.
"Borrowing Subsidiary Agreement" means a Borrowing Subsidiary Agreement
substantially in the form of Exhibit D.
2
<PAGE> 8
"Borrowing Subsidiary Termination" means a Borrowing Subsidiary
Termination substantially in the form of Exhibit E.
"Business Day" means any day that is not a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
remain closed; provided that when used in connection with a Eurodollar Loan, the
term "Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 30% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Company; or (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Company by Persons who were not (i) nominated by the board of directors of the
Company, (ii) appointed in connection with the Spin-off or (iii) appointed by
directors so nominated.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.14(c), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans
or Competitive Loans.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
3
<PAGE> 9
"Commitment" means, with respect to each Lender, the commitment of such
Lender to make Revolving Loans expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.08 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 10.04. The initial amount of each Lender's Commitment
is set forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Commitment, as applicable.
"Company" means The New Dun & Bradstreet Corporation, a Delaware
corporation, and its successors.
"Competitive Bid" means an offer by a Lender to make a Competitive Loan in
accordance with Section 2.04.
"Competitive Bid Rate" means, with respect to any Competitive Bid, the
Margin or the Fixed Rate, as applicable, offered by the Lender making such
Competitive Bid.
"Competitive Bid Request" means a request for Competitive Bids in
accordance with Section 2.04.
"Competitive Loan" means a Loan made pursuant to Section 2.04.
"Competitive Loan Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Competitive Loans
(or the Dollar Equivalent thereof in the case of a Competitive Loan in an
Eligible Currency) at such time.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"D&B" means The Dun & Bradstreet Corporation, a Delaware corporation
(which will be renamed R. H. Donnelley Corporation in connection with the
Spin-off), and its successors.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
4
<PAGE> 10
"Discontinued Companies" means The Reuben H. Donnelley Corporation and
Financial Information Services, and their respective subsidiaries.
"Distribution Agreement" means the Distribution Agreement between D&B and
the Company, substantially in the form set forth as an exhibit to the
Information Statement, as in effect on May 22, 1998.
"dollars" or "$" refers to lawful money of the United States of America.
"Domestic Borrowing Subsidiary" means any Borrowing Subsidiary organized
under the laws of any jurisdiction in the United States.
"EBITDA" means, for any period, the consolidated net income of the Company
and its consolidated Subsidiaries for such period plus, to the extent deducted
in computing such consolidated net income for such period, the sum (without
duplication) of (a) income tax expense, (b) Interest Expense, (c) depreciation
and amortization expense, (d) extraordinary losses, (e) non-cash charges
relating to the change in the Company's revenue recognition policy, which change
was adopted in the fourth fiscal quarter of the 1997 fiscal year, (regardless of
when such charges are recorded or recognized) in an aggregate amount not to
exceed $254,700,000, (f) losses (net of income taxes) resulting from the
operations of the Discontinued Companies (assuming that the Discontinued
Companies owned such operations during such period), but only to the extent such
operations are designated as discontinued operations and continue to be
designated as discontinued operations in the Company's financial statements and
(g) transaction costs recorded in the fiscal year 1998 as a result of the
Spin-off in an aggregate amount not to exceed $30,000,000, and minus, to the
extent added in computing such consolidated net income for such period the sum
(without duplication) of (i) interest income, (ii) extraordinary gains and (iii)
income (net of income taxes) resulting from the operations of the Discontinued
Companies (assuming that the Discontinued Companies owned such operations during
such period), but only to the extent such operations are designated as
discontinued operations and continue to be designated as discontinued operations
in the Company's financial statements.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 10.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material.
5
<PAGE> 11
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Company or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Company or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Company or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article 7.
6
<PAGE> 12
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income (including branch profits or similar taxes)
imposed as a result of a present or former connection between such Lender or the
Administrative Agent and the Governmental Authority imposing such tax (other
than any such connection arising solely from such Lender or the Administrative
Agent having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement) and (b) in the case of a Foreign
Lender, any withholding tax that is imposed on amounts payable to such Foreign
Lender to the extent they are in effect and would apply as of the date such
Foreign Lender becomes a party to this Agreement or designates a new lending
office (including withholding taxes that would be imposed on payments made by a
Borrowing Subsidiary the Relevant Jurisdiction with respect to which is the
United Kingdom, regardless of whether the Company has designated such a
Borrowing Subsidiary) (other than with respect to any Foreign Lender that is a
Foreign Lender with respect to any Borrowing Subsidiary that is designated after
the date of this Agreement (other than a Borrowing Subsidiary the Relevant
Jurisdiction with respect to which is United Kingdom), or that is attributable
to such Foreign Lender's failure to comply with Section 2.16(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the applicable Borrower with respect to such withholding
tax pursuant to Section 2.16(a).
"Existing Credit Agreements" means the Multi-Year Revolving Credit and
Competitive Advance Facility and the 364-Day Revolving Credit and Competitive
Advance Facility, each dated as of August 30, 1996 and among D&B, the borrowing
subsidiaries party thereto, the lenders party thereto, the Chase Manhattan Bank,
as administrative agent, Citibank, N.A., as syndication agent, and Morgan
Guaranty Trust Company of New York, as documentation agent, each as in effect
immediately prior to the Effective Date.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
7
<PAGE> 13
"Financial Officer" of any Person means the chief financial officer,
principal accounting officer, treasurer or controller of such Person.
"Fixed Rate" means, with respect to any Competitive Loan (other than a
Eurodollar Competitive Loan), the fixed rate of interest per annum specified by
the Lender making such Competitive Loan in its related Competitive Bid.
"Fixed Rate Loan" means a Competitive Loan bearing interest at a Fixed
Rate.
"Foreign Lender" means, with respect to any Loan, any Lender making such
Loan that is organized under the laws of a jurisdiction other than the Relevant
Jurisdiction.
"GAAP" means generally accepted accounting principles in the United States
of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "primary
obligor"), whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Indebtedness or other obligation or
to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or any
other financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
8
<PAGE> 14
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (d) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding current accounts payable incurred in the ordinary course of
business), (e) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing unconditional right to be secured by) any Lien
on property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed (the amount of any Indebtedness resulting from
this clause (e) shall be equal to the lesser of (i) the amount secured by such
Lien and (ii) the fair market value of the property subject to such Lien as
determined in good faith by such Person), (f) all Guarantees by such Person of
Indebtedness of others, (g) all Capital Lease Obligations of such Person, (h)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty issued by banks or other
financial institutions and (i) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances created for the account of such
Person. The Indebtedness of any Person shall include the Indebtedness of any
other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information Memorandum
dated May, 1998 relating to the Company and the Transactions.
"Information Statement" means the Information Statement of D&B and the
Company dated May 22, 1998, as amended or supplemented from time to time;
provided that no such material amendment or supplement of any term thereof shall
be effective for purposes of references thereto in this Agreement unless
approved in writing by the Required Lenders.
"Interest Coverage Ratio" means, for any period, the ratio of (a) EBITDA
for such period to (b) Interest Expense for such period. For purposes of
determining the "Interest Coverage Ratio" for any period ended prior to June 30,
9
<PAGE> 15
1999, "Interest Expense" shall be calculated by giving effect to the Spin-off as
if it had occurred on the first day of such period.
"Interest Election Request" means a request by the relevant Borrower to
convert or continue a Revolving Borrowing in accordance with Section 2.07.
"Interest Expense" means, for any period, the interest expense of the
Company and its consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP and including (i) the amortization of
debt discounts to the extent included in interest expense in accordance with
GAAP, (ii) the amortization of all fees (including fees with respect to Hedging
Agreements) payable in connection with the incurrence of Indebtedness to the
extent included in interest expense in accordance with GAAP, (iii) the portion
of any rents payable under capital leases allocable to interest expense in
accordance with GAAP and (iv) minority interest financing expense of D&B
Investors, L.P. and Duns Licensing Associates, L.P.
"Interest Payment Date" means (a) with respect to any ABR Loan, the last
day of each March, June, September and December, (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period and (c) with respect to any Fixed
Rate Loan, the last day of the Interest Period applicable to the Borrowing of
which such Loan is a part and, in the case of a Fixed Rate Borrowing with an
Interest Period of more than 90 days' duration (unless otherwise specified in
the applicable Competitive Bid Request), each day prior to the last day of such
Interest Period that occurs at intervals of 90 days' duration after the first
day of such Interest Period, and any other dates that are specified in the
applicable Competitive Bid Request as Interest Payment Dates with respect to
such Borrowing.
"Interest Period" means (a) with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the relevant Borrower may elect and (b) with respect to any Fixed
Rate Borrowing, the period (which shall not be less than one day or more than
360 days) commencing on the date of such Borrowing and ending on the date
specified in the applicable Competitive Bid Request; provided, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period pertaining to a
Eurodollar
10
<PAGE> 16
Borrowing that commences on the last Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the last calendar
month of such Interest Period) shall end on the last Business Day of the last
calendar month of such Interest Period. For purposes hereof, the date of a
Borrowing initially shall be the date on which such Borrowing is made and, in
the case of a Revolving Borrowing, thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.
"IRS Ruling" has the meaning set forth in Section 4.01(h).
"Judgment Currency" has the meaning assigned to such term in Section
10.14.
"Lenders" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Dow Jones Markets
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such Eurodollar Borrowing for such Interest Period shall be the
rate at which the Administrative Agent is offered dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset of any Person, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset of any Person, for the purpose of securing any
obligation of such Person or any other Person, and (b) the interest of a vendor
or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset.
11
<PAGE> 17
"Loans" means the loans made by the Lenders to the Borrowers pursuant to
this Agreement.
"Margin" means, with respect to any Competitive Loan bearing interest at a
rate based on the LIBO Rate, the marginal rate of interest, if any, to be added
to or subtracted from the LIBO Rate to determine the rate of interest applicable
to such Loan, as specified by the Lender making such Loan in its related
Competitive Bid.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or financial condition of the Company and the
Subsidiaries taken as a whole, (b) the ability of the Company to perform any of
its payment obligations under this Agreement or (c) the rights of or benefits
available to the Lenders under this Agreement.
"Material Indebtedness" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of the Company and its
Subsidiaries in an aggregate principal amount exceeding $50,000,000. For
purposes of determining Material Indebtedness, the "principal amount" of the
obligations of the Company or any Subsidiary in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that the Company or such Subsidiary would be required to pay if such
Hedging Agreement were terminated at such time.
"Material Subsidiary" means any Borrowing Subsidiary and any Subsidiary
(a) the Total Assets of which exceed 10% of the Total Assets of the Company and
its consolidated Subsidiaries as of the end of the most recently completed
fiscal year or (b) the Net Revenue of which exceeds 10% of the Net Revenue of
the Company and its consolidated Subsidiaries as of the end of the most recently
completed fiscal year provided, that (i) any Subsidiary that directly or
indirectly owns a Material Subsidiary shall itself be a Material Subsidiary and
(ii) in the event Subsidiaries that would otherwise not be Material Subsidiaries
shall in the aggregate account for a percentage in excess of 15% of the Total
Assets or 15% of the Net Revenue, then one or more of such Subsidiaries
designated by the Company (or, if the Company shall make no designation, one or
more of such Subsidiaries in descending order based on their respective
contributions to Total Assets), shall be included as Material Subsidiaries to
the extent necessary to eliminate such excess.
"Maturity Date" means the date that falls one year after the Revolver
Termination Date.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
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<PAGE> 18
"Net Revenue" means, with respect to any Person for any period, the net
revenue of such Person and its consolidated subsidiaries, determined on a
consolidated basis in accordance with GAAP for such period.
"New D&B Assets" has the meaning set forth in the Distribution Agreement.
"Obligations" means the obligations of each of the Borrowing Subsidiaries
under this Agreement and the Borrowing Subsidiary Agreements with respect to the
payment of (i) the principal of and interest on the Loans to each such Borrowing
Subsidiary when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment or otherwise and (ii) all other monetary
obligations of each of the Borrowing Subsidiaries hereunder and thereunder.
"Other Credit Agreement " means the Multi-Year Revolving Credit and
Competitive Advance Facility dated as of June 9, 1998 among the Company, the
borrowing subsidiaries party thereto, the lenders party thereto, The Chase
Manhattan Bank, as administrative agent, Citibank, N.A., as syndication agent,
and Morgan Guaranty Trust Company of New York, as documentation agent, as
amended from time to time.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet delinquent or
are being contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
landlords', repairmen's and other like Liens imposed by law, arising in
the ordinary course of business and securing obligations that are not
overdue by more than 60 days or are being contested in compliance with
Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
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(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary
course of business and deposits securing liabilities to insurance carriers
under insurance or self-insurance arrangements; and
(e) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Company or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Company or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Register" has the meaning set forth in Section 10.04.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Relevant Jurisdiction" means (i) in the case of any Loan to the Company
or any Domestic Borrowing Subsidiary, the United States of America, and (ii) in
the case of any Loan to any other Borrowing Subsidiary, the jurisdiction
imposing (or having the power to impose) withholding tax on payments by such
Borrowing Subsidiary under this Agreement.
"Required Lenders" means, at any time, Lenders having Revolving Credit
Exposures and unused Commitments representing at least 51% of the sum of the
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total Revolving Credit Exposures and unused Commitments at such time; provided
that, for purposes of declaring the Loans to be due and payable pursuant to
Article 7, and for all purposes after the Loans become due and payable pursuant
to Article 7 or the Commitments expire or terminate, the total Competitive Loan
Exposures of the Lenders shall be included in their respective Revolving Credit
Exposures in determining the Required Lenders.
"Revolver Termination Date" means the date that is 364 days after the date
hereof.
"Revolving Credit Exposure" means, with respect to any Lender at any time,
the sum of the outstanding principal amount of such Lender's Revolving Loans.
"Revolving Loan" means a Loan made pursuant to Section 2.03.
"Revolving Period" means the period from and including the Effective Date
to but excluding the earlier of (i) the Revolver Termination Date and (ii) the
date of termination of the Commitments.
"SPC" has the meaning set forth in Section 10.04(h).
"Spin-off" means all of the transactions contemplated by the Information
Statement and Article 2 of the Distribution Agreement to be consummated on or
prior to the Distribution Date (as defined therein), including without
limitation (i) the transfer by D&B to the Company of all of D&B's and its
subsidiaries' right, title and interest in the New D&B Assets, (ii) the transfer
by the Company and its subsidiaries to D&B, The Reuben H. Donnelley Corporation
and its subsidiaries of all of the Company's and its subsidiaries' right, title
and interest in the RHD Assets (as defined in the Distribution Agreement), (iii)
the execution, delivery and performance by each party thereto of each Spin-off
Document (other than the Information Statement) and (iv) the Distribution (as
defined in the Distribution Agreement).
"Spin-off Date" means the date of consummation of the Spin-off.
"Spin-off Documents" means (i) the Information Statement, (ii) the
Distribution Agreement and (iii) each Ancillary Agreement (as defined in the
Distribution Agreement) substantially in the form provided to the Lenders on
June 8, 1998.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
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established by the Board to which the relevant Lender is subject, for
eurocurrency funding (currently referred to as "Eurodollar Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"Subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Company.
"Successor Corporation" has the meaning set forth in Section 6.02(c).
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Total Assets" means, at any date as to any Person, the total assets of
such Person and its consolidated subsidiaries at such date, determined on a
consolidated basis in accordance with GAAP.
"Total Debt" means, at any date all indebtedness of the Company and its
consolidated Subsidiaries at such date to the extent such items should be
reflected on the consolidated balance sheet of the Company (excluding any such
items which appear only in the notes to such consolidated balance sheet) at such
date in accordance with GAAP.
"Total Debt to EBITDA Ratio" means, at any time, the ratio of (a) Total
Debt at such time to (b) EBITDA for the most recent period of four consecutive
fiscal quarters of the Company ended at or prior to such time. Solely for
purposes of this definition, (i) if the Company or any of its consolidated
subsidiaries shall have completed an acquisition of all or a substantial part of
the assets, or a going concern business or division, of any Person, or (ii) if
the Company shall have
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merged with any Person during such period or (iii) the Company or any of its
consolidated subsidiaries shall have disposed of all or a substantial part of
its assets or a going concern business or division, in each case, EBITDA for the
relevant period shall be determined on a pro forma basis as if such acquisition,
disposition or merger, and the incurrence of any related Indebtedness, had
occurred on the first day of such period. "Total Debt" for purposes of the
"Total Debt to EBITDA Ratio" at any date prior to the Spin-off Date shall be
calculated by giving effect to the Spin-off as if it had occurred on such date.
"Transactions" means the execution, delivery and performance by the
Borrowers of this Agreement and the Borrowing Subsidiary Agreements, the
borrowing of Loans, the use of the proceeds thereof and the Spin-off.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the LIBO Rate, the Alternate Base Rate or, in the
case of a Competitive Loan or Borrowing, the LIBO Rate or a Fixed Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., a
"Eurodollar Revolving Loan"). Borrowings also may be classified and referred to
by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurodollar
Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
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import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE 2
THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions set forth
herein, each Lender, severally and not jointly, agrees to make Revolving Loans,
denominated in dollars, to any Borrower from time to time during the Revolving
Period in an aggregate principal amount that will not result in (a) such
Lender's Revolving Credit Exposure exceeding such Lender's Commitment or (b) the
sum of the total Revolving Credit Exposures plus the total Competitive Loan
Exposures exceeding the total Commitments. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrowers may borrow,
prepay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings. (a) Each Revolving Loan shall be made
as part of a Borrowing consisting of Revolving Loans made by the Lenders ratably
in accordance with their respective Commitments. Each Competitive Loan shall be
made in accordance with the procedures set forth in Section 2.04. The failure of
any Lender to make
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any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments and Competitive Bids of the
Lenders are several and no Lender shall be responsible for any other Lender's
failure to make Loans as required.
(b) Subject to Section 2.13, (i) each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the applicable Borrower
may request in accordance herewith and (ii) each Competitive Borrowing shall be
comprised entirely of Eurodollar Competitive Loans or Fixed Rate Loans as the
applicable Borrower may request in accordance herewith. Each Lender at its
option may make any Eurodollar Loan by causing any domestic or foreign branch or
Affiliate of such Lender to make such Loan; provided that (i) any exercise of
such option shall not affect the obligation of any Borrower to repay such Loan
in accordance with the terms of this Agreement and (ii) unless any Borrower
shall request that an Affiliate of a Lender make a Loan, a Lender may not
recover for any increased costs under Sections 2.14 or 2.16 incurred solely as a
result of an Affiliate of such Lender, rather than such Lender, making a Loan,
if, without economic disadvantage to, and consistent with the policies and
practices of, such Lender, such Loan could have been made in a manner that would
have avoided such increased costs under Section 2.14 or 2.16.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000. At the time that
each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $1,000,000 and not less than $5,000,000;
provided that an ABR Revolving Borrowing may be in an aggregate amount that is
equal to the entire unused balance of the total Commitments. Each Competitive
Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $5,000,000. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any
time be more than a total of ten Eurodollar Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, no Borrower
shall be entitled to request, or to elect to convert or continue, any Borrowing
if the Interest Period requested with respect thereto would end after the
Maturity Date.
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SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving
Borrowing, a Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New
York City time, one Business Day before the date of the proposed Borrowing. Each
such telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or telecopy to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the applicable Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the relevant Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.06.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the relevant Borrower shall be deemed to have selected an Interest Period of one
month's duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender
of the details thereof and of the amount of such Lender's Loan to be made as
part of the requested Borrowing.
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SECTION 2.04. Competitive Bid Procedure. (a) Subject to the terms and
conditions set forth herein, from time to time during the Revolving Period any
Borrower may request Competitive Bids and may (but shall not have any obligation
to) accept Competitive Bids and borrow Competitive Loans; provided that the sum
of the total Revolving Credit Exposures plus the total Competitive Loan
Exposures at any time shall not exceed the total Commitments. To request
Competitive Bids, a Borrower shall notify the Administrative Agent of such
request by telephone, in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, four Business Days before the date of the
proposed Borrowing and, in the case of a Fixed Rate Borrowing, not later than
10:00 a.m., New York City time, one Business Day before the date of the proposed
Borrowing; provided that the Borrowers may submit jointly up to (but not more
than) three Competitive Bid Requests on the same day, but a Competitive Bid
Request shall not be made within five Business Days after the date of any
previous Competitive Bid Request, unless any and all such previous Competitive
Bid Requests shall have been withdrawn or all Competitive Bids received in
response thereto rejected. Each such telephonic Competitive Bid Request shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of a
written Competitive Bid Request in a form approved by the Administrative Agent
and signed by the applicable Borrower. Each such telephonic and written
Competitive Bid Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a Eurodollar Borrowing or a
Fixed Rate Borrowing;
(iv) the Interest Period to be applicable to such Borrowing, which
shall be a period contemplated by the definition of the term "Interest
Period"; and
(v) the location and number of the relevant Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.06.
Promptly following receipt of a Competitive Bid Request in accordance with this
Section, the Administrative Agent shall notify the Lenders of the details
thereof by telecopy, inviting the Lenders to submit Competitive Bids.
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(b) Each Lender may (but shall not have any obligation to) make one or
more Competitive Bids to any Borrower in response to a Competitive Bid Request.
Each Competitive Bid by a Lender must be in a form reasonably approved by the
Administrative Agent and must be received by the Administrative Agent by
telecopy, in the case of a Eurodollar Competitive Borrowing, not later than 9:30
a.m., New York City time, three Business Days before the proposed date of such
Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than
9:30 a.m., New York City time, on the proposed date of such Competitive
Borrowing. Competitive Bids that do not conform substantially to the form
approved by the Administrative Agent may be rejected by the Administrative
Agent, and the Administrative Agent shall notify the applicable Lender as
promptly as practicable. Each Competitive Bid shall specify (i) the principal
amount (which shall be a minimum of $5,000,000 and which may equal the entire
principal amount of the Competitive Borrowing requested by the applicable
Borrower) of the Competitive Loan or Loans that the Lender is willing to make,
(ii) the Competitive Bid Rate or Rates at which the Lender is prepared to make
such Loan or Loans (expressed as a percentage rate per annum in the form of a
decimal to no more than four decimal places) and (iii) the Interest Period
applicable to each such Loan and the last day thereof.
(c) The Administrative Agent shall promptly notify the relevant Borrower
by telecopy of the Competitive Bid Rate and the principal amount specified in
each Competitive Bid and the identity of the Lender that shall have made such
Competitive Bid.
(d) Subject only to the provisions of this paragraph, a Borrower may
accept or reject any Competitive Bid. The relevant Borrower shall notify the
Administrative Agent by telephone, confirmed by telecopy in a form reasonably
approved by the Administrative Agent, whether and to what extent it has decided
to accept or reject each Competitive Bid, in the case of a Eurodollar
Competitive Borrowing, not later than 10:30 a.m., New York City time, three
Business Days before the date of the proposed Competitive Borrowing, and in the
case of a Fixed Rate Borrowing, not later than 10:30 a.m., New York City time,
on the proposed date of the Competitive Borrowing; provided that (i) the failure
of such Borrower to give such notice shall be deemed to be a rejection of each
Competitive Bid, (ii) such Borrower shall not accept a Competitive Bid made at a
particular Competitive Bid Rate if such Borrower rejects a Competitive Bid made
at a lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive
Bids accepted by such Borrower shall not exceed the aggregate amount of the
requested Competitive Borrowing specified in the related Competitive Bid
Request, (iv) to the extent necessary to comply with clause (iii) above, such
Borrower may accept Competitive Bids at the same Competitive Bid Rate in part,
which acceptance, in the case of multiple Competitive Bids at such Competitive
Bid Rate, shall be made pro rata in accordance with the amount of each such
Competitive Bid, and (v)
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except pursuant to clause (iv) above, no Competitive Bid shall be accepted for a
Competitive Loan unless such Competitive Loan is in a minimum principal amount
of $5,000,000; provided further that if a Competitive Loan must be in an amount
less than $5,000,000 because of the provisions of clause (iv) above, such
Competitive Loan may be for a minimum of $1,000,000, and in calculating the pro
rata allocation of acceptances of portions of multiple Competitive Bids at a
particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be
rounded to integral multiples of $1,000,000 in a manner determined by such
Borrower. A notice given by any Borrower pursuant to this paragraph shall be
irrevocable.
(e) The Administrative Agent shall promptly notify each bidding Lender by
telecopy whether or not its Competitive Bid has been accepted (and, if so, the
amount and Competitive Bid Rate so accepted), and each successful bidder will
thereupon become bound, subject to the terms and conditions hereof, to make the
Competitive Loan in respect of which its Competitive Bid has been accepted.
(f) If the Administrative Agent shall elect to submit a Competitive Bid in
its capacity as a Lender, it shall submit such Competitive Bid directly to the
relevant Borrower at least one quarter of an hour earlier than the time by which
the other Lenders are required to submit their Competitive Bids to the
Administrative Agent pursuant to paragraph (b) of this Section.
SECTION 2.05. Intentionally Omitted.
SECTION 2.06. Funding of Borrowings (a) Each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the relevant Borrower by promptly (but in no event later than 1:00 p.m., New
York City time) crediting the amounts so received by 12:00 noon, New York City
time, in like funds, to an account of the Company maintained with the
Administrative Agent in New York City and designated by such Borrower in the
applicable Borrowing Request or Competitive Bid Request (and, if the applicable
Borrower is a Borrowing Subsidiary, the Company shall make such funds available
to such Borrowing Subsidiary) or to such other account as may be specified in
the applicable Borrowing Request or Competitive Bid Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
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Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative Agent,
then the applicable Lender and each Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to the relevant Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the Federal Funds
Effective Rate or (ii) in the case of such Borrower, the interest rate
applicable to ABR Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender's Loan included in such
Borrowing and the Administrative Agent shall return to such Borrower any amount
(including interest) paid by the Borrower to the Administrative Agent pursuant
to this paragraph with respect to such amount.
SECTION 2.07. Interest Elections. (a) Each Revolving Borrowing initially
shall be of the Type specified in the applicable Borrowing Request and, in the
case of a Eurodollar Revolving Borrowing, shall have an initial Interest Period
as specified in such Borrowing Request. Thereafter, the relevant Borrower may
elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect
Interest Periods therefor, all as provided in this Section. A Borrower may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Competitive Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, a Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if such Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form reasonably approved by the Administrative Agent and signed by
the relevant Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02:
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(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then such Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the relevant Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Revolving Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if
an Event of Default has occurred and is continuing and the Administrative Agent,
at the request of the Required Lenders, so notifies the Company, then, so long
as an Event of Default is continuing (i) no outstanding Revolving Borrowing may
be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Revolving Borrowing shall be converted to an ABR Borrowing at
the end of the Interest Period applicable thereto.
SECTION 2.08. Termination and Reduction of Commitments (a) Unless
previously terminated, the Commitments shall terminate on the Revolver
Termination Date.
(b) Prior to the Revolver Termination Date, the Company may at any time
terminate, or from time to time reduce, the Commitments; provided that (i)
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each reduction of the Commitments shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000 and (ii) the Company shall
not terminate or reduce the Commitments if, after giving effect to any
concurrent prepayment of the Loans in accordance with Section 2.10, the sum of
the Revolving Credit Exposures plus the total Competitive Loan Exposures would
exceed the total Commitments.
(c) The Company shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
one Business Day (or, to the extent a concurrent prepayment of Loans is required
in accordance with Section 2.10, upon the minimum advance notice required in
connection with such prepayment under such Section) prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Company pursuant to this Section shall be irrevocable; provided that a notice of
termination of the Commitments delivered by the Company may state that such
notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Company (by notice to the
Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments shall be made ratably
among the Lenders in accordance with their respective Commitments.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) Each Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Lender the then unpaid principal amount of each Revolving Loan
of such Borrower on the Maturity Date and (ii) to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Competitive
Loan of such Borrower on the earlier of (A) the last day of the Interest Period
applicable to such Loan and (B) the Revolver Termination Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of each Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period (if any) applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the
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Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of any Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, each Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent and the Company. Thereafter, the Loans
evidenced by each such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 10.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.10. Prepayment of Loans. (a) Any Borrower shall have the right
at any time and from time to time to prepay any Borrowing of such Borrower in
whole or in part, subject to prior notice in accordance with paragraph (c) of
this Section; provided that no Borrower shall have the right to prepay any
Competitive Loan without the prior consent of the Lender thereof.
(b) The relevant Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Revolving Borrowing, not later than 11:00 a.m., New
York City time, three Business Days before the date of prepayment and (ii) in
the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m.,
New York City time, one Business Day before the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment date and the
principal amount of each Borrowing or portion thereof to be prepaid; provided
that, if a notice of prepayment is given in connection with a conditional notice
of termination of the Commitments as contemplated by Section 2.08, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08. Promptly following receipt of any such notice
relating to a Revolving Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each partial prepayment of any Revolving
Borrowing shall be in an amount that would be permitted in the case of an
advance
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of a Revolving Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Revolving Borrowing shall be applied ratably to the Loans
included in the prepaid Borrowing. Prepayments shall be accompanied by accrued
interest to the extent required by Section 2.12.
SECTION 2.11. Fees. (a) The Company agrees to pay to the Administrative
Agent for the account of each Lender a facility fee, which shall accrue at the
Applicable Rate (i) for any day prior to the earlier of (x) the Revolver
Termination Date and (y) the date on which the Commitments are terminated, on
the amount of the Commitment of such Lender (whether used or unused) on such day
and (ii) for any day thereafter, the amount of such Lender's Revolving Credit
Exposure on such day. Accrued facility fees shall be payable in arrears on the
last day of March, June, September and December of each year and on the later of
the date on which the Commitments terminate and the date on which such Lender
ceases to have any Revolving Credit Exposure, commencing on the first such date
to occur after the date hereof; provided that any facility fees accruing after
the Maturity Date shall be payable on demand. All facility fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(b) The Company agrees to pay to the Administrative Agent, for its own
account, fees payable in the amounts and at the times separately agreed upon
between the Company and the Administrative Agent.
(c) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, in
the case of facility fees, to the Lenders. Fees paid shall not be refundable
under any circumstances.
SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing shall
bear interest at a rate per annum equal to the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at
a rate per annum equal to (i) in the case of a Eurodollar Revolving Loan, the
LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate, or (ii) in the case of a Eurodollar Competitive Loan, the LIBO
Rate for the Interest Period in effect for such Borrowing plus (or minus, as
applicable) the Margin applicable to such Loan.
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(c) Each Fixed Rate Loan shall bear interest at a rate per annum equal to
the Fixed Rate applicable to such Loan.
(d) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by any Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided above or (ii) in the case of
any other amount, 2% plus the rate applicable to ABR Loans as provided above.
(e) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued pursuant
to paragraph (d) of this Section shall be payable on demand, (ii) in the event
of any repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the Maturity Date), accrued interest on the principal
amount repaid or prepaid shall be payable on the date of such repayment or
prepayment, (iii) in the event of any conversion of any Eurodollar Revolving
Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion and (iv)
all accrued interest shall be payable on the Maturity Date.
(f) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate or LIBO Rate
shall be determined by the Administrative Agent, and such determination shall be
presumed correct absent manifest error.
SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
presumed correct absent manifest error) that adequate and reasonable means do
not exist for ascertaining the LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders (or, in
the case of a Eurodollar Competitive Loan, the Lender that is required to make
such Loan) that the LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest Period;
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then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, and any Eurodollar Borrowing so requested to be continued shall be
converted to an ABR Borrowing, (ii) if any Borrowing Request requests a
Eurodollar Revolving Borrowing, such Borrowing shall be made as an ABR Borrowing
and (iii) any request by any Borrower for a Eurodollar Competitive Borrowing
shall be ineffective; provided that if the circumstances giving rise to such
notice do not affect all the Lenders, then requests for Eurodollar Competitive
Borrowings may be made to Lenders that are not affected thereby and, if the
circumstances giving rise to such notice only affect one Type of Borrowing, then
the other Type of Borrowings shall not be affected.
SECTION 2.14. Increased Costs. (a) If any Governmental Authority shall
have in effect any reserve, liquid asset or similar requirement with respect to
any category of deposits or liabilities customarily used to fund Loans, or by
reference to which interest rates applicable to Loans are determined, and the
result of such requirement shall be to increase the cost to such Lender of
making or maintaining any Loan, and such Lender shall deliver to the Company a
notice requesting compensation under this paragraph and setting forth the
applicable Statutory Reserve Rate, then the Company shall pay to such Lender on
each Interest Payment Date with respect to each affected Loan additional
interest at a rate per annum up to but not exceeding the excess of (i) the rate
otherwise applicable to such Loan (the "Applicable Interest Rate") divided by
one minus the applicable Statutory Reserve Rate over (ii) the Applicable
Interest Rate.
(b) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
covered by subsection (a) above); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans or Fixed Rate Loans
made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of
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maintaining its obligation to make any such Loan) or to reduce the amount of any
sum received or receivable by such Lender in respect thereof hereunder (whether
of principal, interest or otherwise), then the Company will pay to such Lender
such additional amount or amounts as will compensate such Lender for such
additional costs incurred or reduction suffered.
(c) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Company will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(d) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a), (b) or (c) of this Section shall be delivered to
the Company and shall be presumed correct absent manifest error. The Company
shall pay such Lender the amount due under this Section within 10 days after
receipt of the relevant certificate.
(e) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided that the Company shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than six months prior to the date that such Lender
notifies the Company of the Change in Law giving rise to such increased costs or
reductions and of such Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof.
(f) Notwithstanding the foregoing provisions of this Section, a Lender
shall not be entitled to compensation pursuant to this Section in respect of any
Competitive Loan if the Change in Law that would otherwise entitle it to such
compensation shall have been publicly announced or be otherwise known to it
prior to submission of the Competitive Bid pursuant to which such Loan was made.
SECTION 2.15. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan or Fixed Rate Loan other than on the last
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day of an Interest Period applicable thereto (including as a result of an Event
of Default), (b) the conversion of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice is permitted
to be revocable under Section 2.10(b) and is revoked in accordance herewith),
(d) the failure to borrow any Eurodollar Competitive Loan after accepting the
Competitive Bid to make such Loan, or (e) the assignment of any Eurodollar Loan
or Fixed Rate Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Company pursuant to Section 2.18, then,
in any such event, the Company shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, the
loss to any Lender attributable to any such event shall be deemed to include an
amount determined by such Lender to be equal to the excess, if any, of (i) the
amount of interest that such Lender would pay for a deposit equal to the
principal amount of such Loan for the period from the date of such payment,
conversion, failure or assignment to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, convert or
continue, the duration of the Interest Period that would have resulted from such
borrowing, conversion or continuation) if the interest rate payable on such
deposit were equal to the LIBO Rate for such Interest Period, over (ii) the
amount of interest that such Lender would earn on such principal amount for such
period if such Lender were to invest such principal amount for such period at
the interest rate that would be bid by such Lender (or an affiliate of such
Lender) for dollar deposits from other banks in the eurodollar market at the
commencement of such period. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Company and shall be presumed correct absent
manifest error. The Company shall pay such Lender the amount due under this
Section within 10 days after receipt of the relevant certificate.
SECTION 2.16. Taxes. (a) Any and all payments by or an account of any
obligation of any Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if any
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent or Lender
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Borrower shall make such deductions
and (iii) such Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
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(b) In addition, the Borrowers shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The relevant Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of any Borrower hereunder (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section), and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered
to the Company by a Lender, or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by any Borrower to a Governmental Authority, such Borrower shall deliver
to the Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Each Lender that is not a United States person as defined in section
7701(a)(30) of the Code shall, if legally able to do so, prior to the
immediately following due date of any payment by the Borrower under this
Agreement, deliver to the Borrower Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Lender claiming exemption from U.S. federal
withholding tax with respect to payments under this Agreement under section
871(h) or 881(c) of the code relating to payments of "portfolio interest", a
statement substantially in the form of Exhibit F, and any other certificate or
statement of exemption or any subsequent version thereof or successors thereto,
properly completed and duly executed by such Lender claiming complete exemption
or a reduced rate of United States federal withholding tax. Any Foreign Lender
that is entitled to an exemption from or reduction of withholding tax with
respect to payments under this Agreement pursuant to the law of a Relevant
Jurisdiction, other than the United States of America, or under any treaty to
which a Relevant Jurisdiction is a party shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Borrower as will permit such payments to be
made without withholding or at a reduced rate.
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If the Company determines in good faith that a reasonable basis
exists for contesting an Indemnified Tax or Other Tax, the relevant Lender or
the Administrative Agent, as applicable, shall cooperate with the Company in
challenging such Tax at the Company's expense if requested by the Company. If
any Lender or the Administrative Agent, as applicable, shall become aware that
it is entitled to receive a refund in respect of Indemnified Taxes or Other
Taxes pursuant to section 2.16, it shall promptly notify the Borrower of the
availability of such refund and shall, within 30 days after receipt of a request
by the Borrower, apply for such refund if it is not otherwise disadvantageous to
such Lender or the Administrative Agent. If any Lender or the Administrative
Agent, as applicable, receives a refund (whether by way of a direct payment or
by offset) of any Indemnified Tax or Other Tax for which a payment has been made
pursuant to Section 2.16 or realizes any credit or other tax benefit as a result
of the payment of such Tax by any Borrower, which refund, credit or tax benefit
in the good faith judgment of such Lender or the Administrative Agent, as the
case may be, is allocable to such payment made under Section 2.16, the amount of
such refund, credit or tax benefit (together with any interest received from the
applicable Governmental Authority thereon) shall be paid to such Borrower.
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) Each Borrower shall make each payment required to be made by it hereunder
(whether of principal, interest or fees or under Section 2.14, 2.15 or 2.16, or
otherwise) prior to 1:00 p.m., New York City time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made in dollars, to the Administrative Agent at its offices at 270 Park
Avenue, New York, New York, except that payments pursuant to Sections 2.14,
2.15, 2.16 and 10.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All Loans hereunder
shall be denominated and made, and all payments hereunder (whether of principal,
interest or otherwise) shall be made, in dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, interest and fees
then due hereunder, such funds shall be applied (i) first, to pay interest and
fees then
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due hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second, to pay
principal then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans resulting in such Lender receiving
payment of a greater proportion of the aggregate amount of its Revolving Loans
and accrued interest thereon than the proportion received by any other Lender,
then the Lender receiving such greater proportion shall purchase (for cash at
face value) participations in the Revolving Loans of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans; provided that (i) such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Borrower pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to any Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). Each Borrower
consents to the foregoing and agrees, to the extent it may effectively do so
under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Company or the relevant Borrower prior to the date on which any payment is due
to the Administrative Agent for the account of the Lenders hereunder that such
Borrower will not make such payment, the Administrative Agent may assume that
such Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders the amount due. In
such event, if such Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.06(b) or 2.17(d), then the Administrative Agent may, in
its
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discretion (notwithstanding any contrary provision hereof), apply any amounts
thereafter received by the Administrative Agent for the account of such Lender
to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.14, or if any Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.14 or 2.16, as the case may be, in the future and
(ii) would not subject such Lender to any unreimbursed cost or expense and would
not otherwise be disadvantageous to such Lender. The Company hereby agrees to
pay all reasonable costs and expenses incurred by any Lender in connection with
any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or if any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, or if any
Lender fails to approve any waiver or amendment to this Agreement which has been
approved by the Required Lenders, then the Company may, at its sole expense and
effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 10.04), all its interests, rights and
obligations under this Agreement (other than any outstanding Competitive Loans
held by it) to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); provided that (i)
the Company shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans (other than Competitive Loans), accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Company (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.14 or payments required
to be made pursuant to Section 2.16, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling such Borrower to require
such assignment and delegation cease to apply.
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SECTION 2.19. Borrowing Subsidiaries. On or after the Effective Date, the
Company may designate any Subsidiary of the Company as a Borrowing Subsidiary by
delivery to the Administrative Agent of a Borrowing Subsidiary Agreement
executed by such Subsidiary and the Company, and upon such delivery such
Subsidiary shall for all purposes of this Agreement be a Borrowing Subsidiary
and a party to this Agreement until the Company shall have executed and
delivered to the Administrative Agent a Borrowing Subsidiary Termination with
respect to such Subsidiary, whereupon such Subsidiary shall cease to be a
Borrowing Subsidiary and a party to this Agreement. Notwithstanding the
preceding sentence, no Borrowing Subsidiary Termination will become effective as
to any Borrowing Subsidiary at a time when any principal of or interest on any
Loan to such Borrowing Subsidiary shall be outstanding hereunder, provided that
such Borrowing Subsidiary Termination shall be effective to terminate such
Borrowing Subsidiary's right to make further Borrowings under this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers. Each of the Company and its Material
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions are within
the Company's (and, as applicable, each Borrowing Subsidiary's) corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of the Company,
and each Borrowing Subsidiary Agreement with respect to any Borrowing Subsidiary
(as to which a Borrowing Subsidiary Termination has not become effective) has
been duly executed and delivered by the Company and such Borrowing Subsidiary
and constitutes a legal, valid and binding obligation of the Borrowing
Subsidiary thereunder, in each case enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
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SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect and except for such consents,
approvals, registrations, filings and other actions the failure to obtain or
make could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the
Company or any of its Subsidiaries or any order of any Governmental Authority,
except for such violations which, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, (c) will not
violate or result in a default under any indenture, agreement or other
instrument binding the Company or any of its Subsidiaries or its assets, or give
rise to a right thereunder to require any payment to be made by the Company or
any of its Subsidiaries, except for such violations and defaults which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, and (d) will not result in the creation or imposition
of any Lien on any asset of the Company or any of its Material Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
Company has heretofore furnished to the Lenders (i) the consolidated balance
sheet of D&B at December 31, 1996 and December 31, 1997 and the related
consolidated statements of income, shareholders' equity and cash flows of D&B
for the fiscal years ended December 31, 1995, December 31, 1996 and December 31,
1997, in each case reported on by Coopers & Lybrand L.L.P., independent public
accountants, and (ii) the consolidated balance sheet of D&B at March 31, 1998
and the related consolidated statements of income and cash flows for the fiscal
quarter and the portion of the fiscal year ended March 31, 1998, certified by a
Financial Officer of D&B. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of D&B and its consolidated Subsidiaries as of such dates and for such
periods in accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of the statements referred to in clause (ii)
above.
(b) The Company has heretofore furnished to the Lenders (i) its unaudited
pro forma condensed balance sheet and unaudited pro forma condensed statement of
operations, each prepared giving effect to the Transactions as if the
Transactions had occurred on December 31, 1997, in the case of such balance
sheet and January 1, 1997, in the case of such statement of operations and (ii)
its unaudited pro forma condensed balance sheet and unaudited pro forma
condensed statement of operations, each prepared giving effect to the
Transactions as if the Transactions had occurred on March 31, 1998, in the case
of such balance sheet and January 1, 1998, in the case of such statement of
operations. Such pro forma
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financial statements (i) have been prepared in good faith based on the same
assumptions used to prepare the pro forma financial statements included in the
Information Memorandum (which assumptions are believed by the Company to be
reasonable), (ii) are based on the best information available to the Company
after due inquiry, (iii) accurately reflect all adjustments necessary to give
effect to the Transactions and (iv) present fairly, in all material respects (x)
in the case of such pro forma balance sheets, the financial position of the
Company and its consolidated Subsidiaries as of December 31, 1997 and March 31,
1998, respectively, as if the Transactions had occurred on such dates and (y) in
the case of such pro forma statements of operations, the results of operations
of the Company and its consolidated Subsidiaries for the fiscal year ended
December 31, 1997 (as if the Transactions had occurred on January 1, 1997) and
for the fiscal quarter ended March 31, 1998 (as if the Transactions had occurred
on January 1, 1998), respectively.
(c) Since December 31, 1997, there has been no material adverse change in
the business, assets, operations, prospects or financial condition, of the
Company and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Company and its Material
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to the business of the Company and its
Subsidiaries, taken as a whole, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes. There are no Liens on any
such property other than Liens permitted under Section 6.01.
(b) Each of the Company and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to the business of the Company and its Subsidiaries taken as a whole,
and the use thereof by the Company and its Subsidiaries does not infringe upon
the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
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Matters) or (ii) that involve this Agreement, any Borrowing Subsidiary Agreement
or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Company nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the Company and
its Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property (including without
limitation any "margin" rules or regulations promulgated by the Board) and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the Company
nor any of its Material Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Company and each of its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of
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Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan by an amount that could reasonably be
expected to result in a Material Adverse Effect, and the present value of all
accumulated benefit obligations of all underfunded Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of all such underfunded
Plans by an amount that could reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.11. Disclosure. None of the reports, financial statements,
certificates or other written information furnished by or on behalf of any
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of this Agreement or any Borrowing Subsidiary Agreement or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished), including without limitation the Information Statement, contain any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Company represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth as of the date hereof
and the Spin-off Date a list of all Subsidiaries and the percentage ownership
interest of the Company therein. As of the Effective Date and the Spin-off Date,
the shares of capital stock of such Subsidiaries will be fully paid and
non-assessable and such shares and other ownership interests so indicated by
Schedule 3.12 will be owned by the Company, directly or indirectly, free and
clear of all Liens.
SECTION 3.13. Use of Proceeds. The proceeds of the Loans have been applied
by the Borrowers in accordance with the provisions of Section 5.08.
SECTION 3.14. Solvency. On the date which is the earlier of (i) the
Spin-off Date (after giving effect to the Spin-off) and (ii) the date of the
first Borrowing hereunder, (a) the fair value of the assets of the Company, at a
fair valuation, will exceed its debts and liabilities, subordinated, contingent
or otherwise; (b) the present fair saleable value of the property of the Company
will be greater than the amount that will be required to pay the probable
liability of its debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured; (c)
the Company does not intend to incur or does not believe it will incur debts and
liabilities, subordinated, contingent or otherwise, beyond its ability to pay
such debts and liabilities as they become absolute and matured; and (d) the
Company will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted
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and is proposed to be conducted following the Effective Date and the Spin-off
Date.
SECTION 3.15. Year 2000. The cost to the Company and its Subsidiaries of
any reprogramming required to permit the proper functioning, in and following
the year 2000, of the Company's and its Subsidiaries' computer systems could not
reasonably be expected to result in a Material Adverse Effect.
ARTICLE 4
CONDITIONS
SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received favorable written
opinions (addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Nancy L. Henry, Chief Legal Counsel to the Company, and
Simpson Thacher & Bartlett, special New York counsel for the Company,
substantially in the form of Exhibit B-1 and B-2, respectively, and covering
such other matters relating to the Company, this Agreement or the Transactions
as the Required Lenders shall reasonably request. The Company hereby requests
such counsel to deliver such opinion.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Company, the
authorization of the Transactions and any other legal matters relating to the
Company, this Agreement or the Transactions, all in form and substance
reasonably satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a certificate, dated the
Effective Date and signed by the Chairman, the President, a Vice President or a
Financial Officer of the Company, confirming compliance with the conditions set
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forth in paragraphs (a) (including the representations and warranties set forth
in Section 3.04) and (b) of Section 4.02.
(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all reasonable out-of-pocket
expenses required to be reimbursed or paid by the Company hereunder.
(f) The Administrative Agent shall have received evidence satisfactory to
it that all commitments to extend credit under the Existing Credit Agreements
shall have been terminated and all amounts outstanding or payable thereunder
shall have been repaid in full.
(g) The Lenders shall have received copies of all the financial statements
referred to in Section 3.04, and all such financial statements shall be
consistent in all material respects with other information previously provided
to the Lenders.
(h) The proposed Spin-off (including without limitation the corporate and
capital structure of the Borrowers after giving effect thereto, their respective
organizational documents and any material contracts to which they are a party
described therein) shall be in all material respects as described in the
Information Statement, with only such material changes as the Required Lenders
shall have approved. All material authorizations and approvals to be obtained
from any Governmental Authority with respect to the Transactions (including
without limitation the private letter ruling from the Internal Revenue Service
(the "IRS Ruling") to the effect that the Spin-off will be tax-free to D&B and
the shareholders of D&B) as described in the Information Statement shall have
been obtained and shall be in full force and effect. The Administrative Agent
shall have received copies of each such authorization or approval (including
without limitation the IRS Ruling) and each Spin-off Document in effect on the
Effective Date.
The Administrative Agent shall notify the Company and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 10.02) at or prior to 3:00 p.m., New York City time, on or
prior to July 15, 1998 (and, in the event such conditions are not so satisfied
or waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to make a
Loan on the occasion of any Borrowing is subject to the satisfaction of the
following conditions:
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(a) The representations and warranties of the Company set forth in this
Agreement (other than the representations and warranties set forth in Section
3.04) and, in the case of a Borrowing by a Borrowing Subsidiary, the
representations and warranties of such Borrowing Subsidiary in its Borrowing
Subsidiary Agreement, shall be true and correct on and as of the date of such
Borrowing.
(b) At the time of and immediately after giving effect to such Borrowing,
no Default shall have occurred and be continuing.
(c) Solely if such Borrowing is the first Borrowing under this Agreement,
the fact that (i) D&B shall have transferred to the Company substantially all of
the New D&B Assets on the terms described in the Information Statement and (ii)
the Company shall have delivered to the Lenders a certificate of a Financial
Officer of the Company so certifying.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Company and, if applicable, the relevant Borrowing Subsidiary on the date
thereof as to the matters specified in paragraphs (a) and (b) of this Section.
SECTION 4.03. Each Borrowing Subsidiary Credit Event. The obligation of
each Lender to make Loans hereunder to any Borrowing Subsidiary is subject to
the satisfaction of the following conditions:
(a) The Administrative Agent (or its counsel) shall have received from
each party thereto either (i) a counterpart of such Borrowing Subsidiary's
Borrowing Subsidiary Agreement or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page thereof) that such party has signed a counterpart of such
Borrowing Subsidiary Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion of counsel for such Borrowing Subsidiary (which counsel shall be
reasonably acceptable to the Administrative Agent), substantially in the form of
Exhibit C, and covering such other matters relating to such Borrowing Subsidiary
or its Borrowing Subsidiary Agreement as the Administrative Agent shall
reasonably request.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of such Borrowing
Subsidiary, the authorization of the Transactions relating to such Borrowing
Subsidiary and any other legal matters relating to such Borrowing Subsidiary,
its
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Borrowing Subsidiary Agreement or such Transactions, all in form and substance
reasonably satisfactory to the Administrative Agent and its counsel.
ARTICLE 5
AFFIRMATIVE COVENANTS
Until the Commitments have expired or have been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Company covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Company will
furnish to the Administrative Agent (with a copy for each Lender):
(a) within 90 days after the end of each fiscal year of the Company, its
audited consolidated balance sheet and related statements of income and cash
flows as of the end of and for such year, setting forth, in the case of
statements of income and cash flows, comparative figures for the previous fiscal
year (it being understood that the comparative figures for the 1997 fiscal year
shall reflect The Reuben H. Donnelley Corporation and its consolidated
subsidiaries as a discontinued operation), all reported on by Coopers & Lybrand
L.L.P. or other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, its consolidated balance sheet and
related statements of income as of the end of and for such fiscal quarter and
the then elapsed portion of the fiscal year and statements of cash flow for the
then elapsed portion of the fiscal year, setting forth, in the case of
statements of income and cash flows, comparative figures for the corresponding
period or periods of the previous fiscal year (it being understood that the
comparative figures for the relevant portions of the 1997 fiscal year shall
reflect The Reuben H. Donnelley Corporation and its consolidated subsidiaries as
a discontinued operation), all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Company and its consolidated Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;
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(c) prior to the consummation of the Spin-off, copies of the final form of
the Information Statement relating to the Spin-off and copies of the Company's
pro forma condensed balance sheet as of the most recently ended fiscal quarter
and related statement of operations for such period, prepared giving effect to
the Spin-off as if it had occurred on the first day of such period;
(d) concurrently with any delivery of financial statements under clause
(a), (b) or (c) above, a certificate of a Financial Officer of the Company (i)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.05 and 6.06 and (iii) stating whether
any material change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 3.04 affecting
the Company and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;
(e) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(f) promptly after the same become publicly available, copies of all
periodic and other material reports (other than reports relating to employee
benefit matters or employment plans) and proxy statements filed by the Company
or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Company to its shareholders generally, as the case may be, and all material
amendments to any of the foregoing; and
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Company or any Subsidiary, or compliance with the terms of this Agreement or the
Spin-off Documents, as the Administrative Agent may reasonably request.
SECTION 5.02. Notices of Material Events. The Company will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the Company
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or any Subsidiary thereof that could reasonably be expected to result in a
Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Company and its Subsidiaries in an aggregate amount that could
reasonably be expected to result in a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Company will, and will
cause each of its Material Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of the business of the Company and its Subsidiaries, taken as a
whole; provided that the foregoing shall not prohibit any merger, consolidation,
liquidation or dissolution permitted under Section 6.02.
SECTION 5.04. Payment of Obligations. The Company will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The Company will, and
will cause each of its Material Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations; provided that any
such insurance may be maintained through a program of self-insurance to the
extent deemed prudent by the Company in its reasonable business judgment (which
determination shall take into account the self-insurance practices customary
among
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such companies, to the extent the Company has knowledge thereof without any
investigation).
SECTION 5.06. Books and Records; Inspection Rights. The Company will, and
will cause each of its Material Subsidiaries to, keep proper books of record and
account in accordance with GAAP (or, the case of a foreign Subsidiary, generally
accepted accounting principles in the jurisdiction of organization of such
foreign Subsidiary). The Company will, and will cause each of its Material
Subsidiaries to, permit any representatives designated by the Administrative
Agent on its own initiative or at the request of the Required Lenders, upon
reasonable prior notice, to visit and inspect its properties, to examine and
make extracts from its books and records, and to discuss its affairs, finances
and condition with its officers and independent accountants, all at such
reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its property (including ERISA),
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only
for general corporate purposes, including without limitation back-up for the
Company's commercial paper program. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U and X.
ARTICLE 6
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Company covenants and agrees with the Lenders that:
SECTION 6.01. Liens. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, except:
(a) Permitted Encumbrances;
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(b) any Lien on any property or asset of the Company or any Subsidiary
existing on the date hereof and set forth in Schedule 6.01; provided that (i)
such Lien shall not apply to any other property or asset of the Company or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals, refinancings and
replacements thereof that do not increase the outstanding principal amount
thereof (other than by an amount equal to any costs and expenses incurred in
connection with such extension, renewal, refinancing or replacement);
(c) any Lien existing on any property or asset prior to the acquisition
thereof by the Company or any Subsidiary or existing on any property or asset of
any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary or any Lien on any asset of any Person existing
at the time such Person is merged into or consolidated with the Company or a
Subsidiary; provided that (i) such Lien is not created in contemplation of or in
connection with such acquisition or such Person becoming a Subsidiary or such
merger, as the case may be, (ii) such Lien shall not apply to any other property
or assets of the Company or any Subsidiary and (iii) such Lien shall secure only
those obligations which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary or the date of such merger, as the case may be,
and extensions, renewals, refinancings and replacements thereof that do not
increase the outstanding principal amount thereof (other than by an amount equal
to any costs and expenses incurred in connection with such extension, renewal,
refinancing or replacement);
(d) any Lien on any asset (i) initially securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost of acquiring or
constructing such asset or (ii) securing Indebtedness incurred to extend, renew,
refinance or replace the Indebtedness then secured by such Lien, provided that
(x) such Lien attaches to such asset concurrently with or within 180 days after
the acquisition thereof and (y) the principal amount of Indebtedness secured by
such Lien shall not be increased in connection with any extension, renewal,
refinancing or replacement of such Indebtedness (other than by an amount equal
to any costs and expenses incurred in connection with such extension, renewal,
refinancing or replacement);
(e) any Lien arising in connection with the financing of accounts
receivable by the Company or any of its Subsidiaries, provided that the
uncollected amount of account receivables subject at any time to any such
financing shall not exceed $150,000,000;
(f) any Lien on any property sold or transferred pursuant to a transaction
permitted under Section 6.04;
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(g) any Lien in favor of the Company or any Subsidiary granted by the
Company or any Subsidiary in order to secure any intercompany obligations;
(h) any Lien granted or arising in connection with any legal proceeding to
the extent such proceeding has not resulted in an Event of Default under Section
7(k); and
(i) any Lien to secure Indebtedness and other obligations if, at any date,
immediately after the incurrence thereof, the sum (without duplication) of all
amounts secured by Liens which would not be permitted but for this clause (i)
does not exceed $150,000,000.
SECTION 6.02. Fundamental Changes. (a) The Company will not (i) merge or
consolidate with any other Person or (ii) permit any Designated Subsidiary to
merge or consolidate with any other Person, except that (1) the Company and any
Designated Subsidiaries may merge into or consolidate with each other, (2) the
Spin-off may be consummated, so long as it is consummated in all material
respects in accordance with the terms and conditions set forth in the
Information Statement, (3) the Company may merge or consolidate with any other
Person in accordance with subsection (c) and (4) any Designated Subsidiary may
merge or consolidate with any other Person so long as the surviving entity of
such merger or consolidation is a Designated Subsidiary. The Company will not,
and will not permit any Designated Subsidiary to, liquidate or dissolve.
(b) (i) The Company will not sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all of
the assets of the Company and its consolidated Subsidiaries, taken as a whole,
or all or substantially all of the stock or other equity interests of any
Designated Subsidiary and (ii) the Company will not permit any Designated
Subsidiary to sell, transfer, lease or otherwise dispose of (in one transaction
or in a series of transactions) all or substantially all of the assets of such
Designated Subsidiary and its subsidiaries, taken as a whole, except (1) the
Company and any Designated Subsidiaries may consummate any transaction described
in clause (i) or (ii) with the Company or any other Designated Subsidiary, (2)
the Spin-off may be consummated, so long as it is consummated in all material
respects in accordance with the terms and conditions set forth in the
Information Statement, and (3) the Company may consummate any transaction
described in clause (i) in accordance with subsection (c).
(c) The Company may consummate any of the transactions described in
clauses (a)(i) and (b)(i) of this Section if (i) the surviving corporation in
any such merger or consolidation or the Person which acquires all or
substantially all of the assets of the Company and its consolidated Subsidiaries
or all or substantially all of
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the capital stock or other equity interests of a Designated Subsidiary shall be
a corporation organized and existing under the laws of the United States of
America, any state thereof or the District of Columbia (the "Successor
Corporation") and shall expressly assume, pursuant to documentation in form
reasonably satisfactory to the Required Lenders, the due and punctual payment of
the principal of and interest on the Loans and all other amounts payable under
this Agreement and the payment and performance of every covenant hereof on the
part of the Company to be performed or observed; (ii) immediately after giving
effect to such transaction, no Default shall have occurred and be continuing;
and (iii) immediately after giving effect to such transaction, (x) the Company
and its Subsidiaries are in compliance, on a pro-forma basis, with the covenants
contained in Sections 6.05 and 6.06 recomputed as of the last day of the most
recently ended fiscal quarter of the Company, as if such transaction had
occurred on the first day of each relevant period for testing such compliance
and (y) the Company shall have delivered to the Lenders, at least 10 Business
Days prior to the consummation of any such transaction, a certificate of a
Financial Officer of the Company certifying that the condition precedent set
forth in clause (iii)(x) with respect to such transaction will be complied with
and setting forth in reasonable detail the calculations required to demonstrate
such compliance and the assumptions used by the Company to make such
calculations.
(d) The Company will not permit any Borrowing Subsidiary to merge,
consolidate, liquidate or dissolve unless, in addition to the conditions set
forth in clause (a) of this Section (if applicable), the surviving entity, or
the entity into which such Borrowing Subsidiary liquidates or dissolves, is a
Borrower and assumes all Obligations of such Borrowing Subsidiary.
(e) The Company will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Company and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related or complementary thereto.
For purposes of this Section, "Designated Subsidiary" means (i) Moody's
Investors Service, Inc., a Delaware corporation, (ii) Dun & Bradstreet Inc., a
Delaware corporation and (iii) any other Subsidiary designated as a "Designated
Subsidiary" by the Company.
SECTION 6.03. Transactions with Affiliates. The Company will not, and will
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) on terms and conditions not less favorable to the Company
or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties (considering such transactions and all other related
transactions as a whole), (b)
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transactions between or among the Company and its Subsidiaries and (c)
transactions contemplated by the Spin-off Documents and consummated in
accordance therewith.
SECTION 6.04. Sale and Lease-Back Transactions. The Company will not, and
will not permit any of its Subsidiaries to, directly or indirectly, enter into
any arrangement with any Person (other than a Subsidiary) whereby it shall sell
or transfer any property used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
which it intends to use for substantially the same purpose or purposes as the
property being sold or transferred, except for any such arrangement or
arrangements with an aggregate sale price not exceeding at any time
$250,000,000.
SECTION 6.05. Total Debt to EBITDA Ratio. The Total Debt to EBITDA Ratio
will not exceed 4.0 to 1.0 at the end of any fiscal quarter.
SECTION 6.06. Interest Coverage Ratio. The Interest Coverage Ratio for any
period of four consecutive fiscal quarters of the Company will not be less than
3.0 to 1.0.
ARTICLE 7
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur and be
continuing:
(a) any Borrower shall fail to pay any principal of any Loan of such
Borrower when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan of such
Borrower or any fee or any other amount (other than an amount referred to in
clause (a) of this Article) payable by such Borrower under this Agreement, when
and as the same shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf of
the Company or any Subsidiary in or in connection with this Agreement, any
Borrowing Subsidiary Agreement or any amendment or modification hereof or
thereof, or in any certificate or other document furnished pursuant to or in
connection with this Agreement, any Borrowing Subsidiary Agreement or any
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amendment or modification hereof or thereof, shall prove to have been incorrect
in any material respect when made or deemed made;
(d) the Company shall fail to observe or perform any covenant, condition
or agreement contained in Section 5.02(a), 5.03 (with respect to the Company's
existence), 5.08 or in Article 6;
(e) the Company shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement or any Borrowing Subsidiary Agreement
(other than those specified in clause (a), (b), (c) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent (given at the request of any Lender) to
the Company;
(f) the Company or any Subsidiary shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable (after giving
effect to any grace period applicable thereto);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (g) shall not apply
to (i) secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Indebtedness (so long as
such Indebtedness is paid when due (or within any applicable grace period)) or
(ii) any Indebtedness that is mandatorily prepayable prior to the scheduled
maturity thereof with the proceeds of the issuance of capital stock, the
incurrence of other Indebtedness or the sale or other disposition of any assets,
so long as such Indebtedness is so prepaid in full with such proceeds when due
(or within any applicable grace period) and such event shall not have otherwise
resulted in an event of default with respect to such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Company or any Material Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Material Subsidiary or for a substantial
part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;
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(i) the Company or any Material Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Company or any Material Subsidiary or for a substantial
part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(j) the Company or any Material Subsidiary shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount
in excess of $50,000,000 (excluding any amount of such judgment as to which an
Acceptable Insurer has acknowledged liability) shall be rendered against the
Company, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 60 consecutive days during which execution shall
not be effectively stayed, or any action, which shall not be effectively stayed,
shall be legally taken by a judgment creditor to attach or levy upon any assets
of the Company or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Company and
its Subsidiaries in an aggregate amount that could reasonably be expected to
result in a Material Adverse Effect;
(m) the Company shall fail to observe or perform any covenant, condition
or agreement contained in Article 9 or the guarantee of the Company hereunder
shall not be (or shall be claimed by any Person not to be) valid or in full
force and effect;
(n) a Change in Control shall occur;
(o) (i) the Company shall have merged or consolidated with any Person or
any Person shall have acquired all or substantially all of the assets of the
Company and its consolidated Subsidiaries, taken as a whole, or all or
substantially all of the capital stock or other equity interests of any
Designated Subsidiary, (ii) either the Company or the Person with which it is
merging or consolidating or the Person which is acquiring such assets or capital
stock or other equity interests shall at the time of such merger or
consolidation or acquisition have been rated by a rating
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agency and (iii) the Successor Corporation shall not have in effect a rating of
at least Baa1 from Moody's Investors Service, Inc. or BBB+ from Standard &
Poor's Ratings Group on the 90th day following the consummation of such merger
or consolidation or acquisition, as the case may be;
(p) the Spin-off Date shall not have occurred by the 60th day after the
Effective Date; or
(q) (i) the IRS Ruling shall cease to be in full force and effect or (ii)
the Spin-off shall for any reason cease to qualify as a tax-free distribution
under Section 355 of the Internal Revenue Code;
then, and in every such event (other than an event with respect to any Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may (with the
consent of the Required Lenders), and at the request of the Required Lenders
shall, by notice to the Company, take either or both of the following actions,
at the same or different times: (i) terminate the Commitments, and thereupon the
Commitments shall terminate immediately, and (ii) declare the Loans then
outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable), and thereupon the principal of the Loans so declared to be due
and payable, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower; and in case of any event with
respect to the Company described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrowers accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower; and in the case of any event
with respect to any Borrowing Subsidiary described in clause (h) or (i) of this
Article, (i) the eligibility of such Borrowing Subsidiary to borrow shall
thereupon terminate and (ii) the Loans of such Borrowing Subsidiary shall become
immediately due and payable, together with accrued interest thereon and all fees
and other obligations thereunder of such Borrowing Subsidiary accrued
thereunder, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrowing Subsidiary.
ARTICLE 8
THE ADMINISTRATIVE AGENT
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Each of the Lenders hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Company or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Company or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or wilful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by a
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any Borrowing
Subsidiary Agreement, (ii) the contents of any certificate, report or other
document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement or any Borrowing
Subsidiary Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article 4 or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement,
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instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Administrative Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be
counsel for any Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all of its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Company. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Company, to
appoint a successor (and, at any time when no Default shall have occurred and is
continuing, with the prior written consent of the Company). If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on behalf
of the Lenders, appoint a successor Administrative Agent which shall be a bank
with an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Company to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Company and such successor. After the Administrative Agent's
resignation hereunder, the provisions of this Article and Section 10.03 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
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decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
ARTICLE 9
GUARANTEE
In order to induce the Lenders to extend credit hereunder, the Company
hereby irrevocably and unconditionally guarantees, as a primary obligor and not
merely as a surety, the Obligations. The Company further agrees that the due and
punctual payment of the Obligations may be extended or renewed, in whole or in
part, without notice to or further assent from it, and that it will remain bound
upon its Guarantee hereunder notwithstanding any such extension or renewal of
any Obligation.
The Company waives presentment to, demand of payment from and protest to
any Borrowing Subsidiary of any of the Obligations, and also waives notice of
acceptance of its obligations and notice of protest for nonpayment. The
obligations of the Company hereunder shall not be affected by (a) the failure of
any Lender or the Administrative Agent to assert any claim or demand or to
enforce any right or remedy against any Borrowing Subsidiary under the
provisions of this Agreement or otherwise; (b) any rescission, waiver, amendment
or modification of any of the terms or provisions of this Agreement, any
Borrowing Subsidiary Agreement or any other agreement; or (c) the failure of any
Lender to exercise any right or remedy against any Borrowing Subsidiary.
The Company further agrees that its agreement hereunder constitutes a
promise of payment when due (whether or not any bankruptcy or similar proceeding
shall have stayed the accrual or collection of any of the Obligations or
operated as a discharge thereof) and not merely of collection, and waives any
right to require that any resort be had by any Lender to any balance of any
deposit account or credit on the books of any Lender in favor of any Borrower or
any other person.
The obligations of the Company hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, and shall not
be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever, by reason of the invalidity, illegality or unenforceability of the
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Obligations, any impossibility in the performance of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
the Company hereunder shall not be discharged or impaired or otherwise affected
by the failure of the Administrative Agent or any Lender to assert any claim or
demand or to enforce any remedy under this Agreement or any other agreement, by
any waiver or modification in respect of any thereof, by any default, failure or
delay, wilful or otherwise, in the performance of the Obligations, or by any
other act or omission which may or might in any manner or to any extent vary the
risk of the Company or otherwise operate as a discharge of the Company or any
other Borrower as a matter of law or equity.
The Company further agrees that its obligations hereunder shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any Obligation is rescinded or must otherwise be restored
by the Administrative Agent or any Lender upon the bankruptcy or reorganization
of any Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which the Administrative Agent or any Lender may have at law or in equity
against the Company by virtue hereof, upon the failure of any Borrowing
Subsidiary to pay any Obligation when and as the same shall become due, whether
at maturity, by acceleration, after notice of prepayment or otherwise, the
Company hereby promises to and will, upon receipt of written demand by the
Administrative Agent, forthwith pay, or cause to be paid, in cash the amount of
such unpaid Obligation. The Company further agrees that if payment in respect of
any Obligation shall be due in a currency other than dollars and/or at a place
of payment other than New York and if, by reason of any Change in Law,
disruption of currency or foreign exchange markets, war or civil disturbance or
similar event, payment of such Obligation in such currency or at such place of
payment shall be impossible or, in the judgment of any applicable Lender, not
consistent with the protection of its rights or interests, then, at the election
of any applicable Lender, the Company shall make payment of such Obligation in
dollars (based upon the applicable exchange rate in effect on the date of
payment) and/or in New York, and shall indemnify such Lender against any losses
or expenses that it shall sustain as a result of such alternative payment.
Upon payment by the Company of any Obligation, each Lender shall, in a
reasonable manner, assign the amount of such Obligation owed to it and so paid
to the Company, such assignment to be pro tanto to the extent to which the
Obligation in question was discharged by the Company, or make such disposition
thereof as the Company shall direct (all without recourse to any Lender and
without any representation or warranty by any Lender).
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Upon payment by the Company of any sums as provided above, all rights of
Company against any Borrowing Subsidiary arising as a result thereof by way of
right of subrogation or otherwise shall in all respects be subordinated and
junior in right of payment to the prior indefeasible payment in full of all the
Obligations owed by such Borrowing Subsidiary to the Lenders.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to any Borrower, to it in care of the Company at One Diamond Hill
Road, Murray Hill, NJ 07974, Attention of Treasurer (Telecopy No. 908-665-5032),
with a copy to Attention of Chief Legal Officer at the same address (Telecopy
No. 908-665-5827);
(b) if to the Administrative Agent, to The Chase Manhattan Bank, Agent
Bank Services Group, One Chase Manhattan Plaza, New York, New York 10081,
Attention of Janet Belden (Telecopy No. (212) 552-5658), with a copy to The
Chase Manhattan Bank, 270 Park Avenue, New York, New York 10017, Attention of
Tracey Navin (Telecopy No. (212) 270-4164).
(c) if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02. Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or
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further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent and the Lenders hereunder are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by any Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making of
a Loan shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither this Agreement nor any Borrowing Subsidiary Agreement nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Company and the
Required Lenders or by the Company and the Administrative Agent with the consent
of the Required Lenders (and, in the case of a Borrowing Subsidiary Agreement,
the applicable Borrowing Subsidiary); provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan, or any interest thereon, or any
fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any Commitment, without
the written consent of each Lender affected thereby, (iv) change Section 2.17(b)
or (c) in a manner that would alter the pro rata sharing of payments required
thereby, without the written consent of each Lender, (v) change any of the
provisions of this Section or the definition of "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender or (vi)
release the Company from, or limit or condition, its obligations under Article
9, without the written consent of each Lender; provided further that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent.
SECTION 10.03. Expenses; Indemnity; Damage Waiver. (a) The Company shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of this Agreement or any Borrowing Subsidiary
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Agreement or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated) and (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the fees, charges and
disbursements of no more than one counsel for the Administrative Agent and one
counsel for the Lenders (unless representation of the Lenders by the same
counsel would be inappropriate due to actual or potential conflicts of interests
among them, in which case the Lenders shall have right to separate counsel, at
the expense of the Company) in connection with the enforcement or protection of
its rights in connection with this Agreement or any Borrowing Subsidiary
Agreement, including its rights under this Section, or in connection with the
Loans made hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof.
(b) The Company shall indemnify the Administrative Agent and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery of this Agreement or any Borrowing
Subsidiary Agreement or any agreement or instrument contemplated hereby or
thereby, the performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the Transactions or
any other transactions contemplated hereby, (ii) any Loan or the use of the
proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Liability related in any way to the Company
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses result from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Company fails to pay any amount required to be
paid by it to the Administrative Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent such
Lender's Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent in its capacity as such.
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(d) To the extent permitted by applicable law, no Borrower shall assert,
and each Borrower hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any Borrowing Subsidiary Agreement or any agreement
or instrument contemplated hereby or thereby, the Transactions, any Loan or the
use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
SECTION 10.04. Successors and Assigns. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
(including any Borrowing Subsidiaries) and their respective successors and
assigns permitted hereby, except that no Borrower may assign or otherwise
transfer any of its rights or obligations hereunder or under any Borrowing
Subsidiary Agreement without the prior written consent of each Lender (and any
attempted assignment or transfer by any Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment (if any) and the Loans (if any) at the time owing to it); provided
that (i) if contemporaneously with any such proposed assignment, such Lender (or
its Affiliate) assigns to the same proposed assignee a pro rata portion of such
Lender's (or its Affiliate's) rights and obligations under the Other Credit
Agreement (such pro rata portion to be calculated (x) on any date prior to the
Revolver Termination Date, on the basis of such Lender's Commitment hereunder
and such Lender's (or its Affiliate's) commitment under the Other Credit
Agreement and (y) thereafter, on the basis of such Lender's Revolving Credit
Exposure hereunder and such Lender's (or its Affiliate's) commitment under the
Other Credit Agreement) (any such proposed assignment hereunder, a "Pro Rata
Assignment"), each of the Company and the Administrative Agent must give their
prior written consent to such Pro Rata Assignment (which consent shall not be
unreasonably withheld) unless the assignee for such assignment is a Lender or an
Affiliate of a Lender, in which case no such consent shall be required, (ii) if
such proposed assignment is not a Pro Rata Assignment, each of the Company and
the Administrative Agent must give their prior written consent to such proposed
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assignment (which consent shall be given in their discretion) unless the
assignee for such assignment is an Affiliate of the assigning Lender, in which
case no such consent shall be required, (iii) except in the case of any
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment, the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $10,000,000 unless
each of the Company and the Administrative Agent otherwise consent, (iv) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement, except that
this clause (iv) shall not apply to rights in respect of outstanding Competitive
Loans, (v) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500, and (vi) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided further that any consent of the Company otherwise
required under this paragraph shall not be required if an Event of Default under
clause (h) or (i) of Article 7 has occurred and is continuing with respect to
the Company. Upon acceptance and recording pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.15, 2.16 and 10.03). Notwithstanding any other provision of this Agreement, if
any Lender shall assign any of its rights or obligations hereunder to any
assignee (including an Affiliate of such Lender) that, but for this sentence,
would be entitled, immediately following such assignment, to claim a greater
amount than such assigning Lender under Sections 2.14, 2.15, 2.16, such assignee
shall not have the right to claim such greater amount; provided that nothing in
this sentence shall limit the right of any such assignee to make claims (x) for
amounts not in excess of those that could have been claimed by the assigning
Lender, (y) to the extent such claims arise from one or more Changes in Law, or
from the designation of one or more Borrowing Subsidiaries, or (z) from a change
in the office, branch or other place of business from which any payment
hereunder is made by any Borrower, in each case after the date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with and subject to the limitations
set forth in, paragraph (e) of this Section.
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(c) The Administrative Agent, acting for this purpose as an agent of the
Borrowers shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Company and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Borrower or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, each Borrower agrees that
each Participant shall be entitled to the benefits of Sections 2.14, 2.15 and
2.16 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.
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<PAGE> 71
(f) A Participant shall not be entitled to receive any greater payment
under Section 2.14, 2.15 or 2.16 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 2.16 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any such pledge or assignment to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
(h) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC")
of such Granting Lender, identified as such in writing from time to time by the
Granting Lender to the Administrative Agent and the Company, the option to
provide to the Company all or any part of any Loan that such Granting Lender
would otherwise be obligated to make to the Borrower pursuant to Section 2.01 or
2.04, provided that (i) nothing herein shall constitute a commitment to make any
Loan by any SPC, (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof and (iii) all credit
decisions (including without limitation any decisions with respect to amendments
and waivers) will continue to be made by the Granting Lender. The making of a
Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender
(and, if such Loan is a Competitive Loan, shall be deemed to utilize the
Commitments of all the Lenders) to the same extent, and as if, such Loan were
made by the Granting Lender. Each party hereto hereby agrees that no SPC shall
be liable for any payment under this Agreement for which a Lender would
otherwise be liable, for so long as, and to the extent, the related Granting
Lender makes such payment. In furtherance of the foregoing, each party hereto
hereby agrees that, prior to the date that is one year and one day after the
payment in full of all outstanding senior indebtedness of any SPC, it will not
institute against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
or similar proceedings under the laws of the United States or any State thereof.
In addition, notwithstanding anything to the contrary contained in this Section,
any SPC may (i) with notice to, but without the prior written consent of, the
Company or the Administrative Agent and without
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paying any processing fee therefor, assign all or a portion of its interests in
any Loans to its Granting Lender in connection with liquidity and/or credit
facilities to or for the account of such SPC to fund such Loans and (ii) subject
to the provisions of Section 10.12, disclose on a confidential basis any
non-public information relating to its Loans to any rating agency, commercial
paper dealer or provider of a surety, guarantee or credit or liquidity
enhancement to such SPC.
SECTION 10.05. Survival. All covenants, agreements, representations and
warranties made by the Borrowers herein and in the Borrowing Subsidiary
Agreements and the certificates or other instruments delivered in connection
with or pursuant to this Agreement shall be considered to have been relied upon
by the other parties hereto and shall survive the execution and delivery of this
Agreement and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Lender may have had notice or knowledge of any
Default (other than a Default which has been waived in accordance with Section
10.02) or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this Agreement is outstanding and unpaid and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.14,
2.15, 2.16 and 10.03 and Article 8 shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Commitments or
the termination of this Agreement or any provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto (excluding any Borrowing
Subsidiaries), and thereafter shall be binding upon and inure to the benefit of
the parties hereto (including any Borrowing Subsidiaries) and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
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SECTION 10.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Borrower against any of and all the amounts then
due and owing by the Borrower under this Agreement to such Lender, irrespective
of whether or not such Lender shall have made any demand under this Agreement.
The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
(b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement against any
Borrower or its properties in the courts of any jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this
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Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement (including any Borrowing Subsidiaries)
irrevocably consents to service of process in the manner provided for notices in
Section 10.01. Nothing in this Agreement will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 10.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TOR OR ANY OTHER THEORY). EACH PARTY HERETO (a) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement, (g) with the consent of the Company
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Company. For the purposes of this Section, "Information" means
all information received from the Company relating to the Company or its
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business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Company. Any Person required to maintain the confidentiality
of Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 10.13. Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the interest rate applicable to any Loan,
together with all fees, charges and other amounts which are treated as interest
on such Loan under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 10.14. Conversion of Currencies. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto (including
any Borrowing Subsidiary) agrees, to the fullest extent that it may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures in the relevant jurisdiction the first currency could
be purchased with such other currency on the Business Day immediately preceding
the day on which final judgment is given.
(b) The obligations of each Borrower in respect of any sum due to any
party hereto or any holder of the obligations owing hereunder (the "Applicable
Creditor") shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than the currency in which such sum is stated to be due
hereunder (the "Agreement Currency"), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
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Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 10.14 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Roxanne E. Parker
----------------------------------------
Title: Vice President and Treasurer
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent
By: /s/ Marian N. Schulman
----------------------------------------
Title: Vice President
CITIBANK, N.A., individually and as
Syndication Agent
By: /s/ William G. Martens III
----------------------------------------
Title: Attorney-In-Fact
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
individually and as Documentation Agent
By: /s/ John M. Mikolay
----------------------------------------
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Ernest Fung
----------------------------------------
Title: Vice President
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SUNTRUST BANK, ATLANTA
By: /s/ W. David Wisdom
----------------------------------------
Title: Group Vice President
By: /s/ Laura G. Harrison
----------------------------------------
Title: Assistant Vice President
BARCLAYS BANK PLC
By: /s/ Marlene Wechselblatt
----------------------------------------
Title: Vice President
BANK OF MONTREAL
By: /s/ Brian L. Banke
----------------------------------------
Title: Director
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ Michael C. Irwin
----------------------------------------
Title: Vice President
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THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Stephen E. McDonald
----------------------------------------
Title: First Vice President
NORTHERN TRUST COMPANY
By: /s/ Eric Strickland
----------------------------------------
Title: Vice President
TORONTO DOMINION (TEXAS), INC.
By: /s/ J. R. Lents
----------------------------------------
Title: Manager Credit Administration
74
<PAGE> 1
Exhibit 10.1
DISTRIBUTION AGREEMENT
between
THE DUN & BRADSTREET CORPORATION
and
THE NEW DUN & BRADSTREET CORPORATION
Dated as of June 30, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE I. DEFINITIONS................................................... 2
SECTION 1.1. General.................................................. 2
SECTION 1.2. References; Interpretation............................... 13
ARTICLE II. DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS........ 13
SECTION 2.1. The Distribution and Other Transactions.................. 13
SECTION 2.2. Certain Matters Regarding Accounts Payable and Accounts
Receivable............................................... 18
SECTION 2.3. Cash balances............................................ 19
SECTION 2.4. Assumption and Satisfaction of Liabilities............... 19
SECTION 2.5. Resignations............................................. 19
SECTION 2.6. Further Assurances....................................... 19
SECTION 2.7. Limited Representations or Warranties.................... 19
SECTION 2.8. Guarantees............................................... 20
SECTION 2.9. Witness Services......................................... 20
SECTION 2.10. Certain Post-Distribution Transactions.................. 21
SECTION 2.11. Transfers Not Effected Prior to the Distribution;
Transfers Deemed Effective as of the Distribution Date.. 22
SECTION 2.12. Conveyancing and Assumption Instruments................. 22
SECTION 2.13. Ancillary Agreements.................................... 23
SECTION 2.14. Corporate Names......................................... 23
ARTICLE III. INDEMNIFICATION.............................................. 25
SECTION 3.1. Indemnification by the Corporation....................... 25
SECTION 3.2. Indemnification by New D&B............................... 25
SECTION 3.3. Procedures for Indemnification........................... 25
SECTION 3.4. Indemnification Payments................................. 27
ARTICLE IV. ACCESS TO INFORMATION......................................... 27
SECTION 4.1. Provision of Corporate Records........................... 27
SECTION 4.2. Access to Information.................................... 28
SECTION 4.3. Reimbursement; Other Matters............................. 28
SECTION 4.4. Confidentiality.......................................... 28
SECTION 4.5. Privileged Matters....................................... 29
SECTION 4.6. Ownership of Information................................. 30
SECTION 4.7. Limitation of Liability.................................. 30
SECTION 4.8. Other Agreements Providing for Exchange of Information... 31
ARTICLE V. ADMINISTRATIVE SERVICES........................................ 31
SECTION 5.1. Performance of Services.................................. 31
SECTION 5.2. Independence............................................. 31
SECTION 5.3. Non-exclusivity.......................................... 31
</TABLE>
1
<PAGE> 3
<TABLE>
<CAPTION>
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<S> <C>
ARTICLE VI. DISPUTE RESOLUTION............................................ 31
SECTION 6.1. Negotiation.............................................. 31
SECTION 6.2. Arbitration.............................................. 32
SECTION 6.3. Continuity of Service and Performance.................... 33
ARTICLE VII. INSURANCE.................................................... 33
SECTION 7.1. Policies and Rights Included Within Assets; Assignment
of Policies.............................................. 33
SECTION 7.2. Post-Distribution Date Claims............................ 33
SECTION 7.3. Administration; Other Matters............................ 34
SECTION 7.4. Agreement for Waiver of Conflict and Shared Defense...... 35
SECTION 7.5. Cooperation.............................................. 35
ARTICLE VIII. MISCELLANEOUS............................................... 35
SECTION 8.1. Complete Agreement; Construction......................... 35
SECTION 8.2. Ancillary Agreements..................................... 36
SECTION 8.3. Counterparts............................................. 36
SECTION 8.4. Survival of Agreements................................... 36
SECTION 8.5. Expenses................................................. 36
SECTION 8.6. Notices.................................................. 36
SECTION 8.7. Waivers.................................................. 37
SECTION 8.8. Amendments............................................... 37
SECTION 8.9. Assignment............................................... 37
SECTION 8.10. Successors and Assigns.................................. 37
SECTION 8.11. Termination............................................. 37
SECTION 8.12. Subsidiaries............................................ 38
SECTION 8.13. Third Party Beneficiaries............................... 38
SECTION 8.14. Title and Headings...................................... 38
SECTION 8.15. Schedules and Exhibits.................................. 38
SECTION 8.16. GOVERNING LAW........................................... 38
SECTION 8.17. Consent to Jurisdiction................................. 38
SECTION 8.18. Severability............................................ 38
</TABLE>
Exhibits
Exhibit 2.1(m)Undertaking of The New Dun & Bradstreet Corporation
2
<PAGE> 4
DISTRIBUTION AGREEMENT
DISTRIBUTION AGREEMENT, dated as of June 30, 1998, between THE DUN &
BRADSTREET CORPORATION, a Delaware corporation (the "Corporation") and THE NEW
DUN & BRADSTREET CORPORATION, a Delaware corporation ("New D&B").
WHEREAS, the Corporation acting through its direct and indirect
subsidiaries, currently conducts a number of businesses, including, without
limitation, (i) providing sales, marketing and publishing services for yellow
pages and other directory products (the "R.H. Donnelley Business"), (ii)
supplying business, commercial-credit and business-marketing information
services and receivables management services (the "D&B Opco Inc. Business") and
(iii) providing credit ratings on fixed-income securities and other credit
obligations (the "Moody's Business");
WHEREAS, the Board of Directors of the Corporation has determined
that it is appropriate, desirable and in the best interests of the holders of
shares of common stock, par value $1.00 per share, of the Corporation (the "D&B
Common Stock"), as well as of the Corporation and its businesses, to reorganize
the Corporation to separate from the Corporation all businesses currently
conducted by the Corporation other than the R.H. Donnelley Business and to cause
such businesses to be owned and conducted, directly or indirectly, by New D&B;
WHEREAS, in order to effect such separation, the Board of Directors
of the Corporation has determined that it is appropriate, desirable and in the
best interests of the holders of D&B Common Stock, as well as of the Corporation
and its businesses, for the Corporation (i) to take certain steps to reorganize
the Corporation's Subsidiaries (as defined herein) and businesses, including
prior to the Distribution (as defined herein) (A) to cause Dun & Bradstreet,
Inc. ("D&B Opco Inc.") to merge with and into New D&B, with New D&B as the
surviving corporation, and to cause Dun & Bradstreet Holdings, Inc. to merge
with and into the Corporation, with the Corporation as the surviving
corporation, (B) upon the completion of the transactions described in (A), to
cause the Corporation to contribute all of the non-stock assets held directly by
the Corporation (other than assets specified herein to remain with the
Corporation after the Distribution) to New D&B, (C) upon the completion of the
transaction described in (B), to contribute the capital stock held by the
Corporation in Moody's Investors Service, Inc. ("Moody's"), Dun & Bradstreet
International, Ltd. ("D&B International") and all of the other first-tier
subsidiaries of the Corporation other than New D&B and R.H. Donnelley Inc.
("RHD") to New D&B, (D) upon the completion of the transactions described in
(C), to cause New D&B to contribute all of its non-stock assets, other than its
interest in the corporate headquarters of New D&B to New Dun & Bradstreet, Inc.,
a newly formed Delaware corporation and wholly-owned subsidiary of New D&B ("New
D&B Opco Inc.") and (E) upon the completion of the transactions described in (D)
to cause New D&B to contribute the capital stock of all of its first-tier
subsidiaries
<PAGE> 5
2
other than Moody's and Duns Investing VI Corporation to New D&B Opco Inc. and
(ii) upon the completion of such reorganization to distribute to the holders of
the D&B Common Stock all the outstanding shares of common stock of New D&B (the
"New D&B Common Shares"), together with the associated Rights (as defined
herein), as set forth herein;
WHEREAS, each of the Corporation and New D&B has determined that it
is necessary and desirable, on or prior to the Distribution Date (as defined
herein), to allocate and transfer those assets and to allocate and assign
responsibility for those liabilities in respect of the activities of the
businesses of such entities and those assets and liabilities in respect of other
businesses and activities of the Corporation and its current and former
Subsidiaries and other matters; and
WHEREAS, each of the Corporation and New D&B has determined that it
is necessary and desirable to set forth the principal corporate transactions
required to effect such Distribution and to set forth other agreements that will
govern certain other matters following the Distribution.
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the parties hereby agree
as follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. General. As used in this Agreement, the following
terms shall have the following meanings:
(a) "Action" shall mean any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or other
regulatory or administrative agency, body or commission or any arbitration
tribunal.
(b) "Affiliate" shall mean, when used with respect to a specified
person, another person that controls, is controlled by, or is under common
control with the person specified. As used herein, "control" 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 or other interests, by contract or otherwise.
(c) "Agent" shall have the meaning set forth in Section 2.1(b).
(d) "Agreement Disputes" shall have the meaning set forth in Section
6.1.
(e) "Ancillary Agreements" shall mean all of the written agreements,
instruments, assignments or other arrangements (other than this Agreement)
entered into in connection with the transactions contemplated hereby, including,
without limitation, the Conveyancing and Assumption Instruments, the Data
Services Agreement, the Employee Benefits Agreement, the Intellectual Property
Agreement, the Shared Transaction Services Agreement, the Tax Allocation
Agreement and the Transition Services Agreements.
<PAGE> 6
3
(f) "Assets" shall mean assets, properties and rights (including
goodwill), wherever located (including in the possession of vendors or other
third parties or elsewhere), whether real, personal or mixed, tangible,
intangible or contingent, in each case whether or not recorded or reflected or
required to be recorded or reflected on the books and records or financial
statements of any person, including, without limitation, the following:
(i) all accounting and other books, records and files
whether in paper, microfilm, microfiche, computer tape or
disc, magnetic tape or any other form;
(ii) all apparatus, computers and other electronic data
processing equipment, fixtures, machinery, equipment,
furniture, office equipment, automobiles, trucks, aircraft and
other transportation equipment, special and general tools,
test devices, prototypes and models and other tangible
personal property;
(iii) all inventories of materials, parts, raw materials,
supplies, work-in-process and finished goods and products;
(iv) all interests in real property of whatever nature,
including easements, whether as owner, mortgagee or holder of
a Security Interest in real property, lessor, sublessor,
lessee, sublessee or otherwise;
(v) all interests in any capital stock or other equity
interests of any Subsidiary or any other person, all bonds,
notes, debentures or other securities issued by any Subsidiary
or any other person, all loans, advances or other extensions
of credit or capital contributions to any Subsidiary or any
other person and all other investments in securities of any
person;
(vi) all license agreements, leases of personal property,
open purchase orders for raw materials, supplies, parts or
services, unfilled orders for the manufacture and sale of
products and other contracts, agreements or commitments;
(vii) all deposits, letters of credit and performance and
surety bonds;
(viii) all written technical information, data, specifications,
research and development information, engineering drawings,
operating and maintenance manuals, and materials and analyses
prepared by consultants and other third parties;
(ix) all domestic and foreign patents, copyrights, trade
names, trademarks, service marks and registrations and
applications for any of the foregoing, mask works, trade
secrets, inventions, data bases, other proprietary information
and licenses from third persons granting the right to
<PAGE> 7
4
use any of the foregoing;
(x) all computer applications, programs and other software,
including operating software, network software, firmware,
middleware, design software, design tools, systems
documentation and instructions;
(xi) all cost information, sales and pricing data, customer
prospect lists, supplier records, customer and supplier lists,
customer and vendor data, correspondence and lists, product
literature, artwork, design, development and manufacturing
files, vendor and customer drawings, formulations and
specifications, quality records and reports and other books,
records, studies, surveys, reports, plans and documents;
(xii) all prepaid expenses, trade accounts and other accounts
and notes receivables;
(xiii) all rights under contracts or agreements, all claims or
rights against any person arising from the ownership of any
asset, all rights in connection with any bids or offers and
all claims, choses in action or similar rights, whether
accrued or contingent;
(xiv) all rights under insurance policies and all rights in the
nature of insurance, indemnification or contribution;
(xv) all licenses, permits, approvals and authorizations which
have been issued by any Governmental Authority;
(xvi) cash or cash equivalents, bank accounts, lock boxes and
other deposit arrangements; and
(xvii) interest rate, currency, commodity or other swap, collar,
cap or other hedging or similar agreements or arrangements.
(g) "Assignee" shall have the meaning set forth in Section 2.1(f).
(h) "Business Entity" shall mean any corporation, partnership,
limited liability company or other entity which may legally hold title to
Assets.
(i) "Claims Administration" shall mean the processing of claims
made under the Shared Policies, including, without limitation, the reporting of
claims to the insurance carriers and the management of the defense of claims.
(j) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury regulations promulgated thereunder, including any
successor legislation.
(k) "Commission" shall mean the U.S. Securities and Exchange
Commission.
<PAGE> 8
5
(l) "Conveyancing and Assumption Instruments" shall mean,
collectively, the various agreements, instruments and other documents heretofore
entered into and to be entered into to effect the transfer of Assets and the
assumption of Liabilities in the manner contemplated by this Agreement, or
otherwise arising out of or relating to the transactions contemplated by this
Agreement, which shall be in substantially the forms attached hereto as Schedule
1.1(l) for transfers to be effected pursuant to New York law or the laws of one
of the other states of the United States, or, if not appropriate for a given
transfer, and for transfers to be effected pursuant to non-U.S. laws, shall be
in such other form or forms as the parties agree and as may be required by the
laws of such non-U.S.
jurisdictions.
(m) the "Corporation" or "D&B" shall mean The Dun & Bradstreet
Corporation, a Delaware corporation, which will change its name at the time of
the Distribution to "R.H. Donnelley Corporation".
(n) "Corporation Debt" shall have the meaning set forth in Section
2.1(n).
(o) "D&B Opco Inc. Business" shall have the meaning set forth in the
recitals.
(p) "Data Services Agreement" shall mean the Data Services Agreement
between the Corporation and New D&B (or Subsidiaries thereof).
(q) "Distribution" shall mean the distribution on the Distribution
Date to holders of record of shares of D&B Common Stock as of the Distribution
Record Date of the New D&B Common Shares owned by the Corporation on the basis
of one New D&B Common Share for each outstanding share of D&B Common Stock.
(r) "Distribution Date" shall mean June 30, 1998.
(s) "Distribution Record Date" shall mean as of the close of
business of such date as may be determined by the Corporation's Board of
Directors as the record date for the Distribution.
(t) "Effective Time" shall mean immediately prior to the midnight,
New York time, ending the 24-hour period comprising June 30, 1998.
(u) "Employee Benefits Agreement" shall mean the Employee Benefits
Agreement between the Corporation and New D&B.
(v) "Governmental Authority" shall mean any federal, state, local,
foreign or international court, government, department, commission, board,
bureau, agency, official or other regulatory, administrative or governmental
authority.
(w) "Indemnifiable Losses" shall mean any and all losses,
liabilities, claims, damages, demands, costs or expenses (including, without
limitation, reasonable attorneys' fees and any and all out-of-pocket expenses)
reasonably incurred in investigating, preparing for or defending
<PAGE> 9
6
against any Actions or potential Actions or in settling any Action or potential
Action or in satisfying any judgment, fine or penalty rendered in or resulting
from any Action.
(x) "Indemnifying Party" shall have the meaning set forth in Section
3.3.
(y) "Indemnitee" shall have the meaning set forth in Section 3.3.
(z) "Information Statement" shall mean the Information Statement
sent to the holders of shares of D&B Common Stock in connection with the
Distribution, including any amendment or supplement thereto.
(aa) "Insurance Administration" shall mean, with respect to each
Shared Policy, the accounting for premiums, retrospectively-rated premiums,
defense costs, indemnity payments, deductibles and retentions, as appropriate,
under the terms and conditions of each of the Shared Policies; and the reporting
to excess insurance carriers of any losses or claims which may cause the
per-occurrence, per claim or aggregate limits of any Shared Policy to be
exceeded, and the distribution of Insurance Proceeds as contemplated by this
Agreement.
(ab) "Insurance Proceeds" shall mean those monies (i) received by an
insured from an insurance carrier or (ii) paid by an insurance carrier on behalf
of an insured, in either case net of any applicable premium adjustment,
retrospectively-rated premium, deductible, retention, or cost of reserve paid or
held by or for the benefit of such insured.
(ac) "Insured Claims" shall mean those Liabilities that,
individually or in the aggregate, are covered within the terms and conditions of
any of the Shared Policies, whether or not subject to deductibles, co-insurance,
uncollectibility or retrospectively-rated premium adjustments.
(ad) "Intellectual Property Agreement" shall mean the Intellectual
Property Agreement between the Corporation and New D&B.
(ae) "Liabilities" shall mean any and all losses, claims, charges,
debts, demands, actions, causes of action, suits, damages, obligations,
payments, costs and expenses, sums of money, accounts, reckonings, bonds,
specialties, indemnities and similar obligations, exonerations, covenants,
contracts, controversies, agreements, promises, doings, omissions, variances,
guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising under
any law, rule, regulation, Action, threatened or contemplated Action (including
the costs and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all costs and
expenses, whatsoever reasonably incurred in investigating, preparing or
defending against any such Actions or threatened or contemplated Actions), order
or consent decree of any governmental or other regulatory or administrative
agency, body or commission or any award of any arbitrator or mediator of any
kind, and those arising under any contract, commitment or undertaking, including
those arising under this Agreement or any Ancillary Agreement, in each case,
whether or not recorded or reflected or required to be recorded or reflected on
the books and records or financial statements of any person.
<PAGE> 10
7
(af) "Moody's" shall have the meaning set forth in the recitals.
(ag) "Moody's Business" shall have the meaning set forth in the
recitals.
(ah) "New D&B Assets" shall mean, collectively, all the rights and
Assets owned or held by the Corporation or any Subsidiary of the Corporation
immediately prior to the Effective Time, except the RHD Assets.
(ai) "New D&B Business" shall mean each and every business conducted
at any time by the Corporation or any Subsidiary of the Corporation prior to the
Effective Time, except an RHD Business.
(aj) "New D&B Common Shares" shall have the meaning set forth in the
recitals hereto.
(ak) "New D&B Contracts" shall mean all the contracts and agreements
to which the Corporation or any of its Affiliates who are not individuals is a
party or by which it or any of its Affiliates who are not individuals is bound
immediately prior to the Effective Time, except the RHD Contracts.
(al) "New D&B Group" shall mean New D&B and each person (other than
any member of the RHD Group) that is a Subsidiary of the Corporation immediately
prior to the Effective Time.
(am) "New D&B Indemnitees" shall mean New D&B, each member of the
New D&B Group, each of their respective present and former directors, officers,
employees and agents and each of the heirs, executors, successors and assigns of
any of the foregoing, except the RHD Indemnitees.
(an) "New D&B Liabilities" shall mean collectively, all obligations
and Liabilities of the Corporation or any Subsidiary of the Corporation
immediately prior to the Effective Time, except the RHD Liabilities.
(ao) "New D&B Opco Inc." shall mean a newly formed Delaware
corporation and wholly owned subsidiary of D&B Opco Inc. created to hold the
assets and liabilities related to, and to operate, the D&B Opco Inc. Business
after the Distribution.
(ap) "New D&B Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of the Corporation or any
Subsidiary of the Corporation immediately prior to the Effective Time which do
not relate to the RHD Business and which Policies are either maintained by New
D&B or a member of the New D&B Group or are assignable to New D&B or a member of
the New D&B Group.
(aq) "1996 Distribution" shall mean the Distribution described in
the 1996 Distribution Agreement.
<PAGE> 11
8
(ar) "1996 Distribution Agreement" shall mean the Distribution
Agreement among the Corporation, Cognizant Corporation and ACNielsen Corporation
dated as of October 28, 1996.
(as) "person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership, other entity or
government, or any agency or political subdivision thereof.
(at) "Policies" shall mean insurance policies and insurance
contracts of any kind (other than life and benefits policies or contracts),
including, without limitation, primary, excess and umbrella policies,
comprehensive general liability policies, director and officer liability,
fiduciary liability, automobile, aircraft, property and casualty, workers'
compensation and employee dishonesty insurance policies, bonds and
self-insurance and captive insurance company arrangements, together with the
rights, benefits and privileges thereunder.
(au) "Provider" shall have the meaning set forth in Section 5.1.
(av) "Recipient" shall have the meaning set forth in Section 5.1.
(aw) "Records" shall have the meaning set forth in Section 4.1.
(ax) "RHD" shall mean R.H. Donnelley Inc., a Delaware corporation
and a wholly-owned subsidiary of the Corporation.
(ay) "RHD Assets" shall mean:
(i) the ownership interests in those Business Entities listed on
Schedule 1.1(ay)(i);
(ii) any and all Assets that are expressly contemplated by this
Agreement, including those on the list of pre-Distribution
reorganization transactions attached as Schedule 1.1(ay)(ii)
hereto, or any Ancillary Agreement (or included on any
Schedule hereto or thereto) as Assets which have been or are
to be transferred to the Corporation, RHD or any other member
of the RHD Group prior to the Effective Time or are to remain
with the Corporation, RHD or any other member of the RHD Group
subsequent to the Effective Time;
(iii) any Assets reflected on the RHD Balance Sheet or the
accounting records supporting such balance sheet and any
Assets acquired by or for RHD or any member of the RHD Group
subsequent to the date of such balance sheet which, had they
been so acquired on or before such date and owned as of such
date, would have been reflected on such balance sheet if
prepared on a consistent basis, subject to any dispositions of
any of such Assets subsequent to the date of such balance
sheet;
<PAGE> 12
9
(iv) subject to Article VII, any rights of any member of the RHD
Group under any of the Policies, including any rights
thereunder arising from and after the Effective Time in
respect of any Policies that are occurrence policies;
(v) any RHD Contracts, any rights or claims arising thereunder,
and any other rights or claims or contingent rights or claims
primarily relating to or arising from any RHD Asset or the RHD
Business;
(vi) the minute books and similar corporate records of the
Corporation; and
(vii) any and all Assets of the Corporation from and after the
Effective Time.
Notwithstanding the foregoing, the RHD Assets shall not
in any event include:
(w) any rights of the Corporation under the 1996
Distribution Agreement or the Tax Allocation Agreement,
Employee Benefits Agreement or the Ancillary Agreements
referred to in the 1996 Distribution Agreement; or
(x) the Assets listed or described on Schedule 1.1(ay)(x);
or
(y) any Assets primarily relating to or used in any
terminated or divested Business Entity, business or
operation formerly owned or managed by or associated
with the Corporation, RHD or any RHD Business, except
for those Assets primarily relating to or used in those
Business Entities, businesses or operations listed on
Schedule 1.1(ay)(y); or
(z) any and all Assets that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the
Schedules hereto or thereto) as Assets to be transferred
or conveyed to any member of the New D&B Group.
In the event of any inconsistency or conflict which may arise
in the application or interpretation of any of the foregoing
provisions, for the purpose of determining what is and is not
an RHD Asset, any item explicitly included on a Schedule
referred to in this Section 1.1(ay) shall take priority over
any provision of the text hereof, and clause (ii) shall take
priority over clause (iii) hereof of this paragraph (ay).
(az) "RHD Balance Sheet" shall mean the combined balance sheet
of the RHD
<PAGE> 13
10
Group, including the notes thereto, as of March 31, 1998, set forth as Schedule
1.1(az) hereto.
(ba) "RHD Business" shall mean (i) the R.H. Donnelley Business,
(ii) the businesses of the members of the RHD Group, (iii) any other business
conducted by the Corporation or any Subsidiary of the Corporation primarily
through the use of the RHD Assets, (iv) the businesses of Business Entities
acquired or established by or for RHD or any of its Subsidiaries after the date
of this Agreement and (v) the business of the Corporation from and after the
Effective Time.
(bb) "RHD Contracts" shall mean the following contracts and
agreements to which the Corporation or any of its Affiliates who are not
individuals is a party or by which it or any of its Affiliates who are not
individuals or any of their respective Assets is bound, whether or not in
writing, except for any such contract or agreement that is not expressly
contemplated to be transferred or assigned to the Corporation or any member of
the RHD Group prior to the Effective Time or to remain with the Corporation or
any member of the RHD Group subsequent to the Effective Time, pursuant to any
provision of this Agreement or any Ancillary Agreement:
(i) any contracts or agreements listed or described on Schedule
1.1(bb)(i);
(ii) any contract or agreement entered into in the name of, or
expressly on behalf of, any division, business unit or member
of the RHD Group;
(iii) any contract or agreement that relates primarily to the RHD
Business;
(iv) federal, state and local government and other contracts and
agreements that are listed or described on Schedule
1.1(bb)(iv) and any other government contracts or agreements
entered into after the date hereof and prior to the Effective
Time that relate primarily to the RHD Business;
(v) any contract or agreement representing capital or operating
equipment lease obligations reflected on the RHD Balance
Sheet, including obligations as lessee under those contracts
or agreements listed on Schedule 1.1(bb)(v);
(vi) any contract or agreement that is otherwise expressly
contemplated pursuant to this Agreement or any of the
Ancillary Agreements to be transferred or assigned to the
Corporation or any member of the RHD Group prior to the
Effective Time or to remain with the Corporation or any member
of the RHD Group subsequent to the Effective Time; and
(vii) any guarantee, indemnity, representation or warranty of any
member of the RHD Group.
(bc) "RHD Group" shall mean RHD, each Business Entity which is
<PAGE> 14
11
contemplated to become a Subsidiary of the Corporation or RHD hereunder prior to
the Effective Time or to remain a Subsidiary of the Corporation or RHD hereunder
subsequent to the Effective Time, which shall include those identified as such
on Schedule 1.1(ay)(i) hereto, which Schedule shall also indicate the amount of
the Corporation's or RHD's direct or indirect ownership interest therein, and
the Corporation from and after the Effective Time.
(bd) "RHD Indemnitees" shall mean RHD, each member of the RHD
Group, each of their respective present and former directors, officers,
employees and agents and each of the heirs, executors, successors and assigns of
any of the foregoing.
(be) "RHD Liabilities" shall mean:
(i) any and all Liabilities that are expressly contemplated by
this Agreement or any Ancillary Agreement (or the Schedules
hereto or thereto, including Schedule 1.1(be)(i) hereto) as
Liabilities to be assumed by the Corporation or any member of
the RHD Group prior to the Effective Time or to remain with
the RHD Group subsequent to the Effective Time, and all
agreements, obligations and Liabilities of the Corporation or
any member of the RHD Group under this Agreement or any of the
Ancillary Agreements;
(ii) all Liabilities (other than Taxes and any employee-related
Liabilities subject to the provisions of the Tax Allocation
Agreement and the Employee Benefits Agreement, respectively),
primarily relating to, arising out of or resulting from:
(A) the operation of the RHD Business, as conducted at
any time prior to, on or after the Effective Time (including
any Liability relating to, arising out of or resulting from
any act or failure to act by any director, officer, employee,
agent or representative (whether or not such act or failure to
act is or was within such person's authority));
(B) the operation of any business conducted by the
Corporation or any Subsidiary of the Corporation at any time
from and after the Effective Time (including any Liability
relating to, arising out of or resulting from any act or
failure to act by any director, officer, employee, agent or
representative (whether or not such act or failure to act is
or was within such person's authority)); or
(C) any RHD Assets;
whether arising before, on or after the Effective Time;
(iii) all Liabilities reflected as liabilities or obligations on the
RHD Balance Sheet or the accounting records supporting such
balance sheet, and all Liabilities arising or assumed after
the date of such balance sheet which, had they arisen or been
assumed on or before such date and been retained as
<PAGE> 15
12
of such date, would have been reflected on such balance sheet,
subject to any discharge of such Liabilities subsequent to the
date of the RHD Balance Sheet; and
(iv) the Corporation Debt, any guarantees thereof and all
Liabilities related thereto (including, without limitation,
all Liabilities related to any offering or other materials
used in connection therewith).
Notwithstanding the foregoing, the RHD Liabilities shall not
include:
(x) any Liabilities that are expressly contemplated by this
Agreement or any Ancillary Agreement (or the Schedules hereto
or thereto) as Liabilities to be assumed by New D&B or any
member of the New D&B Group, including any Liabilities set
forth in Schedule 1.1(be)(x);
(y) any Liabilities primarily relating to, arising out of or
resulting from any terminated or divested Business Entity,
business or operation formerly owned or managed by or
associated with the Corporation or any RHD Business except for
Liabilities primarily relating to, arising out of or resulting
from those Business Entities, businesses or operations listed
in Schedule 1.1(be)(y); or
(z) all agreements and obligations of any member of the New D&B
Group under this Agreement or any of the Ancillary Agreements.
(bf) "RHD Policies" shall mean all Policies, current or past, which
are owned or maintained by or on behalf of the Corporation or any Subsidiary of
the Corporation immediately prior to the Effective Time, which do not relate to
the New D&B Business.
(bg) "Rights" shall have the meaning set forth in Section 2.1(c).
(bh) "Rules" shall have the meaning set forth in Section 6.2.
(bi) "Security Interest" shall mean any mortgage, security
interest, pledge, lien, charge, claim, option, right to acquire, voting or other
restriction, right-of-way, covenant, condition, easement, encroachment,
restriction on transfer, or other encumbrance of any nature whatsoever.
(bj) "Shared Policies" shall mean all Policies, current or past,
which are owned or maintained by or on behalf of the Corporation or any
Subsidiary of the Corporation immediately prior to the Effective Time which
relate to the New D&B Business and the RHD Business.
(bk) "Shared Transaction Services Agreement" shall mean the
Shared Transaction Services Agreement between the Corporation and New D&B (or
Subsidiaries thereof).
(bl) "Subsidiary" shall mean any corporation, partnership or other
entity of which another entity (i) owns, directly or indirectly, ownership
interests sufficient to elect a
<PAGE> 16
13
majority of the Board of Directors (or persons performing similar functions)
(irrespective of whether at the time any other class or classes of ownership
interests of such corporation, partnership or other entity shall or might have
such voting power upon the occurrence of any contingency) or (ii) is a general
partner or an entity performing similar functions (e.g., a trustee).
(bm) "Tax" shall have the meaning set forth in the Tax
Allocation Agreement.
(bn) "Tax Allocation Agreement" shall mean the Tax Allocation
Agreement between the Corporation and New D&B.
(bo) "Third Party Claim" shall have the meaning set forth in
Section 3.3.
(bp) "Transition Services Agreements" shall mean collectively (i)
the Transition Services Agreement between the Corporation and New D&B (the
"Transition Services Agreement") and (ii) the Amended and Restated Transition
Services Agreement among the Corporation, New D&B, Cognizant Corporation, IMS
Health Incorporated, ACNielsen Corporation and Gartner Group, Inc. (the "Amended
and Restated Transition Services Agreement").
SECTION 1.2. References; Interpretation. References in this
Agreement to any gender include references to all genders, and references to the
singular include references to the plural and vice versa. The words "include",
"includes" and "including" when used in this Agreement shall be deemed to be
followed by the phrase "without limitation". Unless the context otherwise
requires, references in this Agreement to Articles, Sections, Schedules and
Exhibits shall be deemed references to Articles and Sections of, and Schedules
and Exhibits to, such Agreement. Unless the context otherwise requires, the
words "hereof", "hereby" and "herein" and words of similar meaning when used in
this Agreement refer to this Agreement in its entirety and not to any particular
Article, Section or provision of this Agreement.
ARTICLE II. DISTRIBUTION AND OTHER TRANSACTIONS; CERTAIN COVENANTS
SECTION 2.1. The Distribution and Other Transactions.
(a) Certain Transactions. On or prior to the Distribution Date:
(i) the Corporation shall, on behalf of itself and its Subsidiaries,
transfer or cause to be transferred to New D&B or another member of the
New D&B Group, effective prior to or as of the Effective Time, all of the
Corporation's and its Subsidiaries' right, title and interest in the New
D&B Assets.
(ii) New D&B shall to the extent not already held by the Corporation
or a member of the RHD Group, on behalf of itself and its Subsidiaries,
transfer or cause to be transferred to the Corporation or a member of the
RHD Group, effective prior to or as of the Effective Time, all of New
D&B's and its Subsidiaries' right, title and interest in the RHD Assets.
<PAGE> 17
14
(iii) To the extent not indicated by Schedule 1.1(ay)(i) or (ii) or
otherwise agreed by the parties hereto, the Corporation or New D&B, as
applicable, shall be entitled to designate the Business Entity within the
RHD Group or the New D&B Group, as applicable, to which any Assets are to
be transferred pursuant to this Section 2.1(a).
(b) Stock Dividend to the Corporation. On or prior to the
Distribution Date, New D&B shall issue to the Corporation as a stock dividend
such number of New D&B Common Shares as will be required to effect the
Distribution, as certified by the Corporation's stock transfer agent (the
"Agent"). In connection with such issuance, the Corporation shall deliver to New
D&B for cancellation the share certificate held by it representing New D&B
Common Shares and shall receive a new certificate representing the total number
of New D&B Common Shares to be owned by the Corporation after giving effect to
such stock dividend.
(c) Charters; By-laws; Rights Plans. On or prior to the Distribution
Date, all necessary actions shall have been taken to provide for the adoption of
the form of Certificate of Incorporation and By-laws and the execution and
delivery of the form of Rights Agreement, relating to the preferred share
purchase rights relating to the New D&B Common Shares (the "Rights"), filed by
New D&B with the Commission as exhibits to New D&B's Registration Statement on
Form 10 (or any amendment thereto).
(d) Directors. On or prior to the Distribution Date, the Corporation
as the sole stockholder of New D&B, shall have taken all necessary action on or
prior to the Distribution Date to cause the Board of Directors of New D&B to
consist of the individuals identified in the Information Statement as directors
of New D&B.
(e) Certain Licenses and Permits. Without limiting the generality of
the obligations set forth in Section 2.1(a), on or prior to the Distribution
Date or as soon as reasonably practicable thereafter:
(i) all transferable licenses, permits and authorizations issued by
any Governmental Authority which do not relate primarily to the RHD
Business but which are held in the name of the Corporation or any member
of the RHD Group, or in the name of any employee, officer, director,
stockholder or agent of the Corporation or any such member, or otherwise,
on behalf of a member of the New D&B Group shall be duly and validly
transferred or caused to be transferred by the Corporation to the
appropriate member of the New D&B Group; and
(ii) all transferable licenses, permits and authorizations issued by
Governmental Authorities which relate primarily to the RHD Business but
which are held in the name of any member of the New D&B Group, or in the
name of any employee, officer, director, stockholder, or agent of any such
member, or otherwise, on behalf of a member of the RHD Group shall be duly
and validly transferred or caused to be transferred by New D&B to the
Corporation or the appropriate member of the RHD Group.
(f) Transfer of Agreements. Without limiting the generality of the
obligations set forth in Section 2.1(a):
<PAGE> 18
15
(i) the Corporation hereby agrees that on or prior to the
Distribution Date or as soon as reasonably practicable thereafter, subject
to the limitations set forth in this Section 2.1(f), it will, and it will
cause each member of the RHD Group to, assign, transfer and convey to the
appropriate member of the New D&B Group all of the Corporation's or such
member of the RHD Group's respective right, title and interest in and to
any and all New D&B Contracts;
(ii) New D&B hereby agrees that on or prior to the Distribution Date
or as soon as reasonably practicable thereafter, subject to the
limitations set forth in this Section 2.1(f), it will, and it will cause
each member of the New D&B Group to, assign, transfer and convey to the
Corporation or the appropriate member of the RHD Group all of New D&B's or
such member of the New D&B Group's respective right, title and interest in
and to any and all RHD Contracts;
(iii) subject to the provisions of this Section 2.1(f), any
agreement to which any of the parties hereto or any of their Subsidiaries
is a party that inures to the benefit of both the RHD Business and the New
D&B Business shall be assigned in part so that each party shall be
entitled to the rights and benefits inuring to its business under such
agreement;
(iv) the assignee of any agreement assigned, in whole or in part,
hereunder (an "Assignee") shall assume and agree to pay, perform, and
fully discharge all obligations of the assignor under such agreement or,
in the case of a partial assignment under paragraph (f)(iii), such
Assignee's related portion of such obligations as determined in accordance
with the terms of the relevant agreement, where determinable on the face
thereof, and otherwise as determined in accordance with the practice of
the parties prior to the Distribution; and
(v) notwithstanding anything in this Agreement to the contrary, this
Agreement shall not constitute an agreement to assign any agreement, in
whole or in part, or any rights thereunder if the agreement to assign or
attempt to assign, without the consent of a third party, would constitute
a breach thereof or in any way adversely affect the rights of the assignor
or Assignee thereof. Until such consent is obtained, or if an attempted
assignment thereof would be ineffective or would adversely affect the
rights of any party hereto so that the intended Assignee would not, in
fact, receive all such rights, the parties will cooperate with each other
in any arrangement designed to provide for the intended Assignee the
benefits of, and to permit the intended Assignee to assume liabilities
under, any such agreement.
(g) Consents. The parties hereto shall use their commercially
reasonable efforts to obtain required consents to transfer and/or assignment of
licenses, permits and authorizations of Governmental Authorities and of
agreements hereunder.
(h) Delivery of Shares to Agent. The Corporation shall deliver to
the Agent the share certificates representing the New D&B Common Shares issued
to the Corporation by New D&B pursuant to Section 2.1(b) and shall instruct the
Agent to distribute, on or as soon as practicable following the Distribution
Date, certificates representing such Common Shares to
<PAGE> 19
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holders of record of shares of D&B Common Stock on the Distribution Record Date
as further contemplated by the Information Statement and herein. New D&B shall
provide all share certificates that the Agent shall require in order to effect
the Distribution.
(i) Certain Liabilities. For purposes of this Agreement, including
Article III hereof, New D&B agrees with the Corporation that:
(i) any and all Liabilities arising from or based upon "controlling
person" liability relating to the Form 10 (or any amendment thereto) filed
by New D&B shall be deemed to be New D&B Liabilities and not RHD
Liabilities; and
(ii) notwithstanding Section 2.1(m) below, any and all Liabilities
arising from the 1996 Distribution Agreement, other than those set forth
on Schedule 2.1(i), shall be deemed to be New D&B Liabilities and not RHD
Liabilities.
(j) Certain Contingencies. Notwithstanding anything to the contrary
herein or in the Tax Allocation Agreement, on or prior to the Distribution Date,
each of the Corporation and New D&B agree to take all actions necessary to cause
the Corporation's interests in certain prior business transactions set forth in
Schedule 2.1(j) to be transferred to New D&B or a member of the New D&B Group,
and each of the Corporation and New D&B agree that any rights with respect
thereto shall be held by New D&B or a member of the New D&B Group and not by RHD
or any member of the RHD Group and any Liabilities arising in connection with
such interests and any transactions relating thereto (including, without
limitation, any Liabilities for Taxes of any member of the Pre-Distribution D&B
Group (as defined in the Tax Allocation Agreement) imposed by reason of audit
adjustment or otherwise) shall be New D&B Liabilities and not RHD Liabilities.
(k) Certain Contracts (i) The Corporation agrees to enter into an
agreement with MCI Communications Corporation ("MCI") pursuant to which the
Corporation will agree to purchase at least $75,000.00 of "eligible services"
per month ("eligible services" shall mean services of a type that count toward
New D&B's purchase commitments under an Agreement for Telecommunications
Services between New D&B (as assignee from the Corporation) and MCI, dated
December 1, 1991, as amended (the "MCI Agreement")) from MCI during the period
from July 1, 1998 to June 30, 2000 (the "RHD MCI Liability"). New D&B agrees to
purchase an amount of eligible services per month under the MCI Agreement equal
to the difference between the minimum amount required to be purchased per month
thereunder and $105,000.00 (the "New D&B MCI Liability"). In the event that New
D&B in any way is liable for or pays any portion of the RHD MCI Liability or any
penalty or other liability or charge related thereto, the Corporation agrees to
immediately pay to New D&B upon demand any such amounts owing or paid by New
D&B. Each of the Corporation and New D&B agree to be liable for and to pay 50%
of any penalties imposed by MCI for which the parties become liable as a result
of the failure of the parties to purchase, in the aggregate, the minimum amount
of "eligible services" per month specified in the MCI Agreement; provided that
to the extent that any such penalties are attributable to the RHD MCI Liability
or the New D&B MCI Liability, respectively, then the Corporation or New D&B,
respectively shall have sole liability with respect thereto. The Corporation and
New D&B agree that the RHD MCI Liability and any penalties related
<PAGE> 20
17
thereto shall be an RHD Liability and the New D&B MCI Liability and any
penalties related thereto shall be a New D&B Liability under this
Agreement.
(ii) The Corporation agrees to purchase at least $60,000.00 of
"eligible services" per month from eunetcom S.A. and eunetcom, Inc.,
(collectively "eunetcom") during the period from July 1, 1998 to August
28, 1999 ("eligible services" shall mean services of a type that count
toward New D&B's purchase commitments under an Amended and Restated
Value-Added Network Services Agreement (the "eunetcom Agreement") between
New D&B (as assignee from the Corporation) and eunetcom, dated as of
January 31, 1997) (the "RHD eunetcom Liability"). New D&B agrees to
purchase an amount of eligible services per month under the eunetcom
Agreement equal to the difference between the minimum amount required to
be purchased per month thereunder and $135,600.00 (the "New D&B eunetcom
Liability"). In the event that New D&B in any way is liable for or pays
any portion of the RHD eunetcom liability or any penalty or other
liability or charge related thereto, the Corporation agrees to immediately
pay to New D&B upon demand any such amounts owing or paid by New D&B. Each
of the Corporation and New D&B agree to be liable for and to pay 50% of
any penalties imposed by eunetcom for which the parties become liable as a
result of the failure of the parties to purchase, in the aggregate, the
minimum amount of "eligible services" per month specified in the eunetcom
Agreement; provided that to the extent that any such penalties are
attributable to the RHD eunetcom Liability or the New D&B eunetcom
Liability, respectively, then the Corporation or New D&B, respectively
shall have sole liability with respect thereto. The Corporation and New
D&B agree that the RHD eunetcom liability and any penalties related
thereto shall be an RHD Liability and the New D&B eunetcom Liability and
any penalties related thereto shall be a New D&B Liability under this
Agreement.
(l) 1996 Distribution. The Corporation agrees that it will not take
any action it is required or permitted to take pursuant to the terms of (i) the
1996 Distribution Agreement or (ii) the Indemnity and Joint Defense Agreement,
the Tax Allocation Agreement, the Employee Benefits Agreement or any Ancillary
Agreement referred to in the 1996 Distribution Agreement, in each such case
without the prior written consent of New D&B. The Corporation agrees that it
will take any action pursuant to the terms of the agreements referred to in
clauses (i) and (ii) of the preceding sentence that it is reasonably requested
to take by New D&B.
(m) Undertaking of New D&B. On or prior to the Distribution Date,
New D&B will undertake to each of Cognizant Corporation and ACNielsen
Corporation to be jointly and severally liable for all "D&B Liabilities" (as
defined in the 1996 Distribution Agreement) under the 1996 Distribution
Agreement pursuant to an undertaking substantially in the form of Exhibit 2.1(m)
hereto.
(n) Corporation Debt. In connection with the Distribution, RHD has
borrowed $350 million under a bank credit facility (the "RHD Credit Facility")
and issued $150 million of senior subordinated notes pursuant to an indenture
(the "RHD Notes"), all of which is guaranteed by the Corporation (collectively,
the "Corporation Debt"). A portion of the proceeds of this indebtedness shall be
used by the Corporation to repay existing indebtedness to third parties, another
portion of the proceeds shall be contributed to New D&B to pay the remaining
costs and
<PAGE> 21
18
expenses related to the Distribution as described in Section 8.5 and the rest of
the proceeds shall be used to repay existing intercompany indebtedness of the
Corporation or members of the RHD Group to members of the New D&B Group. The
Corporation agrees that this indebtedness, as well as any obligations of the
Corporation or RHD pursuant to the RHD Credit Facility, the indenture and any
RHD Notes issued thereunder, shall be RHD Liabilities.
(o) D&B Restricted Stock. At the time of the Distribution, the
Corporation shall contribute to New D&B any New D&B Common Shares received by
the Corporation as a result of the forfeiture of restricted D&B Common Stock by
D&B employees or directors who will become New D&B employees or directors in
connection with the Distribution.
(p) Other Transactions. On or prior to the Distribution Date, each
of the Corporation and New D&B shall consummate those other transactions in
connection with the Distribution that are contemplated by the ruling request
submissions by the Corporation to the Internal Revenue Service in respect of the
ruling granted on April 9, 1998, and not specifically referred to in
subparagraphs (a)-(o) above. After the Distribution Date, each of the
Corporation and New D&B will exercise good faith commercially reasonable efforts
to consummate as promptly as practicable all other transactions which must be
consummated in order fully to complete the Distribution and any of the
transactions contemplated hereby or by any of the Ancillary Agreements.
SECTION 2.2. Certain Matters Regarding Accounts Payable and
Accounts Receivable. (a) The Corporation and New D&B agree that the amounts to
be paid pursuant to any outstanding checks of the Corporation written on bank
accounts which will remain with the Corporation after the Distribution and which
have not been presented to the Corporation for payment as of the close of
business on the Distribution Date shall be RHD Liabilities and not New D&B
Liabilities.
(b) Notwithstanding anything to the contrary herein or in any
Ancillary Agreement, the Corporation agrees to promptly remit to New D&B any
amounts representing prepayments or advances of expenses or payables of the
Corporation or any of its Subsidiaries relating to the RHD Business which would
not in the ordinary course of business consistent with past practice have been
prepaid or advanced on or prior to the Distribution Date.
(c) The Corporation agrees to promptly remit to New D&B any amounts
received by any member of the RHD Group (whether before, on or after the
Distribution Date) in respect of the accounts receivable of the Corporation set
forth on Schedule 2.2(c).
(d) New D&B agrees that within a reasonable period of time after
presentment to New D&B of acceptable invoices, New D&B will reimburse the
Corporation for the expenses set forth on Schedule 2.2(d).
SECTION 2.3. Cash balances. In addition to any other obligations
hereunder or under any Ancillary Agreement or otherwise, on the Distribution
Date, the Corporation shall contribute to New D&B all cash in the Corporation's
accounts as of the close of business on the Distribution Date and such other
cash as is necessary for the Corporation's net debt to be $500
<PAGE> 22
19
million as of the close of business on the Distribution Date.
SECTION 2.4. Assumption and Satisfaction of Liabilities. Except as
otherwise specifically set forth in any Ancillary Agreement, and subject to
Section 2.3 hereof, from and after the Effective Time, (i) the Corporation
shall, and shall cause each member of the RHD Group to, assume, pay, perform and
discharge all RHD Liabilities and (ii) New D&B shall, and shall cause each
member of the New D&B Group to, assume, pay, perform and discharge all New D&B
Liabilities. To the extent reasonably requested to do so by another party
hereto, each party hereto agrees to sign such documents, in a form reasonably
satisfactory to such party, as may be reasonably necessary to evidence the
assumption of any Liabilities hereunder.
SECTION 2.5. Resignations. (a) Subject to Section 2.5(b), the
Corporation and RHD shall cause all their employees to resign or be terminated,
effective as of the close of business on the Distribution Date, from all
positions as officers or directors of any member of the New D&B Group in which
they serve, and New D&B shall cause all its employees to resign or be
terminated, effective as of the close of business on the Distribution Date, from
all positions as officers or directors of the Corporation or any members of the
RHD Group in which they serve.
(b) No person shall be required by any party hereto to resign from
any position or office with another party hereto if such person is disclosed in
the Information Statement as the person who is to hold such position or office
following the Distribution.
SECTION 2.6. Further Assurances. In case at any time after the
Effective Time any further action is reasonably necessary or desirable to carry
out the purposes of this Agreement and the Ancillary Agreements, the proper
officers of each party to this Agreement shall take all such necessary action.
Without limiting the foregoing, the Corporation and New D&B shall use their
commercially reasonable efforts promptly to obtain all consents and approvals,
to enter into all amendatory agreements and to make all filings and applications
that may be required for the consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements, including, without limitation, all
applicable governmental and regulatory filings.
SECTION 2.7. Limited Representations or Warranties. Each of the
parties hereto agrees that no party hereto is, in this Agreement or in any other
agreement or document contemplated by this Agreement or otherwise, making any
representation or warranty whatsoever, as to title or value of Assets being
transferred. It is also agreed that, notwithstanding anything to the contrary
otherwise expressly provided in the relevant Conveyancing and Assumption
Instrument, all Assets either transferred to or retained by the parties, as the
case may be, shall be "as is, where is" and that (subject to Section 2.6) the
party to which such Assets are to be transferred hereunder shall bear the
economic and legal risk that such party's or any of the Subsidiaries' title to
any such Assets shall be other than good and marketable and free from
encumbrances. Similarly, each party hereto agrees that, except as otherwise
expressly provided in the relevant Conveyancing and Assumption Instrument, no
party hereto is representing or warranting in any way that the obtaining of any
consents or approvals, the execution and delivery of any amendatory agreements
and the making of any filings or applications contemplated by this Agreement
will satisfy the provisions of any or all applicable agreements or the
requirements of any or all applicable laws or judgments, it being agreed that
the party to which any Assets are transferred shall bear the
<PAGE> 23
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economic and legal risk that any necessary consents or approvals are not
obtained or that any requirements of laws or judgments are not complied with.
SECTION 2.8. Guarantees. (a) Except as otherwise specified in any
Ancillary Agreement, the Corporation and New D&B shall use their commercially
reasonable efforts to have, on or prior to the Distribution Date, or as soon as
practicable thereafter, the Corporation and any member of the RHD Group removed
as guarantor of or obligor for any New D&B Liability, including, without
limitation, in respect of those guarantees set forth on Schedule 2.8(a) to the
extent that they relate to New D&B Liabilities.
(b) Except as otherwise specified in any Ancillary Agreement, the
Corporation and New D&B shall use their commercially reasonable efforts to have,
on or prior to the Distribution Date, or as soon as practicable thereafter, any
member of the New D&B Group removed as guarantor of or obligor for any RHD
Liability, including, without limitation, in respect of those guarantees set
forth on Schedule 2.8(b) to the extent that they relate to RHD Liabilities.
(c) If the Corporation or New D&B is unable to obtain, or to cause
to be obtained, any such required removal as set forth in clauses (a) or (b) of
this Section 2.8, the applicable guarantor or obligor shall continue to be bound
as such and, unless not permitted by law or the terms thereof, the relevant
beneficiary shall or shall cause one of its Subsidiaries, as agent or
subcontractor for such guarantor or obligor to pay, perform and discharge fully
all the obligations or other liabilities of such guarantor or obligor thereunder
from and after the date hereof.
SECTION 2.9. Witness Services. At all times from and after the
Distribution Date, each of the Corporation and New D&B shall use their
commercially reasonable efforts to make available to the other, upon reasonable
written request, its and its Subsidiaries' officers, directors, employees and
agents as witnesses to the extent that (i) such persons may reasonably be
required in connection with the prosecution or defense of any Action in which
the requesting party may from time to time be involved and (ii) there is no
conflict in the Action between the requesting party and the Corporation or New
D&B as applicable. A party providing witness services to the other party under
this Section shall be entitled to receive from the recipient of such services,
upon the presentation of invoices therefor, payments for such amounts, relating
to disbursements and other out-of-pocket expenses (which shall be deemed to
exclude the costs of salaries and benefits of employees who are witnesses), as
may be reasonably incurred in providing such witness services.
SECTION 2.10. Certain Post-Distribution Transactions. (a) (i) The
Corporation shall comply and shall cause its Subsidiaries to comply with and
otherwise not take action inconsistent with each representation and statement
made to the Internal Revenue Service in connection with the request by the
Corporation for a ruling letter in respect of the Distribution as to certain tax
aspects of the Distribution and (ii) until two years after the Distribution
Date, the Corporation will cause RHD to maintain its status as a company engaged
in the active conduct of a trade or business, as defined in Section 355(b) of
the Code, will continue to own stock of RHD constituting control (within the
meaning of Section 368(c) of the Code) of RHD and will maintain at least ninety
percent of the fair market value of the Corporation's assets in stock and
securities of RHD and such other assets which, based on an opinion of a law firm
reasonably acceptable to New D&B, or a supplemental ruling from the Internal
Revenue Service, will not cause the Corporation
<PAGE> 24
21
or RHD to be in violation of the active business requirement under the holding
company test.
(b)(i) New D&B shall comply and shall cause its Subsidiaries to
comply with and otherwise not take action inconsistent with each representation
and statement made to the Internal Revenue Service in connection with the
request by the Corporation for a ruling letter in respect of the Distribution as
to certain tax aspects of the Distribution and (ii) until two years after the
Distribution Date, New D&B will cause each of Moody's and New D&B Opco Inc. to
maintain its status as a company engaged in the active conduct of a trade or
business, as defined in Section 355(b) of the Code, will continue to own stock
in each of Moody's and New D&B Opco Inc. constituting control (within the
meaning of Section 368(c) of the Code) of Moody's and New D&B Opco Inc. and will
maintain at least ninety percent of the fair market value of New D&B's assets in
stock and securities of Moody's and New D&B Opco Inc. and such other assets
which, based on an opinion of a law firm reasonably acceptable to the
Corporation, or a supplemental ruling from the Internal Revenue Service, will
not cause New D&B, Moody's or New D&B Opco Inc. to be in violation of the active
business requirement under the holding company test.
(c) The Corporation agrees that until two years after the
Distribution Date, it will not (i) merge or consolidate with or into any other
corporation, (ii) liquidate or partially liquidate, (iii) sell or transfer all
or substantially all of its assets (within the meaning of Rev. Proc. 77-37, 1977
- - - 2 C.B. 568) in a single transaction or series of related transactions, (iv)
redeem or otherwise repurchase any D&B Common Stock (other than as described in
Section 4.05(1)(b) of Rev. Proc. 96-30, 1996-1 C.B. 696), or (v) take any other
action or actions which in the aggregate would have the effect of causing or
permitting one or more persons to acquire directly or indirectly stock
representing a 50 percent or greater interest (within the meaning of Section
355(e) of the Code) in the Corporation, unless prior to taking such action the
Corporation has obtained (and provided to New D&B) a written opinion of a law
firm reasonably acceptable to New D&B, or a supplemental ruling from the
Internal Revenue Service, that such action or actions will not result in (i) the
Distribution failing to qualify under Section 355(a) of the Code or (ii) the New
D&B Common Shares failing to qualify as qualified property for purposes of
Section 355(c)(2) of the Code by reason of Section 355(e) of the Code.
(d) Notwithstanding anything to the contrary herein or in the Tax
Allocation Agreement, if the Corporation or New D&B (or any of their respective
Subsidiaries) fails to comply with any of its obligations under Sections
2.10(a), 2.10(b) and 2.10(c) above or takes or fails to take any action on or
after the Distribution Date, and such failure to comply, action or omission
contributes to a determination that (i) the Distribution fails to qualify under
Section 355(a) of the Code or (ii) the New D&B Common Shares fail to qualify as
qualified property for purposes of Section 355(c)(2) of the Code by reason of
Section 355(e) of the Code, the party shall indemnify and hold harmless the
other party and each member of the consolidated group of which the other party
is a member from and against any and all federal, state and local taxes,
including any interest, penalties or additions to tax, imposed upon or incurred
by such other party, any member of its group or any stockholder of either party
as a result of the failure of the Distribution to qualify under Section 355(a)
of the Code or the application of Section 355(e). The obligation of the
Corporation to indemnify New D&B pursuant to the preceding sentence shall not be
affected by the delivery of any legal opinion or supplemental ruling under
Section 2.10(c).
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SECTION 2.11. Transfers Not Effected Prior to the Distribution;
Transfers Deemed Effective as of the Distribution Date. To the extent that any
transfers contemplated by this Article II shall not have been consummated on or
prior to the Distribution Date, the parties shall cooperate to effect such
transfers as promptly following the Distribution Date as shall be practicable.
Nothing herein shall be deemed to require the transfer of any Assets or the
assumption of any Liabilities which by their terms or operation of law cannot be
transferred; provided, however, that the parties hereto and their respective
Subsidiaries shall cooperate to seek to obtain any necessary consents or
approvals for the transfer of all Assets and Liabilities contemplated to be
transferred pursuant to this Article II. In the event that any such transfer of
Assets or Liabilities has not been consummated, from and after the Distribution
Date the party retaining such Asset or Liability shall hold such Asset in trust
for the use and benefit of the party entitled thereto (at the expense of the
party entitled thereto) or retain such Liability for the account of the party by
whom such Liability is to be assumed pursuant hereto, as the case may be, and
take such other action as may be reasonably requested by the party to whom such
Asset is to be transferred, or by whom such Liability is to be assumed, as the
case may be, in order to place such party, insofar as is reasonably possible, in
the same position as would have existed had such Asset or Liability been
transferred as contemplated hereby. As and when any such Asset or Liability
becomes transferable, such transfer shall be effected forthwith. The parties
agree that, as of the Distribution Date, each party hereto shall be deemed to
have acquired complete and sole beneficial ownership over all of the Assets,
together with all rights, powers and privileges incident thereto, and shall be
deemed to have assumed in accordance with the terms of this Agreement all of the
Liabilities, and all duties, obligations and responsibilities incident thereto,
which such party is entitled to acquire or required to assume pursuant to the
terms of this Agreement.
SECTION 2.12. Conveyancing and Assumption Instruments. In
connection with the transfers of Assets and the assumptions of Liabilities
contemplated by this Agreement, the parties shall execute or cause to be
executed by the appropriate entities the Conveyancing and Assumption Instruments
in substantially the form contemplated hereby for transfers to be effected
pursuant to New York law or the laws of one of the other states of the United
States or, if not appropriate for a given transfer, and for transfers to be
effected pursuant to non-U.S. laws, in such other form as the parties shall
reasonably agree, including the transfer of real property with deeds as may be
appropriate. The transfer of capital stock shall be effected by means of
delivery of stock certificates and executed stock powers and notation on the
stock record books of the corporation or other legal entities involved, or by
such other means as may be required in any non-U.S. jurisdiction to transfer
title to stock and, to the extent required by applicable law, by notation on
public registries.
SECTION 2.13. Ancillary Agreements. On or prior to the Distribution
Date, each of the Corporation and New D&B shall enter into, and/or (where
applicable) shall cause members of the RHD Group or the New D&B Group, as
applicable, to enter into, the Ancillary Agreements and any other agreements in
respect of the Distribution reasonably necessary or appropriate in connection
with the transactions contemplated hereby and thereby.
<PAGE> 26
23
SECTION 2.14. Corporate Names. (a) Except as otherwise
specifically provided in any Ancillary Agreement:
(i) on or prior to the Distribution Date, the Corporation shall
change its name to remove any reference to "Dun & Bradstreet" therein;
(ii) as soon as reasonably practicable after the Distribution Date
but in any event within six months thereafter, the Corporation will, at
its own expense, remove (or, if necessary, on an interim basis, cover up)
any and all exterior signs and other identifiers located on any of its
property or premises or on the property or premises used by it or its
Subsidiaries (except property or premises to be shared with New D&B or its
Subsidiaries after the Distribution) which refer or pertain to D&B or
which include the Dun & Bradstreet name, logo or other trademark or other
intellectual property utilizing D&B;
(iii) as soon as reasonably practicable after the Distribution Date
but in any event within six months thereafter, the Corporation will, and
will cause its Subsidiaries to, remove from all letterhead, envelopes,
invoices and other communications media of any kind, all references to
D&B, including the "Dun & Bradstreet" name, logo and any other trademark
or other intellectual property utilizing D&B (except that the Corporation
shall not be required to take any such action with respect to materials in
the possession of customers), and neither the Corporation nor its
Subsidiaries shall use or display the "Dun & Bradstreet" name, logo or
other trademarks or intellectual property utilizing D&B without the prior
written consent of New D&B;
(iv) as soon as reasonably practicable after the Distribution Date,
but in any event within six months thereafter, the Corporation will cause
its Subsidiaries to change their corporate names to the extent necessary
to remove and eliminate any reference to D&B, including the "Dun &
Bradstreet" name; provided, however, that notwithstanding the foregoing
requirements of this Section 2.14(a), if the Corporation has exercised
good faith efforts to comply with this clause (iv) but is unable, due to
regulatory or other circumstance beyond its control, to effect a corporate
name change in compliance with applicable law, then the Corporation or its
Subsidiary will not be deemed to be in breach hereof if it continues to
exercise good faith efforts to effectuate such name change and does
effectuate such name change within nine months after the Distribution
Date, and, in such circumstances, such party may continue to include in
exterior signs and other identifiers and in letterhead, envelopes,
invoices and other communications references to the name which includes
references to D&B, but only to the extent necessary to identify such party
and only until such party's corporate name can be changed to remove and
eliminate such references; and
(v) notwithstanding the foregoing clauses (i) through (iv), nothing
herein or in any Ancillary Agreement shall require the Corporation to take
any action to remove any reference to D&B, including the "Dun &
Bradstreet" name, from any stock certificate relating to shares of D&B
Common Stock outstanding on or prior to the Record Date; provided that
from and after the Record Date, any newly issued stock certificates
representing D&B Common Stock (which at the Effective Time will become RHD
<PAGE> 27
24
Common Stock) shall not have any reference to D&B, including the "Dun &
Bradstreet" name.
(b) Except as otherwise specifically provided in any Ancillary
Agreement:
(i) as soon as reasonably practicable after the Distribution Date
but in any event within six months thereafter, New D&B will, at its own
expense, remove (or, if necessary, on an interim basis, cover up) any and
all exterior signs and other identifiers located on any of their
respective property or premises owned or used by them or their respective
Subsidiaries (except property or premises to be shared with the
Corporation or its Subsidiaries after the Distribution) which refer or
pertain to RHD or which include the "Reuben H. Donnelley," "R.H. Donnelley
Inc." or "Donnelley" name, logo or other trademark or other RHD
intellectual property;
(ii) as soon as reasonably practicable after the Distribution Date
but in any event within six months thereafter, New D&B will, and will
cause its respective Subsidiaries to, remove from all letterhead,
envelopes, invoices and other communications media of any kind, all
references to RHD, including the "Reuben H. Donnelley," "R.H. Donnelley
Inc." or "Donnelley" name, logo and any other trademark or other RHD
intellectual property (except that New D&B shall not be required to take
any such action with respect to materials in the possession of customers),
and neither New D&B nor any of its Subsidiaries shall use or display the
"Reuben H. Donnelley," "R.H. Donnelley Inc." or "Donnelley" name, logo or
other trademarks or RHD intellectual property without the prior written
consent of the Corporation; and
(iii) as soon as reasonably practicable after the Distribution Date
but in any event within six months thereafter, New D&B will, and will
cause its Subsidiaries to, change their corporate names to the extent
necessary to remove and eliminate any reference to RHD, including the
"Reuben H. Donnelley," "R.H. Donnelley Inc." or "Donnelley" name;
provided, however, that notwithstanding the foregoing requirements of this
Section 2.14(b), if New D&B has exercised good faith efforts to comply
with this clause (iii) but is unable, due to regulatory or other
circumstance beyond its control, to effect a corporate name change in
compliance with applicable law, then New D&B or its Subsidiary will not be
deemed to be in breach hereof if it continues to exercise good faith
efforts to effectuate such name change and does effectuate such name
change within nine months after the Distribution Date, and, in such
circumstances, such party may continue to include in exterior signs and
other identifiers and in letterhead, envelopes, invoices and other
communications references to the name which includes references to RHD but
only to the extent necessary to identify such party and only until such
party's corporate name can be changed to remove and eliminate such
references.
<PAGE> 28
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ARTICLE III. INDEMNIFICATION
SECTION 3.1. Indemnification by the Corporation. Except as
otherwise specifically set forth in any provision of this Agreement or of any
Ancillary Agreement, the Corporation shall indemnify, defend and hold harmless
the New D&B Indemnitees from and against any and all Indemnifiable Losses of the
New D&B Indemnitees arising out of, by reason of or otherwise in connection with
the RHD Liabilities or alleged RHD Liabilities, including any breach by the
Corporation of any provision of this Agreement or any Ancillary Agreement.
SECTION 3.2. Indemnification by New D&B. Except as otherwise
specifically set forth in any provision of this Agreement or of any Ancillary
Agreement, New D&B shall indemnify, defend and hold harmless the RHD Indemnitees
from and against any and all Indemnifiable Losses of the RHD Indemnitees arising
out of, by reason of or otherwise in connection with the New D&B Liabilities or
alleged New D&B Liabilities, including any breach by New D&B of any provision of
this Agreement or any Ancillary Agreement.
SECTION 3.3. Procedures for Indemnification.
(a) Third Party Claims. If a claim or demand is made against an RHD
Indemnitee or a New D&B Indemnitee (each, an "Indemnitee") by any person who is
not a party to this Agreement (a "Third Party Claim") as to which such
Indemnitee is entitled to indemnification pursuant to this Agreement, such
Indemnitee shall notify the party which is or may be required pursuant to
Section 3.1 or Section 3.2 hereof to make such indemnification (the
"Indemnifying Party") in writing, and in reasonable detail, of the Third Party
Claim promptly (and in any event within 15 business days) after receipt by such
Indemnitee of written notice of the Third Party Claim; provided, however, that
failure to give such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure (except that the Indemnifying Party shall
not be liable for any expenses incurred during the period in which the
Indemnitee failed to give such notice). Thereafter, the Indemnitee shall deliver
to the Indemnifying Party, promptly (and in any event within five business days)
after the Indemnitee's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnitee relating to the Third Party
Claim.
If a Third Party Claim is made against an Indemnitee, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if it so chooses and acknowledges in writing its obligation to indemnify the
Indemnitee therefor, to assume the defense thereof with counsel selected by the
Indemnifying Party; provided that such counsel is not reasonably objected to by
the Indemnitee. Should the Indemnifying Party so elect to assume the defense of
a Third Party Claim, the Indemnifying Party shall, within 30 days (or sooner if
the nature of the Third Party Claim so requires), notify the Indemnitee of its
intent to do so, and the Indemnifying Party shall thereafter not be liable to
the Indemnitee for legal or other expenses subsequently incurred by the
Indemnitee in connection with the defense thereof; provided, that such
Indemnitee shall have the right to employ counsel to represent such Indemnitee
if, in such Indemnitee's reasonable judgment, a conflict of interest between
such Indemnitee and such Indemnifying Party exists in respect of such claim
which would make representation of both such parties by one counsel
inappropriate, and in such event the fees and expenses of such separate counsel
shall be paid by such Indemnifying
<PAGE> 29
26
Party. If the Indemnifying Party assumes such defense, the Indemnitee shall have
the right to participate in the defense thereof and to employ counsel, subject
to the proviso of the preceding sentence, at its own expense, separate from the
counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall control such defense. The Indemnifying Party shall be
liable for the fees and expenses of counsel employed by the Indemnitee for any
period during which the Indemnifying Party has failed to assume the defense
thereof (other than during the period prior to the time the Indemnitee shall
have given notice of the Third Party Claim as provided above). If the
Indemnifying Party so elects to assume the defense of any Third Party Claim, all
of the Indemnitees shall cooperate with the Indemnifying Party in the defense or
prosecution thereof, including by providing or causing to be provided, Records
and witnesses as soon as reasonably practicable after receiving any request
therefor from or on behalf of the Indemnifying Party.
If the Indemnifying Party acknowledges in writing responsibility for
a Third Party Claim, then in no event will the Indemnitee admit any liability
with respect to, or settle, compromise or discharge, any Third Party Claim
without the Indemnifying Party's prior written consent; provided, however, that
the Indemnitee shall have the right to settle, compromise or discharge such
Third Party Claim without the consent of the Indemnifying Party if the
Indemnitee releases the Indemnifying Party from its indemnification obligation
hereunder with respect to such Third Party Claim and such settlement, compromise
or discharge would not otherwise adversely affect the Indemnifying Party. If the
Indemnifying Party acknowledges in writing liability for a Third Party Claim,
the Indemnitee will agree to any settlement, compromise or discharge of a Third
Party Claim that the Indemnifying Party may recommend and that by its terms
obligates the Indemnifying Party to pay the full amount of the liability in
connection with such Third Party Claim and releases the Indemnitee completely in
connection with such Third Party Claim and that would not otherwise adversely
affect the Indemnitee; provided, however, that the Indemnitee may refuse to
agree to any such settlement, compromise or discharge if the Indemnitee agrees
that the Indemnifying Party's indemnification obligation with respect to such
Third Party Claim shall not exceed the amount that would be required to be paid
by or on behalf of the Indemnifying Party in connection with such settlement,
compromise or discharge. If an Indemnifying Party elects not to assume the
defense of a Third Party Claim, or fails to notify an Indemnitee of its election
to do so as provided herein, such Indemnitee may compromise, settle or defend
such Third Party Claim.
Notwithstanding the foregoing, the Indemnifying Party shall not be
entitled to assume the defense of any Third Party Claim (and shall be liable for
the fees and expenses of counsel incurred by the Indemnitee in defending such
Third Party Claim) if the Third Party Claim seeks an order, injunction or other
equitable relief or relief for other than money damages against the Indemnitee
which the Indemnitee reasonably determines, after conferring with its counsel,
cannot be separated from any related claim for money damages. If such equitable
relief or other relief portion of the Third Party Claim can be so separated from
that for money damages, the Indemnifying Party shall be entitled to assume the
defense of the portion relating to money damages.
(b) In the event of payment by an Indemnifying Party to any
Indemnitee in connection with any Third-Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right
or claim relating to such Third-Party Claim against any claimant or
<PAGE> 30
27
plaintiff asserting such Third-Party Claim. Such Indemnitee shall cooperate with
such Indemnifying Party in a reasonable manner, and at the cost and expense of
such Indemnifying Party, in prosecuting any subrogated right or claim.
(c) The remedies provided in this Article III shall be cumulative
and shall not preclude assertion by any Indemnitee of any other rights or the
seeking of any and all other remedies against any Indemnifying Party.
SECTION 3.4. Indemnification Payments. Indemnification required by
this Article III shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
loss, liability, claim, damage or expense is incurred.
ARTICLE IV. ACCESS TO INFORMATION
SECTION 4.1. Provision of Corporate Records.
(a) Other than in circumstances in which indemnification is sought
pursuant to Article III (in which event the provisions of such Article will
govern), after the Distribution Date, upon the prior written request by New D&B
for specific and identified agreements, documents, books, records or files
(collectively, "Records") which relate to (x) New D&B or the conduct of the New
D&B Business up to the Effective Time, or (y) any Ancillary Agreement to which
the Corporation and New D&B are parties, as applicable, the Corporation shall
arrange, as soon as reasonably practicable following the receipt of such
request, for the provision of appropriate copies of such Records (or the
originals thereof if New D&B has a reasonable need for such originals) in the
possession or control of the Corporation or any of its Subsidiaries, but only to
the extent such items are not already in the possession or control of New D&B.
(b) Other than in circumstances in which indemnification is sought
pursuant to Article III (in which event the provisions of such Article will
govern), after the Distribution Date, upon the prior written request by the
Corporation for specific and identified Records which relate to (x) the
Corporation, RHD or the conduct of the RHD Business up to the Effective Time, or
(y) any Ancillary Agreement to which New D&B and the Corporation are parties, as
applicable, New D&B shall arrange, as soon as reasonably practicable following
the receipt of such request, for the provision of appropriate copies of such
Records (or the originals thereof if the Corporation has a reasonable need for
such originals) in the possession or control of New D&B or any of its
Subsidiaries, but only to the extent such items are not already in the
possession or control of the Corporation.
SECTION 4.2. Access to Information. Other than in circumstances in
which indemnification is sought pursuant to Article III (in which event the
provisions of such Article will govern), from and after the Distribution Date,
each of the Corporation and New D&B shall afford to the other and its authorized
accountants, counsel and other designated representatives reasonable access
during normal business hours, subject to appropriate restrictions for
classified, privileged or confidential information, to the personnel,
properties, books and records of such party and its
<PAGE> 31
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Subsidiaries insofar as such access is reasonably required by the other party
and relates to (x) such other party or the conduct of its business prior to the
Effective Time or (y) any Ancillary Agreement to which each of the party
requesting such access and the party requested to grant such access are parties.
SECTION 4.3. Reimbursement; Other Matters. Except to the extent
otherwise contemplated by any Ancillary Agreement, a party providing Records or
access to information to the other party under this Article IV shall be entitled
to receive from the recipient, upon the presentation of invoices therefor,
payments for such amounts, relating to supplies, disbursements and other
out-of-pocket expenses, as may be reasonably incurred in providing such Records
or access to information, as well as reimbursements on a per diem basis for the
reasonable costs of any personnel reasonably utilized by the party providing
Records or access to information under this Article IV to respond to the
relevant request.
SECTION 4.4. Confidentiality. Each of (i) the Corporation and its
Subsidiaries and (ii) New D&B and its Subsidiaries shall not use or permit the
use of (without the prior written consent of the other) and shall keep, and
shall cause its consultants and advisors to keep, confidential all information
concerning the other parties in its possession, its custody or under its control
(except to the extent that (A) such information has been in the public domain
through no fault of such party or (B) such information has been later lawfully
acquired from other sources by such party or (C) this Agreement or any other
Ancillary Agreement or any other agreement entered into pursuant hereto permits
the use or disclosure of such information) to the extent such information (w)
relates to or was acquired during the period up to the Effective Time, (x)
relates to any Ancillary Agreement, (y) is obtained in the course of performing
services for the other party pursuant to any Ancillary Agreement, or (z) is
based upon or is derived from information described in the preceding clauses
(w), (x) or (y), and each party shall not (without the prior written consent of
the other) otherwise release or disclose such information to any other person,
except such party's auditors and attorneys, unless compelled to disclose such
information by judicial or administrative process or unless such disclosure is
required by law and such party has used commercially reasonable efforts to
consult with the other affected party or parties prior to such disclosure.
SECTION 4.5. Privileged Matters. The parties hereto recognize that
legal and other professional services that have been and will be provided on or
prior to the Distribution Date have been and will be rendered for the benefit of
each of the Corporation, the members of the RHD Group and the members of the New
D&B Group, and that each of the Corporation, the members of the RHD Group and
the members of the New D&B Group should be deemed to be the client for the
purposes of asserting all privileges which may be asserted under applicable law.
To allocate the interests of each party in the information as to which any party
is entitled to assert a privilege, the parties agree as follows:
(a) The Corporation shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
which relates solely to the RHD Business, whether or not the privileged
information is in the possession of or under the control of the Corporation or
New D&B. The Corporation shall also be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
that relates solely to the subject matter of any claims constituting RHD
Liabilities, now pending or which may be
<PAGE> 32
29
asserted in the future, in any lawsuits or other proceedings initiated against
or by the Corporation, whether or not the privileged information is in the
possession of or under the control of the Corporation or New D&B.
(b) New D&B shall be entitled, in perpetuity, to control the
assertion or waiver of all privileges in connection with privileged information
which relates solely to the New D&B Business, whether or not the privileged
information is in the possession of or under the control of the Corporation or
New D&B. New D&B shall also be entitled, in perpetuity, to control the assertion
or waiver of all privileges in connection with privileged information which
relates solely to the subject matter of any claims constituting New D&B
Liabilities, now pending or which may be asserted in the future, in any lawsuits
or other proceedings initiated against or by New D&B whether or not the
privileged information is in the possession of or under the control of the
Corporation or New D&B.
(c) The parties hereto agree that they shall have a shared
privilege, with equal right to assert or waive, subject to the restrictions in
this Section 4.5, with respect to all privileges not allocated pursuant to the
terms of Sections 4.5(a) and (b). All privileges relating to any claims,
proceedings, litigation, disputes, or other matters which involve both the
Corporation and New D&B in respect of which both parties retain any
responsibility or liability under this Agreement, shall be subject to a shared
privilege among them.
(d) No party hereto may waive any privilege which could be asserted
under any applicable law, and in which the other party hereto has a shared
privilege, without the consent of the other party, except to the extent
reasonably required in connection with any litigation with third-parties or as
provided in subsection (e) below. Consent shall be in writing, or shall be
deemed to be granted unless written objection is made within twenty (20) days
after notice upon the other party requesting such consent.
(e) In the event of any litigation or dispute between or among any
of the parties hereto, any party and a Subsidiary of another party hereto, or a
Subsidiary of one party hereto and a Subsidiary of another party hereto, either
such party may waive a privilege in which the other party has a shared
privilege, without obtaining the consent of the other party, provided that such
waiver of a shared privilege shall be effective only as to the use of
information with respect to the litigation or dispute between the parties and/or
their Subsidiaries, and shall not operate as a waiver of the shared privilege
with respect to third parties.
(f) If a dispute arises between or among the parties hereto or their
respective Subsidiaries regarding whether a privilege should be waived to
protect or advance the interest of any party, each party agrees that it shall
negotiate in good faith, shall endeavor to minimize any prejudice to the rights
of the other parties, and shall not unreasonably withhold consent to any request
for waiver by another party. Each party hereto specifically agrees that it will
not withhold consent to waiver for any purpose except to protect its own
legitimate interests.
(g) Upon receipt by any party hereto or by any Subsidiary thereof of
any subpoena, discovery or other request which arguably calls for the production
or disclosure of information subject to a shared privilege or as to which
another party has the sole right hereunder to assert a
<PAGE> 33
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privilege, or if any party obtains knowledge that any of its or any of its
Subsidiaries' current or former directors, officers, agents or employees have
received any subpoena, discovery or other requests which arguably calls for the
production or disclosure of such privileged information, such party shall
promptly notify the other party or parties of the existence of the request and
shall provide the other party or parties a reasonable opportunity to review the
information and to assert any rights it or they may have under this Section 4.5
or otherwise to prevent the production or disclosure of such privileged
information.
(h) The transfer of all Records and other information pursuant to
this Agreement is made in reliance on the agreement of the Corporation and New
D&B, as set forth in Sections 4.4 and 4.5, to maintain the confidentiality of
privileged information and to assert and maintain all applicable privileges. The
access to information being granted pursuant to Sections 4.1 and 4.2 hereof, the
agreement to provide witnesses and individuals pursuant to Sections 2.9 and 3.3
hereof, the furnishing of notices and documents and other cooperative efforts
contemplated by Section 3.3 hereof, and the transfer of privileged information
between and among the parties and their respective Subsidiaries pursuant to this
Agreement shall not be deemed a waiver of any privilege that has been or may be
asserted under this Agreement or otherwise.
SECTION 4.6. Ownership of Information. Any information owned by one
party or any of its Subsidiaries that is provided to a requesting party pursuant
to Article III or this Article IV shall be deemed to remain the property of the
providing party. Unless specifically set forth herein, nothing contained in this
Agreement shall be construed as granting or conferring rights of license or
otherwise in any such information.
SECTION 4.7. Limitation of Liability. (a) No party shall have any
liability to any other party in the event that any information exchanged or
provided pursuant to this Agreement which is an estimate or forecast, or which
is based on an estimate or forecast, is found to be inaccurate.
(b) No party or any Subsidiary thereof shall have any liability or
claim against any other party or any Subsidiary of any other party based upon,
arising out of or resulting from any agreement, arrangement, course of dealing
or understanding existing on or prior to the Distribution Date (other than this
Agreement or any Ancillary Agreement or any agreement entered into in connection
herewith or in order to consummate the transactions contemplated hereby or
thereby), unless such agreement, arrangement, course of dealing or understanding
is listed on Schedule 4.7(b) hereto, and any such liability or claim, whether or
not in writing, which is not reflected on such Schedule, is hereby irrevocably
cancelled, released and waived.
SECTION 4.8. Other Agreements Providing for Exchange of
Information. The rights and obligations granted under this Article IV are
subject to any specific limitations, qualifications or additional provisions on
the sharing, exchange or confidential treatment of information set forth in any
Ancillary Agreement.
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ARTICLE V. ADMINISTRATIVE SERVICES
SECTION 5.1. Performance of Services. Beginning on the Distribution
Date, each party will provide, or cause one or more of its Subsidiaries to
provide, to the other party and its Subsidiaries such services on such terms as
may be set forth in the Transition Services Agreements. Except as otherwise set
forth in the Transition Services Agreements or any Schedule thereto, the party
that is to provide the services (the "Provider") will use (and will cause its
Subsidiaries to use) commercially reasonable efforts to provide such services to
the other party (the "Recipient") and its Subsidiaries in a satisfactory and
timely manner and as further specified in such Transition Services Agreement.
SECTION 5.2. Independence. Unless otherwise agreed in writing, all
employees and representatives of the Provider providing the scheduled services
to the Recipient will be deemed for purposes of all compensation and employee
benefits matters to be employees or representatives of the Provider and not
employees or representatives of the Recipient. In performing such services, such
employees and representatives will be under the direction, control and
supervision of the Provider (and not the Recipient) and the Provider will have
the sole right to exercise all authority with respect to the employment
(including, without limitation, termination of employment), assignment and
compensation of such employees and representatives.
SECTION 5.3. Non-exclusivity. Nothing in this Agreement precludes
any party from obtaining, in whole or in part, services of any nature that may
be obtainable from the other party from its own employees or from providers
other than the other party.
ARTICLE VI. DISPUTE RESOLUTION
SECTION 6.1. Negotiation. In the event of a controversy, dispute or
claim arising out of, in connection with, or in relation to the interpretation,
performance, nonperformance, validity or breach of this Agreement or otherwise
arising out of, or in any way related to this Agreement or the transactions
contemplated hereby, including, without limitation, any claim based on contract,
tort, statute or constitution (but excluding any controversy, dispute or claim
arising out of any agreement relating to the use or lease of real property if
any third party is a party to such controversy, dispute or claim) (collectively,
"Agreement Disputes"), the general counsels of the parties shall negotiate in
good faith for a reasonable period of time to settle such Agreement Dispute,
provided such reasonable period shall not, unless otherwise agreed by the
parties in writing, exceed 30 days from the time the parties began such
negotiations; provided further that in the event of any arbitration in
accordance with Section 6.2 hereof, the parties shall not assert the defenses of
statute of limitations and laches arising for the period beginning after the
date the parties began negotiations hereunder, and any contractual time period
or deadline under this Agreement or any Ancillary Agreement to which such
Agreement Dispute relates shall not be deemed to have passed until such
Agreement Dispute has been resolved.
SECTION 6.2. Arbitration. If after such reasonable period such
general counsels are unable to settle such Agreement Dispute (and in any event,
unless otherwise agreed in writing by the parties, after 60 days have elapsed
from the time the parties began such negotiations), such
<PAGE> 35
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Agreement Dispute shall be determined, at the request of any party, by
arbitration conducted in New York City, before and in accordance with the
then-existing International Arbitration Rules of the American Arbitration
Association (the "Rules"). In any dispute between the parties hereto, the number
of arbitrators shall be three. Any judgment or award rendered by the arbitrators
shall be final, binding and nonappealable (except upon grounds specified in 9
U.S.C. Section 10(a) as in effect on the date hereof). If the parties are unable
to agree on the arbitrators, the arbitrators shall be selected in accordance
with the Rules; provided that each arbitrator shall be a U.S. national. Any
controversy concerning whether an Agreement Dispute is an arbitrable Agreement
Dispute, whether arbitration has been waived, whether an assignee of this
Agreement is bound to arbitrate, or as to the interpretation of enforceability
of this Article VI shall be determined by the arbitrators. In resolving any
dispute, the parties intend that the arbitrators apply the substantive laws of
the State of New York, without regard to the choice of law principles thereof.
The parties intend that the provisions to arbitrate set forth herein be valid,
enforceable and irrevocable. The parties agree to comply with any award made in
any such arbitration proceeding that has become final in accordance with the
Rules and agree to enforcement of or entry of judgment upon such award, by any
court of competent jurisdiction, including (a) the Supreme Court of the State of
New York, New York County, or (b) the United States District Court for the
Southern District of New York, in accordance with Section 8.17 hereof. The
arbitrators shall be entitled, if appropriate, to award any remedy in such
proceedings, including, without limitation, monetary damages, specific
performance and all other forms of legal and equitable relief; provided,
however, the arbitrators shall not be entitled to award punitive damages.
Without limiting the provisions of the Rules, unless otherwise agreed in writing
by or among the parties or permitted by this Agreement, the parties shall keep
confidential all matters relating to the arbitration or the award, provided such
matters may be disclosed (i) to the extent reasonably necessary in any
proceeding brought to enforce the award or for entry of a judgment upon the
award and (ii) to the extent otherwise required by law. Notwithstanding Article
32 of the Rules, the party other than the prevailing party in the arbitration
shall be responsible for all of the costs of the arbitration, including legal
fees and other costs specified by such Article 32. Nothing contained herein is
intended to or shall be construed to prevent any party, in accordance with
Article 22(3) of the Rules or otherwise, from applying to any court of competent
jurisdiction for interim measures or other provisional relief in connection with
the subject matter of any Agreement Disputes.
SECTION 6.3. Continuity of Service and Performance. Unless
otherwise agreed in writing, the parties will continue to provide service and
honor all other commitments under this Agreement and each Ancillary Agreement
during the course of dispute resolution pursuant to the provisions of this
Article VI with respect to all matters not subject to such dispute, controversy
or claim.
<PAGE> 36
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ARTICLE VII. INSURANCE
SECTION 7.1. Policies and Rights Included Within Assets; Assignment
of Policies. (a) Policy Rights. The New D&B Assets shall include any and all
rights of an insured party under each of the Shared Policies, subject to the
terms of such Shared Policies and any limitations or obligations of New D&B
contemplated by this Article VII, specifically including rights of indemnity and
the right to be defended by or at the expense of the insurer, with respect to
all claims, suits, actions, proceedings, injuries, losses, liabilities, damages
and expenses incurred or claimed to have been incurred on or prior to the
Distribution Date by any party in or in connection with the conduct of the New
D&B Business or, to the extent any claim is made against New D&B or any of its
Subsidiaries, the conduct of the RHD Business, and which claims, suits, actions,
proceedings, injuries, losses, liabilities, damages and expenses may arise out
of an insured or insurable occurrence under one or more of such Shared Policies.
(b) Assignment of Shared Policies. Subject to the terms and
conditions hereof, the Corporation hereby assigns, transfers and conveys to New
D&B all of the Corporation's right, title and interest in and to any and all of
the Shared Policies, including, without limitation, the right of indemnity, the
right to be defended by or at the expense of the insurer and the right to any
applicable Insurance Proceeds thereunder; and the Corporation and New D&B shall
use their commercially reasonable efforts to obtain any required consents of
insurers to the assignment contemplated by this paragraph.
SECTION 7.2. Post-Distribution Date Claims. If, subsequent to the
Distribution Date, any person shall assert a claim against New D&B or any of its
Subsidiaries (including, without limitation, where New D&B or its Subsidiaries
are joint defendants with other persons) with respect to any claim, suit,
action, proceeding, injury, loss, liability, damage or expense incurred or
claimed to have been incurred on or prior to the Distribution Date in or in
connection with the conduct of the New D&B Business or, to the extent any claim
is made against New D&B or any of its Subsidiaries (including, without
limitation, where New D&B or its Subsidiaries are joint defendants with other
persons), in connection with the conduct of the RHD Business, and which claim,
suit, action, proceeding, injury, loss, liability, damage or expense may arise
out of an insured or insurable occurrence under one or more of the Shared
Policies, the Corporation shall, at the time such claim is asserted, to the
extent any such Policy may require that Insurance Proceeds thereunder be
collected directly by the named insured or anyone other than the party against
whom the Insured Claim is asserted, be deemed to designate, without need of
further documentation, New D&B as the agent and attorney-in-fact to assert and
to collect any related Insurance Proceeds under such Shared Policy.
SECTION 7.3. Administration; Other Matters. (a) Administration.
After the Distribution Date, New D&B shall be responsible for (i) Insurance
Administration of the Shared Policies and (ii) Claims Administration under such
Shared Policies with respect to RHD Liabilities and New D&B Liabilities;
provided that the assumption of such responsibilities by New D&B is in no way
intended to limit, inhibit or preclude any right to insurance coverage for any
Insured Claim of a named insured under such Policies as contemplated by the
terms of this Agreement; provided further that New D&B's assumption of the
administrative responsibilities for the Shared Policies shall not relieve the
party submitting any Insured Claim of the primary responsibility for reporting
<PAGE> 37
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such Insured Claim accurately, completely and in a timely manner or of such
party's authority to settle any such Insured Claim within any period permitted
or required by the relevant Policy; and provided further that all direct or
indirect communications with insurers relating to the Shared Policies shall be
conducted by New D&B. New D&B may discharge its administrative responsibilities
under this Section 7.3 by contracting for the provision of services by
independent parties. Each of the parties hereto shall administer and pay any
costs relating to defending its respective Insured Claims under Shared Policies
to the extent such defense costs are not covered under such Policies and shall
be responsible for obtaining or reviewing the appropriateness of releases upon
settlement of its respective Insured Claims under Shared Policies. The
disbursements, out-of-pocket expenses and direct and indirect costs of employees
or agents of New D&B relating to Claims Administration and Insurance
Administration contemplated by this Section 7.3(a) shall be treated in
accordance with the terms of the Amended and Restated Transition Services
Agreement, if still in effect with respect to insurance and risk management, or,
if the Amended and Restated Transition Services Agreement shall no longer be in
effect with respect to insurance and risk management, then each of the
Corporation and New D&B shall be responsible for its own Claims Administration
and Insurance Administration.
(b) Exceeding Policy Limits. The Corporation and New D&B shall not
be liable to one another for claims not reimbursed by insurers for any reason
not within the control of the Corporation or New D&B, as the case may be,
including, without limitation, coinsurance provisions, deductibles, quota share
deductibles, self-insured retentions, bankruptcy or insolvency of an insurance
carrier, Shared Policy limitations or restrictions, any coverage disputes, any
failure to timely claim by the Corporation or New D&B or any defect in such
claim or its processing.
(c) Allocation of Insurance Proceeds. Insurance Proceeds received
with respect to claims, costs and expenses under the Shared Policies shall be
paid to New D&B, which shall thereafter administer the Shared Policies by paying
the Insurance Proceeds, as appropriate, to the Corporation with respect to RHD
Liabilities and to New D&B with respect to New D&B Liabilities. Payment of the
allocable portions of indemnity costs of Insurance Proceeds resulting from such
Policies will be made by New D&B to the appropriate party upon receipt from the
insurance carrier. In the event that the aggregate limits on any Shared Policies
are exceeded by the aggregate of outstanding Insured Claims by both of the
parties hereto, the parties agree to allocate the Insurance Proceeds received
thereunder based upon their respective percentage of the total of their bona
fide claims which were covered under such Shared Policy (their "allocable
portion of Insurance Proceeds"), and any party who has received Insurance
Proceeds in excess of such party's allocable portion of Insurance Proceeds shall
pay to the other party the appropriate amount so that each party will have
received its allocable portion of Insurance Proceeds pursuant hereto. Each of
the parties agrees to use commercially reasonable efforts to maximize available
coverage under those Shared Policies applicable to it, and to take all
commercially reasonable steps to recover from all other responsible parties in
respect of an Insured Claim to the extent coverage limits under a Shared Policy
have been exceeded or would be exceeded as a result of such Insured Claim.
(d) Allocation of Deductibles. In the event that both parties have
bona fide claims under any Shared Policy for which an aggregate deductible is
reached, the parties agree that the aggregate amount of the deductible paid
shall be borne by the parties in the same proportion which the Insurance
Proceeds received by each such party bears to the total Insurance Proceeds
received
<PAGE> 38
35
under the applicable Shared Policy (their "allocable share of the deductible"),
and any party who has paid more than such share of the deductible shall be
entitled to receive from the other party an appropriate amount so that each
party has borne its allocable share of the deductible pursuant hereto.
(e) After the Distribution Date, each of New D&B and the Corporation
shall be responsible for its applicable deductible for workers' compensation,
general liability and automobile liability claims.
SECTION 7.4. Agreement for Waiver of Conflict and Shared Defense. In
the event that Insured Claims of both of the parties hereto exist relating to
the same occurrence, the parties shall jointly defend and waive any conflict of
interest necessary to the conduct of the joint defense. Nothing in this Article
VII shall be construed to limit or otherwise alter in any way the obligations of
the parties to this Agreement, including those created by this Agreement, by
operation of law or otherwise.
SECTION 7.5. Cooperation. The parties agree to use their
commercially reasonable efforts to cooperate with respect to the various
insurance matters contemplated by this Agreement.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. Complete Agreement; Construction. This Agreement,
including the Schedules and Exhibits, and the Ancillary Agreements shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter. In the event of any inconsistency
between this Agreement and any Schedule hereto, the Schedule shall prevail.
Other than Section 2.1(j), Section 2.7, Section 4.5 and Article VI, which shall
prevail over any inconsistent or conflicting provisions in any Ancillary
Agreement, notwithstanding any other provisions in this Agreement to the
contrary, in the event and to the extent that there shall be a conflict between
the provisions of this Agreement and the provisions of any Ancillary Agreement,
such Ancillary Agreement shall control.
SECTION 8.2. Ancillary Agreements. Subject to the last sentence of
Section 8.1, this Agreement is not intended to address, and should not be
interpreted to address, the matters specifically and expressly covered by the
Ancillary Agreements.
SECTION 8.3. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties.
SECTION 8.4. Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the parties
contained in this Agreement shall survive the Distribution Date.
<PAGE> 39
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SECTION 8.5. Expenses. Except as set forth on Schedule 8.5 or as
otherwise set forth in this Agreement or any Ancillary Agreement, all costs and
expenses incurred on or prior to the Distribution Date in connection with the
preparation, execution, delivery and required implementation of this Agreement
and any Ancillary Agreement, the Information Statement (including any
registration statement on Form 10 (or any amendment thereto) of which such
Information Statement may be a part) and the Distribution and the consummation
of the transactions contemplated thereby shall be borne by New D&B. Except as
otherwise set forth in this Agreement or any Ancillary Agreement, each party
shall bear its own costs and expenses incurred after the Distribution Date. Any
amount or expense to be paid or reimbursed by any party hereto to any other
party hereto shall be so paid or reimbursed promptly after the existence and
amount of such obligation is determined and demand therefor is made.
SECTION 8.6. Notices. All notices and other communications hereunder
shall be in writing and hand delivered or mailed by registered or certified mail
(return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to the parties at
the following addresses (or at such other addresses for a party as shall be
specified by like notice) and will be deemed given on the date on which such
notice is received:
To the Corporation:
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, NY 10577
Telecopy: (914) 933-6899
Attn: Chief Legal Counsel
To New D&B:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, NJ 07974
Telecopy: (908) 665-5803
Attn: Chief Legal Counsel
SECTION 8.7. Waivers. The failure of any party to require strict
performance by any other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.
SECTION 8.8. Amendments. Subject to the terms of Section 8.11
hereof, this Agreement may not be modified or amended except by an agreement in
writing signed by each of the parties hereto.
SECTION 8.9. Assignment. (a) This Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any party hereto
without the prior written consent of the other parties hereto, and any attempt
to assign any rights or obligations arising under this
<PAGE> 40
37
Agreement without such consent shall be void.
(b) The Corporation will not distribute to its stockholders any
interest in any RHD Business Entity, by way of a spin-off distribution,
split-off or other exchange of interests in a RHD Business Entity for any
interest in the Corporation held by RHD stockholders, or any similar transaction
or transactions, unless the distributed RHD Business Entity undertakes to New
D&B to be jointly and severally liable for all RHD Liabilities hereunder.
(c) New D&B will not distribute to its stockholders any interest in
any New D&B Business Entity, by way of a spin-off distribution, split-off or
other exchange of interests in a New D&B Business Entity for any interest in New
D&B held by New D&B stockholders, or any similar transaction or transactions,
unless the distributed New D&B Business Entity undertakes to the Corporation to
be jointly and severally liable for all New D&B Liabilities hereunder.
SECTION 8.10. Successors and Assigns. The provisions to this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and permitted assigns.
SECTION 8.11. Termination. This Agreement (including, without
limitation, Article III hereof) may be terminated and the Distribution may be
amended, modified or abandoned at any time prior to the Distribution by and in
the sole discretion of the Corporation without the approval of New D&B or the
shareholders of the Corporation. In the event of such termination, no party
shall have any liability of any kind to any other party or any other person.
After the Distribution, this Agreement may not be terminated except by an
agreement in writing signed by the parties; provided, however, that Article III
shall not be terminated or amended after the Distribution in respect of the
third party beneficiaries thereto without the consent of such persons.
SECTION 8.12. Subsidiaries. Each of the parties hereto shall cause
to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth herein to be performed by any Subsidiary of
such party or by any entity that is contemplated to be a Subsidiary of such
party on and after the Distribution Date.
SECTION 8.13. Third Party Beneficiaries. Except as provided in
Article III relating to Indemnitees, this Agreement is solely for the benefit of
the parties hereto and their respective Subsidiaries and Affiliates and should
not be deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
SECTION 8.14. Title and Headings. Titles and headings to sections
herein are inserted for the convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
SECTION 8.15. Schedules and Exhibits. The Schedules and Exhibits
shall be construed with and as an integral part of this Agreement to the same
extent as if the same had been set forth verbatim herein.
<PAGE> 41
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SECTION 8.16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
SECTION 8.17. Consent to Jurisdiction. Without limiting the
provisions of Article VI hereof, each of the parties irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County, and (b) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby. Subject to Article
VI hereof, each of the parties agrees to commence any action, suit or proceeding
relating hereto either in the United States District Court for the Southern
District of New York or if such suit, action or other proceeding may not be
brought in such court for jurisdictional reasons, in the Supreme Court of the
State of New York, New York County. Each of the parties further agrees that
service of any process, summons, notice or document by U.S. registered mail to
such party's respective address set forth above shall be effective service of
process for any action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction in this Section 8.17. Each of
the parties irrevocably and unconditionally waives any objection to the laying
of venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the Supreme Court of the State of New
York, New York County, or (ii) the United States District Court for the Southern
District of New York, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
SECTION 8.18. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
<PAGE> 42
39
IN WITNESS WHEREOF, the parties have caused this Agreement to be
duly executed as of the day and year first above written.
<PAGE> 43
40
THE DUN & BRADSTREET CORPORATION
By: /s/ Frank R. Noonan
___________________________________
Name: Frank R. Noonan
Title: Senior Vice President
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Volney Taylor
____________________________________
Name: Volney Taylor
Title: Chairman and Chief Executive Officer
<PAGE> 44
Exhibit 2.1(M)
The New Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, New Jersey 07974
June 29, 1998
Kenneth Siegel, Esq.
Cognizant Corporation
200 Nyala Farms
Westport, CT 06880
Earl Doppelt, Esq.
ACNielsen Corporation
177 Broad Street
Stamford, CT 06901
Dear Sirs:
Reference is made to the Distribution Agreement (the "1996
Distribution Agreement"), dated as of October 28, 1996, among The Dun &
Bradstreet Corporation ("D&B"), Cognizant Corporation ("Cognizant") and
ACNielsen Corporation ("ACNielsen"). D&B has announced its intention to separate
into two separate companies through a distribution (the "New D&B Distribution")
to its stockholders of all of the shares of common stock of its subsidiary The
New Dun & Bradstreet Corporation ("New D&B"). In Section 8.9(b) of the 1996
Distribution Agreement, D&B agreed not to make a distribution such as the New
D&B Distribution unless it caused the distributed entity to undertake to both
Cognizant and ACNielsen to be jointly and severally liable for all D&B
Liabilities (as defined in the 1996 Distribution Agreement). Therefore, in
accordance with Section 8.9(b) of the 1996 Distribution Agreement and intending
to be legally bound hereby, from and after the effective time of the New D&B
Distribution, New D&B undertakes to each of Cognizant and ACNielsen to be
jointly and severally liable with D&B for all D&B Liabilities under the 1996
Distribution Agreement.
Very truly yours,
THE NEW DUN & BRADSTREET CORPORATION
By:
---------------------------------
Name:
Title:
<PAGE> 1
Exhibit 10.2
TAX ALLOCATION AGREEMENT
This TAX ALLOCATION AGREEMENT is dated as of June 30, 1998,
between THE DUN & BRADSTREET CORPORATION, a Delaware corporation (the
"Corporation") and THE NEW DUN & BRADSTREET CORPORATION, a Delaware corporation
("New D&B") (collectively, the "Parties").
WHEREAS, as of the date hereof, the Corporation is the common
parent of an affiliated group of domestic corporations within the meaning of
Section 1504(a) of the Code, including Dun & Bradstreet, Inc. ("D&B Opco Inc."),
Dun & Bradstreet International, Ltd. ("D&B International"), Moody's Investors
Service, Inc. ("Moody's"), The Reuben H. Donnelley Corporation ("RHD"), and
others, and the members of the affiliated group have heretofore joined in filing
consolidated federal income tax returns;
WHEREAS, the Board of Directors of the Corporation has
determined that it is appropriate, desirable and in the best interests of the
holders of shares of common stock, par value $1.00 per share, of the Corporation
(the "D&B Common Stock") to take certain steps to reorganize the Corporation's
Subsidiaries (as defined herein) and businesses and to distribute to the holders
of D&B Common Stock all the outstanding shares of common stock of New D&B (the
"New D&B Common Shares"), together with associated Rights;
WHEREAS, as a result of the Reorganization (as defined herein)
and Distribution (as defined herein), New D&B, D&B Opco Inc., D&B International,
Moody's, and others, will not be included in the consolidated federal income tax
return of the Corporation for the portion of the year following the Distribution
or in future years;
WHEREAS, the Parties desire to allocate the tax burdens and
benefits of transactions which occurred on or prior to the Distribution Date and
to provide for certain other tax matters, including the assignment of
responsibility for the preparation and filing of tax returns, the payment of
taxes, and the prosecution and defense of any tax controversies;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained in this Agreement, the Parties hereby agree
as follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. General. Capitalized terms used in this Agreement
and not defined herein shall have the meanings that such terms have in the
Distribution Agreement. As used in this Agreement, the following terms shall
have the following meanings:
(a) "Agreement" shall mean this Tax Allocation Agreement.
<PAGE> 2
2
(b) "Ancillary Agreements" shall mean all of the written
agreements, instruments, assignments or other arrangements (other than this
Agreement) entered into in connection with the transactions contemplated hereby,
including, without limitation, the Distribution Agreement, the Conveyancing and
Assumption Instruments, the Employee Benefits Agreement, the Shared Transaction
Services Agreement, the Transition Services Agreement, the Amended and Restated
Transition Services Agreement, the Data Services Agreement and the Intellectual
Property Agreement.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury regulations promulgated thereunder, including any
successor legislation.
(d) "Consolidated Return" shall mean the consolidated federal
income tax return of the Corporation for the period commencing on January 1,
1998, and including the members of the New D&B Group through the Distribution
Date.
(e) "Controlled Entity" shall mean any corporation,
partnership or other entity of which another entity (i) owns, directly or
indirectly, ownership interests sufficient to elect a majority of the Board of
Directors (or persons performing similar functions) (irrespective of whether at
the time any other class or classes of ownership interests of such corporation,
partnership or other entity shall or might have such voting power upon the
occurrence of any contingency) or (ii) is a general partner or an entity
performing similar functions (e.g., a trustee).
(f) "Deferred Compensation Deduction" shall mean a deduction
with respect to deferred compensation payments and/or the exercise of stock
options in the Corporation by any former employee of the Pre-Distribution D&B
Group if such deduction is disallowed for a member of the New D&B Group and may
be claimed by any member of the RHD Group.
(g) "Distribution" shall mean the distribution on the
Distribution Date to holders of record of shares of D&B Common Stock as of the
Distribution Record Date of the New D&B Common Shares owned by the Corporation
on the basis of one New D&B Common Share for each outstanding share of D&B
Common Stock.
(h) "Distribution Agreement" shall mean the agreement between
the Corporation and New D&B, dated as of June 30, 1998, to, among other things,
allocate certain assets and allocate and assign responsibility for certain
liabilities of the Corporation and its current and former Subsidiaries.
(i) "Distribution Date" shall mean June 30, 1998.
(j) "Distribution Record Date" shall mean such date as may be
determined by the Corporation's Board of Directors as the record date for the
Distribution.
<PAGE> 3
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(k) "Final Determination" shall mean the final resolution of
liability for any Tax for any taxable period, including any related interest or
penalties, by or as a result of: (i) a final and unappealable decision,
judgment, decree or other order by any court of competent jurisdiction; (ii) a
closing agreement or accepted offer in compromise under Section 7121 or 7122 of
the Code, or comparable agreement under the laws of other jurisdictions which
resolves the entire Tax liability for any taxable period; (iii) any allowance of
a refund or credit in respect of an overpayment of Tax, but only after the
expiration of all periods during which such refund may be recovered by the
jurisdiction imposing the Tax; or (iv) any other final disposition, including by
reason of the expiration of the applicable statute of limitations.
(l) "Governmental Authority" shall mean any federal, state,
local, foreign or international court, government, department, commission,
board, bureau, agency, official or other regulatory, administrative or
governmental authority.
(m) "Income Tax Return" shall mean any Tax Return relating to
Income Taxes.
(n) "Income Taxes" shall mean any federal, state or local
Taxes determined by reference to income, net worth, gross receipts or capital or
any federal, state or local Taxes imposed in lieu of income Taxes.
(o) "Indemnifying Party" shall have the meaning as defined in
Section 3.5.
(p) "Indemnitee" shall have the meaning as defined in Section
3.5.
(q) "IRS" shall mean the Internal Revenue Service.
(r) "New D&B Group" shall mean New D&B, New D&B Opco Inc., D&B
International, Moody's and each corporation, partnership, limited liability
company, or other entity (other than any member of the RHD Group) that is a
Subsidiary of the Corporation immediately prior to the Distribution.
(s) "New D&B Opco Inc." shall mean a newly formed Delaware
corporation and wholly owned subsidiary of New D&B created to hold the assets
and liabilities related to, and to operate, the business of supplying business,
commercial-credit and business-marketing information services and receivables
management services.
(t) "Nonperforming Party" shall have the meaning as defined in
Section 5.2.
(u) "Other Taxes" shall mean any federal, state or local Taxes
other than Income Taxes.
(v) "Person" shall mean any natural person,
<PAGE> 4
4
corporation, business trust, joint venture, association, company, partnership or
government, or any agency or political subdivision thereof.
(w) "Pre-Distribution D&B Group" shall mean the Corporation
and all of its Subsidiaries (direct and indirect, domestic and foreign) at any
time prior to the Distribution.
(x) "Reorganization" shall mean the series of contributions
and distributions of Controlled Entities and assets, transfers and assumptions
of liabilities, and other transactions whereby the New D&B Group and the RHD
Group are formed and all Controlled Entities of the Corporation prior to the
Distribution (other than New D&B and the members of the RHD Group) are placed
under the control of New D&B in preparation for the Distribution.
(y) "Reorganization Tax Payment" shall mean the payment of any
Tax for which New D&B is liable pursuant to Section 3.3 of this Agreement and
the imposition and/or payment of which will permit the other Party or any of its
Subsidiaries to increase deductions, losses or Tax credits or decrease income,
gains or recapture of Tax credits for any taxable period or periods beginning
after or including but not ending on the Distribution Date.
(z) "RHD Group" shall mean the Corporation, RHD and each
corporation, partnership, limited liability company or other entity contemplated
to remain or become a Subsidiary of the Corporation after the Distribution.
(aa) "Separate Company State or Local Income Tax Return" shall
mean any state or local Income Tax Return initially filed on a separate basis
(whether or not it is subsequently determined that such Income Tax Return should
have been filed on a combined basis).
(ab) "Subsidiary" shall mean any entity of which another
entity's ownership satisfies the 80-percent voting and value test defined in
Section 1504(a)(2) of the Code, whether directly or indirectly.
(ac) "Tax" or "Taxes" whether used in the form of a noun or
adjective, shall mean taxes on or measured by income, capital, net worth,
franchise, gross receipts, sales, use, excise, payroll, personal property, real
property, ad-valorem, value-added, leasing, leasing use or other taxes, levies,
imposts, duties, charges or withholdings of any nature. Whenever the term "Tax"
or "Taxes" is used (including, without limitation, regarding any duty to
reimburse another Party for indemnified taxes or refunds or credits of taxes) it
shall include penalties, fines, additions to tax and interest thereon.
(ad) "Tax Benefit" shall mean the sum of the amount by which
the Tax liability (after giving effect to any alternative minimum or similar
Tax) of a corporation or group of affiliated
<PAGE> 5
5
corporations to an applicable taxing authority is reduced (including, without
limitation, by deduction, entitlement to refund, credit or otherwise, whether
available in the current taxable year, as an adjustment to taxable income in any
other taxable year or as a carryforward or carryback, as applicable) plus any
interest from such government or jurisdiction relating to such Tax liability.
(ae) "Tax Detriment" shall mean the sum of the amount by which
the Tax liability (after giving effect to any alternative minimum or similar
Tax) of a corporation or group of affiliated corporations to an applicable
taxing authority is increased plus any interest or penalties due to such
government or jurisdiction relating to such Tax liability.
(af) "Tax Item" shall mean any item of income, capital gain,
net operating loss, capital loss, deduction, credit or other Tax attribute
relevant to the calculation of a Tax liability.
(ag) "Tax Returns" shall mean all reports or returns
(including information returns) required to be filed or that may be filed for
any period with any taxing authority (whether domestic or foreign) in connection
with any Tax or Taxes (whether domestic or foreign).
(ah) "Timing Adjustment" shall mean any adjustment which (x)
decreases deductions, losses or credits or increases income (including any
increases in income where no income was previously reported), gains or recapture
of Tax credits for the period in question, and for which either Party is liable
pursuant to this Agreement, and (y) will permit an increase in deductions,
losses or Tax credits or a decrease in income, gains or recapture of Tax credits
for another taxable period, and with respect to which the other Party benefits.
SECTION 1.2. References; Interpretation. References in this
Agreement to any gender include references to all genders, and references to the
singular include references to the plural and vice versa. The words "include",
"includes" and "including" when used in this Agreement shall be deemed to be
followed by the phrase "without limitation". Unless the context otherwise
requires, references in this Agreement to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and Exhibits
and Schedules to, such Agreement. Unless the context otherwise requires, the
words "hereof", "hereby" and "herein" and words of similar meaning when used in
this Agreement refer to this Agreement in its entirety and not to any particular
Article, Section or provision of this Agreement.
ARTICLE II. PREPARATION AND FILING OF TAX RETURNS
SECTION 2.1. Predistribution Tax Returns.
(a) All federal Income Tax Returns of the Pre-
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Distribution D&B Group that are required to be filed for periods beginning
before the Distribution Date shall be prepared by New D&B and filed by the
Corporation.
(b) All combined state and local Income Tax Returns of the
Pre-Distribution D&B Group that may be or are required to be filed for periods
beginning before the Distribution Date shall be prepared by New D&B and filed by
the Corporation.
(c) In the case of Tax Returns for foreign, non-combined state
and local Income Taxes and Other Taxes of any member of the Pre-Distribution D&B
Group that may be or are required to be filed for any period beginning before
the Distribution Date, New D&B shall prepare and file such Tax Returns (or shall
cause such Tax Returns to be prepared and filed) if they relate to a member of
the New D&B Group and the Corporation shall prepare and file such Tax Returns
(or shall cause such Tax Returns to be prepared and filed) if they relate to a
member of the RHD Group.
(d) In the case of any partnership in which a member of the
Pre-Distribution D&B Group is the designated tax matters partner, the
Corporation or New D&B, as the case may be, shall cause such entity to prepare
and file such partnership's Tax Returns for all periods beginning prior to the
Distribution Date.
SECTION 2.2. Post-Distribution Tax Returns.
(a) The filing of all Tax Returns for periods beginning on or
after the Distribution Date shall be the responsibility of the Corporation if
they relate to any member of the RHD Group and shall be the responsibility of
New D&B if they relate to any member of the New D&B Group.
(b) In the case of any partnership in which a member of the
Pre-Distribution D&B Group is the designated tax matters partner, the
Corporation or New D&B, as the case may be, shall cause such entity to continue
to prepare and file such partnership's Tax Returns.
SECTION 2.3. Manner of Preparation.
(a) Unless otherwise required by the IRS, any Governmental
Authority or a court, the Parties hereby agree to file all Tax Returns, and to
take all other actions, in a manner consistent with the position that the last
day on which any member of the New D&B Group was included in the
Pre-Distribution D&B Group is the Distribution Date. For any period that
includes but does not end on the Distribution Date, to the extent permitted by
law or administrative practice, the taxable year of each member of the
Pre-Distribution D&B Group and any group of such members shall be treated as
ending on the Distribution Date.
(b) In the case of federal Income Tax Returns and combined
state and local Income Tax Returns, the Corporation shall prepare, in a manner
consistent with prior practice, a tax
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package for each member of the RHD Group included in the relevant Tax Return and
shall provide such tax package to New D&B at least 90 days prior to the due date
(including extensions) of the Tax Return. New D&B shall submit any part of the
Tax Return that relates to a member of the RHD Group to the Corporation at least
30 days prior to the date on which such Tax Return is due (including
extensions). The Corporation shall submit its comments to New D&B within 10 days
of receipt of the relevant portions of such Tax Return. New D&B shall not be
required to alter the Tax Return to reflect such comments unless the Corporation
receives an opinion of tax counsel, which counsel shall be reasonably acceptable
to New D&B, to the effect that failure to make such alteration would create a
significant risk of the imposition of a penalty on the Corporation or any other
member of the RHD Group.
(c) With regard to Tax Returns to be prepared and filed by the
Corporation or any other member of the RHD Group with respect to which New D&B
has liability under section 3.1 hereof, the Corporation shall submit such Tax
Return to New D&B at least 30 days prior to the date on which such Tax Return is
due (including extensions). New D&B shall submit its comments to the Corporation
within 10 days of receipt of such Tax Return. The Corporation shall alter the
Tax Return to reflect the comments of New D&B unless the Corporation receives an
opinion of tax counsel, which counsel shall be reasonably acceptable to New D&B,
to the effect that such alteration would create a significant risk of the
imposition of a penalty on the Corporation or any other member of the RHD Group.
(d) All Tax Returns filed on or after the Distribution Date
shall be prepared on a basis that is consistent with the rulings obtained from
the IRS or any other Governmental Authority in connection with the
Reorganizations or Distribution (in the absence of a controlling change in law
or circumstances) and shall be filed on a timely basis (including pursuant to
extensions) by the Party responsible for such filing under this Agreement. In
the absence of a controlling change in law or circumstances and unless deviation
from past practice would have no adverse effect on either Party, all Tax Returns
filed after the date of this Agreement shall be prepared on a basis consistent
with the elections, accounting methods, conventions, assumptions and principles
of taxation used for the most recent taxable periods for which Tax Returns
involving similar Tax Items have been filed. In the event of a deviation from
such past practices by the Corporation, the Corporation shall not be in breach
of this agreement, but, notwithstanding Article III, New D&B shall have no
liability for any Taxes resulting from such deviation and the Corporation shall
hold New D&B harmless from any such increased tax liability; provided, however,
either Party filing any Tax Return that does not conform to such past practices
shall not be liable for any additional Tax liability imposed (subject to Section
3.1), in whole or in part, as a result of such deviation from past practice if:
(i) for Tax Returns filed within three years of the Distribution Date, 30 days
prior to the filing of such Tax Return, the Party filing
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such Tax Return notifies the other Party; and (ii) the Party filing such Tax
Return establishes that conformity with past practice involves a significant
risk of the imposition of a penalty.
ARTICLE III. PAYMENT OF TAXES
SECTION 3.1. Predistribution Taxes.
(a) New D&B shall be liable for and shall pay all federal,
state, local and foreign Income Taxes (or receive all refunds) for all members
of the Pre-Distribution D&B Group for all periods ending on or prior to the
Distribution Date, including Taxes arising as a result of an audit adjustment;
provided, however, that in the case of any Separate Company State or Local
Income Tax Return, the RHD Group and the New D&B Group shall be liable for and
shall pay their own liabilities (or receive their own refunds) arising from any
audit adjustment (including any state or local audit adjustment resulting from a
federal audit adjustment).
(b) The RHD Group and the New D&B Group shall be responsible
for their own Other Taxes for all periods.
(c) Straddle Periods
(i) In the case of any tax period including but ending after
the Distribution Date, New D&B shall be liable for and shall pay all Income
Taxes (or receive all refunds) of all members of the Pre-Distribution D&B Group
attributable to the period up to the Distribution Date (any such Income Taxes,
"Pre-Distribution Income Taxes"). The RHD Group and the New D&B Group shall be
responsible for their own Tax liabilities (or be entitled to their own refunds)
attributable to the portion of the tax period after the Distribution Date. Such
apportionment will be done on a closing of the books basis, except that Tax
Items that are calculated on an annual basis shall be apportioned on a time
basis.
(ii) The amount of Pre-Distribution Income Taxes payable by
New D&B pursuant to Section 3.1(c)(i) above shall be reduced by the amount of
any estimated Income Taxes paid by the Pre-Distribution D&B Group (or any member
thereof) prior to the Distribution Date. If the amount of any such estimated
Income Tax payments exceeds the amount of Pre-Distribution Income Taxes, RHD
shall pay New D&B the amount of such excess.
SECTION 3.2. Post-Distribution Taxes. Unless otherwise
provided in this Agreement:
(a) New D&B shall pay all Taxes and shall be entitled to
receive and retain all refunds of Taxes with respect to tax periods beginning on
or after the Distribution Date that are attributable to the New D&B Group or any
member thereof; and
(b) The Corporation shall pay all Taxes and shall be
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entitled to receive and retain all refunds of Taxes with respect to tax periods
beginning on or after the Distribution Date that are attributable to the RHD
Group or any member thereof.
SECTION 3.3. Restructuring Taxes. Notwithstanding any
statement to the contrary in this Agreement and except as otherwise provided in
the Distribution Agreement, to the extent that any Taxes are found to arise out
of the Reorganization, then any such Tax liability incurred by the Parties (or
any of their Subsidiaries) shall be the responsibility of New D&B; provided,
however, that to the extent specific cash allocations for such Taxes are made in
connection with the Distribution, New D&B shall be relieved of its liability for
such Taxes.
SECTION 3.4. Gain Recognition Agreements. New D&B shall
prepare all documentation required to be filed with any Tax Returns, including
required annual certifications, relating to gain recognition agreements under
Section 367(a) of the Code entered into with respect to transactions between
members of the Pre-Distribution D&B Group occurring before the Distribution Date
and shall deliver such documentation to the Corporation. The Corporation shall
be obligated to file such documentation with the appropriate Tax Returns.
SECTION 3.5. Indemnification.
(a) Indemnification by New D&B. New D&B shall indemnify,
defend and hold harmless the Corporation and RHD (and their respective
affiliates) from and against any and all Tax liabilities allocated to New D&B by
this Agreement.
(b) Indemnification by the Corporation. The Corporation shall
indemnify, defend and hold harmless New D&B, New D&B, Inc. and Moody's (and
their respective affiliates) from and against any and all Tax liabilities
allocated to the Corporation by this Agreement.
(c) Indemnity Payments.
(i) To the extent that one Party (the "Indemnifying Party")
owes money to another Party (the "Indemnitee") pursuant to this Section 3.5, the
Indemnitee shall provide the Indemnifying Party with its calculations of the
amount required to be paid pursuant to this Section 3.5, showing such
calculations in sufficient detail so as to permit the Indemnifying Party to
understand the calculations. The Indemnifying Party shall pay the Indemnitee, no
later than the later of 30 business days prior to the due date (including
extensions) of the relevant Tax Returns and 14 business days after the
Indemnifying Party receives the Indemnitee's calculations, the amount that the
Indemnifying Party is required to pay or indemnify the Indemnitee under this
Section 3.5 unless the Indemnifying Party disagrees with the Indemnitee's
calculations (in which case any dispute regarding such calculations shall be
resolved in accordance with Section 5.4 of this Agreement).
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(ii) All indemnity payments shall be calculated on an
after-Tax basis and shall be treated as contributions to capital and/or
dividends immediately prior to the Distribution.
ARTICLE IV. TAX ATTRIBUTES, TIMING ADJUSTMENTS AND REORGANIZATION TAX PAYMENTS
SECTION 4.1. Carrybacks. In the event any net operating loss,
capital loss or credit of the Corporation for any taxable period ending on or
after the Distribution Date is eligible to be carried back to a taxable period
beginning prior to the Distribution Date (any such amount, an "Eligible
Amount"), the Corporation may, to the extent permitted under applicable Tax law,
elect not to carry back such Eligible Amount. To the extent any Eligible Amount
is carried back and used by the Corporation for a taxable period beginning prior
to the Distribution Date, the Corporation shall be obligated to pay any refund
that it receives to New D&B; provided, that in the case of any taxable period
including but ending after the Distribution Date, the Corporation shall not be
obligated to pay any such refund to New D&B to the extent the refund is
attributable to the portion of the taxable period after the Distribution Date
(determined in accordance with the principles of Section 3.1(c)). Upon request
by New D&B, the Corporation shall, within 90 days of such request, deliver an
officer's certificate to New D&B stating whether or not the Corporation has any
Eligible Amount.
SECTION 4.2. Timing Adjustments, Reorganization Tax Payments,
and Deferred Compensation Deductions.
(a) If an audit or other examination of any federal, state or
local Tax Return (other than a Separate Company State or Local Income Tax Return
with respect to which the RHD Group is liable for audit adjustments pursuant to
Section 3.1(a)) (x) for any period beginning prior to the Distribution Date
shall result (by settlement or otherwise) in a Timing Adjustment in favor of the
RHD Group or any member thereof, or (y) for any taxable period shall result (by
settlement or otherwise) in a Deferred Compensation Deduction in favor of the
RHD Group or any member thereof, or if any Reorganization Tax Payment in favor
of the RHD Group or any member thereof is made by New D&B, then:
(i) The Corporation shall pay New D&B the amount of any Tax
Benefit that results from such Timing Adjustment, Reorganization Tax Payment, or
Deferred Compensation Deduction within 30 business days of the date such Tax
Benefits are realized; and
(ii) Notwithstanding the foregoing, the Corporation shall only
be required to take steps to obtain such Tax Benefit or to pay New D&B if, in
the opinion of the Corporation's tax counsel, which counsel shall be reasonably
acceptable to New D&B, the reporting of such Tax Benefit shall not expose the
Corporation to the imposition of a penalty.
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(b) If an audit or other examination of any federal, state or
local Tax Return for any period beginning prior to the Distribution Date shall
result (by settlement or otherwise) in a Timing Adjustment to the Tax Detriment
of the RHD Group or any member thereof after the Distribution Date, then New D&B
shall pay the Corporation the lesser of (i) the amount of any such Tax Detriment
and (ii) the actual Tax Benefit to New D&B that results from such Timing
Adjustment.
(c) Realization of Tax Benefits.
(i) For purposes of this Section 4.3, a Tax Benefit shall be
deemed to have been realized at the time any refund of Taxes is received or
applied against other Taxes due, or at the time of filing of a Tax Return
(including any Tax Return relating to estimated Taxes) on which a loss,
deduction or credit is applied in reduction of Taxes which would otherwise be
payable. Where a Party has other losses, deductions, credits or similar items
available to it, such deductions, credits or similar items of such Party may
only be applied after the use of any Timing Adjustment, Reorganization Tax
Payment, or Deferred Compensation Deduction.
(ii) The Corporation may, at its election, pay the amount of
any Tax Benefit to New D&B rather than filing amended returns or otherwise
reflecting adjustments or taking positions on its Tax Returns. If such an
election is made, the Corporation will be treated as having realized a Tax
Benefit at the time it would have realized a Tax Benefit had it chosen to file
amended returns or otherwise to reflect adjustments or to take positions on its
Tax Returns.
(d) Tax Benefits Subsequently Denied. If any Tax Benefit
realized pursuant to Section 4.3(c)(i) is subsequently denied, then the
Corporation or New D&B, as the case may be, shall refund the amount of any
payment for such Tax Benefit within 30 business days of its notification that a
Final Determination has been reached denying the claimed Tax Benefit.
ARTICLE V. TAX AUDITS, TRANSACTIONS AND OTHER MATTERS
SECTION 5.1. Tax Audits and Controversies.
(a) In the case of any audit, examination or other proceeding
("Proceeding") brought against the Corporation (or a Subsidiary) with respect to
Taxes for which New D&B is or may be liable pursuant to this Agreement, the
Corporation shall promptly inform New D&B and shall execute or cause to be
executed any powers of attorney or other documents necessary to enable New D&B
to take all actions desired with respect to such Proceeding. Each Party shall
have the right to control, at its own expense, the portion of any such
Proceeding that relates to Taxes for which such Party is or may be liable
pursuant to this Agreement; provided, however, that New D&B shall have the right
to control, at its own expense, all Proceedings in respect of the
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Consolidated Return and 1998 combined state and local Income Tax Returns.
(b) The Party in control of a Proceeding or any part thereof
pursuant to Section 5.1(a) above shall consult with the other Party with respect
to any issue that may affect such other Party (or Subsidiary). The Party in
control of such Proceeding or any part thereof shall not enter into any final
settlement or closing agreement that may adversely affect the other Party (or
Subsidiary) without the consent of such other Party, which consent may not
unreasonably be withheld. Where consent to any final settlement or closing
agreement is withheld, the Party withholding consent shall continue or initiate
further proceedings, at its own expense, and the liability of the Party in
control of such Proceeding shall not exceed the liability that would have
resulted from the proposed closing agreement or final settlement (including
interest, additions to Tax and penalties which have accrued at that time).
SECTION 5.2. Cooperation. The Corporation and New D&B shall
cooperate with each other in the filing of any Tax Returns and the conduct of
any audit or other proceeding and each shall execute and deliver such powers of
attorney and other documents and make available such information and documents
as are necessary to carry out the intent of this Agreement. To the extent such
cooperation involves the services of officers, directors, employees, or agents
of either Party, such services shall be made available in accordance with
Section 2.9 of the Distribution Agreement. Each Party agrees to notify the other
Party of any audit adjustment that does not result in Tax liability but can
reasonably be expected to affect Tax Returns of the other Party or any of its
Subsidiaries. Notwithstanding any other provision of this Agreement, if a Party
(the "Nonperforming Party") fails to give its full cooperation and use its best
efforts in the conduct of an audit or other proceeding as provided by this
Section 5.2, and such failure results in the imposition of additional Taxes for
the period or periods involved in the audit or other proceeding, the
Nonperforming Party shall be liable in full for such additional Taxes.
SECTION 5.3. Retention of Records; Access.
(a) The Corporation and New D&B shall, and shall cause each of
their Controlled Entities to, retain adequate records, documents, accounting
data and other information (including computer data) necessary for the
preparation and filing of all Tax Returns required to be filed by any member of
the Pre-Distribution D&B Group or any combination of such members and for any
audits and litigation relating to such Tax Returns or to any Taxes payable by
any member of the Pre-Distribution D&B Group or any combination of such members.
(b) The Corporation and New D&B shall, and shall cause each of
their Controlled Entities to, give to the other Party reasonable access to (i)
all records, documents, accounting data and other information (including
computer data) necessary for the
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preparation and filing of all Tax Returns required to be filed by any member of
the Pre-Distribution D&B Group or any combination of such members and for any
audits and litigation relating to such Tax Returns or to any Taxes payable by
any member of the Pre-Distribution D&B Group or any combination of such members
and (ii) its personnel and premises, for the purpose of the review or audit of
such reports or returns to the extent relevant to an obligation or liability of
a Party under this Agreement and in accordance with the procedures provided in
Article IV of the Distribution Agreement.
(c) The obligations set forth above in Sections 5.3(a) and
5.3(b) shall continue until the final conclusion of any litigation to which the
records and information relate or until expiration of all applicable statutes of
limitations, whichever is longer. For purposes of the preceding sentence, each
Party shall assume that no applicable statute of limitations has expired unless
such Party has received notification or otherwise has knowledge that such
statute of limitations has expired.
(d) Notwithstanding any other provision of this Agreement, if
a Party fails to comply with any of its obligations set forth in this Section
5.3 and such failure results in the imposition of additional Taxes, such
nonperforming Party shall be liable in full for such additional Taxes.
SECTION 5.4. Dispute Resolution. Any dispute or claim arising
out of, in connection with, or in relation to the interpretation, performance,
nonperformance, validity or breach of this Agreement or otherwise arising out
of, or in any way related to this Agreement, shall be resolved in the manner set
forth in Article VI of the Distribution Agreement.
SECTION 5.5. Confidentiality; Ownership of Information;
Privileged Information. The provisions of Article IV of the Distribution
Agreement relating to confidentiality of information, ownership of information,
privileged information and related matters shall apply with equal force to any
records and information prepared and/or shared by and among the Parties in
carrying out the intent of this Agreement.
ARTICLE VI. MISCELLANEOUS
SECTION 6.1. Complete Agreement; Construction. This
Agreement, including the Exhibits and Schedules, and the Ancillary Agreements
shall constitute the entire agreement between the Parties with respect to the
subject matter hereof and shall supersede all previous negotiations, commitments
and writings with respect to such subject matter. In the event of any
inconsistency between this Agreement and any Schedule hereto, the Schedule shall
prevail.
SECTION 6.2. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by both
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Parties.
SECTION 6.3. Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the Parties
contained in this Agreement shall survive the Distribution Date.
SECTION 6.4. Expenses. Except as otherwise set forth in this
Agreement, all costs and expenses incurred on or prior to the Distribution Date
(whether or not paid on or prior to the Distribution Date) in connection with
the preparation, execution, delivery and implementation of this Agreement shall
be charged to and paid by New D&B. Except as otherwise set forth in this
Agreement, each Party shall bear its own costs and expenses incurred after the
Distribution Date.
SECTION 6.5. Notices. All notices and other communications
hereunder shall be in writing and hand delivered or mailed by registered or
certified mail (return receipt requested) or sent by any means of electronic
message transmission with delivery confirmed (by voice or otherwise) to the
Parties at the following addresses (or at such other addresses for a Party as
shall be specified by like notice) and will be deemed given on the date on which
such notice is received:
To the Corporation:
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, N.Y. 10577
Attn: General Counsel
To New D&B:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, NJ 07974
Attn: General Counsel
SECTION 6.6. Waivers. The failure of any Party to require
strict performance by the other Party of any provision in this Agreement will
not waive or diminish that Party's right to demand strict performance thereafter
of that or any other provision hereof.
SECTION 6.7. Amendments. This Agreement may not be modified
or amended except by an agreement in writing signed by the Parties hereto.
SECTION 6.8. Assignment. This Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any Party hereto
without the prior written consent of the other Party hereto, and any attempt to
assign any rights or obligations arising under this Agreement without such
consent shall be void.
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SECTION 6.9. Successors and Assigns. The provisions to this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties and their respective successors and permitted assigns.
SECTION 6.10. Termination. This Agreement may be terminated,
amended, modified or abandoned at any time prior to the Distribution by and in
the sole discretion of the Corporation without the approval of New D&B or the
stockholders of the Corporation. In the event of such termination, no Party
shall have any liability of any kind to any other Party or any other person.
After the Distribution, this Agreement may not be terminated except by an
agreement in writing signed by the Parties.
SECTION 6.11. Controlled Entities. Each of the Parties hereto
shall cause to be performed, and hereby guarantees the performance of, all
actions, agreements and obligations set forth herein to be performed by any
Controlled Entity of such Party or by any entity that is contemplated to be a
Controlled Entity of such Party on and after the Distribution Date.
SECTION 6.12. Third Party Beneficiaries. This Agreement is
solely for the benefit of the Parties hereto and their respective Subsidiaries
and should not be deemed to confer upon third parties any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement.
SECTION 6.13. Title and Headings. Titles and headings to
sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
SECTION 6.14. Exhibits and Schedules. The Exhibits and
Schedules shall be construed with and as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein.
SECTION 6.15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
SECTION 6.16. Consent to Jurisdiction. Without limiting the
provisions of Section 5.4 hereof, each of the Parties irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County, and (b) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby. Each of the
Parties agrees to commence any action, suit or proceeding relating hereto either
in the United States District Court for the Southern District of New York or if
such suit, action or other proceeding may not be brought in such
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court for jurisdictional reasons, in the Supreme Court of the State of New York,
New York County. Each of the Parties further agrees that service of any process,
summons, notice or document by U.S. registered mail to such Party's respective
address set forth above shall be effective service of process for any action,
suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction in this Section 6.16. Each of the Parties irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) the Supreme Court of the State of New York, New York
County, or (ii) the United States District Court for the Southern District of
New York, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 6.17. Severability. In the event any one or more of
the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The Parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
<PAGE> 17
IN WITNESS WHEREOF, the Parties have caused this Agreement to
be duly executed as of the day and year first above written.
THE DUN & BRADSTREET CORPORATION
By: /s/ Frank R. Noonan
----------------------------
Name: Frank R. Noonan
Title: Senior Vice President
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Volney Taylor
----------------------------
Name: Volney Taylor
Title: Chairman and Chief
Executive Officer
<PAGE> 1
Exhibit 10.3
EMPLOYEE BENEFITS AGREEMENT
This EMPLOYEE BENEFITS AGREEMENT is dated as of June 30, 1998
(the "Agreement"), between THE DUN & BRADSTREET CORPORATION, a Delaware
corporation (the "Corporation") and THE NEW DUN & BRADSTREET CORPORATION, a
Delaware corporation ("New D&B").
WHEREAS, the Board of Directors of Corporation has determined
that it is appropriate, desirable and in the best interests of the holders of
shares of common stock, par value $1.00 per share, of Corporation (the
"Corporation Common Stock") to take certain steps to reorganize Corporation's
Subsidiaries (as defined herein) and businesses and then to distribute to the
holders of the Corporation Common Stock all the outstanding shares of common
stock of New D&B (the "New D&B Common Shares"); and
WHEREAS, Corporation and New D&B have determined that it is
necessary and desirable to allocate and assign responsibility for certain
employee benefit matters in respect of such entities on and after the Effective
Time (as defined herein).
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, Corporation and New D&B agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. Capitalized terms used in this
Agreement shall have the following meanings:
"ACNielsen" shall mean the ACNielsen Corporation, a Delaware
corporation.
"Action" shall mean any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or other
regulatory or administrative agency, body or commission or any arbitration
tribunal.
"Adjusted Corporation Founders' Awards" shall have the meaning
set forth in Section 6.3 of this Agreement.
"Affiliate" shall mean, when used with respect to a specified
person, another person that controls, is controlled by, or is under common
control with the person specified. As used herein, "control" 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 or other interests, by contract or otherwise.
"Ameritech Common Stock" shall mean the common stock of
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Ameritech Corporation, a Delaware corporation.
"Ancillary Agreements" shall mean all of the written
agreements, instruments, assignments or other written arrangements (other than
this Agreement and the Distribution Agreement) entered into in connection with
the transactions contemplated by this Agreement and the Distribution Agreement,
including, without limitation, the Conveyancing and Assumption Instruments, the
Data Services Agreements, the Intellectual Property Agreement, the Shared
Transaction Services Agreements, the Tax Allocation Agreement and the Transition
Services Agreement.
"Assets" shall have the meaning set forth in Section 1.1(f) of
the Distribution Agreement.
"Board of Directors" shall mean, when used with respect to a
specified corporation, the board of directors of the corporation so specified.
"Business Entity" shall mean any corporation, partnership,
limited liability company or other entity which may legally hold title to
Assets.
"COBRA" shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, and the regulations promulgated
thereunder, including any successor legislation.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder, including any successor
legislation.
"Cognizant" shall mean Cognizant Corporation, a Delaware
corporation.
"Conveyancing and Assumption Instruments" shall mean,
collectively, the various agreements, instruments and other documents heretofore
entered into and to be entered into to effect the transfer of Assets and the
assumption of Liabilities in the manner contemplated by the Distribution
Agreement, or otherwise arising out of or relating to the transactions
contemplated in the Distribution Agreement.
"Corporation" shall mean The Dun & Bradstreet Corporation, a
Delaware corporation.
"Corporation Common Stock" shall have the meaning set forth in
the recitals hereto.
"Corporation Employees" shall mean persons who, at any time
prior to the Effective Time, were employed by Corporation or its Subsidiaries.
"Corporation Founders' Award" shall have the meaning set forth
in Section 6.3 of this Agreement.
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"Corporation Group" shall mean The Dun & Bradstreet
Corporation and each Business Entity that is a Subsidiary of Corporation.
"Corporation Long-Term Disability Plan" shall mean The Dun &
Bradstreet Long Term Disability Plan or any other long-term disability plan
sponsored by Corporation or any Subsidiary of Corporation prior to the Effective
Time.
"Corporation SARs" shall have the meaning set forth in Section
6.2 of this Agreement.
"Corporation Master Trust" shall mean the trust established in
connection with the Corporation Retirement Plan and the DonTech Retirement Plan,
as in effect from time to time.
"Corporation Master Trust Agreement" shall mean the agreement
entered into in connection with the Corporation Master Trust.
"Corporation Master Welfare Trust" shall mean the trust
established in connection with the Corporation Long-Term Disability Plan, as in
effect from time to time.
"Corporation Master Welfare Plan Trust Agreement" shall mean
the agreement entered into in connection with the Corporation Master Welfare
Trust.
"Corporation Nonqualified Plans" shall have the meaning as set
forth in Section 4.1 of this Agreement.
"Corporation Pension BEP" shall mean the Pension Benefit
Equalization Plan of The Dun & Bradstreet Corporation, as in effect from time to
time.
"Corporation Pension BEP Trust" shall mean the trust
established in connection with the Corporation Pension BEP, as in effect from
time to time.
"Corporation Performance Shares" shall have the meaning set
forth in Section 6.5 of this Agreement.
"Corporation Restricted Stock" shall mean restricted stock
awarded under the Corporation Restricted Stock Plan.
"Corporation Restricted Stock Plan" shall mean the 1989 Key
Employees Restricted Stock Plan for The Dun & Bradstreet Corporation and
Subsidiaries.
"Corporation Retirees" shall mean persons who (i) were
Corporation Employees, (ii) terminated employment from the Corporation Group
prior to the Effective Time and (iii) are not New D&B Employees or RHD Employees
after the Effective Time.
"Corporation Retirement Plan" shall mean the Retirement
Account Plan of The Dun & Bradstreet Corporation, as in effect from time to
time.
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"Corporation Savings BEP" shall mean the Profit Participation
Benefit Equalization Plan of The Corporation, as in effect from time to time.
"Corporation Savings Plan" shall mean the Profit Participation
Plan of The Dun & Bradstreet Corporation, as in effect from time to time.
"Corporation Stock Option" shall have the meaning set forth in
Section 6.1 of this Agreement.
"Corporation Stock Option Plan" shall mean the 1991 Key
Employees Stock Option Plan for The Dun & Bradstreet Corporation and
Subsidiaries.
"Corporation Supplemental EBP" shall mean the Supplemental
Executive Benefit Plan of The Dun & Bradstreet Corporation, as in effect from
time to time.
"Corporation Supplemental EBP Trust" shall mean the trust
established in connection with the Corporation Supplemental EBP as in effect
from time to time.
"D&B" shall mean The Dun & Bradstreet Corporation, a Delaware
corporation, prior to the distribution dated November 1, 1996.
"Daily Average Trading Price" of a given stock on a given day
shall mean the average of the high and low trading prices for such stock on such
date on the principal exchange on which the stock trades.
"Data Services Agreements" shall mean the Data Services
Agreements to be entered into by Corporation and New D&B.
"Distribution" shall mean the distribution on the Distribution
Date to holders of record of shares of Corporation Common Stock as of the
Distribution Record Date of the New D&B Common Shares owned by Corporation on
the basis of one New D&B Common Share for each outstanding share of Corporation
Common Stock.
"Distribution Agreement" shall mean the Distribution Agreement
between Corporation and New D&B, dated as of June 30, 1998.
"Distribution Date" shall mean June 30, 1998.
"Distribution Record Date" shall mean such date as may be
determined by Corporation's Board of Directors as the record date for the
Distribution.
"Dividended Restricted Stock" shall have the meaning set forth
in Section 6.4 of this Agreement.
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"DonTech" shall mean the DonTech Partnership.
"DonTech Bifurcated Savings Plan Employees" shall have the
meaning set forth in Section 3.7(b) of this Agreement.
"DonTech Employees" shall mean persons who, immediately after
the Effective Time, are employed by DonTech (including persons who are absent
from work by reason of layoff or leave of absence and inactive employees treated
as such by agreement therewith).
"DonTech Former Employees" shall mean persons who (i) were
employees of DonTech, (ii) terminated employment from DonTech prior to the
Effective Time and (iii) are not DonTech Retirees.
"DonTech Retirees" shall mean persons who (i) were employees
of DonTech and (ii) retired from DonTech prior to the Effective Time and are, as
of the Effective Time, eligible to receive benefits under the Corporation
Retirement Plan or (iii) terminated employment from DonTech prior to the
Effective Time and are receiving benefits from the Corporation Retirement Plan
as of the Effective Time.
"DonTech Retirement Plan" shall mean the Retirement Plan of
the DonTech Corporation, as in effect from time to time.
"DonTech Transferred Savings Plan Employees" shall have the
meaning set forth in Section 3.7(b) of this Agreement.
"Effective Time" shall mean immediately prior to the midnight,
New York time, ending the 24-hour period comprising the Distribution Date.
"Employee Benefit Dispute" shall include any controversy,
dispute or claim arising out of, in connection with, or in relation to the
interpretation, performance, nonperformance, validity or breach of this
Agreement or otherwise arising out of, or in any way related to this Agreement,
including, without limitation, any claim based on contract, tort, statute or
constitution.
"Employee Benefit Litigation Liability" shall mean, with
respect to a Business Entity, a Liability relating to a controversy, dispute or
claim arising out of, in connection with or in relation to the interpretation,
performance, nonperformance, validity or breach of an Employee Benefit Plan of
such Business Entity or otherwise arising out of, or in any way related to such
Employee Benefit Plan, including, without limitation, any claim based on
contract, tort, statute or constitution.
"Employee Benefit Plans" shall mean, with respect to a
Business Entity, all "employee benefit plans" (within the meaning of Section
3(3) of ERISA), "multiemployer plans" (within the meaning of Section 3(37) of
ERISA), retirement, pension, savings,
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profit-sharing, welfare, stock purchase, stock option, equity-based, severance,
employment, change-in-control, fringe benefit, collective bargaining, bonus,
incentive, deferred compensation and all other employee benefit plans,
agreements, programs, policies or other arrangements (including any funding
mechanisms therefor), whether or not subject to ERISA, whether formal or
informal, oral or written, legally binding or not, under which (i) any past,
present or future employee of the Business Entity or its Subsidiaries has a
right to benefits and (ii) the Business Entity or its Subsidiaries has any
Liability.
"Employee Benefit Records" shall mean all agreements,
documents, books, records or files relating to the Employee Benefit Plans of
Corporation and New D&B.
"Employee Benefit Welfare Plans" shall mean, with respect to a
Business Entity, all Employee Benefit Plans that are "welfare plans" within the
meaning of Section 3(1) of ERISA.
"Employer Stock" shall mean, after the Distribution Date, New
D&B Common Shares credited to the account of a New D&B Employee and RHD Common
Stock credited to the account of a RHD Employee in an employer stock fund of the
respective savings plan in which such employee participates, pursuant to Section
3.5.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and the regulations promulgated thereunder, including any
successor legislation.
"ESOP" shall mean an "employee stock ownership plan" within
the meaning of Section 4975(e)(7) of the Code.
"Founders' Stock" shall have the meaning set forth in Section
6.3 of this Agreement.
"Information Statement" shall mean the Information Statement
sent to the holders of shares of Corporation Common Stock in connection with the
Distribution, including any amendment or supplement thereto.
"Intellectual Property Agreement" shall mean the intellectual
property and licensing agreement between Corporation and New D&B.
"Liabilities" shall mean any and all losses, claims, charges,
debts, demands, actions, causes of action, suits, damages, obligations,
payments, costs and expenses, sums of money, accounts, reckonings, bonds,
specialties, indemnities and similar obligations, exonerations, covenants,
contracts, controversies, agreements, promises, doings, omissions, variances,
guarantees, make whole agreements and similar obligations, and other
liabilities, including all contractual obligations, whether absolute or
contingent, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising, and including those arising under
any law, rule, regulation, Action, threatened or contemplated Action (including
the costs and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and attorneys' fees and any and all costs and
expenses (including allocated costs of in-house counsel and other personnel),
whatsoever reasonably incurred in investigating, preparing or defending against
any such Actions or threatened or
<PAGE> 7
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contemplated Actions), order or consent decree of any governmental or other
regulatory or administrative agency, body or commission or any award of any
arbitrator or mediator of any kind, and those arising under any contract,
commitment or undertaking, including those arising under this Agreement, the
Distribution Agreement or any Ancillary Agreement, in each case, whether or not
recorded or reflected or required to be recorded or reflected on the books and
records or financial statements of any person.
"New D&B" shall mean The New Dun & Bradstreet Corporation, a
Delaware corporation.
"New D&B Common Shares" shall have the meaning set forth in
the recitals hereto.
"New D&B Disabled Employees" shall mean all employees of the
New D&B Group who are receiving benefits under the Dun & Bradstreet Long-Term
Disability Plan as of the Effective Time.
"New D&B Employees" shall mean persons who, immediately after
the Effective Time, are employed by the New D&B Group (including persons who are
absent from work by reason of layoff or leave of absence and inactive employees
treated as such by agreement therewith).
"New D&B Employee Stock Purchase Plan" shall mean the Employee
Stock Purchase Plan to be adopted by New D&B pursuant to Section 6.7.
"New D&B Group" shall mean New D&B and each Business Entity
which is contemplated to remain or become a Subsidiary of New D&B pursuant to
the Distribution Agreement.
"New D&B Performance Shares" shall have the meaning set forth
in Section 6.5 of this Agreement.
"New D&B Ratio" shall have the meaning set forth in Section
6.1 of this Agreement.
"New D&B Replacement Plans" shall mean the replacement plans
to be adopted by New D&B pursuant to Section 6.1(b) of this Agreement.
"New D&B Restricted Stock" shall have the meaning set forth in
Section 6.4 of this Agreement.
"Nonemployer Stock" shall mean, after the Distribution Date,
New D&B Common Shares credited to the account of a RHD Employee and RHD Common
Stock credited to an account of a New D&B
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Employee in a nonemployer stock fund in the respective savings plan in which
such employee participates, pursuant to Section 3.5.
"Participant Election Period" shall mean the period during
which the elections described in Section 3.2 are permitted.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor entity thereto.
"PBGC Assumptions" shall mean the actuarial assumptions set
forth in 29 C.F.R. Part 2619, et seq.
"Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership or government, or any
agency or political subdivision thereof.
"Present Value" shall mean the single sum value of a series of
future payments, determined utilizing PBGC Assumptions in effect as of the
measurement date.
"RHD" shall mean R.H. Donnelley Inc., a Delaware Corporation.
"RHD Bifurcated Savings Plan Employees" shall have the meaning
set forth in Section 3.2(a) of this Agreement.
"RHD Common Stock" shall mean shares of common stock of RHD.
"RHD Disabled Employees" shall mean all employees of the RHD
Group who are receiving or are eligible to receive benefits under the Dun &
Bradstreet Long-Term Disability Plan as of the Effective Time.
"RHD Employees" shall mean persons who, immediately after the
Effective Time, are employed by the RHD Group (including persons who are absent
from work by reason of layoff or leave of absence and inactive employees treated
as such by agreement therewith).
"RHD Group" shall mean RHD and each Business Entity which is
contemplated to remain or become a Subsidiary of RHD pursuant to the
Distribution Agreement.
"RHD Long-Term Disability Plan" shall mean the long-term
disability plan to be adopted by RHD pursuant to Section 5.5 of this Agreement.
"RHD Nonqualified Plan Participants" shall have the meaning as
set forth in Section 4.2 of this Agreement.
"RHD Ratio" shall have the meaning set forth in Section 6.1 of
this Agreement.
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"RHD Retirement Plan Segregation Ratio" shall equal a
fraction, the numerator of which is the Present Value of the accrued vested and
nonvested benefits (as defined in ERISA Section 4044(a)(1)-(6)) of the RHD
Transferred Retirement Plan Employees under the Corporation Retirement Plan at
the Effective Time, and the denominator of which is the Present Value of the
accrued vested and nonvested benefits (as defined in ERISA Section
4044(a)(1)-(6)) of the Corporation Employees under the Corporation Retirement
Plan at the Effective Time.
"RHD Retirement Plan" shall mean the defined benefit plan to
be adopted by RHD pursuant to Section 2.2(a) of this Agreement.
"RHD Retirement Plan Effective Date" shall have the meaning
set forth in Section 2.2(a) of this Agreement.
"RHD Retirement Plan Transfer Date" shall have the meaning set
forth in Section 2.2(b) of this Agreement.
"RHD Savings Plan" shall mean the defined contribution plan to
be adopted by RHD pursuant to Section 3.2(a) of this Agreement.
"RHD Savings Plan Transfer Date" shall have the meaning set
forth in Section 3.2(b) of this Agreement.
"RHD Transferred Retirement Plan Employees" shall have the
meaning set forth in Section 2.2(a) of this Agreement.
"RHD Transferred Savings Plan Employees" shall have the
meaning set forth in Section 3.2(a) of this Agreement.
"Service" shall mean the Internal Revenue Service or any
successor entity thereto.
"Shared Transaction Services Agreements" shall mean the Shared
Transaction Services Agreements between Corporation and New D&B.
"Subsidiary" shall mean any corporation, partnership or other
entity of which another entity (i) owns, directly or indirectly, ownership
interests sufficient to elect a majority of the Board of Directors (or persons
performing similar functions) (irrespective of whether at the time any other
class or classes of ownership interests of such corporation, partnership or
other entity shall or might have such voting power upon the occurrence of any
contingency) or (ii) is a general partner or an entity performing similar
functions (e.g., a trustee).
"Tax Allocation Agreement" shall mean the Tax Allocation
Agreement between Corporation and New D&B.
"Transition Services Agreement" shall mean the Transition
Services Agreement between Corporation and New D&B.
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ARTICLE II
CORPORATION & DONTECH RETIREMENT PLANS
SECTION 2.1. Assumption by New D&B. Prior to the Effective
Time, New D&B shall assume and become the sponsor of the Corporation Retirement
Plan and New D&B shall be substituted for Corporation in the Corporation Master
Trust Agreement. Active participation of RHD Employees in the Corporation
Retirement Plan shall cease immediately after the Effective Time.
SECTION 2.2. Transfer to RHD Retirement Plan. (a) As soon as
practicable after the Effective Time, but not later than the first day of the
fourth calendar month that begins after the Effective Time (herein referred to
as the "RHD Retirement Plan Effective Date"), RHD shall establish the RHD
Retirement Plan for the benefit of RHD Employees, DonTech Employees and DonTech
Former Employees who were participants in the Corporation Retirement Plan
immediately prior to the Effective Time (the "RHD Transferred Retirement Plan
Employees"). As soon as practicable after the Effective Time, New D&B shall
cause the trustee of the Corporation Retirement Plan to segregate the assets of
the Corporation Retirement Plan allocable to RHD Transferred Retirement Plan
Employees in an amount equal to the sum of (i) and (ii), as follows:
(i) the amount allocable to RHD Transferred
Retirement Plan Employees under ERISA Section
4044 as of the Effective Time, determined using
PBGC Assumptions; and
(ii) the excess (if any) of the fair market value of
assets of the Corporation Retirement Plan over
the Present Value of the vested and nonvested
benefits accrued thereunder for all the
Corporation Employees as of the Effective Time,
multiplied by the RHD Retirement Plan
Segregation Ratio.
(b) As soon as practicable after the Effective Time, the
assets allocable to the RHD Transferred Retirement Plan Employees shall be
transferred to a separate trust established under the RHD Retirement Plan (such
date herein referred to as the "RHD Retirement Plan Transfer Date"); provided,
however, that in no event shall such transfer take place until (i) New D&B has
made all required filings and submissions to the appropriate governmental
agencies and (ii) if requested by New D&B, RHD has furnished to New D&B a
favorable determination letter that the RHD Retirement Plan is qualified under
Section 401(a) of the Code. The value of such assets to be transferred shall
equal the value of segregated assets determined under Section 2.2(a) of this
Agreement, adjusted as follows:
(i) reduced by the amount of benefit payments made
under the Corporation Retirement Plan with
respect to RHD Transferred Retirement Plan
Employees from the Effective Time to the RHD
Retirement Plan Transfer Date; and
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(ii) increased (or decreased) by the share of the
net investment income (or loss) and decreased
by the share of investment expenses from the
Effective Time to the RHD Retirement Plan
Transfer Date attributable to the value of such
segregated assets.
(c) Unless otherwise agreed to by RHD and New D&B, the assets
to be transferred shall consist of an undivided percentage interest in each
asset that is held by the Corporation Retirement Plan on the RHD Retirement Plan
Transfer Date, such undivided percentage interest being equal to the value of
assets allocable to the RHD Transferred Retirement Plan Employees, divided by
the fair market value of plan assets.
(d) Prior to the RHD Retirement Plan Transfer Date, all
benefit payments to RHD Transferred Retirement Plan Employees shall be made from
the Corporation Retirement Plan.
SECTION 2.3. Allocation of Liabilities. The RHD Group shall
retain all Liabilities relating to the participation of RHD Transferred
Retirement Plan Employees in the Corporation Retirement Plan. The New D&B Group
shall assume all other Liabilities relating to the Corporation Retirement Plan.
SECTION 2.4. DonTech Retirement Plan. As soon as practicable
after the Effective Time, but not later than the first day of the second
calendar month that begins after the Effective Time, RHD shall establish a
separate account within the RHD Retirement Plan trust for the DonTech Retirement
Plan and New D&B shall cause the assets allocable to the DonTech Retirement Plan
to be transferred from the Corporation Master Trust to the separate account
established for such plan.
ARTICLE III
CORPORATION AND DONTECH SAVINGS PLANS
SECTION 3.1. Assumption by New D&B. Prior to the Effective
Time, New D&B shall assume and become the sponsor of the Corporation Savings
Plan. Active participation of RHD Employees in the Corporation Savings Plan
shall cease immediately after the Effective Time.
SECTION 3.2. RHD Savings Plan. (a) As of the Effective Time,
RHD shall adopt the RHD Savings Plan for the benefit of RHD Employees who were
participants in the Corporation Savings Plan immediately prior to the Effective
Time. Prior to the Effective Time, RHD Employees shall be given the right to
elect one of the following options with respect to their Corporation Savings
Plan account balances (the "Participant Election Period"): (i) RHD Employees may
keep their balances in the Corporation Savings Plan (such employees being known
as "RHD Bifurcated Savings Plan Employees"); or (ii) RHD Employees may transfer
their balances to the RHD Savings Plan (such employees being known as "RHD
Transferred Savings Plan Employees"). If a
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RHD Employee fails to elect any of the foregoing options prior to the end of the
Participant Election Period, (i) his or her balance shall be transferred to the
RHD Savings Plan, and (ii) such employee shall be treated as a RHD Transferred
Savings Plan Employee.
(b) Prior to the date on which the transfer of assets and
liabilities to the RHD Savings Plan shall occur (the "RHD Savings Plan Transfer
Date"), which date shall occur as promptly as practicable following the
Participant Election Period, (i) New D&B shall (A) cause the trustee of the
Corporation Savings Plan to segregate, in accordance with the spinoff provisions
set forth under Section 414(l) of the Code, the assets of the Corporation
Savings Plan representing the full account balances of RHD Transferred Savings
Plan Employees for all periods of participation through the Effective Time
(including, as applicable, all contributions and all earnings attributable
thereto); (B) make all required filings and submissions to the appropriate
governmental agencies; and (C) make all required amendments to the Corporation
Savings Plan and related trust agreement necessary to provide for the
segregation and transfer of assets described in this Section 3.2, and (ii) if
requested by New D&B, RHD shall furnish to New D&B a favorable determination
letter that the RHD Savings Plan is qualified under Section 401(a) of the Code.
(c) On the RHD Savings Plan Transfer Date, New D&B shall cause
the trustee of the Corporation Savings Plan to transfer to the trustee of the
RHD Savings Plan the full account balances (inclusive of loans) of RHD
Transferred Savings Plan Employees in kind based on those investment funds in
which such account balances are then invested (including, but not limited to,
the stock funds); provided, however, that loans to RHD Transferred Savings Plan
Employees shall be transferred in the form of notes. In consideration of the
segregation and transfer of assets described herein, the RHD Savings Plan shall,
as of the RHD Savings Plan Transfer Date, assume all Liabilities attributable to
such assets.
SECTION 3.3. Vesting. As of the Effective Time, the account
balances of RHD Employees and DonTech Employees in the Corporation Savings Plan
shall fully vest. Future employer contributions by RHD under the RHD Savings
Plan shall vest based on the vesting schedule thereunder.
SECTION 3.4. Outstanding Loans. During their employment with
RHD, RHD Transferred Savings Plan Employees who have outstanding loans
originally made from the Corporation Savings Plan shall be permitted to repay
such loans by way of regular deductions from their paychecks, and, prior to the
RHD Savings Plan Transfer Date, RHD or New D&B (as the case may be) shall cause
all such deductions to be forwarded to the Corporation Savings Plan as promptly
as practicable. After the Effective Time, no such deductions by RHD shall be
made in respect of RHD Bifurcated Savings Plan Employees who have outstanding
loans from the Corporation Savings Plan, and all such
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employees shall be required to repay their loans directly to the Corporation
Savings Plan in accordance with the existing terms thereof.
SECTION 3.5. Employer Stock Fund. (a) Participants in the
Corporation Savings Plan who, immediately prior to the Effective Time, have
balances in the Corporation Common Stock fund shall have such balances
converted, as of the Effective Time, to the extent applicable, to units in two
stock funds. The Corporation Savings Plan shall maintain one stock fund
consisting of only RHD Common Stock ("RHD Stock Fund") and one stock fund
consisting of only New D&B Common Shares ("New D&B Stock Fund"). Each stock fund
shall initially consist of an equal number of shares. The initial percentage
interest of each participant in each stock fund as of the Effective Time shall
equal such participant's percentage interest in the Corporation Common Stock
fund immediately prior to the Effective Time. The RHD Savings Plan shall
maintain a nonemployer stock fund to which the New D&B Stock Fund assets of RHD
Transferred Savings Plan Employees in the Corporation Savings Plan shall be
transferred on the RHD Savings Plan Transfer Date. The RHD Savings Plan shall
also maintain an employer stock fund to which the RHD Stock Fund assets of RHD
Transferred Savings Plan Employees in the Corporation Savings Plan shall be
transferred on the RHD Savings Plan Transfer Date.
(b) Prior to the end of the sixth month after the Distribution
Date, each participant shall liquidate his or her units of Nonemployer Stock in
the nonemployer stock fund and invest the proceeds thereof in any other
investment option available under the applicable plan. If the participant does
not liquidate such units, such units shall be liquidated and invested in either
a fixed income investment option or an employee stock fund option available
under the applicable plan as determined by RHD or New D&B.
(c) A participant may not transfer or contribute any amounts
to a nonemployer stock fund from or after the Effective Time.
SECTION 3.6. Allocation of Liabilities. The RHD Group shall
retain all Liabilities relating to the participation of (a) RHD Transferred
Savings Plan Employees in the Corporation Savings Plan and (b) RHD Bifurcated
Savings Plan Employees in the RHD Savings Plan. The New D&B Group shall assume
all other Liabilities relating to the Corporation Savings Plan.
SECTION 3.7. DonTech Savings Plan. (a) As soon as practicable
after the Effective Time, RHD shall establish a separate account within the RHD
Savings Plan trust for the DonTech Savings Plan and New D&B shall cause the
trustee of the Corporation Master Trust to transfer to the trustee the full
account balances (inclusive of loans) of all participants in the DonTech Savings
Plan ("DonTech Participants") in kind based on those investment funds in which
such account balances are then invested (including, but not limited to, the
stock funds);
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provided, however, that loans to DonTech Participants shall be transferred in
the form of notes.
(b) Prior to the Effective Time, DonTech Employees shall be
given the right to elect one of the following options with respect to their
Corporation Savings Plan account balances: (i) DonTech Employees may keep their
balances in the Corporation Savings Plan (such employees being known as "DonTech
Bifurcated Savings Plan Employees"); or (ii) DonTech Employees may transfer
their balances to the DonTech Savings Plan (such employees being known as
"DonTech Transferred Savings Plan Employees "). If a DonTech Employee fails to
elect any of the foregoing options prior to the end of the Participant Election
Period, (i) his or her balance shall be transferred to the DonTech Savings Plan,
and (ii) such employee shall be treated as a DonTech Transferred Savings Plan
Employee. As promptly as practicable following the Participation Election
Period, the full account balances of DonTech Transferred Savings Plan Employees
shall be transferred to the DonTech Savings Plan based on the same methodology
as Sections 3.2(b) and 3.2(c).
(c) Participants in the DonTech Savings Plan who, immediately
prior to the Effective Time, have balances in the DonTech Common Stock Fund
shall have the units of Corporation Common Stock converted, as of the Effective
Time, to the extent applicable, to units in two stock funds. The DonTech Savings
Plan shall maintain one stock fund consisting of RHD Common Stock and Ameritech
Common Stock and one stock fund consisting of only New D&B Common Shares. The
percentage interest of each participant in each stock fund as of the Effective
Time shall equal such participant's percentage interest in the DonTech Common
Stock fund immediately prior to the Effective Time.
ARTICLE IV
NONQUALIFIED PLANS
SECTION 4.1. Corporation Nonqualified Plans. Prior to the
Effective Time, New D&B shall assume and become the sponsor of the Corporation
Supplemental EBP, the Corporation Supplemental EBP Trust, the Corporation
Pension BEP, the Corporation Pension BEP Trust and the Corporation Savings BEP
(collectively, the "Corporation Nonqualified Plans") for the benefit of persons
who, prior to the Effective Time, were participants thereunder; provided,
however, that, with respect to RHD Employees, (i) RHD shall retain the liability
for benefits under the Corporation Savings BEP and (ii) New D&B shall retain
only those Liabilities for benefits under the Corporation Nonqualified Plans
(other than the Corporation Savings BEP) that, prior to the Effective Time, were
accrued and to which such participants had earned vested rights thereunder and
(iii) the Liabilities retained by New D&B under such plans shall be
appropriately adjusted to reflect (A) increases in the contribution limits
imposed by Section 415 of the Code and (B) future accruals under the RHD pension
plans.
SECTION 4.2. Service Credit. RHD Employees who were
participants with vested benefits in the Corporation Nonqualified
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Plans immediately prior to the Effective Time (the "RHD Nonqualified Plan
Participants") shall continue to receive service credit under such plans for
their service with the RHD Group from and after the Effective Time, but solely
for purposes of satisfying the one-year waiting requirement for a valid election
under the Corporation Nonqualified Plans.
SECTION 4.3. Consent to Termination. Solely with respect to
determining the level of benefits payable under the Corporation Nonqualified
Plans, RHD shall have the authority to consent to the termination of employment
prior to age 60 of a RHD Nonqualified Plan Participant from the RHD Group.
SECTION 4.4. Termination of Employment. Benefits under the
Corporation Nonqualified Plans shall not become payable to a RHD Nonqualified
Plan Participant until such participant terminates employment from the RHD Group
and is otherwise eligible to receive such payment under the terms of the
Corporation Nonqualified Plans.
SECTION 4.5. Noncompetition. Solely with respect to the
noncompetition clauses of the Corporation Nonqualified Plans, New D&B hereby
consents to the employment of the Corporation Nonqualified Plan Participants by
the RHD Group after the Effective Time, whether or not such employment would
otherwise trigger such noncompetition clauses.
SECTION 4.6. Distributions. RHD Nonqualified Plan Participants
who participated in the Corporation Savings BEP immediately prior to the
Effective Time shall receive a distribution thereunder from the RHD Group, based
on their notional elective deferrals through the Effective Time, at the time
distributions are otherwise made under such plan.
SECTION 4.7. Guarantees; Subrogation. The RHD Group agrees
that, in the event the New D&B Group is unable to satisfy its obligations in
respect of the benefits of any RHD Employee that have accrued under the
Corporation Nonqualified Plans prior to the Effective Time, the RHD Group shall
make payment when due with respect to such obligations of the New D&B Group. In
the event that the RHD Group is required to make any payment pursuant to this
Section 4.7, the RHD Group shall have full rights of subrogation against the New
D&B Group.
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SECTION 4.8. Third-Party Beneficiaries. It is the intention of
the parties to this Agreement that the provisions of Section 4.7 shall be
enforceable by (a) the RHD Nonqualified Plan Participants and (b) their
respective surviving beneficiaries.
SECTION 4.9. Joint and Several Liability. RHD and New D&B
acknowledge joint and several liability under the Employee Benefits Agreement
dated as of October 29, 1996 among D&B, Cognizant and ACNielsen with respect to
certain nonqualified plans maintained by Corporation prior to such date. To the
extent joint and several liability is imposed on RHD in respect of a liability
assumed by New D&B under this Agreement, RHD shall be entitled to contribution
from New D&B for the amount of such liability imposed. To the extent joint and
several liability is imposed on New D&B in respect of a liability assumed by RHD
under this Agreement, New D&B shall be entitled to contribution from RHD for the
amount of such liability imposed.
ARTICLE V
WELFARE PLANS
SECTION 5.1. Employee Benefit Welfare Plans. Prior to the
Effective Time, the Corporation shall continue to sponsor its Employee Benefit
Welfare Plans for the benefit of the Corporation Employees. Except as provided
in Section 5.4 and Section 5.6 below, from and after the Effective Time, RHD
shall continue to sponsor its Employee Benefit Welfare Plans solely for the
benefit of RHD Employees and RHD Disabled Employees. From and after the
Effective Time, New D&B shall sponsor its Employee Benefit Welfare Plans for the
benefit of New D&B Employees, Corporation Retirees, New D&B Disabled Employees
and DonTech Retirees who participated in the Corporation Employee Benefit
Welfare Plans immediately prior to the Effective Time. Notwithstanding the
foregoing, neither RHD nor New D&B shall have any obligation to sponsor any
Employee Benefit Welfare Plan from or after the Effective Time.
SECTION 5.2. Pre-Existing Conditions; Dollar Limits. With
respect to any medical plan that may be sponsored by New D&B and RHD after the
Effective Time, New D&B and RHD (a) shall cause there to be waived any
pre-existing condition limitations and (b) shall give effect, in determining any
deductible and maximum out-of-pocket limitations, to claims incurred, and
amounts paid by, and amounts reimbursed to, (in each case during 1998 prior to
the Effective Time) New D&B Employees, RHD Employees, Corporation Retirees, New
D&B Disabled Employees and RHD Disabled Employees under similar plans maintained
by Corporation (or any Affiliate thereof) for their benefit immediately prior to
the Effective Time.
SECTION 5.3. Severance Plans. The RHD Group shall retain all
Liabilities with respect to severance payments made or to be made to RHD
Employees. The New D&B Group shall retain all Liabilities with respect to
severance payments made or to be made to all other Corporation Employees who
terminated employment
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prior to the Effective Time. For purposes of this Section 5.3, the term
"severance payments" shall include any welfare benefit coverage and all other
severance related benefits provided under severance plans and agreements.
SECTION 5.4. Flexible Spending Accounts. From the Effective
Time until December 31, 1998, New D&B shall sponsor its flexible spending
accounts for all Corporation Employees; provided, however, that RHD shall cause
all deductions from participant paychecks to be forwarded to New D&B as promptly
as practicable.
SECTION 5.5 VEBA. Prior to the Effective Time, New D&B shall
assume and become the sponsor of the Corporation Long-Term Disability Plan and
New D&B shall be substituted for Corporation in the Corporation Master Welfare
Plan Trust Agreement. Active participation of RHD Disabled Employees in the
Corporation Long-Term Disability Plan shall cease immediately after the
Effective Time. As soon as practicable after the Effective Time, RHD shall
establish the RHD Long-Term Disability Plan for the benefit of RHD Disabled
Employees who became disabled prior to January 1, 1994 and the assets, as
actuarially calculated, allocable to such RHD Disabled Employees shall be
transferred to a separate trust or insurance arrangement established by RHD
under such plan.
SECTION 5.6. Allocation of Liabilities. (a) The RHD Group
shall retain responsibility for and continue to pay all expenses and benefits
relating to the Corporation Employee Benefit Welfare Plans with respect to
claims incurred from and after the Effective Time by RHD Employees and RHD
Disabled Employees as well as their dependents. The New D&B Group shall be
responsible for and pay expenses and benefits relating to all Employee Benefit
Welfare Plan claims (i) incurred prior to the Effective Time by Corporation
Employees, RHD Disabled Employees and their covered dependents and (ii) incurred
by New D&B Employees, Corporation Retirees, DonTech Retirees and New D&B
Disabled Employees as well as their covered dependents from and after the
Effective Time. For purposes of this paragraph, a claim is deemed incurred when
the services that are the subject of the claim are performed; in the case of
life insurance, when the death occurs; in the case of long-term disability, when
the disability occurs; and, in the case of a hospital stay, when the employee
first enters the hospital. Notwithstanding the foregoing, claims incurred by any
employee of a pre-Distribution Subsidiary of Corporation or their covered
dependents under any welfare plan maintained by such Subsidiary solely for the
benefit of its employees and their dependents shall, whether incurred prior to,
on or after the Effective Time, be the sole responsibility and liability of that
Subsidiary.
(b) The RHD Group shall be responsible for all COBRA coverage
for any RHD Employee and his or her covered dependents who participated in a
Corporation Employee Benefit Welfare Plan and who had or have a loss of health
care coverage due to a qualifying event occurring prior to the Effective Time.
The New
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D&B Group shall be responsible for all COBRA coverage for any other
Corporation Employee and his or her covered dependents who participated in a
Corporation Employee Benefit Welfare Plan and who had or have a loss of health
care coverage due to a qualifying event occurring prior to the Effective Time.
Notwithstanding the foregoing, a pre-Distribution Subsidiary of Corporation
shall be responsible for all COBRA coverage for its former employees and covered
dependents who participated in a plan maintained solely for their benefit
whether the applicable event occurs prior to, on or after the Effective Time.
COBRA coverage to which a RHD Employee is entitled as a result of a qualifying
event occurring at or after the Effective Time shall be the responsibility of
the RHD Group.
SECTION 5.7. Retiree Welfare Plans. The RHD Group shall be
responsible for providing retiree welfare benefits, where applicable, to RHD
Employees. The New D&B Group shall be responsible for providing retiree welfare
benefits, where applicable, to Corporation Retirees and New D&B Employees
ARTICLE VI
EQUITY-BASED PLANS
SECTION 6.1. Corporation Stock Options. Stock options awarded
under the Corporation Stock Option Plans ("Corporation Stock Options") shall be
treated as follows:
(a) RHD Employees. From and after the Effective Time, each
unexercised Corporation Stock Option held by RHD Employees shall remain
outstanding pursuant to the terms of the award agreements and the Corporation
Stock Option Plans; provided, however, that from and after such time, each
unexercised Corporation Stock Option shall be adjusted as follows: (i) the
number of shares of RHD Common Stock covered by the adjusted stock option shall
be determined by (A) multiplying the number of shares of Corporation Common
Stock covered by the Corporation Stock Option by a fraction, the numerator of
which equals the average of high and low trading prices of a share of
Corporation Common Stock for the five trading days immediately preceding the
ex-dividend date, and the denominator of which equals the average of high and
low trading prices of a share of RHD Common Stock for the five trading days
starting on the ex-dividend date ("RHD Ratio") and (B) rounding down the result
to a whole number of shares and (ii) the exercise price of the adjusted stock
option shall equal the original exercise price multiplied by the reciprocal of
the RHD Ratio.
(b) New D&B Employees. As of the Effective Time, (i) each
unexercised Corporation Stock Option held by New D&B Employees shall be
cancelled and (ii) such individuals shall receive replacement stock options
awarded under the New D&B Replacement Plans, which shall be adopted by New D&B
prior to the Effective Time. The number of New D&B Common Shares covered by each
replacement stock option shall be determined by (i) multiplying the number of
shares of Corporation Common Stock
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covered by the cancelled Corporation Stock Option by a fraction, the numerator
of which equals the average of high and low trading prices of a share of
Corporation Common Stock for the five trading days immediately preceding the
ex-dividend date, and the denominator of which equals the average of high and
loaw trading prices of a New D&B Common Share for the five trading days starting
on the regular way trading date ("New D&B Ratio") and (ii) rounding down the
result to a whole number of shares. The exercise price of each replacement stock
option shall be determined by multiplying the exercise price of the cancelled
Corporation Stock Option by the reciprocal of the New D&B ratio. Except as
otherwise provided in the New D&B Replacement Plans, all other terms of the
replacement stock options shall remain substantially identical to the terms of
the cancelled Corporation Stock Options.
(c) Corporation Retirees; RHD Disabled Employees; and New D&B
Disabled Employees. As of the Effective Time, (i) each unexercised Corporation
Stock Option held by Corporation Retirees, RHD Disabled Employees and New D&B
Disabled Employees shall be adjusted in substantially the same manner as
employees of the RHD Group and (ii) New D&B shall offer to such Corporation
Retirees alternative adjustments or substitutions provided such retirees agree
to surrender their adjusted Corporation Stock Options.
SECTION 6.2. Corporation SARs. All stock appreciation rights
awarded under the Corporation Stock Option Plans ("Corporation SARs") shall be
adjusted or substituted (as the case may be) in substantially the same manner as
the Corporation Stock Options described in Section 6.1 above.
SECTION 6.3. Corporation Founders' Match Program. All
Founders' Match Program stock options awarded under the Corporation Stock Option
Plans ("Corporation Founders' Awards") shall be adjusted or substituted (as the
case may be) in substantially the same manner as the Corporation Stock Options
described in Section 6.1 above ("Adjusted Corporation Founders' Awards").
Adjusted Corporation Founders' Awards shall vest if performance goals (as
established prior to the Effective Time) are met at the end of the original
vesting period of such awards (based upon the sum of the share prices of the RHD
Common Stock and the New D&B Shares and taking into account any dividends after
the Effective Time).
(a) RHD Employees. Restrictions on stock purchased on the open
market pursuant to the Corporation Founders' Match Program ("Founders' Stock")
shall lapse according to their original terms. Restrictions on the New D&B
Common Shares received in the Distribution as a dividend on such shares shall
lapse as of the Effective Time.
(b) New D&B Employees. Restrictions on Founders' Stock shall
lapse as of the Effective Time. New D&B Common Shares received in the
Distribution as a dividend on the Founders' Stock shall be subject to the
restrictions originally
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imposed on the Founders' Stock.
SECTION 6.4. Restricted Stock Plan. New D&B Common Shares
received in the Distribution as a dividend on Corporation Restricted Stock
("Dividended Restricted Stock") shall be subject to the same restrictions as the
Corporation Restricted Stock. In addition, both the Corporation Restricted Stock
and the Dividended Restricted Stock shall be treated as follows:
(a) RHD Employees. As of Effective Time, Dividended Restricted
Stock credited to RHD Employees shall be adjusted pursuant to the Corporation
Restricted Stock Plan and each such individual shall receive a number of shares
of RHD Restricted Stock, determined by multiplying the number of shares of
Dividended Restricted Stock by the RHD Ratio and the reciprocal of the New D&B
Ratio, having the same terms as the Corporation Restricted Stock from which they
arose.
(b) New D&B Employees. As of the Effective Time, Corporation
Restricted Stock and Dividended Restricted Stock credited to New D&B Employees
shall be forfeited and such individuals shall receive replacement New D&B Common
Shares of restricted stock ("New D&B Restricted Stock") equal to (i) the number
of shares of forfeited Dividended Restricted Stock plus (ii) the product of the
number of shares of forfeited Corporation Restricted Stock multiplied by the New
D&B Ratio and the reciprocal of the RHD Ratio, such replacement shares of New
D&B Restricted Stock to have the same terms as the Corporation Restricted Stock
from which they arose.
SECTION 6.5. Performance Unit Plan. Performance shares awarded
under the Performance Unit Plan ("Corporation Performance Shares") shall be
treated as follows:
(a) RHD Employees. As of the Effective Time, RHD Employees
shall receive (if, for the pro rata performance cycle, all targets are met) a
number of shares of RHD Common Stock equal to (i) the pro rata target number of
Corporation Performance Shares plus (ii) the pro rata target number of
Corporation Performance Shares multiplied by the RHD Ratio and the reciprocal of
the New D&B Ratio.
(b) New D&B Employees. As of the Effective Time, Corporation
Performance Share opportunities granted to New D&B Employees shall be cancelled
and such individuals shall receive replacement New D&B Performance Share
opportunities representing an amount of New D&B Common Shares equal to (i) the
target number of Corporation Performance Shares plus (ii) the product of the
target number of Corporation Performance Shares multiplied by the New D&B Ratio
and the reciprocal of the RHD Ratio.
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SECTION 6.6. Allocation of Liabilities. The New D&B Group
shall assume all Liabilities with respect to awards granted to New D&B
Employees, Corporation Retirees, RHD Disabled Employees and New D&B Disabled
Employees pursuant to the New D&B Replacement Option Plan. The RHD Group shall
retain all other Liabilities with respect to awards granted pursuant to the
Corporation Stock Option Plans (including, but not limited to, awards granted to
RHD Employees).
ARTICLE VII
OTHER EMPLOYEE BENEFIT ISSUES
SECTION 7.1. Employee Benefit Litigation Liabilities. Except
as otherwise expressly provided in this Agreement or with respect to Articles
II, III and VI hereof, the New D&B Group shall assume all Employee Benefit
Litigation Liabilities that are asserted by Corporation Employees prior to the
Effective Time. With respect to Articles II, III and VI, all Employee Benefit
Litigation Liabilities covered by such Articles shall be allocated as
contemplated by such Articles.
SECTION 7.2. Workers' Compensation. The RHD Group shall retain
all Liabilities relating to workers' compensation claims that were incurred (a)
prior to the Effective Time with respect to Corporation Employees who were
employed by the RHD Group after the Effective Time and (b) on and after the
Effective Time with respect to RHD Employees. The New D&B Group shall retain all
Liabilities relating to workers' compensation claims that were incurred (a)
prior to the Effective Time with respect to Corporation Employees who were not
employed by the RHD Group, after the Effective Time and (b) on and after the
Effective Time with respect to New D&B Employees. For purposes of this
paragraph, a claim is deemed incurred when the injury that is the subject of the
claim occurs.
ARTICLE VIII
BENEFIT PLAN PARTICIPATION
SECTION 8.1. Corporation Plans. Except as specifically
provided herein, all RHD Employees shall cease participation in all Corporation
Employee Benefit Plans as of the Effective Time.
SECTION 8.2. RHD Plans. Except as provided in Section 5.6
herein, (a) with respect to any newly created Employee Benefit Plan sponsored by
the RHD Group after the Effective Time, the RHD Group shall cause to be
recognized (to the extent applicable) each RHD Employee's (i) past service with
the Corporation Group to the extent recognized under similar plans maintained by
the Corporation Group immediately prior to the Effective Time and (ii) accrued
but unused vacation time and sick days, and (b) any RHD Employee who
participated in a Corporation Employee Benefit Plan immediately prior to the
Effective Time shall be entitled to immediate participation in a similar newly
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created Employee Benefit Plan sponsored by the RHD Group.
SECTION 8.3. New D&B Plans. Except as provided in Section 5.6
herein, (a) with respect to any Employee Benefit Plan sponsored by the New D&B
Group after the Effective Time, the New D&B Group shall cause to be recognized
(to the extent applicable) each New D&B Employee's (i) past service with the
Corporation Group to the extent recognized under similar plans maintained by the
Corporation Group immediately prior to the Effective Time and (ii) accrued but
unused vacation time and sick days, and (b) any New D&B Employee who
participated in a Corporation Employee Benefit Plan immediately prior to the
Effective Time shall be entitled to immediate participation in a similar
Employee Benefit Plan sponsored by New D&B.
SECTION 8.4. Subsequent Employer. Except as provided in
Section 5.7 herein, if, during the one-year period following the Effective Time,
a RHD Employee or a New D&B Employee terminates employment with his or her
employer and then immediately commences employment with the RHD Group or the New
D&B Group, the subsequent employer shall cause to be recognized (to the extent
applicable) such employee's past service with the Corporation Group, the RHD
Group or the New D&B Group to the extent recognized under similar plans
maintained by the prior employer. Notwithstanding the foregoing, no past service
shall be recognized with respect to pension accruals under the defined benefit
plans of the subsequent employer.
SECTION 8.5. Right to Amend or Terminate. Except as
specifically provided herein, nothing in this Agreement shall be construed or
interpreted to restrict the RHD Group's or the New D&B Group's right or
authority to amend or terminate any of their Employee Benefit Plans following
the Effective Time.
ARTICLE IX
ACCESS TO INFORMATION
SECTION 9.1. Access to Information. Article IV of the
Distribution Agreement shall govern the rights of the RHD Group and the New D&B
Group with respect to access to information. The term "Records" in that Article
shall be read to include all Employee Benefit Records.
ARTICLE X
INDEMNIFICATION
SECTION 10.1. Indemnification. Article III of the Distribution
Agreement shall govern the rights of the RHD Group and the New D&B Group with
respect to indemnification. The term "RHD Liabilities" in that Article shall be
read to include all Liabilities assumed or retained by the RHD Group pursuant to
this Agreement. The term "New D&B Liabilities" in that Article shall be read to
include all Liabilities assumed or retained by the New D&B Group pursuant to
this Agreement.
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ARTICLE XI
DISPUTE RESOLUTION
SECTION 11.1. Dispute Resolution. Article VI of the
Distribution Agreement shall govern the rights of the RHD Group and the New D&B
Group with respect to dispute resolution. The term "Agreement Dispute" in that
Article shall be read to include all Employee Benefit Disputes.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1. Complete Agreement; Construction. This
Agreement, including the Exhibits and Schedules (if any), and the Distribution
Agreement shall constitute the entire agreement between the parties with respect
to the subject matter hereof and shall supersede all previous negotiations,
commitments and writings with respect to such subject matter. In the event of
any inconsistency between this Agreement and any Schedule hereto, the Schedule
shall prevail. Other than Sections 2.7 and 4.5 and Article VI of the
Distribution Agreement, which shall prevail over any inconsistent or conflicting
provisions in this Agreement, notwithstanding any other provisions in this
Agreement to the contrary, in the event and to the extent that there shall be a
conflict between the provisions of this Agreement and the provisions of the
Distribution Agreement, this Agreement shall control.
SECTION 12.2. Ancillary Agreements. This Agreement is not
intended to address, and should not be interpreted to address, the matters
specifically and expressly covered by the Ancillary Agreements.
SECTION 12.3. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the parties and delivered to the other parties.
SECTION 12.4. Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the parties
contained in this Agreement shall survive the Distribution Date.
SECTION 12.5. Expenses. Except as otherwise set forth in this
Agreement, the Distribution Agreement or any Ancillary Agreement, all costs and
expenses incurred on or prior to the Distribution Date (whether or not paid on
or prior to the Distribution Date) in connection with the preparation,
execution, delivery and implementation of this Agreement, the Distribution
Agreement, any Ancillary Agreement, the Information Statement (including any
registration statement on Form 10 of which such Information Statement may be a
part) and the Distribution and the
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consummation of the transactions contemplated thereby shall be charged to and
paid by New D&B. Except as otherwise set forth in this Agreement, the
Distribution Agreement or any Ancillary Agreement, each party shall bear its own
costs and expenses incurred after the Distribution Date. Any amount or expense
to be paid or reimbursed by any party hereto to any other party hereto shall be
so paid or reimbursed promptly after the existence and amount of such obligation
is determined and demand therefor is made.
SECTION 12.6. Notices. All notices and other communications
hereunder shall be in writing and hand delivered or mailed by registered or
certified mail (return receipt requested) or sent by any means of electronic
message transmission with delivery confirmed (by voice or otherwise) to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by like notice) and will be deemed given on the date on which
such notice is received:
To the Corporation:
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, NY 10577
Telecopy: (914) 933-6899
Attn: Chief Legal Counsel
To New D&B:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, NJ 07974
Telecopy: (908) 665-5803
Attn: Chief Legal Counsel
SECTION 12.7. Waivers. The failure of any party to require
strict performance by any other party of any provision in this Agreement will
not waive or diminish that party's right to demand strict performance thereafter
of that or any other provision hereof.
SECTION 12.8. Amendments. Subject to the terms of Section
12.11 hereof, this Agreement may not be modified or amended except by an
agreement in writing signed by each of the parties hereto.
SECTION 12.9. Assignment. This Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any party hereto
without the prior written consent of the other parties hereto, and any attempt
to assign any rights or obligations arising under this Agreement without such
consent shall be void.
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SECTION 12.10. Successors and Assigns. The provisions to this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and permitted assigns.
SECTION 12.11. Termination. This Agreement (including, without
limitation, Section 4.8 and Article XI hereof) may be terminated and may be
amended, modified or abandoned at any time prior to the Distribution by and in
the sole discretion of Corporation without the approval of the shareholders of
Corporation. In the event of such termination, no party shall have any liability
of any kind to any other party or any other person. After the Distribution, this
Agreement may not be terminated except by an agreement in writing signed by the
parties; provided, however, that Section 4.8 and Article XI shall not be
terminated or amended after the Distribution in respect of the third party
beneficiaries thereto without the consent of such persons.
SECTION 12.12. Subsidiaries. Each of the parties hereto shall
cause to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth herein to be performed by any Subsidiary of
such party or by any entity that is contemplated to be a Subsidiary of such
party on and after the Distribution Date.
SECTION 12.13. Third Party Beneficiaries. Except as provided
in Section 4.8 and Article XI, this Agreement is solely for the benefit of the
parties hereto and their respective Subsidiaries and Affiliates and should not
be deemed to confer upon third parties any remedy, claim, liability,
reimbursement, claim of action or other right in excess of those existing
without reference to this Agreement.
SECTION 12.14. Title and Headings. Titles and headings to
sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
SECTION 12.15. Exhibits and Schedules. The Exhibits and
Schedules, if any, shall be construed with and as an integral part of this
Agreement to the same extent as if the same had been set forth verbatim herein.
SECTION 12.16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
SECTION 12.17. Consent to Jurisdiction. Without limiting the
provisions of Article XII hereof, each of the parties irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County, and (b) the United States District Court for the Southern District
of New York, for the purposes of any suit, action or other
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proceeding arising out of this Agreement or any transaction contemplated hereby.
Each of the parties agrees to commence any action, suit or proceeding relating
hereto either in the United States District Court for the Southern District of
New York or if such suit, action or other proceeding may not be brought in such
court for jurisdictional reasons, in the Supreme Court of the State of New York,
New York County. Each of the parties further agrees that service of any process,
summons, notice or document by U.S. registered mail to such party's respective
address set forth above shall be effective service of process for any action,
suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction in this Section 12.17. Each of the parties irrevocably
and unconditionally waives any objection to the laying of venue of any action,
suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) the Supreme Court of the State of New York, New York
County, or (ii) the United States District Court for the Southern District of
New York, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
SECTION 12.18. Severability. In the event any one or more of
the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
SECTION 12.19. Governmental Notices; Cooperation.
Notwithstanding anything in this Agreement to the contrary, all actions
contemplated herein with respect to Employee Benefit Plans which are to be
consummated pursuant to this Agreement shall be subject to such notices to,
and/or approvals by, the Service or the PBGC (or any other governmental agency
or entity) as are required or deemed appropriate by such Employee Benefit Plan's
sponsor. RHD and New D&B agree to use their commercially reasonable efforts to
cause all such notices and/or approvals to be filed or obtained, as the case may
be. Each party hereto shall reasonably cooperate with the other parties with
respect to any government filings, employee notices or any other actions
reasonably necessary to maintain and implement the Employee Benefit Plans
covered by this Agreement.
SECTION 12.20. Further Assurances. From time to time, as and
when reasonably requested by any other party hereto, each party hereto shall
execute and deliver, or cause to be executed and delivered, all such documents
and instruments and shall take, or cause to be taken, all such further or other
actions as such other party may reasonably deem necessary or desirable to effect
the purposes of this Agreement and the transactions contemplated
<PAGE> 27
27
hereunder.
<PAGE> 28
IN WITNESS WHEREOF, the parties have duly executed and entered
into this Agreement, as of the date first above written.
THE DUN & BRADSTREET CORPORATION
By: /s/ Frank R. Noonan
--------------------------------
Name: Frank R. Noonan
Title: Senior Vice President
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Volney Taylor
--------------------------------
Name: Volney Taylor
Title: Chairman and Chief
Executive Officer
<PAGE> 1
Exhibit 10.4
INTELLECTUAL PROPERTY AGREEMENT
This INTELLECTUAL PROPERTY AGREEMENT (the "Agreement") is
dated as of June 30, 1998, between THE DUN & BRADSTREET CORPORATION, a Delaware
corporation (the "Corporation"), and THE NEW DUN & BRADSTREET CORPORATION, a
Delaware corporation ("New D&B") (each a "Party" and collectively, the
"Parties").
RECITALS
WHEREAS, the Corporation, acting through its direct and
indirect subsidiaries, currently owns various intellectual property rights used
in connection with a number of businesses, which businesses are described in the
Distribution Agreement dated as of June 30, 1998, between the Corporation and
New D&B (the "Distribution Agreement"); and
WHEREAS, the Parties hereto have determined that this
Agreement is appropriate in order to effectuate the purposes of the Distribution
Agreement as described therein, and in order to promote a clear understanding of
their respective intellectual property rights subsequent to the execution of
said Distribution Agreement and the Distribution (as defined therein)
contemplated thereby;
NOW, THEREFORE, in consideration of the mutual agreements,
undertakings and covenants herein and therein, the sufficiency of which is
hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I. DEFINITIONS
Section 1.01. Except as may be set forth herein, all defined
terms shall have the meaning set forth in Article I, Section 1.1 of the
Distribution Agreement.
Section 1.02. "Infringement" shall mean any infringement,
imitation, dilution, distortion, misappropriation or other unauthorized use or
conduct in violation or derogation of the rights in question.
Section 1.03. "Intellectual Property" shall mean all
intellectual property rights related to the Assets or Businesses of either the
Corporation or New D&B as defined in the Distribution Agreement, as they are now
or may in future exist or be conducted, including without limitation:
a. any and all rights, privileges and priorities arising
under the laws or treaties of the United States, any
state, territory or possession thereof, any other
country or political subdivision or territory
thereof, or the European Community, relating to
intellectual property, including patents, copyrights,
trade names, trademarks, service marks, mask works,
trade secrets,
<PAGE> 2
2
inventions, databases, names and logos, trade dress,
technology, know-how, and other proprietary
information and licenses from third persons granting
the right to use any of the foregoing, including all
registrations and applications for any of the
foregoing that have been issued by or filed with the
appropriate authorities, any common-law rights
arising from the use of the foregoing, any rights
commonly known as "industrial property rights" or the
"moral rights" of authors relating to the foregoing,
all rights of renewal, continuations, divisions,
extensions and the like regarding the foregoing and
all claims, causes of action, or other rights arising
out of or relating to any actual or threatened
Infringement by any person relating to the foregoing;
b. all computer applications, programs and other
software, including without limitation operating
software, network software, firmware, middleware, and
design software, all design tools, systems
documentation and instructions, databases, and
related items except to the extent that they may be
more specifically addressed in the Data Services
Agreement; and
c. all cost information, sales and pricing data,
customer prospect lists, supplier records, customer
and supplier lists, customer and vendor data,
correspondence and lists, product literature,
artwork, design, development and manufacturing files,
vendor and customer drawings, formulations and
specifications, quality records and reports and other
books, records, studies, surveys, reports, plans and
documents.
Section 1.04. "Intellectual Property Disputes" shall mean any
and all controversies, disputes or claims arising out of, in connection with, or
in relation to the interpretation, performance, nonperformance, validity or
breach of this Agreement or otherwise arising out of, or in any way related to
this Agreement or the Intellectual Property, including, without limitation, any
and all claims based on contract, tort, statute or constitution.
ARTICLE II. OWNERSHIP OF INTELLECTUAL PROPERTY.
General Principles of Allocation and Recognition
Section 2.01. Without limiting any obligation or liability of
the Corporation under the Distribution Agreement or any Ancillary Agreement,
each of the Parties hereto acknowledges, recognizes and agrees that, after the
Distribution, the Corporation (or another member of the RHD Group) shall own all
right, title and interest in all Intellectual Property that (i) originated
primarily with the conduct of the RHD Business or primarily in connection with
the RHD Assets; (ii) was obtained by, or exclusively or primarily for the
conduct of, the RHD Business or in connection with the RHD Assets; (iii) was
developed exclusively or primarily for the conduct of the RHD Business or in
connection with the RHD Assets; (iv) arose from funding by, or exclusively or
primarily for the benefit of the conduct of, the RHD Business or in connection
with the RHD Assets; or (v) as of the Distribution Date is used or held for use
exclusively or primarily for the conduct of the RHD Business or in connection
with the RHD Assets. If a conflict exists between any of the subsections (i)
through (iv) of this Section or Section 2.02 on the one hand and subsection (v)
of this Section on the other hand, then subsection (v) of this Section 2.01
shall prevail.
<PAGE> 3
3
Section 2.02. Without limiting any obligation or liability of
New D&B under the Distribution Agreement or any Ancillary Agreement, and subject
to the provisions set forth in Article III below, each of the Parties hereto
acknowledges, recognizes and agrees that, after the Distribution, New D&B (or
another member of the New D&B Group) shall own all right, title and interest in
all Intellectual Property owned by the Corporation or any of its subsidiaries
immediately prior to the Distribution other than Intellectual Property described
in subsections (i) through (v) of Section 2.01.
Section 2.03. Reserved.
Section 2.04. Rights Arising in Future. Each of the Parties
hereto acknowledges, recognizes and agrees that, after the Distribution Date,
(i) any and all Intellectual Property created by or on behalf of a Party,
including common-law rights related thereto, shall belong solely and exclusively
to such Party; and (ii) any and all subsequent ownership, possession and use by
each Party of the Intellectual Property that it will own subsequent to the
Distribution pursuant to the terms of this Agreement (excluding any possession
or use pursuant to license granted by another Party), including common-law
rights related thereto, shall inure solely to such Party's own benefit.
Section 2.05. No Warranties. Each of the Parties hereto
understands and agrees that, except as otherwise expressly provided, no Party
hereto is, in this Agreement or in any other agreement or document contemplated
by this Agreement or otherwise, making any representation or warranty whatsoever
regarding the Intellectual Property, including, without limitation, as to title,
value or legal sufficiency. It is also agreed and understood that any and all
Intellectual Property assets either transferred or retained by the Parties, as
the case may be, shall be "as is, where is".
Section 2.06. Recognition of Non-Party Rights. The
recognition among the Parties of ownership of Intellectual Property rights under
Sections 2.01-2.04 of this Agreement is subject to all pre-existing rights,
obligations and restrictions of non-parties to this Agreement as of the
Distribution Date.
ARTICLE III. FURTHER ASSURANCES AND COOPERATION.
Section 3.01. Each Party hereto shall execute and deliver,
or cause to be executed and delivered, as and when reasonably requested by any
other Party hereto, all such documents and instruments and shall take, or cause
to be taken, all such further or other actions as such other Party may
reasonably deem necessary or desirable to effect the purposes of this Agreement
and/or to clarify, confirm and/or record the respective ownership rights of the
Parties as provided for in this Agreement.
Section 3.02. Each Party hereto shall reasonably cooperate
with the other Parties with respect to any government filings or any other
actions reasonably necessary to maintain, enforce and/or record the rights to
the Intellectual Property covered by this Agreement.
Section 3.03. Each Party hereto shall, upon the prior
written request of another Party, arrange for the provision of appropriate
copies of Records in its possession or control (or the originals thereof if the
Party making the request has a reasonable need for such originals) created
<PAGE> 4
4
prior to the Distribution Date and relating to the Intellectual Property, as
soon as reasonably practicable following the receipt of such request, but only
to the extent such items are not already in the possession or control of the
requesting Party.
ARTICLE IV. INDEMNIFICATION.
Section 4.01. Article III of the Distribution Agreement shall
govern the rights of the Corporation and New D&B with respect to indemnification
for any and all Indemnifiable Losses incurred by any Party related to the
Intellectual Property.
ARTICLE V. DISPUTE RESOLUTION.
Section 5.01. Article VI of the Distribution Agreement shall
govern the rights of the Corporation and New D&B with respect to dispute
resolution. The term "Agreement Dispute" in that Article shall be read to
include all Intellectual Property Disputes.
ARTICLE VI. MISCELLANEOUS.
Section 6.01. Complete Agreement; Construction. This
Agreement, the Schedules hereto, the Distribution Agreement and the Data
Services Agreement shall constitute the entire agreement between the Parties
with respect to the subject matter hereof and shall supersede all previous
negotiations, commitments and writings with respect to such subject matter. In
the event of any inconsistency between this Agreement and any Schedule hereto,
the Schedule shall prevail. Other than Sections 2.7, 2.14 and 4.5 of the
Distribution Agreement, which shall prevail over any inconsistent or conflicting
provisions in this Agreement notwithstanding any other provisions in this
Agreement to the contrary, in the event and to the extent that there shall be an
inconsistency between the provisions of this Agreement and the provisions of the
Distribution Agreement, this Agreement shall prevail.
Section 6.02. Other Agreements. This Agreement is not
intended to address, and should not be interpreted to address, the matters
specifically and expressly covered by the Distribution Agreement and/or other
Ancillary Agreements.
Section 6.03. Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more such counterparts have
been signed by each of the Parties and delivered to the other Party.
Section 6.04. Survival of Agreements. Except as otherwise
contemplated by this Agreement, all covenants and agreements of the Parties
contained in this Agreement shall survive the Distribution Date.
<PAGE> 5
5
Section 6.05. Notices. All notices and other communications
hereunder shall be in writing and hand delivered or mailed by registered or
certified mail (return receipt requested) or sent by any means of electronic
message transmission with delivery confirmed (by voice or otherwise) to the
Parties at the following addresses (or at such other addresses for a Party as
shall be specified by like notice) and will be deemed given on the date on which
such notice is received:
To the Corporation:
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, NY 10577
Telecopy: (914) 933-6899
Attn: Chief Legal Counsel
To New D&B:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, NJ 07974
Telecopy: (908) 665-5827
Attn: Chief Legal Counsel
Section 6.06. Waivers. The failure of any Party to require
strict performance by any other Party of any provision in this Agreement will
not waive or diminish that Party's right to demand strict performance thereafter
of that or any other provision hereof.
Section 6.07. Amendments. Subject to the terms of Section
6.10 hereof, this Agreement may not be modified or amended except by an
agreement in writing signed by each of the Parties hereto.
Section 6.08. Assignment. This Agreement shall not be
assignable, in whole or in part, directly or indirectly, by any Party hereto
without the prior written consent of the other Party hereto, and any attempt to
assign any rights or obligations arising under this Agreement without such
consent shall be void.
Section 6.09. Successors and Assigns. The provisions to this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties and their respective successors and permitted assigns.
Section 6.10. Termination. This Agreement may be terminated
and may be amended, modified or abandoned at any time prior to the Distribution
by and in the sole discretion of the Corporation without the approval of New D&B
or the shareholders of the Corporation. In the event of such termination, no
Party shall have any liability of any kind to any other Party or any other
person. After the Distribution, this Agreement may not be terminated except by
an agreement
<PAGE> 6
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in writing signed by the Parties.
Section 6.11. Subsidiaries. Each of the Parties hereto shall
cause to be performed, and hereby guarantees the performance of, all actions,
agreements and obligations set forth herein to be performed by any Subsidiary of
such Party or by any entity that is contemplated to be a Subsidiary of such
Party on and after the Distribution Date.
Section 6.12. Third Party Beneficiaries. This Agreement is
solely for the benefit of the Parties hereto and their respective Subsidiaries
and Affiliates and should not be deemed to confer upon third Parties any remedy,
claim, liability, reimbursement, claim of action or other right in excess of
those existing without reference to this Agreement.
Section 6.13. Title and Headings. Titles and headings to
sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
Section 6.14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
Section 6.15. Consent to Jurisdiction. Without limiting the
provisions of Article V hereof, each of the Parties irrevocably submits to the
exclusive jurisdiction of (a) the Supreme Court of the State of New York, New
York County, and (b) the United States District Court for he Southern District
of New York, for the purposes of any suit, action or other proceeding arising
out of this Agreement or any transaction contemplated hereby. Each of the
Parties agrees to commence any action, suit or proceeding relating hereto either
in the United States District Court for the Southern District of New York or if
such suit, action or other proceeding may not be brought in such court for
jurisdictional reasons, in the Supreme Court of the State of New York, New York
County. Each of the Parties further agrees that service of any process, summons,
notice or document by U.S. registered mail to such Party's respective address
set forth above shall be effective service of process for any action, suit or
proceeding in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 6.15. Each of the Parties irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (i) the Supreme Court of the State of New York, New York County, or
(ii) the United States District Court for the Southern District of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
Section 6.16. Severability. In the event any one or more of
the provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The Parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
<PAGE> 7
IN WITNESS WHEREOF, the Parties have caused this Agreement to
be duly executed as of the day and year first above written.
THE DUN & BRADSTREET CORPORATION
By: /s/ Frank R. Noonan
--------------------------------
Name: Frank R. Noonan
Title: Senior Vice President
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Volney Taylor
--------------------------------
Name: Volney Taylor
Title: Chairman and Chief
Executive Officer
<PAGE> 1
Exhibit 10.5
SHARED TRANSACTION SERVICES AGREEMENT
BETWEEN
THE DUN & BRADSTREET CORPORATION
AND
THE NEW DUN & BRADSTREET CORPORATION
Dated as of June 30, 1998
<PAGE> 2
SHARED TRANSACTION SERVICES AGREEMENT (this "Agreement"),
dated as of June 30, 1998 (the "Agreement Date"), by and between The New Dun &
Bradstreet Corporation, a Delaware Corporation ("New D&B") and The Dun &
Bradstreet Corporation, a Delaware corporation (the "Corporation").
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Corporation has
determined that it is appropriate, desirable and in the best interests of the
holders of shares of common stock, par value $1.00 per share, of Corporation
("Corporation Common Stock"), to take certain steps to reorganize Corporation's
subsidiaries and businesses and then to distribute to the holders of the
Corporation Common Stock all the outstanding shares of common stock of New D&B
(the "Distribution");
WHEREAS, prior to the Distribution Date, Dun & Bradstreet,
Inc. ("Service Provider") a subsidiary of New D&B, has provided and R.H.
Donnelley, Inc. ("RHD"), a subsidiary of the Corporation, has purchased,
pursuant to various written and oral agreements, the Services described in this
Agreement; and
WHEREAS, in order to facilitate the orderly continuation of
RHD's business for a transitional period after the Distribution Date and to
provide certain services to RHD and the Corporation after the Distribution Date,
New D&B, on behalf of Service Provider, has agreed to provide to RHD and the
Corporation (collectively, RHD and the Corporation are referred to herein as the
"Recipient"), and the Corporation, on behalf of itself and RHD, has agreed to
purchase from Service Provider, the Services described in this Agreement.
NOW, THEREFORE, in consideration of the agreements set forth
below, it is agreed as follows:
ARTICLE 1. DEFINITIONS AND CONSTRUCTION
1.1 Definitions. The following defined terms shall have the
meanings specified below:
(1) "Additional Services" shall mean those services, in addition to the
Services, requested by Recipient pursuant to Section 3.2.
(2) "Agreement" shall have the meaning set forth in the Heading.
(3) "Agreement Date" shall have the meaning set forth in the preamble.
(4) "Alternative Provider" shall mean any alternative external service
provider selected by Recipient for the provision of services similar to
the Services following the expiration or termination of this Agreement.
(5) "Corporation" shall have the meaning set forth in the preamble.
(6) "Distribution" shall have the meaning set forth in the Recitals.
<PAGE> 3
2
(7) "Distribution Agreement" shall mean the Distribution Agreement dated as
of June 30, 1998, between the Corporation and New D&B.
(8) "Distribution Date" shall mean the date on which the Distribution is
made under the Distribution Agreement.
(9) "Fees" shall mean those charges for the Services set forth in Schedule
B.
(10) "New D&B" shall have the meaning set forth in the preamble.
(11) "Parties" shall mean Service Provider and Recipient, collectively.
(12) "Party" shall mean either of Service Provider or Recipient, as the case
may be.
(13) "Recipient" shall have the meaning set forth in the Recitals.
(14) "Recipient Data" shall mean all data or information supplied by
Recipient to Service Provider for processing or transmission in
connection with the Services.
(15) "RHD" shall have the meaning set forth in the Recitals.
(16) "Service Provider" shall have the meaning set forth in the Recitals.
(17) "Service Provider Service Location" shall mean any Service Provider
service location from which Service Provider provides or performs the
Services. The Service Provider Service Locations as of the Agreement
Date are located at Shelton, Connecticut, New York, New York,
Allentown, Pennsylvania, Berkeley Heights, New Jersey and Murray Hill,
New Jersey.
(18) "Service" shall mean the Shared Transaction Services.
(19) "Shared Transaction Services" shall mean the services described in
Schedule A.
(20) "Term" shall have the meaning set forth in Article 2.
1.2 References. In this Agreement and the Schedules to this
Agreement:
(1) the Schedules to this Agreement shall be incorporated in and
deemed part of this Agreement and all references to this
Agreement shall include the Schedules to this Agreement; and
(2) references to the word "including" or the phrase "e.g." in
this Agreement shall mean "including, without limitation".
1.3 Headings. The article and section headings are for
reference and convenience only and shall not be considered in the interpretation
of this Agreement.
<PAGE> 4
3
1.4 Interpretation of Documents. In the event of a conflict
between this Agreement and the terms of any of the Schedules, the terms of this
Agreement shall prevail.
ARTICLE 2. TERM OF AGREEMENT.
The term of this Agreement shall commence on the Distribution
Date and shall continue until all services to be provided hereunder have been
completed (the "Term"), unless terminated earlier pursuant to Section 13.1.
ARTICLE 3. SERVICES.
3.1 Services. Service Provider shall provide to Recipient, and
Recipient shall purchase from Service Provider, the Shared Transaction Services.
The Services shall be of substantially the same type, quantity, quality and
utilization levels and provided with substantially the same degree of care and
diligence as such services had been provided to Recipient during the period
prior to the Distribution Date.
3.2 Additional Services. In the event that Recipient desires
to receive Additional Services or requires an increase in volume of Services,
Recipient shall notify Service Provider. If Service Provider agrees to provide
Additional Services or to an increase in volume of Services and the parties
agree on the terms applicable thereto, Service Provider and Recipient shall
execute a written amendment to this Agreement setting forth any additional terms
and conditions applicable thereto, including any additional fees.
ARTICLE 4. RECIPIENT OBLIGATIONS.
4.1 Generally. Recipient shall:
(1) comply with any reasonable instructions provided by Service Provider
that are necessary for Service Provider to adequately provide the
Services;
(2) comply with all standards and procedures applicable to the Service
Provider Service Location;
(3) promptly report any operational or system problem to Service Provider;
and
(4) maintain a business recovery plan detailing the requirements of
Recipient in the event of the occurrence of a disaster affecting the
Services and periodically test such plan.
4.2 Associated Equipment. Recipient shall maintain and be
responsible for all costs (including personnel, maintenance and repair)
associated with communications equipment (including terminals, communications
hardware, modems and telephone lines) that Recipient owns or operates and that
are not located at the Service Provider Service Location necessary to provide
the Services or to transmit the Recipient Data for processing at the Service
Provider Service Location.
<PAGE> 5
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4.3 Security. Recipient shall ensure that user accounts shall
only be used by the person for whom such account was created or other authorized
personnel. Recipient shall promptly inform Service Provider of any individual
who is no longer authorized to use the Services.
ARTICLE 5. PROPRIETARY RIGHTS.
5.1 Exclusive Property. All software and hardware used by
Service Provider to provide the Services is, or shall be, and shall remain, the
exclusive property of Service Provider or its third party licensor and Recipient
shall have no rights or interests in same.
5.2 Third-Party Licenses. With regard to any software used by
Service Provider to provide the Services, in the event that any licensor of such
software to Service Provider does not permit Service Provider to use such
software or any portion thereof to provide the Services, Recipient shall obtain
a license for such software at its own cost (which permits Service Provider to
use such software to provide the Services), Service Provider shall reduce the
Fees to reflect such reduction in its costs, or in the event that Service
Provider itself obtains the right to use such software to provide the services,
Service Provider shall have the right to increase the Fees to reflect any
increase in its costs, and Service Provider shall not be responsible for the
loss of the right to use such software to provide the Services or for any
failure or delay of Recipient in procuring such license provided that Service
Provider gives notice to Recipient and reasonably assists Recipient in procuring
such license.
ARTICLE 6. DATA
6.1 Form of Data. All data submitted by Recipient to Service
Provider in connection with the Services shall be in the form substantially
similar to that submitted before the Distribution date, unless otherwise agreed
to in writing by the parties.
6.2 Ownership of Data. The Recipient Data is and shall remain
the property of Recipient or its customers.
6.3 Ownership of Media. Unless furnished to Service Provider
by Recipient, all media upon which Recipient Data is stored is and shall remain
the property of Service Provider. Recipient may, upon Service Provider's
consent, (1) provide Service Provider with a replacement for the media upon
which the Recipient Data is stored or (2) purchase such media from Service
Provider at the price specified by Service Provider.
6.4 Responsibility for Data. Recipient is responsible from the
Agreement Date for (1) the accuracy and completeness of the data submitted by
Recipient in connection with the Services and (2) any errors in and with respect
to data obtained from Service Provider because of any inaccurate or incomplete
data submitted by Recipient to Service Provider.
ARTICLE 7. FEES
7.1 Fees. Recipient shall pay to Service Provider the fees set
forth in Schedule B in respect of each of the Services.
<PAGE> 6
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7.2 Time of Payment. The Fees shall be paid by Recipient as
set forth on Schedule B.
7.3 Taxes. Recipient shall pay any value-added tax and any
tariff, duty, export or import fee, sales tax, use tax, service tax or other tax
or charge subsequently imposed by any government or government agency on
Recipient or Service Provider with respect to the Services or the execution or
performance of this Agreement.
7.4 Late Payments. Any fees or payments owing to Service
Provider pursuant to this Agreement that are not paid when due (other than as a
result of a delay directly caused by Service Provider or its affiliates) shall
bear interest at the rate of one and one-half (1-1/2) percent per month, but in
no event to exceed the highest lawful rate of interest, calculated from the date
such amount was due until the date payment is received by Service Provider.
ARTICLE 8. CONFIDENTIALITY.
Each of the Parties shall not use or permit the use of
(without the prior consent of the other) and shall keep, and shall cause its
consultants and advisors to keep, confidential all information concerning the
other Party in its possession, its custody or under its control, except to the
extent that (1) such information has been in the public domain through no fault
of such Party or (2) such information has been later lawfully acquired from
other sources by such Party or (3) this Agreement or any other agreement entered
into pursuant to this Agreement permits the use or disclosure of such
information, to the extent such information (a) relates to the period up to the
Distribution Date or (b) is obtained in the course of providing or receiving the
Services pursuant to this Agreement, and each Party shall not (without the prior
consent of the other) otherwise release or disclose such information to any
other person, except such Party's auditors and attorneys, unless compelled to
disclose such information by judicial or administrative process or unless such
disclosure is required by law and such Party has used commercially reasonable
efforts to consult with the other Party prior to such disclosure.
ARTICLE 9. INDEMNITY.
Each Party agrees to indemnify and hold harmless the other
Party in respect of all claims, costs, expenses, damages and liabilities
(including reasonable attorney's fees) arising from the gross negligence or
willful misconduct of the employees, agents or other representatives of the
indemnifying Party after the Agreement Date or the breach of such Party's
covenants or other obligations under this Agreement. In no event shall either
Party have any liability to the other Party for any claims, losses, damages,
judgments, costs or expenses which the other Party may suffer or incur as a
result of injuries to personnel of such other Party or loss or theft or damage
to any personal property of such other Party at the Service Provider Service
Location, except as provided in the foregoing sentence.
ARTICLE 10. DISCLAIMER AND LIMITATION OF LIABILITY.
10.1 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH HEREIN, SERVICE
PROVIDER MAKES NO REPRESENTATIONS OR WARRANTIES IN RESPECT OF THE SERVICES,
EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF
<PAGE> 7
6
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
10.2 Limitation of Liability. Recipient acknowledges that the
Services are provided by Service Provider (1) at the request of Recipient in
order to accommodate the Distribution, (2) at Service Provider's cost and that
no profit is being made by Service Provider and (3) with the expectation that
Service Provider is not assuming any financial or operational risks, including
those usually assumed by a service provider. Accordingly, Recipient agrees that
Service Provider shall not be liable for any direct, indirect, special,
incidental, consequential or other damages, of any nature whatsoever, including
lost profits or savings, whether or not such damages are foreseeable, or for any
third party claims relating to the Services or Service Provider's performance
under this Agreement.
ARTICLE 11. DISPUTE RESOLUTION.
11.1 Procedure. Any disputes arising out of or in connection
with this Agreement shall be settled in accordance with the dispute resolution
mechanisms set forth in Article VI and Section 8.17 of the Distribution
Agreement.
11.2 Continuity of Services and Performance. Unless otherwise
agreed in writing, the Parties shall continue to provide the Services and honor
all other commitments under this Agreement during the course of dispute
resolution pursuant to the provisions of this Article 12 with respect to all
matters not subject to such dispute, controversy or claim.
ARTICLE 12. CONTINUED PROVISION OF SERVICES.
12.1 Force Majeure. Service Provider shall not be in default
of its obligations hereunder for any delays or failure in performance resulting
from any cause or circumstance beyond the reasonable control of Service
Provider, provided that Service Provider exercises commercially reasonable
efforts to perform its obligations in a timely manner. If any such occurrence
prevents Service Provider from providing any of the Services, Service Provider
shall cooperate with Recipient in obtaining, at Recipient's sole expense, an
alternative source for the affected Services, and Recipient shall be released
from any payment obligation to Service Provider in respect of such Services
during the period of such force majeure.
12.2 Disaster Recovery. Service Provider shall maintain a
disaster recovery policy in accordance with Schedule A. Upon the occurrence of a
disaster affecting the Services, Service Provider shall implement the disaster
recovery policy and Recipient shall be responsible for its proportionate share
of any fees incurred by Service Provider in connection with implementing the
disaster recovery policy.
ARTICLE 13. TERMINATION.
13.1 For Convenience. Recipient may terminate this Agreement
at any time during the Term upon ninety (90) days' notice to Service Provider.
13.2 Effect of Termination. Upon the termination of this
Agreement pursuant to Section 13.1, Recipient shall pay to Service Provider, no
later than the effective date of such
<PAGE> 8
7
termination, the balance of the Fees due for the Term, together with any
incremental costs related to such termination.
ARTICLE 14. TERMINATION ASSISTANCE SERVICES.
Upon the expiration of this Agreement or the effective date of termination of
this Agreement, Service Provider shall have no further obligation to provide the
Services to Recipient and for a period up to (a) sixty (60) days prior to the
expiration or the effective date of termination of this Agreement and (b) thirty
(30) days following the expiration of this Agreement or the effective date of
termination of this Agreement, Service Provider shall use reasonable efforts to
cooperate, at Recipient's expense (which shall not be greater than Service
Provider's costs related thereto), with (i) the Alternative Provider or (ii)
Recipient, in connection with the transfer of the Services and the Recipient
Data, from Service Provider to the facilities of (x) the Alternative Provider or
(y) Recipient, as requested by Recipient.
ARTICLE 15. MISCELLANEOUS PROVISIONS.
15.1 No Waivers. No failure on the part of either Party to
exercise and no delay in exercising any right or remedy hereunder shall operate
as a waiver thereof nor shall any single or partial exercise by a Party of any
right or remedy hereunder preclude any other right or remedy or further exercise
thereof or the exercise of any other right.
15.2 Consents, Approvals and Requests. Unless otherwise
specified in this Agreement, all consents and approvals, acceptances or similar
actions to be given by either Party under this Agreement shall not be
unreasonably withheld or delayed and each Party shall make only reasonable
requests under this Agreement.
15.3 Partial Invalidity. In the event any of the provisions of
this Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality or enforceability of the remaining provisions of this
Agreement shall not be affected or impaired.
15.4 Notices. All notices, designations, approvals, consents,
requests, acceptances, rejections or other communications required or permitted
by this Agreement shall be in writing and shall be sent via telecopy to the
telecopy number specified below. A copy of any such notice shall also be sent by
registered express air mail on the date such notice is transmitted by telecopy
to the address specified below:
If to Service Provider:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, New Jersey 07974
Telecopy No.: (908) 665-5827
Attention: Chief Legal Counsel
If to Recipient:
<PAGE> 9
8
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, New York 10577
Telecopy No.: (914) 933-6899
Attention: Chief Legal Counsel
Any Party may at any time, by notice to the other Party transmitted or sent in
the manner described above, change the address or telecopy number to which
communications to it are to be sent.
IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
15.5 Relationship. The performance by Service Provider of its
duties and obligations under this Agreement shall be that of an independent
contractor and nothing herein contained shall create or imply an agency
relationship between the Parties, nor shall this Agreement be deemed to
constitute a joint venture or partnership between the Parties. THE NEW DUN &
BRADSTREET CORPORATION.
15.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
15.7 Covenant of Further Assurances. The Parties covenant and
agree that, subsequent to the execution and delivery of this Agreement and
without any additional consideration, each of the Parties will execute and
deliver any further legal instruments and perform any acts which are or may
become reasonably necessary to effectuate this Agreement.
15.8 Assignment. This Agreement may not be assigned by
either Party, other than to an affiliate of such Party or pursuant to a
corporate reorganization or merger, without the consent of the other Party. Any
assignment in contravention of this Section 15.8 shall be void.
15.9 Entire Understanding. This Agreement represents the
entire understanding of the Parties with respect to the Services and supersedes
all previous writings, correspondence and memoranda with respect thereto, and no
representations, warranties, agreements or covenants, express or implied, of any
kind or character whatsoever with respect to such subject matter have been made
by either Party to the other, except as herein expressly set forth.
15.10 Successors. Subject to the restrictions on assignment
set forth in Section 15.8, this Agreement shall be binding upon and inure to the
benefit of and be enforceable against the Parties hereto and their respective
successors and assigns.
15.11 Amendments. This Agreement can be modified or amended
only by a written amendment executed by both Parties.
15.12 Survival. The provisions of Article 5, Article 8,
Article 9, Article 10, Article 11, Article 14, Section 6.2, Section 6.3, Section
7.2, Section 13.2, Section 15.6, this Section 15.12 and Section 15.14 shall
survive the expiration or termination of this Agreement.
15.13 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
<PAGE> 10
15.14 Good Faith and Fair Dealing. Each Party hereby agrees that its
performance of all obligations and exercise of all rights under this Agreement
shall be governed by the fundamental principles of good faith and fair dealing.
15.15 Third Party Beneficiaries. Each Party intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person or entity other than Recipient and Service Provider.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
THE NEW DUN & BRADSTREET
CORPORATION
By: /s/ Volney Taylor
----------------------------
Name: Volney Taylor
Title: Chairman and Chief
Executive Officer
THE DUN & BRADSTREET CORPORATION
By: /s/ Frank R. Noonan
----------------------------
Name: Frank R. Noonan
Title: Senior Vice President
<PAGE> 1
Exhibit 10.6
DATA SERVICES AGREEMENT
between
THE DUN & BRADSTREET CORPORATION
and
THE NEW DUN & BRADSTREET CORPORATION
Dated as of June 30, 1998
<PAGE> 2
DATA SERVICES AGREEMENT (this "Agreement"), dated as of June 30,
1998 (the "Agreement Date"), by and between THE DUN & BRADSTREET CORPORATION
(the "Corporation") and THE NEW DUN & BRADSTREET CORPORATION ("New D&B").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Corporation has determined
that it is appropriate, desirable and in the best interests of the holders of
shares of common stock, par value $1.00 per share, of Corporation ("Corporation
Common Stock"), to take certain steps to reorganize Corporation's subsidiaries
and businesses and then to distribute to the holders of the Corporation Common
Stock all the outstanding shares of common stock of New D&B (the
"Distribution");
WHEREAS, prior to the Distribution Date, Dun & Bradstreet, Inc.
("Service Provider") a subsidiary of New D&B, has provided and R.H.
Donnelley, Inc. ("Recipient"), a subsidiary of the Corporation, has
purchased, pursuant to various written and oral agreements, the Services
described in this Agreement; and
WHEREAS, in order to facilitate the orderly continuation of
Recipient's business for a transitional period after the Distribution Date, New
D&B, on behalf of Service Provider, has agreed to provide to Recipient, and the
Corporation, on behalf of Recipient, has agreed to purchase from Service
Provider, the Services described in this Agreement.
NOW, THEREFORE, in consideration of the agreements as set forth
below, it is agreed as follows:
ARTICLE 1. DEFINITIONS AND CONSTRUCTION
1.1 Definitions. The following defined terms shall have the meanings
specified below:
(1) "Agreement" shall have the meaning set forth in the Heading.
(2) "Agreement Date" shall have the meaning set forth in the
Heading.
(3) "Alternative Provider" shall mean any alternative external
service provider selected by Recipient for the provision of services similar to
the Services following the expiration or termination of this Agreement.
(4) "Corporation" shall have the meaning set forth in the preamble.
(5) "Data Center" shall mean Service Provider's data center located
at Berkeley Heights, New Jersey and any successor location.
(6) "Data Processing Services" shall mean the data processing
services described in Schedule A.
<PAGE> 3
2
(7) "Distribution" shall have the meaning set forth in the Recitals.
(8) "Distribution Agreement" shall mean the Distribution Agreement,
dated as of June 30, 1998, between the Corporation and New D&B.
(9) "Distribution Date" shall mean the date on which the
Distribution is made under the Distribution Agreement.
(10) "Fees" shall mean those charges for the Services set forth in
Schedule D.
(11) "New D&B" shall have the meaning set forth in the preamble.
(12) "Recipient" shall have the meaning set forth in the Recitals.
(13) "Recipient Data" shall mean all data or information supplied by
Recipient to Service Provider for processing or transmission in connection with
the Services.
(14) "Recipient Software" shall mean the software and related
documentation owned or licensed by Recipient as set forth on Schedule C.
(15) "Service Provider" shall have the meaning set forth in the
Recitals.
(16) "Service Provider Software" shall mean the software and related
documentation (a) owned, acquired or developed by Service Provider that is used
in connection with the provision of the Services or (b) licensed or leased by
Service Provider from a third party which is used in connection with the
provision of the Services. The Service Provider Software is set forth in
Schedule E.
(17) "Services" shall mean the Data Processing Services.
(18) "Term" shall have the meaning set forth in Article 2.
1.2 References. In this Agreement and the Schedules to this
Agreement:
(1) the Schedules to this Agreement shall be incorporated in and
deemed part of this Agreement and all references to this Agreement shall include
the Schedules to this Agreement; and
(2) references to the word "including" or the phrase "e.g." in this
Agreement shall mean "including, without limitation".
1.3 Headings. The article and section headings and the table of
contents are for reference and convenience only and shall not be considered in
the interpretation of this Agreement.
1.4 Interpretation of Documents. In the event of a conflict between
this Agreement and the terms of any of the Schedules, the terms of this
Agreement shall prevail.
<PAGE> 4
3
ARTICLE 2. TERM OF AGREEMENT
The term of this Agreement shall commence on the Distribution Date
and shall continue until 12:00 midnight (Eastern Standard Time) on March 31,
1999 (the "Term"), unless extended as set forth below or terminated earlier
pursuant to Section 14.1. Subject to Schedule D, Recipient may extend the term
of this Agreement through 12:00 midnight (Eastern Standard Time) on December 31,
1999 (the "Extended Term") by giving notice to Service Provider no later than
January 1, 1999.
ARTICLE 3. SERVICES
Service Provider shall provide to Recipient, and Recipient shall
purchase from Service Provider the Data Processing Services described in
Schedule A. The Services shall be provided with substantially the same degree of
care and diligence as such services had been provided to Recipient during the
period prior to the Distribution Date. The Services shall be provided at the
levels of service set forth in Schedule B.
ARTICLE 4. RECIPIENT OBLIGATIONS
4.1 Recipient Software. With respect to the Recipient
Software, Recipient shall:
(1) maintain the Recipient Software and operational features at the
same level that was provided immediately prior to the Distribution Date, and
shall receive maintenance services from those third party service providers that
provided maintenance services to Recipient immediately prior to the Distribution
Date; and
(2) upon notice from Service Provider (which notice shall include
Service Provider's estimate of the costs, if any, of the enhancement or
modification) as soon as possible after it has been determined that an
enhancement or modification is necessary, but in any event upon at least thirty
(30) days' notice, enhance or modify such Recipient Software and operational
features as may be necessary to remain compatible with any systems used by
Service Provider in connection with the Services; provided, however, in the
event such enhancement or modification results in Service Provider incurring any
incremental expense or providing any additional resources, Recipient shall be
responsible for the payment of such incremental expense or the costs of such
additional resources.
4.2 Generally. Recipient shall:
(1) comply with any reasonable instructions provided by Service
Provider that are necessary for Service Provider to adequately provide the
Services;
(2) comply with all standards and procedures applicable to the Data
Center;
<PAGE> 5
4
(3) promptly report any operational or system problem to Service
Provider;
(4) maintain a business recovery plan detailing the requirements of
Recipient in the event of the occurrence of a disaster affecting the Services
and periodically test such plan.
4.3 Associated Equipment. Recipient shall maintain and be
responsible for all costs (including personnel, maintenance and repair)
associated with communications equipment (including terminals, communications
hardware, modems and telephone lines) that Recipient owns or operates and that
is not located at the Data Center necessary to provide the Services or to
transmit the Recipient Data for processing at the Data Center.
4.4 Security. Recipient shall ensure that user accounts shall only
be used by the person for whom such account was created or other authorized
personnel. Recipient shall promptly inform Service Provider of any individual
who is no longer authorized to use the Services.
ARTICLE 5. PROPRIETARY RIGHTS
5.1 Recipient Software. Recipient shall grant a non-exclusive,
nontransferable, royalty-free right for Service Provider, solely in connection
with providing the Services, to (1) have access to and operate the Recipient
Software and (2) use any other hardware, software and documentation owned by
Recipient that is necessary to allow Service Provider to perform the Services.
Recipient represents and warrants that it has obtained or will obtain all
consents or approvals necessary in connection with Service Provider's use of the
Recipient Software, the Licensed Documentation and any other such hardware,
software and documentation.
5.2 Service Provider Software. All Service Provider Software is, or
shall be, and shall remain, the exclusive property of Service Provider or its
third party licensor and Recipient shall have no rights or interests to the
Service Provider Software. Service Provider represents and warrants that it has
obtained or will obtain all consents or approvals necessary in connection with
Service Provider's use of the Service Provider Software to provide the Services.
Notwithstanding the foregoing, in connection with Software licensed from IBM,
Service Provider acknowledges that it has been verbally advised by IBM that the
Service Provider Software provided by IBM may be used by Service Provider to
provide the Services. However, if IBM or any other licensor of Service Provider
Software no longer permits Service Provider to use the Service Provider Software
or any portion thereof to provide the Services, Recipient shall obtain a license
for such software at its own cost (which permits Service Provider to use such
software to provide the Services), Service Provider shall reduce the Fees to
reflect such reduction in its costs and Service Provider shall not be
responsible for the loss of the right to use such software to provide the
Services or for any failure or delay of Recipient in procuring such license
provided that Service Provider gives notice to Recipient and reasonably assists
Recipient in procuring such license. If Recipient's use of Service Provider
Software no longer qualifies for consideration under IBM's "parallel sysplex
pricing program" as part of Service Provider's agreement with IBM, Recipient
will either pay to Service Provider the resulting increase in cost to Service
Provider or obtain a license for such software at its own cost (which permits
Service Provider to use such software to provide the Services) and in the latter
event Service Provider shall reduce the Fees to reflect the reduction in its
costs. If Recipient's use of any Service Provider Software results in the
imposition of any "multiversion charges", then
<PAGE> 6
5
Recipient shall pay to Service Provider the resulting increase in cost.
ARTICLE 6. DATA
6.1 Form of Data. All data submitted by Recipient to Service
Provider in connection with the Services shall be in the form substantially
similar to that submitted before the Distribution Date, unless otherwise agreed
to in writing by the parties.
6.2 Ownership of Data. The Recipient Data is and shall remain the
property of Recipient or its customers.
6.3 Ownership of Media. All media upon which Recipient Data is
stored is and shall remain the property of Recipient. In the event additional
media is needed, it shall be obtained by Recipient, and be the property of
Recipient or its lessor.
6.4 Responsibility for Data. Recipient is responsible from the
Agreement Date for (1) the accuracy and completeness of the data submitted by
Recipient in connection with the Services and (2) any errors in and with respect
to data obtained from Service Provider because of any inaccurate or incomplete
data submitted by Recipient to Service Provider.
ARTICLE 7. FEES
7.1 Fees. Recipient shall pay to Service Provider the fees set forth
in Schedule D in respect of each of the Services.
7.2 Time of Payment. The Fees shall be paid by Recipient monthly in
arrears on or before the first business day immediately following the end of
each whole or partial calendar month of the Term or the Extended Term, as the
case may be.
7.3 Additional Services. In the event that Recipient believes that
its use of a Service will increase above that set forth in Schedule A or in
Schedule B for such Service, then Recipient shall notify Service Provider of the
need for such an increase. Service Provider shall then determine whether any
additional hardware or software is necessary in order for Service Provider to
provide the Service and any additional Fees that Service Provider will charge
for such additional Service. In the event that the parties agree that such
additional Service shall be provided, then, in the event that additional
hardware or software is required, (1) Recipient shall acquire, and provide to
Service Provider, such additional hardware or software (and the right for
Service Provider to use same to provide the Services) and Recipient shall pay to
the supplier or third party lessor or licensor, as may be applicable, the
purchase or lease fees in respect of such additional hardware or software and
(2) Service Provider shall implement the agreed-upon increase to the Fees.
7.4 Taxes. Recipient shall pay any value-added tax and any tariff,
duty, export or import fee, sales tax, use tax, service tax or other tax or
charge subsequently imposed by any government or government agency on Recipient
or Service Provider with respect to the Services or the execution or performance
of this Agreement.
<PAGE> 7
6
7.5 Late Payments. Any undisputed fees or payments owing to Service
Provider pursuant to this Agreement that are not paid when due (other than as a
result of a delay directly caused by Service Provider or its affiliates) shall
bear interest at the rate of one and one-half (1 1/2) percent per month, but in
no event to exceed the highest lawful rate of interest, calculated from the date
such amount was due until the date payment is received by Service Provider.
ARTICLE 8. AUDITS
No more than one (1) time during the Term of this Agreement and one
(1) additional time during any Extended Term, Recipient shall have the right
during normal business hours and upon reasonable advance notice (but not less
than thirty (30) days' notice), to review the computer printouts and reports and
other records of Service Provider to the extent such books and records relate to
the provision by Service Provider of the Services. Any such review shall be
conducted at Recipient's sole expense.
ARTICLE 9. CONFIDENTIALITY
Each of the Parties shall not use or permit the use of (without the
prior consent of the other) and shall keep, and shall cause its consultants and
advisors to keep, confidential all information concerning the other Party in its
possession, its custody or under its control (except to the extent that (1) such
information has been in the public domain through no fault of such Party or (2)
such information has been later lawfully acquired from other sources by such
Party or (3) this Agreement or any other agreement entered into pursuant to this
Agreement permits the use or disclosure of such information) to the extent such
information (a) relates to the period up to the Distribution Date or (b) is
obtained in the course of providing or receiving the Services pursuant to this
Agreement, and each Party shall not (without the prior consent of the other)
otherwise release or disclose such information to any other person, except such
Party's auditors and attorneys, unless compelled to disclose such information by
judicial or administrative process or unless such disclosure is required by law
and such Party has used commercially reasonable efforts to consult with the
other Party prior to such disclosure.
ARTICLE 10. INDEMNITY
10.1 Subject to Section 5.2, Service Provider shall indemnify and
hold harmless Recipient in respect of all claims, costs, expenses, damages and
liabilities (including reasonable attorneys' fees) arising from any claim by a
third party licensor that the Service Provider Software made available to
Recipient by Service Provider infringes such third party's proprietary rights.
10.2 Recipient shall indemnify and hold harmless Service Provider in
respect of all claims, costs, expenses, damages and liabilities (including
reasonable attorneys' fees) arising from any claim by a third party licensor
that the Recipient Software made available to Service Provider by Recipient
infringes such third party's proprietary rights or otherwise for a breach of
Section 5.1.
<PAGE> 8
7
ARTICLE 11. DISCLAIMER AND LIMITATION OF LIABILITY
11.1 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH HEREIN, SERVICE
PROVIDER MAKES NO REPRESENTATIONS OR WARRANTIES IN RESPECT OF THE SERVICES, THE
RECIPIENT SOFTWARE AND THE SERVICE PROVIDER SOFTWARE, EXPRESS OR IMPLIED,
INCLUDING THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
11.2 Limitation of Liability. Neither of the parties shall be liable
to the other (or any claiming under or through the other) for any indirect,
special, incidental or consequential damages, including lost profits or savings,
whether or not such damages are foreseeable, or for any third party claims
relating to the Services or a Party's performance under this Agreement
regardless of the form of action (including negligence). Except as may arise as
a result of a party's gross negligence or willful misconduct, and as set forth
in Section 10 above, each party's liability for direct damages arising in
connection with its performance or failure to perform under this Agreement shall
in no event exceed three (3) months' Fees hereunder.
11.3 Acknowledgement. Recipient acknowledges that Recipient has
licensed, purchased or selected the Recipient Software and Service Provider
Software and the hardware upon which such software is installed to be used by
Service Provider in the provision of the Services, or directed Service Provider
to use same. Service Provider shall have no obligation to determine whether or
not the Recipient Software and Service Provider Software and the hardware upon
which such software is installed is adequate for Recipient's purposes,
including, but not limited to, the ability of such Recipient Software and
Service Provider Software and the hardware upon which such software is installed
to adequately process Recipient Data or adequately handle "Year 2000" issues,
such obligations being solely that of Recipient.
11.4 Relief From Obligations. Service Provider shall be relieved of
its obligations under this Agreement to the extent that it's ability to perform
is limited, hindered or disrupted by the acts or omissions of Recipient,
including Recipient's failure to perform its obligations under this Agreement in
a prompt and timely manner.
ARTICLE 12. DISPUTE RESOLUTION
12.1 Procedure. Any disputes arising out of or in connection with
this Agreement shall be settled in accordance with the dispute resolution
mechanisms set forth in Article VI and Section 8.17 of the Distribution
Agreement.
12.2 Continuity of Services and Performance. Unless otherwise agreed
in writing, the Parties shall continue to provide the Services and honor all
other commitments under this Agreement during the course of dispute resolution
pursuant to the provisions of this Article 12 with respect to all matters not
subject to such dispute, controversy or claim.
<PAGE> 9
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ARTICLE 13. CONTINUED PROVISION OF SERVICES
13.1 Force Majeure. Service Provider shall not be in default of its
obligations hereunder for any delays or failure in performance resulting from
any cause or circumstance beyond the reasonable control of Service Provider,
provided that Service Provider exercises commercially reasonable efforts to
perform its obligations in a timely manner. If any such occurrence prevents
Service Provider from providing any of the Services, Service Provider shall
cooperate with Recipient in obtaining, at Recipient's sole expense, an
alternative source for the affected Services, and Recipient shall be released
from any payment obligation to Service Provider in respect of such Services
during the period of such force majeure.
13.2 Disaster Recovery. Recipient shall maintain a mainframe
computer disaster recovery coverage plan, including coverage for the Services.
Service Provider shall provider mainframe computer capacity for business
recovery purposes as set forth on Schedule F. Upon the occurrence of a disaster
affecting the Services relating to mainframe computing, Service Provider shall
assist Recipient in the implementation of the mainframe computer disaster
recovery procedures and Recipient shall be responsible for its proportionate
share of any fees incurred by Service Provider in connection with implementing
such procedures. Recipient shall provide Service Provider with a copy of the
plan at the beginning of each contract year and promptly after each change
thereto.
ARTICLE 14. TERMINATION
14.1 For Convenience. Recipient may terminate this Agreement at any
time during the Term or the Extended Term, as the case may be, upon ninety (90)
days' notice to Service Provider.
14.2 Effect of Termination. Upon the termination of this Agreement
pursuant to Section 14.1, Recipient shall pay to Service Provider, no later than
the effective date of such termination, the balance of the Fees due for the Term
and/or the Extended Term, as the case may be.
ARTICLE 15. TERMINATION ASSISTANCE SERVICES
Upon the expiration of this Agreement or the effective date of
termination of this Agreement, Service Provider shall have no further obligation
to provide the Services to Recipient and for a period of up to (a) sixty (60)
days prior to the expiration or the effective date of termination of this
Agreement and (b) thirty (30) days following the expiration or the effective
date of termination of this Agreement, Service Provider shall use reasonable
efforts to cooperate, at Recipient's expense, with (i) the Alternative Provider
or (ii) Recipient, in connection with the transfer of the Services, the
Recipient Data and the Recipient Software, from Service Provider to the
facilities of (x) the Alternative Provider or (y) Recipient, as requested by
Recipient.
ARTICLE 16. MISCELLANEOUS PROVISIONS
<PAGE> 10
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16.1 No Waivers. No failure on the part of either Party to exercise
and no delay in exercising any right or remedy hereunder shall operate as a
waiver thereof nor shall any single or partial exercise by a Party of any right
or remedy hereunder preclude any other right or remedy or further exercise
thereof or the exercise of any other right.
16.2 Consents, Approvals and Requests. Unless otherwise specified in
this Agreement, all consents and approvals, acceptances or similar actions to be
given by either Party under this Agreement shall not be unreasonably withheld or
delayed and each Party shall make only reasonable requests under this Agreement.
16.3 Partial Invalidity. In the event any of the provisions of this
Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality or enforceability of the remaining provisions of this
Agreement shall not be affected or impaired.
16.4 Notices. All notices, designations, approvals, consents,
requests, acceptances, rejections or other communications required or permitted
by this Agreement shall be in writing and shall be sent via telecopy to the
telecopy number specified below. A copy of any such notice shall also be sent by
registered express air mail on the date such notice is transmitted by telecopy
to the address specified below:
If to New D&B or the Service Provider:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, New Jersey 07974
Telecopy No.: (908) 665-5827
Attention: Chief Legal Counsel
If to the Corporation or the Recipient:
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, New York 10577
Telecopy No.: (914) 933-6899
Attention: Chief Legal Counsel
Any Party may at any time, by notice to the other Party transmitted or sent in
the manner described above, change the address or telecopy number to which
communications to it are to be sent.
16.5 Relationship. The performance by Service Provider of its duties
and obligations under this Agreement shall be that of an independent contractor
and nothing herein contained shall create or imply an agency relationship
between the Parties, nor shall this Agreement be deemed to constitute a joint
venture or partnership between the Parties.
16.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
<PAGE> 11
10
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
16.7 Covenant of Further Assurances. The Parties covenant and agree
that, subsequent to the execution and delivery of this Agreement and without any
additional consideration, each of the Parties will execute and deliver any
further legal instruments and perform any acts which are or may become
reasonably necessary to effectuate this Agreement.
16.8 Assignment. This Agreement may not be assigned by either Party,
other than to an affiliate of such Party or pursuant to a corporate
reorganization or merger, without the consent of the other Party. Any assignment
in contravention of this Section 16.8 shall be void.
16.9 Entire Understanding. This Agreement represents the entire
understanding of the Parties with respect to the Services and supersedes all
previous writings, correspondence and memoranda with respect thereto, and no
representations, warranties, agreements or covenants, express or implied, of any
kind or character whatsoever with respect to such subject matter have been made
by either Party to the other, except as expressly set forth herein.
16.10 Successors. Subject to the restrictions on assignment set
forth in Section 16.8, this Agreement shall be binding upon and inure to the
benefit of an be enforceable against the Parties hereto and their respective
successors and assigns.
16.11 Amendments. This Agreement can be modified or amended only by
a written amendment executed by both Parties.
16.12 Survival. The provisions of Article 5, Article 9, Article 10,
Article 11, Article 12, Article 15, Section 6.2, Section 6.3, Section 14.2,
Section 16.6, this Section 16.12 and Section 16.15 shall survive termination of
this Agreement.
16.13 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
16.14 Third Party Beneficiaries. Each Party intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any person or entity other than Recipient and Service Provider.
16.15 Good Faith and Fair Dealing. Each Party hereby agrees that its
performance of all obligations and exercise of all rights under this Agreement
shall be governed by the fundamental principles of good faith and fair dealing.
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized officers as of the day and year first above
written.
THE DUN & BRADSTREET CORPORATION
By: /s/ Frank R. Noonan
_______________________________________
Name: Frank R. Noonan
Title: Senior Vice President
THE NEW DUN & BRADSTREET
CORPORATION
By: /s/ Volney Taylor
_______________________________________
Name: Volney Taylor
Title: Chairman and Chief Executive Officer
<PAGE> 1
Exhibit 10.7
TRANSITION SERVICES AGREEMENT
between
THE DUN & BRADSTREET CORPORATION
and
THE NEW DUN & BRADSTREET CORPORATION
Dated as of June 30, 1998
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
SERVICES PROVIDED........ 1
1.1 Transition Services...................................... 1
1.2 Personnel................................................ 1
1.3 Representatives.......................................... 1
1.4 Level of Transition Services............................. 2
1.5 Limitation of Liability.................................. 2
1.6 Force Majeure............................................ 3
1.7 Modification of Procedures............................... 3
1.8 Provider Access.......................................... 3
ARTICLE II
COMPENSATION........... 3
2.1 Consideration............................................ 3
2.2 Invoices................................................. 4
2.3 Payment of Invoices...................................... 4
2.4 Late Payment............................................. 4
ARTICLE III
CONFIDENTIALITY......... 4
3.1 Obligation............................................... 4
3.2 Care and Inadvertent Disclosure.......................... 4
ARTICLE IV
TERM AND TERMINATION....... 5
4.1 Term..................................................... 5
4.2 Termination.............................................. 5
4.3 Termination of Obligations............................... 5
4.4 Survival of Certain Obligations.......................... 5
ARTICLE V
DISPUTE RESOLUTION........ 6
5.1 Dispute Resolution....................................... 6
-i-
<PAGE> 3
ARTICLE VI
Page
MISCELLANEOUS.......... 6
6.1 Complete Agreement; Construction......................... 6
6.2 Other Ancillary Agreements............................... 6
6.3 Counterparts............................................. 6
6.4 Survival of Agreements................................... 6
6.5 Notices.................................................. 6
6.6 Waivers.................................................. 7
6.7 Amendments............................................... 7
6.8 Assignment............................................... 7
6.9 Successors and Assigns................................... 7
6.10 Subsidiaries............................................. 7
6.11 Third Party Beneficiaries................................ 7
6.12 Title and Headings....................................... 7
6.13 Appendices............................................... 8
6.14 GOVERNING LAW............................................ 8
6.15 Consent to Jurisdiction.................................. 8
6.16 Severability............................................. 8
6.17 Laws and Government Regulations.......................... 8
6.18 Relationship of Parties.................................. 8
6.19 Definitions.............................................. 9
-ii-
<PAGE> 4
TRANSITION SERVICES AGREEMENT
TRANSITION SERVICES AGREEMENT dated as of June 30, 1998,
between THE DUN & BRADSTREET CORPORATION, a Delaware corporation (the
"Corporation"), and THE NEW DUN & BRADSTREET CORPORATION, a Delaware corporation
("New D&B").
W I T N E S S E T H :
WHEREAS, the Corporation and New D&B have entered into a
Distribution Agreement dated as of the date hereof (the "Distribution
Agreement") pursuant to which, among other matters, New D&B has agreed to
provide, or cause one or more of its Subsidiaries to provide, to the Corporation
certain transitional, administrative and support services on the terms set forth
in this Agreement and the Appendices hereto.
NOW, THEREFORE, subject to the terms, conditions, covenants
and provisions of this Agreement, each of the Corporation and New D&B mutually
covenant and agree as follows:
ARTICLE I
SERVICES PROVIDED
1.1 Transition Services. Upon the terms and subject to the
conditions set forth in this Agreement, with respect to each of those services
set forth in an Appendix hereto, each of which Appendices is made a part of this
Agreement, New D&B will provide to the Corporation the services indicated in
such Appendix (hereinafter referred to individually as a "Transition Service",
and collectively as the "Transition Services") during the time period for each
such Transition Service set forth in such Appendix (hereinafter referred to as
the "Time Periods" for all of the Transition Services, and the "Time Period" for
each Transition Service).
1.2 Personnel. In providing the Transition Services, New D&B
as it deems necessary or appropriate in its sole discretion, may (i) use its
personnel and that of its Affiliates, and (ii) employ the services of third
parties to the extent such third party services are routinely utilized to
provide similar services to other businesses of New D&B or are reasonably
necessary for the efficient performance of any of such Transition Services. The
Corporation may retain at its own expense its own consultants and other
professional advisers.
1.3 Representatives. Each of the Corporation and New D&B shall
nominate a representative to act as its primary contact person for the provision
of all of the Transition Services (collectively, the "Primary Coordinators").
The initial Primary Coordinators shall be Anna Patruno for the Corporation and
Chester Geveda, Jr. for New D&B. The initial coordinators for each specific
Transition Service shall be the individuals named in the Appendix relating to
such Transition Service (the "Service Coordinators"). Each party may treat an
act of a Primary Coordinator or Service Coordinator of another party as being
authorized by such other party
<PAGE> 5
2
without inquiring behind such act or ascertaining whether such Primary
Coordinator or Service Coordinator had authority to so act. New D&B and the
Corporation shall advise each other in writing of any change in the Primary
Coordinators and any Service Coordinator for such Transition Service, setting
forth the name of the Primary Coordinator or Service Coordinator to be replaced
and the name of the replacement, and certifying that the replacement Primary
Coordinator or Service Coordinator is authorized to act for such party in all
matters relating to this Agreement. Each of the Corporation and New D&B agree
that all communications relating to the provision of the Transition Services
shall be directed to the Primary Coordinators.
1.4 Level of Transition Services. (a) New D&B shall perform
the Transition Services for which it is responsible hereunder following commonly
accepted standards of care in the industry and exercising the same degree of
care as it exercises in performing the same or similar services for its own
account as of the date of this Agreement, with priority equal to that provided
to its own businesses or those of any of its Affiliates, Subsidiaries or
divisions. Nothing in this Agreement shall require New D&B to favor the
businesses of the Corporation over its own businesses or those of any of its
Affiliates, Subsidiaries or divisions.
(b) New D&B shall not be required to provide the Corporation
with extraordinary levels of Transition Services, special studies, training, or
the like or the advantage of systems, equipment, facilities, training, or
improvements procured, obtained or made after the Distribution Date by New D&B.
(c) In addition to being subject to the terms and conditions
of this Agreement for the provision of the Transition Services, the Corporation
agrees that the Transition Services provided by third parties shall be subject
to the terms and conditions of any agreements between New D&B and such third
parties. New D&B shall consult with the Corporation concerning the terms and
conditions of any such agreements to be entered into, or proposed to be entered
into, with third parties after the date hereof but the Corporation shall have no
right to require New D&B to reject or amend any of such terms and conditions.
1.5 Limitation of Liability. In the absence of gross
negligence or willful misconduct on the part of New D&B, and whether or not New
D&B is negligent, New D&B shall not be liable for any claims, liabilities,
damages, losses, costs, expenses (including, but not limited to, settlements,
judgments, court costs and reasonable attorneys' fees), fines and penalties,
arising out of any actual or alleged injury, loss or damage of any nature
whatsoever in providing or failing to provide Transition Services for which it
is responsible hereunder to the Corporation. Notwithstanding anything to the
contrary contained herein, in the event New D&B commits an error with respect to
or incorrectly performs or fails to perform any Transition Service, at the
Corporation's request, New D&B shall use reasonable efforts and good faith to
correct such error, re-perform or perform such Transition Service at no
additional cost to such Recipient; provided, that New D&B shall have no
obligation to recreate any lost or destroyed data to the extent the same cannot
be cured by the re-performance of the Transition Service in question.
1.6 Force Majeure. Any failure or omission by a party in the
performance of any obligation under this Agreement shall not be deemed a breach
of this Agreement or create any liability, if the same arises from any cause or
causes beyond the control of such party, including, but not limited to, the
following, which, for purposes of this Agreement shall be regarded as beyond the
control of each of the parties hereto: acts of God, fire, storm, flood,
earthquake, governmental
<PAGE> 6
3
regulation or direction, acts of the public enemy, war, rebellion, insurrection,
riot, invasion, strike or lockout; provided, however, that such party shall
resume the performance whenever such causes are removed. Notwithstanding the
foregoing, if such party cannot perform under this Agreement for a period of
forty-five (45) days due to such cause or causes, the affected party may
terminate the Agreement with the defaulting party by providing written notice
thereto.
1.7 Modification of Procedures. New D&B may make changes from
time to time in its standards and procedures for performing the Transition
Services for which it is responsible hereunder. Notwithstanding the foregoing
sentence, unless required by law, New D&B shall not implement any substantial
changes affecting the Corporation unless:
(a) New D&B has furnished the Corporation written notice
(which may be the same notice New D&B shall provide its own businesses)
thereof;
(b) New D&B changes such procedures for its own businesses at
the same time; and
(c) New D&B gives the Corporation a reasonable period of time
for the Corporation (i) to adapt its operations to accommodate such
changes or (ii) to reject the proposed changes. In the event the
Corporation fails to accept or reject a proposed change on or before a
date specified in such notice of change, the Corporation shall be
deemed to have accepted such change. In the event the Corporation
rejects a proposed change but does not terminate this Agreement, the
Corporation agrees to pay any charges resulting from New D&B's need to
maintain different versions of the same systems, procedures,
technologies, or services or resulting from requirements of third party
vendors or suppliers.
1.8 Provider Access. To the extent reasonably required for
personnel of New D&B to perform the Transition Services hereunder, the
Corporation shall provide personnel of New D&B with access to its equipment,
office space, plants, telecommunications and computer equipment and systems, and
any other areas and equipment.
ARTICLE II
COMPENSATION
2.1 Consideration. As consideration for the Transition
Services, the Corporation shall pay to New D&B the amount specified for each
such Transition Service as set forth in the Appendix relating to such Transition
Service.
2.2 Invoices. After the end of each month, New D&B together
with such party's Affiliates or Subsidiaries providing Transition Services will
submit one invoice to the Corporation for all Transition Services provided to
the Corporation and its Subsidiaries by New D&B during such month. Such monthly
invoices shall be issued no later than the fifteenth day of each succeeding
month. Each invoice shall include a summary list of the previously agreed upon
Transition Service for which there are fixed dollar fees, together with
documentation supporting each of the invoiced amounts that are not covered by
the fixed fee agreements. The total amount set forth on such summary list and
such supporting detail shall equal the invoice total, and will be
<PAGE> 7
4
provided under separate cover apart from the invoice. All invoices shall be sent
to the attention of Service Coordinator of the Corporation at the address set
forth in Section 6.5 hereof or to such other address as the Corporation shall
have specified by notice in writing to New D&B.
2.3 Payment of Invoices. (a) Payment of all invoices in
respect of a Transition Service shall be made by check or electronic funds
transmission in U.S. Dollars, without any offset or deduction of any nature
whatsoever, within thirty (30) days of the invoice date unless otherwise
specified in the Appendix relating to such Transition Service. All payments
shall be made to the account designated by New D&B, with written confirmation of
payment sent by facsimile to the Service Coordinator or other person designated
thereby.
(b) If any payment is not paid when due, New D&B shall have
the right, without any liability to the Corporation, or anyone claiming by or
through the Corporation, to immediately cease providing any or all of the
Transition Services provided by New D&B to the Corporation, which right may be
exercised by New D&B in its sole and absolute discretion.
2.4 Late Payments. Any payments owing to New D&B pursuant to
this Agreement that are not paid when due (other than as a result of a delay
directly caused by New D&B or its affiliates) shall bear interest at the rate of
one and one-half (1-1/2) percent per month, but in no event to exceed the
highest lawful rate of interest, calculated from the date such amount was due
until the date payment is received by New D&B.
ARTICLE III
CONFIDENTIALITY
3.1 Obligation. Each party and its Subsidiaries shall not
use or permit the use of (without the prior written consent of the other
parties) and shall keep, and shall cause its consultants and advisors to keep,
confidential all information concerning the other party received pursuant to or
in connection with this Agreement.
3.2 Care and Inadvertent Disclosure. With respect to any
confidential information, each party agrees as follows:
(a) it shall use the same degree of care in safeguarding said
information as it uses to safeguard its own information which must be
held in confidence; and
(b) upon the discovery of any inadvertent disclosure or
unauthorized use of said information, or upon obtaining notice of such
a disclosure or use from the other party, it shall take all necessary
actions to prevent any further inadvertent disclosure or unauthorized
use, and, subject to the provisions of Section 1.5 above, such other
party shall be entitled to pursue any other remedy which may be
available to it.
<PAGE> 8
5
ARTICLE IV
TERM AND TERMINATION
4.1 Term. This Agreement shall become effective on the
Distribution Date and shall remain in force until the expiration of the longest
Time Period specified in any Appendix hereto, including any extension thereof,
unless this Agreement is terminated under Sections 1.6, 4.2 or 6.16 prior to the
end of such Time Period.
4.2 Termination. If any party (hereafter called the
"Defaulting Party") shall fail to perform or default in the performance of any
of its obligations under this Agreement (other than a payment default), the
party entitled to the benefit of such performance (hereinafter referred to as a
"Non-Defaulting Party") may give written notice to the Defaulting Party
specifying the nature of such failure or default and stating that the
Non-Defaulting Party intends to terminate this Agreement with respect to the
Defaulting Party if such failure or default is not cured within fifteen days of
such written notice. If any failure or default so specified is not cured within
such fifteen day period, the Non-Defaulting Party may elect to immediately
terminate this Agreement with respect to the Defaulting Party; provided,
however, that if the failure or default relates to a dispute contested in good
faith by the Defaulting Party, the Non-Defaulting Party may not terminate this
Agreement pending the resolution of such dispute in accordance with Article V
hereof. Such termination shall be effective upon giving a written notice of
termination from the Non-Defaulting Party to the Defaulting Party and shall be
without prejudice to any other remedy which may be available to the
Non-Defaulting Party against the Defaulting Party.
4.3 Termination of Obligations. The Corporation specifically
agrees and acknowledges that all obligations of New D&B to provide each
Transition Service hereunder shall immediately cease upon the expiration of the
Time Period for such Transition Service, and New D&B's obligations to provide
all of the Transition Services for which New D&B is responsible hereunder shall
immediately cease upon the termination of this Agreement. Upon the cessation of
New D&B's obligation to provide any Transition Service, the Corporation shall
immediately cease using, directly or indirectly, such Transition Service
(including, without limitation, any and all software of New D&B or third party
software provided through New D&B, telecommunications services or equipment, or
computer systems or equipment).
4.4 Survival of Certain Obligations. Without prejudice to the
survival of the other agreements of the parties, the following obligations shall
survive the termination of this Agreement: (a) the obligations of each party
under Articles III, IV, V and VI and (b) New D&B's right to receive the
compensation for the Transition Services provided by it hereunder provided in
Section 2.1 above incurred prior to the effective date of termination.
ARTICLE V
DISPUTE RESOLUTION
5.1 Dispute Resolution. Any disputes arising out of or in
connection with this Agreement shall be settled in accordance with the dispute
resolution mechanisms set forth in Article VI of the Distribution Agreement.
<PAGE> 9
6
ARTICLE VI
MISCELLANEOUS
6.1 Complete Agreement; Construction. This Agreement,
including the Appendices hereto, shall constitute the entire agreement between
the parties with respect to the subject matter hereof and shall supersede all
previous negotiations, commitments and writings with respect to such subject
matter. In the event of any inconsistency between this Agreement and any
Appendix hereto, the Appendix shall prevail. In the event and to the extent that
there shall be a conflict between the provisions of this Agreement and the
provisions of any other Ancillary Agreement, this Agreement shall control.
6.2 Other Ancillary Agreements. This Agreement is not
intended to address, and should not be interpreted to address, the matters
specifically and expressly covered by the other Ancillary Agreements.
6.3 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more such counterparts have been signed
by each of the parties and delivered to the other parties.
6.4 Survival of Agreements. Except as otherwise contemplated
by this Agreement, all covenants and agreements of the parties contained in this
Agreement shall survive the Distribution Date.
6.5 Notices. All notices and other communications hereunder
shall be in writing and hand delivered or mailed by registered or certified mail
(return receipt requested) or sent by any means of electronic message
transmission with delivery confirmed (by voice or otherwise) to the parties at
the following addresses (or at such other addresses for a party as shall be
specified by like notice) and will be deemed given on the date on which such
notice is received:
To the Corporation:
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, New York 10577
Telecopy: (914) 933-6899
Attn.: Chief Legal Counsel
To New D&B:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, New Jersey 07974
Telecopy: (908) 665-5827
Attn.: Chief Legal Counsel
<PAGE> 10
7
6.6 Waivers. The failure of any party to require strict
performance by any other party of any provision in this Agreement will not waive
or diminish that party's right to demand strict performance thereafter of that
or any other provision hereof.
6.7 Amendments. This Agreement may not be modified or amended
except by an agreement in writing signed by each of the parties hereto.
6.8 Assignment. This Agreement may not be assigned by either
party, other than to an Affiliate of such party or pursuant to a corporate
reorganization or merger, without the consent of the other party. Any assignment
in contravention of this Section 6.8 shall be void.
6.9 Successors and Assigns. The provisions to this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and permitted assigns.
6.10 Subsidiaries. Each of the parties hereto shall cause to
be performed, and hereby guarantees the performance of, all actions, agreements
and obligations set forth herein to be performed by any Subsidiary of such party
or by any entity that is contemplated to be a Subsidiary of such party on and
after the Distribution Date.
6.11 Third Party Beneficiaries. This Agreement is solely for
the benefit of the parties hereto and should not be deemed to confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.
6.12 Title and Headings. Titles and headings to sections
herein are inserted for the convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
6.13 Appendices. The Appendices shall be construed with and
as an integral part of this Agreement to the same extent as if the same had been
set forth verbatim herein. In the event of any inconsistency between the terms
of any Appendix and the terms set forth in the main body of this Agreement, the
terms of the Appendix shall govern.
6.14 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
6.15 Consent to Jurisdiction. Each of the parties irrevocably
submits to the exclusive jurisdiction of (a) the Supreme Court of the State of
New York, New York County, and (b) the United States District Court for the
Southern District of New York, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each of the parties agrees to commence any action, suit or proceeding relating
hereto either in the United States District Court for the Southern District of
New York or if such suit, action or other proceeding may not be brought in such
court for jurisdictional reasons, in the Supreme Court of the State of New York,
New York County. Each of the parties further agrees that service of any
<PAGE> 11
8
process, summons, notice or document by U.S. registered mail to such party's
respective address set forth above shall be effective service of process for any
action, suit or proceeding in New York with respect to any matters to which it
has submitted to jurisdiction in this Section 6.15. Each of the parties
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (i) the Supreme Court of the State of New York, New York
County, or (ii) the United States District Court for the Southern District of
New York, and hereby further irrevocably and unconditionally waives and agrees
not to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum.
6.16 Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions, the economic effect of which comes as close as possible to
that of the invalid, illegal or unenforceable provisions.
6.17 Laws and Government Regulations. The Corporation shall
be responsible for (i) compliance with all laws and governmental regulations
affecting its businesses and (ii) any use the Corporation may make of the
Transition Services to assist it in complying with such laws and governmental
regulations. New D&B shall not have any responsibility for the compliance by the
Corporation of such Transition Services with such laws and regulations.
6.18 Relationship of Parties. Nothing in this Agreement shall
be deemed or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture between the
parties, it being understood and agreed that no provision contained herein, and
no act of the parties, shall be deemed to create any relationship between the
parties other than the relationship of buyer and seller of services nor be
deemed to vest any rights, interests or claims in any third parties. The parties
do not intend to waive any privileges or rights to which they may be entitled.
6.19 Definitions. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Distribution Agreement.
<PAGE> 12
IN WITNESS WHEREOF, the parties hereto have caused this
Transition Services Agreement to be executed the day and year first above
written.
THE DUN & BRADSTREET CORPORATION
By: /s/ Frank R. Noonan
----------------------------
Name: Frank R. Noonan
Title: Senior Vice President
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Volney Taylor
----------------------------
Name: Volney Taylor
Title: Chairman and Chief
Executive Officer
<PAGE> 1
Exhibit 10.8
AMENDED AND RESTATED
TRANSITION SERVICES AGREEMENT
This AMENDED AND RESTATED TRANSITION SERVICES AGREEMENT dated as of
June 30, 1998, among THE DUN & BRADSTREET CORPORATION, a Delaware corporation
(the "Corporation"), THE NEW DUN & BRADSTREET CORPORATION, a Delaware
corporation ("New D&B"), COGNIZANT CORPORATION, a Delaware corporation
("Cognizant"), IMS HEALTH INCORPORATED, a Delaware corporation ("IMS Health"),
ACNIELSEN CORPORATION, a Delaware corporation ("ACNielsen"), and GARTNER GROUP,
INC., a Delaware Corporation ("Gartner") amends and restates in its entirety the
Transition Services Agreement dated as of October 28, 1996 (the "1996 Transition
Services Agreement") among the Corporation, Cognizant and ACNielsen.
W I T N E S S E T H
WHEREAS, pursuant to a Distribution Agreement dated as of October
28, 1996 (the "1996 Distribution Agreement") among the Corporation, Cognizant
and ACNielsen, each party agreed to provide to the other parties certain
transitional, administrative and support services, including insurance and risk
management services, on the terms set forth in the 1996 Transition
Services Agreement and the Appendix thereto.
WHEREAS, each of the Corporation, Cognizant and ACNielsen desires to
amend and restate the 1996 Transition Services Agreement as set forth in this
Agreement and to include New D&B, IMS Health and Gartner as parties hereto; and
each of New D&B, IMS Health and Gartner desires to become a party to this
Agreement.
NOW, THEREFORE, in consideration of the agreements, covenants and
provisions in this Agreement and intending to be legally bound hereby, each of
the Corporation, New D&B, Cognizant, IMS Health, ACNielsen and Gartner mutually
covenant and agree as follows:
ARTICLE I
SERVICES PROVIDED
1.1 Transition Services. New D&B (the "Provider") shall provide
comprehensive insurance and risk management services to the Corporation,
Cognizant, IMS Health, ACNielsen and Gartner (each a "Recipient"; collectively,
the "Recipients"). Such services shall include risk identification, development
of appropriate insurance programs, loss prevention initiatives, accounting for
premiums, deductibles, retentions and defense costs, claims management
(including coordination with insurance carriers), the collection and
distribution of insurance proceeds and such other services as the Corporation's
Risk Management staff has been providing to the Corporation, Cognizant and
ACNielsen as of the date hereof (all such services, collectively, the
"Transition Services").
<PAGE> 2
2
1.2 Personnel. In providing the Transition Services, the Provider as
it deems necessary or appropriate in its sole discretion, may (i) use the
personnel of such Provider or its Affiliates, and (ii) employ the services of
third parties to the extent such third party services are routinely utilized to
provide similar services to other businesses of such Provider or are reasonably
necessary for the efficient performance of any of such Transition Services. Each
Recipient may retain at its own expense its own consultants and other
professional advisers.
1.3 Representatives. Each of the Corporation, New D&B, Cognizant,
IMS Health, ACNielsen and Gartner shall nominate a representative to act as its
primary contact person for the provision of all of the Transition Services
(collectively, the "Primary Coordinators"). The initial Primary Coordinators
shall be Frank Colarusso, Treasurer, for the Corporation, John Riley, Director
of Risk Management, for New D&B, Stuart Goldshein, Controller, for Cognizant,
Matthew Friedman, Assistant Treasurer, for IMS Health, John Forster for
ACNielsen and Andrea Tarbox for Gartner. Each party may treat an act of a
Primary Coordinator of another party as being authorized by such other party
without inquiring behind such act or ascertaining whether such Primary
Coordinator had authority to so act. The Provider and the relevant Recipient of
a Transition Service shall advise each other in writing of any change in the
Primary Coordinators for such Transition Service, setting forth the name of the
Primary Coordinator to be replaced and the name of the replacement, and
certifying that the replacement Primary Coordinator is authorized to act for
such party in all matters relating to this Agreement. Each of the Corporation,
New D&B, Cognizant, IMS Health, ACNielsen and Gartner agree that all
communications relating to the provision of the Transition Services shall be
directed to the Primary Coordinators.
1.4 Level of Transition Services. (a) The Provider shall perform the
Transition Services for which it is responsible hereunder following commonly
accepted standards of care in the industry and exercising the same degree of
care as it exercises in performing the same or similar services for its own
account as of the date of this Agreement, with priority equal to that provided
to its own businesses or those of any of its Affiliates, Subsidiaries or
divisions. Nothing in this Agreement shall require the Provider to favor the
businesses of any Recipient over its own businesses or those of any of its
Affiliates, Subsidiaries or divisions.
(b) The Provider shall not be required to provide any Recipient of
such Transition Services with extraordinary levels of Transition Services,
special studies, training, or the like or the advantage of systems, equipment,
facilities, training, or improvements procured, obtained or made by the
Provider.
(c) In addition to being subject to the terms and conditions of this
Agreement for the provision of the Transition Services, each Recipient agrees
that the Transition Services provided by third parties shall be subject to the
terms and conditions of any agreements between the Provider and such third
parties. The Provider shall consult with the relevant Recipient concerning the
terms and conditions of any such agreements to be entered into, or proposed to
be entered into, with third parties after the date hereof.
1.5 Limitation of Liability. In the absence of gross negligence or
willful
<PAGE> 3
3
misconduct on the part of the Provider, and whether or not the Provider is
negligent, such Provider shall not be liable for any claims, liabilities,
damages, losses, costs, expenses (including, but not limited to, settlements,
judgments, court costs and reasonable attorneys' fees), fines and penalties,
arising out of any actual or alleged injury, loss or damage of any nature
whatsoever in providing or failing to provide Transition Services for which it
is responsible hereunder to the Recipient of such Transition Services.
Notwithstanding anything to the contrary contained herein, in the event the
Provider commits an error with respect to or incorrectly performs or fails to
perform any Transition Service, at the relevant Recipient's request, the
Provider shall use reasonable efforts and good faith to correct such error,
re-perform or perform such Transition Service at no additional cost to such
Recipient; provided, that the Provider shall have no obligation to recreate any
lost or destroyed data to the extent the same cannot be cured by the
re-performance of the Transition Service in question.
1.6 Force Majeure. Any failure or omission by a party in the
performance of any obligation under this Agreement shall not be deemed a breach
of this Agreement or create any liability, if the same arises from any cause or
causes beyond the control of such party, including, but not limited to, the
following, which, for purposes of this Agreement shall be regarded as beyond the
control of each of the parties hereto: acts of God, fire, storm, flood,
earthquake, governmental regulation or direction, acts of the public enemy, war,
rebellion, insurrection, riot, invasion, strike or lockout; provided, however,
that such party shall resume the performance whenever such causes are removed.
Notwithstanding the foregoing, if such party cannot perform under this Agreement
for a period of forty-five (45) days due to such cause or causes, the affected
party may terminate the Agreement with the defaulting party by providing written
notice thereto.
1.7 Modification of Procedures. The Provider may make changes from
time to time in its standards and procedures for performing the Transition
Services for which it is responsible hereunder. Notwithstanding the foregoing
sentence, unless required by law, the Provider shall not implement any
substantial changes affecting a Recipient of the relevant Transition Services
unless:
(a) the Provider has furnished such Recipient notice (which shall be
the same notice the Provider shall provide its own businesses) thereof;
(b) the Provider changes such procedures for its own businesses at
the same time; and
(c) the Provider gives such Recipient a reasonable period of time
for such Recipient (i) to adapt its operations to accommodate such changes or
(ii) to reject the proposed changes. In the event such Recipient fails to accept
or reject a proposed change on or before a date specified in such notice of
change, such Recipient shall be deemed to have accepted such change. In the
event such Recipient rejects a proposed change but does not terminate this
Agreement, such Recipient agrees to pay any charges resulting from the
Provider's need to maintain different versions of the same systems, procedures,
technologies, or services or resulting from requirements of third party vendors
or suppliers.
<PAGE> 4
4
1.8 No Obligation to Continue to Use Services. No Recipient shall
have any obligation to continue to use the Transition Services and may terminate
the Transition Services that the Provider is providing to such Recipient by
giving the Provider 180 days notice thereof.
1.9 Provider Access. To the extent reasonably required for personnel
of the Provider to perform the Transition Services for which the Provider is
responsible hereunder, the Recipient of such Transition Services shall provide
personnel of the Provider with access to its equipment, office space, plants,
telecommunications and computer equipment and systems, and any other areas and
equipment.
1.10 Performance Reviews. The Primary Coordinators for each
Recipient shall meet during the fourth quarter of each calendar year with the
Primary Coordinator for the Provider for the purpose of reviewing the
performance of the Provider's Risk Management staff. Any disputes relating to
the quality of such performance shall be brought to the attention of the
respective Chief Financial Officers (or person holding an equivalent title) of
the Provider and the Recipients.
ARTICLE II
COMPENSATION
2.1 Consideration. As consideration for the Transition Services,
each Recipient of Transition Services shall pay to the Provider a portion of the
costs and expenses incurred by the Provider relating to the Risk Management
staff as follows: each Recipient shall pay (i) a base charge of $50,000 per year
plus (ii) a proportionate share of any additional costs and expenses (i.e., not
covered by the total base charge) based on such Recipient's proportion of total
revenue as a percentage of the aggregate total revenue of all parties to this
Agreement. For purposes of calculating any additional amount payable pursuant to
clause (ii) of the preceding sentence, a party's revenue shall be that set forth
on its audited financial statements for the most recent fiscal year-end. Such
costs and expenses shall be calculated in accordance with generally accepted
accounting principles applied consistently and billed in twelve monthly
installments. Notwithstanding the foregoing, however, any services provided by
the Provider's Risk Management staff to the Provider or the Recipients that are
not in the ordinary course (all such services being "extraordinary services")
shall be borne by the company or companies for whom such extraordinary service
was provided. No extraordinary service shall be provided without the specific
approval of the company to be charged. The costs and expenses to be borne by
each Recipient will be in accordance with the annual Risk Management budget to
be provided by the Primary Coordinator for the Provider during the preceding
calendar year by May 1 of each year. The Risk Management budget may increase
each year in an amount equal to 5% over the prior year's budget; increases in
excess of 5% must be approved by the respective Primary Coordinators for each
Recipient.
<PAGE> 5
5
2.2 Invoices. After the end of each month, the Provider, together
with its Affiliates or Subsidiaries providing Transition Services will submit
one invoice to the Recipient of such Transition Services for all Transition
Services provided to such Recipient and its Subsidiaries by the Provider during
such month. Such monthly invoices shall be issued no later than the fifteenth
day of each succeeding month. Each invoice shall include a summary list of the
previously agreed upon Transition Service for which there are fixed dollar fees,
together with documentation supporting each of the invoiced amounts that are not
covered by the fixed fee agreements. The total amount set forth on such summary
list and such supporting detail shall equal the invoice total, and will be
provided under separate cover apart from the invoice. All invoices shall be sent
to the attention of the Primary Coordinator of the applicable Recipient at the
address set forth in Section 6.5 hereof or to such other address as such
Recipient shall have specified by notice in writing to the Provider.
2.3 Payment of Invoices. (a) Payment of all invoices in respect of
Transition Services shall be made by check or electronic funds transmission in
U.S. Dollars, without any offset or deduction of any nature whatsoever, within
thirty (30) days of the invoice date. All payments shall be made to the account
designated by the Provider to the relevant Recipient, with written confirmation
of payment sent by facsimile to the Primary Coordinator or other person
designated thereby.
(b) If any payment is not paid when due, the Provider shall have the
right, without any liability to any Recipient of Transition Services, or anyone
claiming by or through such Recipient, upon five days' notice, to cease
providing any or all of the Transition Services provided by the Provider to such
Recipient, which right may be exercised by the Provider in its sole and absolute
discretion.
ARTICLE III
CONFIDENTIALITY
3.1 Obligation. Each party and its Subsidiaries shall not use or
permit the use of (without the prior written consent of the other parties) and
shall keep, and shall cause its consultants and advisors to keep, confidential
all information concerning the other parties received pursuant to or in
connection with this Agreement. Additionally, any information which is
identified by a party as being "highly sensitive" (in connection with a
contemplated acquisition or otherwise) shall not be disclosed outside of the
Provider's Risk Management staff.
3.2 Care and Inadvertent Disclosure. With respect to any
confidential information, each party agrees as follows:
(a) it shall use the same degree of care in safeguarding said
information as it uses to safeguard its own information which must be held
in confidence; and
(b) upon the discovery of any inadvertent disclosure or
unauthorized
<PAGE> 6
6
use of said information, or upon obtaining notice of such a disclosure or
use from any other party, it shall take all necessary actions to prevent
any further inadvertent disclosure or unauthorized use, and, subject to
the provisions of Section 1.5 above, each such other party shall be
entitled to pursue any other remedy which may be available to it.
ARTICLE IV
TERM AND TERMINATION
4.1 Term. This Agreement shall become effective on June 30, 1998 and
shall remain in force for a period of three years (or in the case of ACNielsen,
IMS Health and Gartner until November 1, 1999). After such initial period, this
Agreement shall automatically be renewed for successive one-year periods as to
each party unless such party provides at least 180-days notice to the other
parties of its intention not to renew; provided that this Agreement may be
terminated at such other times as are set forth in Sections 1.6, 1.8 and 4.3.
4.2 Reserved.
4.3 Default. If any party (hereafter called the "Defaulting Party")
shall fail to perform or default in the performance of any of its obligations
under this Agreement (other than a payment default), the party entitled to the
benefit of such performance (hereinafter referred to as a "Non-Defaulting
Party") may give written notice to the Defaulting Party specifying the nature of
such failure or default and stating that the Non-Defaulting Party intends to
terminate this Agreement with respect to the Defaulting Party if such failure or
default is not cured within fifteen days of such written notice. If any failure
or default so specified is not cured within such fifteen day period, the
Non-Defaulting Party may elect to immediately terminate this Agreement with
respect to the Defaulting Party; provided, however, that if the failure or
default relates to a dispute contested in good faith by the Defaulting Party,
the Non-Defaulting Party may not terminate this Agreement pending the resolution
of such dispute in accordance with Article V hereof. Such termination shall be
effective upon giving a written notice of termination from the Non-Defaulting
Party to the Defaulting Party and shall be without prejudice to any other remedy
which may be available to the Non-Defaulting Party against the Defaulting Party.
4.4 Termination of Obligations. Each Recipient specifically agrees
and acknowledges that all obligations of the Provider to provide the Transition
Services shall immediately cease, with respect to such Recipient, upon the
termination of this Agreement as to such Recipient. Upon the cessation of the
Provider's obligation to provide any Transition Service to a Recipient, such
Recipient shall immediately cease using, directly or indirectly, the Transition
Services (including, without limitation, any and all software of the Provider or
third party software provided through the Provider, telecommunications services
or equipment, or computer systems or equipment).
<PAGE> 7
7
4.5 Survival of Certain Obligations. Without prejudice to the
survival of the other agreements of the parties, Sections 1.5, 2.1 (with respect
to services provided prior to the effective time of the termination), 3.1, 3.2,
4.4, 4.5, 5.1, 6.10, 6.13 and 6.14 shall survive any termination of this
Agreement.
ARTICLE V
DISPUTE RESOLUTION
5.1 Dispute Resolution. Any disputes arising out of or in connection
with this Agreement shall be settled in accordance with the dispute resolution
mechanisms set forth in Article VI of the 1996 Distribution Agreement, with each
of the parties hereto being deemed a party to that agreement for this purpose.
ARTICLE VI
MISCELLANEOUS
6.1 Complete Agreement; Construction. This Agreement shall
constitute the entire agreement between the parties with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter.
6.2 Other Agreements. This Agreement is not intended to address, and
should not be interpreted to address, the matters specifically and expressly
covered by other agreements between or among the parties.
6.3 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one or more such counterparts has been signed by
each of the parties and delivered to the other parties.
6.4 Notices. All notices and other communications hereunder shall be
in writing and hand delivered or mailed by registered or certified mail (return
receipt requested) or sent by any means of electronic message transmission with
delivery confirmed (by voice or otherwise) to the parties at the following
addresses (or at such other addresses for a party as shall be specified by like
notice) and will be deemed given on the date on which such notice is received:
To the Corporation:
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, New York 10577
Telecopy: (914) 933-6899
<PAGE> 8
8
Attn: Treasurer
With a copy to:
R.H. Donnelley Corporation
One Manhattanville Road
Purchase, New York 10577
Telecopy: (914) 933-6899
Attn: General Counsel
To New D&B:
The Dun & Bradstreet Corporation
220 East 42 Street
New York, New York 10017
Telecopy: (212) 883-3403
Attn: Director of Risk Management
With a copy to:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, New Jersey 07974
Telecopy: (908) 665-5803
Attn: Chief Legal Counsel
To Cognizant:
Nielsen Media Research, Inc.
299 Park Avenue
New York, New York 10171
Telecopy: (212) 708-7504
Attn: Controller
With a copy to:
Nielsen Media Research, Inc.
299 Park Avenue
New York, New York 10171
Telecopy: 212-708-6927
Attn: Chief Legal Officer
To IMS Health:
IMS Health Incorporated
<PAGE> 9
9
200 Nyala Farms
Westport, Connecticut 06880
Telecopy: (203) 222-4201
Attn: Treasurer
With a copy to:
IMS Health Incorporated
200 Nyala Farms
Westport, Connecticut 06880
Telecopy: (203) 222-4201
Attn: General Counsel
To ACNielsen:
ACNielsen Corporation
177 Broad Street
Stamford, Connecticut 06901
Telecopy: (203) 961-3177
Attn: John Forster
With a copy to:
ACNielsen Corporation
177 Broad Street
Stamford, Connecticut 06901
Telecopy: (203) 961-3179
Attn: General Counsel
To Gartner:
Gartner Group, Inc.
P.O. Box 10212
56 Top Gallant Road
Stamford, Connecticut 06904
Telecopy: (203) 316-6525
Attn: Andrea Tarbox
With a copy to:
Gartner Group, Inc.
P.O. Box 10212
56 Top Gallant Road
Stamford, Connecticut 06904
Telecopy: (203) 316-6525
<PAGE> 10
10
Attn: General Counsel
6.5 Waivers. The failure of any party to require strict performance
by any other party of any provision in this Agreement will not waive or diminish
that party's right to demand strict performance thereafter of that or any other
provision hereof.
6.6 Amendments. This Agreement may not be modified or amended except
by an agreement in writing signed by each of the parties hereto.
6.7 Assignment. This Agreement may not be assigned by any party,
other than to an Affiliate of such party or pursuant to a corporate
reorganization or merger, without the consent of the other party. Any assignment
in contravention of this Section 6.7 shall be void.
6.8 Successors and Assigns. The provisions to this Agreement shall
be binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and permitted assigns.
6.9 Subsidiaries. Each of the parties hereto shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and
obligations set forth herein to be performed by any Subsidiary of such party or
by any entity that is contemplated to be a Subsidiary of such party on and after
the applicable Distribution Date.
6.10 Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and should not be deemed to confer upon third
parties any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.
6.11 Title and Headings. Titles and headings to sections herein are
inserted for the convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
6.12 Reserved.
6.13 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
6.14 Consent to Jurisdiction. Each of the parties irrevocably
submits to the exclusive jurisdiction of (a) the Supreme Court of the State of
New York, New York County, and (b) the United States District Court for the
Southern District of New York, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby.
Each of the parties agrees to commence any action, suit or proceeding relating
hereto either in the United States District Court for the Southern District of
New York or if such suit, action or other proceeding may not be brought in such
court for jurisdictional
<PAGE> 11
11
reasons, in the Supreme Court of the State of New York, New York County. Each of
the parties further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set forth
above shall be effective service of process for any action, suit or proceeding
in New York with respect to any matters to which it has submitted to
jurisdiction in this Section 6.14. Each of the parties irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (i) the Supreme Court of the State of New York, New York County, or
(ii) the United States District Court for the Southern District of New York, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
6.15 Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions,
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
6.16 Laws and Government Regulations. Each Recipient shall be
responsible for (i) compliance with all laws and governmental regulations
affecting its businesses and (ii) any use such Recipient may make of the
Transition Services to assist it in complying with such laws and governmental
regulations. While the Provider shall not have any responsibility for the
compliance by the Recipient of such Transition Services with such laws and
regulations, the Provider agrees to use reasonable efforts to cause the
Transition Services to be provided by such party to be designed in such manner
that such Transition Services shall be able to assist the Recipient of such
Transition Services in complying with applicable legal and regulatory
responsibilities.
6.17 Relationship of Parties. Nothing in this Agreement shall be
deemed or construed by the parties or any third party as creating the
relationship of principal and agent, partnership or joint venture between the
parties, it being understood and agreed that no provision contained herein, and
no act of the parties, shall be deemed to create any relationship between the
parties other than the relationship of buyer and seller of services nor be
deemed to vest any rights, interests or claims in any third parties. The parties
do not intend to waive any privileges or rights to which they may be entitled.
6.18 Definitions. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the applicable
Distribution Agreement governing the relevant parties.
<PAGE> 12
12
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Transition Services Agreement to be executed the day and year first
above written.
THE DUN & BRADSTREET CORPORATION
By: /s/ Frank R. Noonan
___________________________
Name: Frank R. Noonan
Title: Senior Vice President
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Volney Taylor
___________________________
Name: Volney Taylor
Title: Chairman and
Chief Executive Officer
COGNIZANT CORPORATION
By: /s/ Kenneth S. Siegel
___________________________
Name: Kenneth S. Siegel
Title: Senior Vice President,
General Counsel and Secretary
IMS HEALTH INCORPORATED
By: /s/ Kenneth S. Siegel
___________________________
Name: Kenneth S. Siegel
Title: Senior Vice President,
General Counsel and Secretary
ACNIELSEN CORPORATION
By: /s/ John A. Forster
___________________________
Name: John A. Forster
Title: Vice President and Treasurer
GARTNER GROUP, INC.
<PAGE> 13
13
By: /s/ George C. Roy Jr.
___________________________
Name: George C. Roy Jr.
Title: Senior VP - Finance
<PAGE> 1
Exhibit 10.9
The New Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, New Jersey 07974
June 29, 1998
Kenneth Siegel, Esq.
Cognizant Corporation
200 Nyala Farms
Westport, CT 06880
Earl Doppelt, Esq.
ACNielsen Corporation
177 Broad Street
Stamford, CT 06901
Dear Sirs:
Reference is made to the Distribution Agreement (the "1996
Distribution Agreement"), dated as of October 28, 1996, among The Dun &
Bradstreet Corporation ("D&B"), Cognizant Corporation ("Cognizant") and
ACNielsen Corporation ("ACNielsen"). D&B has announced its intention to separate
into two separate companies through a distribution (the "New D&B Distribution")
to its stockholders of all of the shares of common stock of its subsidiary The
New Dun & Bradstreet Corporation ("New D&B"). In Section 8.9(b) of the 1996
Distribution Agreement, D&B agreed not to make a distribution such as the New
D&B Distribution unless it caused the distributed entity to undertake to both
Cognizant and ACNielsen to be jointly and severally liable for all D&B
Liabilities (as defined in the 1996 Distribution Agreement). Therefore, in
accordance with Section 8.9(b) of the 1996 Distribution Agreement and intending
to be legally bound hereby, from and after the effective time of the New D&B
Distribution, New D&B undertakes to each of Cognizant and ACNielsen to be
jointly and severally liable with D&B for all D&B Liabilities under the 1996
Distribution Agreement.
Very truly yours,
THE NEW DUN & BRADSTREET CORPORATION
By: /s/ Nancy L. Henry
---------------------------------
Name: Nancy L. Henry
Title: Senior Vice President
& Chief Legal Counsel
<PAGE> 1
Exhibit 10.14
AMENDED AND RESTATED
AGREEMENT OF
LIMITED PARTNERSHIP
Of
D&B INVESTORS L.P.,
A Delaware Limited Partnership
By and Among
DUNS INVESTING VII CORPORATION
DUN & BRADSTREET, INC.
DUNS HOLDING, INC.
UTRECHT-AMERICA FINANCE CO.
AND
LEIDEN, INC.
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
THE PARTNERSHIP..............................1
SECTION 1.01. Formation...............................................1
SECTION 1.02. Name....................................................1
SECTION 1.03. Purpose.................................................1
SECTION 1.04. Principal Place of Business.............................2
SECTION 1.05. Term....................................................2
SECTION 1.06. Filings; Agent for Service of Process...................2
SECTION 1.07. Title to Partnership Property...........................2
SECTION 1.08. Payments of Individual Obligations......................3
SECTION 1.09. Independent Activities; Transactions with Affiliates....3
SECTION 1.10. Definitions.............................................4
SECTION 1.11. Other Terms............................................19
ARTICLE II
PARTNERS' CAPITAL CONTRIBUTIONS.....................20
SECTION 2.01. General Partner........................................20
SECTION 2.02. Limited Partners.......................................20
SECTION 2.03. Additional Capital Contributions.......................21
SECTION 2.04. Other Matters..........................................22
ARTICLE III
ALLOCATIONS...............................23
SECTION 3.01. Profits................................................23
SECTION 3.02. Losses.................................................24
SECTION 3.03. Special Loss Allocation................................24
SECTION 3.04. Other Special Allocations..............................25
SECTION 3.05. Curative Allocations...................................26
SECTION 3.06. Loss Limitation........................................26
SECTION 3.07. Other Allocation Rules.................................26
SECTION 3.08. Tax Allocations: Code Section 704(c)..................27
i
<PAGE> 3
Page
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ARTICLE IV
DISTRIBUTIONS..............................28
SECTION 4.01. Cash Flow..............................................28
SECTION 4.02. Amounts Withheld.......................................28
ARTICLE V
MANAGEMENT................................28
SECTION 5.01. Authority of the General Partner.......................28
SECTION 5.02. Right to Rely on the General Partner...................28
SECTION 5.03. Restrictions on Authority of the General Partner.......29
SECTION 5.04. Duties and Obligations of the General Partner..........31
SECTION 5.05. Indemnification of the Partners........................32
SECTION 5.06. Compensation and Expenses..............................34
ARTICLE VI
ROLE OF LIMITED PARTNERS.........................35
SECTION 6.01. Rights or Powers.......................................35
SECTION 6.02. Voting Rights..........................................35
SECTION 6.03. Procedure for Consent..................................35
ARTICLE VII
REPRESENTATIONS AND WARRANTIES......................35
SECTION 7.01. In General.............................................35
SECTION 7.02. Representations and Warranties.........................35
ARTICLE VIII
ACCOUNTING; BOOKS AND RECORDS......................38
SECTION 8.01. Accounting; Books and Records..........................38
SECTION 8.02. Reports................................................39
SECTION 8.03. Tax Matters............................................41
SECTION 8.04. Proprietary Information................................42
ARTICLE IX
AMENDMENTS; MEETINGS...........................42
SECTION 9.01. Amendments.............................................42
ii
<PAGE> 4
Page
----
SECTION 9.02. Meetings of the Partners...............................42
SECTION 9.03. Unanimous Consent......................................43
ARTICLE X
TRANSFERS OF INTERESTS..........................43
SECTION 10.01. Restriction on Transfers..............................43
SECTION 10.02. Permitted Transfers...................................43
SECTION 10.03. Conditions to Permitted Transfers.....................44
SECTION 10.04. Prohibited Transfers..................................45
SECTION 10.05. Rights of Unadmitted Assignees........................45
SECTION 10.06. Admission as Substituted Partners.....................46
SECTION 10.07. Distributions with Respect to Transferred Interests...46
SECTION 10.08. Retirement of Class A Limited Partners' Interests
in the Partnership; Determination of Mark-to-Market
Values and Gross Asset Values.......................47
ARTICLE XI
GENERAL PARTNER.............................49
SECTION 11.01. Covenant Not to Withdraw, Transfer, or Dissolve.......49
SECTION 11.02. Termination of Status as General Partner..............49
SECTION 11.03. Election of New General Partners......................50
ARTICLE XII
DISSOLUTION AND WINDING UP........................50
SECTION 12.01. Liquidating Events....................................50
SECTION 12.02. Winding Up............................................51
SECTION 12.03. Restoration of Deficit Capital Accounts; Compliance
With Timing Requirements of Regulations.............52
SECTION 12.04. Deemed Distribution and Recontribution................53
SECTION 12.05. Rights of Partners....................................54
SECTION 12.06. Notice of Dissolution.................................54
SECTION 12.07. Liquidation Guaranteed Payment........................54
SECTION 12.08. Character of Liquidating Distributions................54
SECTION 12.09. The Liquidator........................................54
SECTION 12.10. Form of Liquidating Distributions.....................55
iii
<PAGE> 5
Page
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ARTICLE XIII
POWER OF ATTORNEY............................55
SECTION 13.01. General Partner as Attorney-In-Fact...................55
SECTION 13.02. Nature of Special Power...............................56
ARTICLE XIV
NOTICE EVENTS..............................56
SECTION 14.01. Notice Events.........................................56
SECTION 14.02. Liquidation Notice....................................57
SECTION 14.03. Electing Partners' Purchase Option....................57
ARTICLE XV
MISCELLANEOUS..............................58
SECTION 15.01. Notices...............................................58
SECTION 15.02. Binding Effect........................................59
SECTION 15.03. Construction..........................................59
SECTION 15.04. Headings..............................................59
SECTION 15.05. Severability..........................................59
SECTION 15.06. Variation of Pronouns.................................59
SECTION 15.07. Governing Law.........................................60
SECTION 15.08. Waiver of Action for Partition........................60
SECTION 15.09. Waiver of Jury Trial..................................60
SECTION 15.10. Consent to Jurisdiction...............................60
SECTION 15.11. Counterpart Execution.................................60
SECTION 15.12. Sole and Absolute Discretion..........................60
SECTION 15.13. Specific Performance..................................60
EXHIBITS
EXHIBIT A - Contribution Agreement
EXHIBIT B - Form Demand Note and Guaranty of Payment
EXHIBIT C - Form Confidentiality Certificate
EXHIBIT D-1 - Form Transferor Certificate
EXHIBIT D-2 - Form Transferee Certificate
iv
<PAGE> 6
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
D&B INVESTORS L.P.,
A DELAWARE LIMITED PARTNERSHIP
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is entered into
and shall be effective as of the 1st day of April, 1997, by and among Duns
Investing VII Corporation, a Delaware corporation ("Investing"), as the General
Partner, Utrecht-America Finance Co., a Delaware corporation ("Utrecht"), and
Leiden, Inc., a Delaware corporation ("Leiden"), as the Class A Limited
Partners, and Dun & Bradstreet, Inc., a Delaware corporation ("DBI"), and Duns
Holding, Inc., a Delaware corporation ("Holding"), as the Class B Limited
Partners.
ARTICLE I
THE PARTNERSHIP
SECTION 1.01. Formation. The Partnership was formed on October 14, 1993.
The Partners hereby agree to continue the Partnership as a limited partnership
pursuant to the provisions of the Act and upon the terms and conditions set
forth in this Agreement. This Agreement completely amends, restates and
supersedes that certain Agreement of Limited Partnership of D&B Investors L.P.,
a Delaware limited partnership entered into on October 14, 1993 and amended to
date (the "Original Partnership Agreement"). Simultaneously with the execution
of this Agreement, DBI hereby withdraws as a general partner and is admitted as
a Class B Limited Partner, Investing hereby withdraws as a limited partner and
is admitted as the General Partner, Leiden is hereby admitted as a Class A
Limited Partner and Holding is hereby admitted as a Class B Limited Partner.
SECTION 1.02. Name. The name of the Partnership shall continue to be D&B
Investors L.P., a Delaware limited partnership, and all business of the
Partnership shall continue to be conducted in such name or, in the discretion of
the General Partner, under any other name; provided that, the General Partner
may change the name of the Partnership only upon ten (10) Business Days notice
to the Limited Partners.
SECTION 1.03. Purpose. The purpose of the Partnership is to engage in the
business of owning certain investments in Permitted Assets and to manage,
protect and conserve such investments in Permitted Assets and to make such
additional investments and engage in such additional business endeavors as are
permitted under this Agreement, and engage in activities related or incidental
thereto. The Partnership shall have the power to do any and all acts necessary,
appropriate, proper, advisable, incidental or convenient to or in furtherance of
the
<PAGE> 7
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purpose of the Partnership and shall have without limitation, any and all powers
that may be exercised on behalf of the Partnership by the General Partner
pursuant to Section 1.09(c) and Article V hereof.
SECTION 1.04. Principal Place of Business. The principal place of business
of the Partnership shall continue to be at 911 Washington Street, Suite 100,
Wilmington, Delaware 19801, Attention: Kenneth J. Kubacki. The General Partner
may change the principal place of business of the Partnership to any other place
within or without the State of Delaware upon ten (10) Business Days notice to
the Limited Partners. The registered office of the Partnership in the State of
Delaware is located at Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, New Castle County, Delaware 19801.
SECTION 1.05. Term. The term of the Partnership commenced on the date the
certificate of limited partnership described in Section 17-201 of the Act (the
"Certificate") was filed in the office of the Secretary of State of the State of
Delaware in accordance with the Act and shall continue until the winding up and
liquidation of the Partnership and its business is completed following a
Liquidating Event as provided in Article XII.
SECTION 1.06. Filings; Agent for Service of Process. (a) The General
Partner has caused the Certificate to be filed in the office of the Secretary of
State of the State of Delaware in accordance with the provisions of the Act. The
General Partner shall take any and all other actions including without
limitation the filing of amendments to the Certificate reasonably necessary to
perfect and maintain the status of the Partnership as a limited partnership
under the laws of the State of Delaware or any other states in which the
Partnership is engaged in business. The General Partner shall cause amendments
to the Certificate to be filed whenever required by the Act. Such amendments may
be executed by any General Partner and by each Person designated in the
amendment as a new General Partner.
(b) The registered agent for service of process on the Partnership in the
State of Delaware shall be Corporation Trust Company, Corporation Trust Center,
1209 Orange Street, Wilmington, New Castle County, Delaware 19801 or any
successor as appointed by the General Partner in accordance with the Act.
(c) Upon the dissolution and completion of the winding up and liquidation
of the Partnership, the General Partner (or, in the event there is no remaining
General Partner, any Person appointed pursuant to Section 12.09) shall promptly
execute and cause to be filed certificates of cancellation in accordance with
the Act and the laws of any other states or jurisdictions in which the General
Partner or such other appointed Person, as the case may be, deems such filing
necessary or advisable.
SECTION 1.07. Title to Partnership Property. All Partnership Property
shall be owned by the Partnership as an entity and no Partner shall have any
ownership interest in such property in its individual name or right, and each
Partner's interest in the Partnership shall be personal
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3
property for all purposes. The Partnership shall hold all of its property in the
name of the Partnership and not in the name of any Partner.
SECTION 1.08. Payments of Individual Obligations. The Partnership's credit
and assets shall be used solely for the benefit of the Partnership, and no asset
of the Partnership shall be Transferred or encumbered for or in payment of any
individual obligation of any Partner.
SECTION 1.09. Independent Activities; Transactions with Affiliates. (a)
The General Partner and any of its Affiliates shall be required to devote only
such time to the affairs of the Partnership as the General Partner determines in
its sole discretion may be necessary to manage and operate the Partnership, and
each such Person, shall be free to serve any other Person or enterprise in any
capacity that it may deem appropriate in its discretion.
(b) To the extent permitted by applicable law and except as otherwise
provided in this Agreement, each Partner acknowledges that the other Partners
(each acting on its own behalf) and their Affiliates are free to engage or
invest in an unlimited number of activities or businesses, any one or more of
which may be related to the activities or businesses of the Partnership, without
having or incurring any obligation to offer any interest in such activities or
businesses to the Partnership or any Partner, and neither this Agreement nor any
activity undertaken pursuant to this Agreement shall prevent any Partner or its
Affiliates from engaging in such activities, or require any Partner to permit
the Partnership or any Partner or its Affiliates to participate in any such
activities, and as a material part of the consideration for the execution of
this Agreement by each Partner, each Partner hereby waives, relinquishes, and
renounces any such right or claim of participation. The Partners acknowledge
that certain conflicts of interest may thus arise and hereby agree that the
specific rights with respect to the Partners' and their Affiliates' freedom of
action provided in this Section 1.09(b) are sufficient to protect their
respective interests in relation to such possible conflicts and are to be in
lieu of all other possible limitations which might otherwise be implied in fact,
in law or in equity.
(c) To the extent permitted by applicable law and except as otherwise
provided in this Agreement, the General Partner, when acting on behalf of the
Partnership, is hereby authorized to purchase property from, sell property to or
otherwise deal with any Partner, acting on its own behalf, or any Affiliate of
any Partner; provided that any such purchase, sale or other transaction shall be
in the ordinary course of the Partnership's business and shall be made on terms
and conditions which are no less favorable to the Partnership than if the sale,
purchase or other transaction had been made with an independent third party on
prevailing market terms. The Partners agree that the Contribution Agreement, D&B
Loans, D&B Guaranteed Loans, and the Lease Agreement satisfy this independent
third-party standard and the Partners hereby authorize the General Partner to
cause the Partnership to enter into the documents referenced in this Section
1.09(c).
(d) Each Partner and any Affiliate thereof may also borrow money from, and
transact other business with the Partnership and, subject to other applicable
law, has the same rights and
<PAGE> 9
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obligations with respect thereto as a Person who is not a Partner. The existence
of these relationships and acting in such capacities will not result in any
Limited Partner being deemed to be participating in the control of the business
of the Partnership or otherwise affect the limited liability of any Limited
Partner.
SECTION 1.10. Definitions. Capitalized words and phrases used in this
Agreement have the following meanings:
"Act" means the Delaware Revised Uniform Limited Partnership Act, as
set forth in Del. Code Ann. tit. 6, Sections 17-101 to 17-1111, as
amended, modified or supplemented from time to time (or any corresponding
provisions of succeeding law).
"Additional Capital Contributions" means, with respect to each
Partner, the Capital Contributions made by such Partner (or its
predecessors in interest) pursuant to Section 2.03.
"Adjusted Capital Account Deficit" means, with respect to each
Limited Partner, the deficit balance, if any, in such Limited Partner's
Capital Account as of the end of the relevant Allocation Year, after
giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such
Limited Partner is deemed to be obligated to restore pursuant to the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5); and
(ii) Debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account Deficit is intended
to comply with the provisions of Section 1.704-1(b)(2)(ii)(d) of the
Regulations and shall be interpreted consistently therewith.
"Affiliate" means, with respect to any Person, (i) any Person
directly or indirectly controlling, controlled by or under common control
with such Person, (ii) any officer, director or general partner of such
Person, or (iii) any Person who is an officer, director, general partner
or trustee of any Person described in clauses (i) or (ii) of this
sentence. For purposes of this definition, the term "control," (including,
with correlative meanings, the terms "controlling," "controlled by" or
"under common control with") means the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of voting securities, by
contract or otherwise.
<PAGE> 10
5
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as amended, modified or supplemented from time to time. All
references in this Agreement to "Section" or "Sections" are to a section
or sections of this Agreement unless otherwise specified.
"Allocation Year" means (i) the period commencing on the Closing
Date and ending on December 31, 1997, (ii) any subsequent period
commencing on January 1 and ending on the following December 31, or (iii)
any portion of the period described in clause (ii) for which the
Partnership is required to allocate Profits, Losses and other items of
Partnership income, gain, loss or deduction pursuant to Article III.
"Alternative Appraiser" means any of the "Big Six" accounting firms
(including appraisal divisions thereof or successors thereto), Valuation
Research Corp., Arthur D. Little, Inc., American Appraisal Valuation
Research, American Appraisal Associates Inc., Valuation Counselors Inc.,
Software Productivity Research, Stephen C. Gerard (including any firm with
which he is associated), or with the consent of all Partners, any firm
recommended by any of the foregoing Alternative Appraisers.
"Applicable Margin" means, as of the determination date for LIBOR
with respect to any Loan, the Applicable Rate for a Eurocurrency Revolving
Loan on such date, in each case, as defined in, and determined in
accordance with the provisions of, the D&B Credit Facility. .
"Bankruptcy" means, with respect to any Person, a "Voluntary
Bankruptcy" or an "Involuntary Bankruptcy." A "Voluntary Bankruptcy"
means, with respect to any Person, (a) (i) the inability of such Person
generally to pay its debts as such debts become due, (ii) the failure of
such Person generally to pay its debts as such debts become due, or (iii)
an admission in writing by such Person of its inability to pay its debts
generally or a general assignment by such Person for the benefit of
creditors, (b) the filing of any petition or answer by such Person seeking
to adjudicate it a bankrupt or insolvent, or seeking for itself any
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of such Person or its debts under any
law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking, consenting to, or acquiescing in the entry of an
order for relief or the appointment of a receiver, trustee, custodian or
other similar official for such Person or for any substantial part of its
property, or (c) corporate action taken by such Person to authorize any of
the actions set forth above. An "Involuntary Bankruptcy" means, with
respect to any Person, without the consent or acquiescence of such Person,
the entering of an order for relief or approving a petition for relief or
reorganization or any other petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or other
similar relief under any present or future bankruptcy, insolvency or
similar statute, law or regulation, or the filing of any such petition
against such Person which petition shall not be dismissed within sixty
(60) days, or, without the consent or acquiescence of such Person, the
entering of an order appointing a trustee, custodian, receiver or
liquidator of
<PAGE> 11
6
such Person or of all or any substantial part of the property of such
Person which order shall not be dismissed within sixty (60) days. It is
the intent of the Partners that these definitions supersede those set
forth in Section 17-402(d)(4) of the Act.
"Business Day" means any day except Saturday or Sunday or any other
day on which commercial banks are required or authorized by law to close
in New York City or on which dealings in deposits are not carried on in
the London interbank market.
"Capital Account" means, with respect to any Partner, the Capital
Account maintained for such Partner in accordance with the following
provisions:
(i) To each Partner's Capital Account there shall be credited
such Partner's Capital Contributions, such Partner's distributive
share of Profits and any items in the nature of income or gain which
are specially allocated pursuant to Sections 3.03, 3.04 or 3.05.
(ii) To each Partner's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any Partnership
Property distributed to such Partner pursuant to any provision of
this Agreement, such Partner's distributive share of Losses and any
items in the nature of expenses or losses which are specially
allocated pursuant to Sections 3.03, 3.04 or 3.05.
(iii) In the event all or a portion of an Interest in the
Partnership is Transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of
the transferor to the extent it relates to the Transferred Interest.
The provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Section 1.704-1(b) of the
Regulations, and they shall be interpreted and applied in a manner
consistent with such Regulations.
"Capital Contributions" means, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any property (other
than money) contributed to the Partnership by such Partner (or its
predecessors in interest) with respect to the Interest in the Partnership
held by such Partner.
"Cash Available for Distribution" for any Fiscal Quarter means the
gross cash proceeds of the Partnership less the portion thereof used to
pay or establish reasonable reserves for all Partnership expenses
(including, without limitation, taxes), all as determined by the General
Partner. "Cash Available for Distribution" will not be reduced by
depreciation, depletion, amortization, cost recovery deduction, or similar
allowances, and will be increased by any reductions of reserves previously
established pursuant to the first sentence of this definition.
<PAGE> 12
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"Cash Equivalents" shall mean cash and any of the following: (i)
readily marketable direct obligations of the Government of the United
States or any agency or instrumentality thereof or obligations
unconditionally guaranteed by the full faith and credit of the Government
of the United States, or (ii) insured certificates of deposit of or time
or demand deposits with (A) any commercial bank that is a member of the
Federal Reserve System, the parent of which issues commercial paper rated
at least P-1 (or the equivalent grade) by Moody's or A-1 (or the then
equivalent grade) by S&P, is organized under the laws of the United States
or any State thereof, and the long term unsecured debt of which is rated
A-2 or better by Moody's and A or better by S&P or (B) any commercial bank
organized under the laws of any OECD member country (as of the effective
date of this Agreement) which is not subject to currency controls and the
long term unsecured debt of which is rated A-2 or better by Moody's and A
or better by S&P; provided, however, that all Partnership Property
described in this definition other than cash shall have a maturity of not
longer than ninety (90) days.
"Certificate" has the meaning set forth in Section 1.05.
"Class A Limited Partner" means any Person who (i) is referred to as
such in the introductory statement of this Agreement or who has become a
substituted Class A Limited Partner pursuant to the terms of this
Agreement, and (ii) has not ceased to be a Class A Limited Partner.
"Class B Limited Partner" means any Person who (i) is referred to as
such in the introductory statement of this Agreement or who has become a
substituted Class B Limited Partner pursuant to the terms of this
Agreement, and (ii) has not ceased to be a Class B Limited Partner.
"Closing Date" means April 1, 1997.
"Closing Date Capital Account" means, with respect to each Partner,
the Capital Account balance stated for such Partner in Section 2.01 or
2.02 as the case may be.
"Code" means the Internal Revenue Code of 1986, as amended, modified
or supplemented from time to time, or any successor legislation.
"Computer Equipment" has the meaning set forth in paragraph (vii) of
the definition of "Permitted Assets."
"Contribution Agreement" means the Contribution Agreement between
Holding on the one hand, and the Partnership on the other hand, attached
hereto as Exhibit A.
"D&B" means The Dun & Bradstreet Corporation, a Delaware
corporation.
<PAGE> 13
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"D&B Credit Facility" means that certain $1,000,000,000 Credit
Agreement, dated as of August 30, 1996 among D&B, the Borrowing
Subsidiaries party thereto, the Lenders party thereto, The Chase Manhattan
Bank, as Administrative Agent, Citibank, N.A., as Syndication Agent, and
Morgan Guaranty Trust Company of New York, as Documentation Agent, as it
may be amended, modified, supplemented, substituted or refinanced from
time to time.
"D&B Event" has the meaning set forth in the D&B Guaranty of even
date herewith given by D&B in favor of the Class A Limited Partners.
"D&B Guaranteed Loan" means a Loan made by the Partnership or a
Partnership Subsidiary to an Affiliate of D&B in each case guaranteed by
D&B.
"D&B Loan" means a Loan made by the Partnership or a Partnership
Subsidiary to D&B.
"D&B Partners" means Investing, DBI and Holding and any other
Affiliate of D&B which may from time to time own an Interest hereunder.
"Demand Note" means any promissory note evidencing a Loan in the
form attached hereto as Exhibit B.
"Depreciation" means, for each Allocation Year, an amount equal to
the depreciation, amortization, or other cost recovery deduction allowable
for federal income tax purposes with respect to an asset for such
Allocation Year, except that (x) with respect to any asset whose Gross
Value differs from its adjusted tax basis for United States federal income
tax purposes and which difference is being eliminated by use of the
"remedial method" defined by ss. 1.704-3(d) of the Regulations,
Depreciation for such Allocation Year shall be the amount of book basis
recovered for such Allocation Year under the rules prescribed by ss.
1.704-3(d)(2) of the Regulations; and (y) with respect to any other asset
whose Gross Asset Value differs from its adjusted basis for federal income
tax purposes at the beginning of such Allocation Year, Depreciation shall
be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization, or other cost
recovery deduction for such Allocation Year bears to such beginning
adjusted tax basis; provided, however, that if the adjusted basis for
federal income tax purposes of an asset at the beginning of such
Allocation Year is zero, Depreciation shall be determined with reference
to such beginning Gross Asset Value using any reasonable method selected
by the General Partner.
"Early Liquidation Date" has the meaning set forth in the definition
of "Early Liquidation Premium."
<PAGE> 14
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"Early Liquidation Premium" means, with respect to each Class A
Limited Partner, an amount determined for such Partner as of any date
occurring prior to the fourth anniversary of the Closing Date on which (w)
the Partnership is liquidated pursuant to Article XII, (x) such Partner's
Interest is retired in whole or in part pursuant to Section 10.08 or (y)
the Interest of such Class A Limited Partner is purchased pursuant to
Section 14.03 (the "Early Liquidation Date"), equal to the excess, if any,
of (i) the present value of the deemed quarterly distributions to be made
to such Class A Limited Partner on the last business day of each Fiscal
Quarter equal to 7.47% of such Class A Limited Partner's Unrecovered
Capital as of the Early Liquidation Date during the period beginning on
the Early Liquidation Date and ending on such fourth anniversary, minus
(ii) the present value of a series of amounts defined by the product of
(A) such Class A Limited Partner's Unrecovered Capital as of the Early
Liquidation Date multiplied times (B) a percentage that will be defined by
the sum of (1) the sum of (a) the bid side of the Treasury yield plus (b)
the bid side of the interbank swap spread, in each case best approximating
the period between the Early Liquidation Date and ending on such fourth
anniversary, plus (2) 50 basis points, the present value determined under
subparagraph (i) and the present value determined under subparagraph (ii)
each to be calculated using the sum of (X) the bid side of the Treasury
yield, plus (Y) the bid side of the interbank swap spread, in each case
best approximating the period between the Early Liquidation Date and
ending on such fourth anniversary as the discount rate.
"Electing Partners" has the meaning set forth in Section 14.03(a).
"Election Date" has the meaning set forth in Section 14.03(a).
"Election Notice" has the meaning set forth in Section 14.03(a).
"Expenses" means any and all judgments, damages or penalties with
respect to, or amounts paid in settlement of, claims (including, but not
limited to negligence, strict or absolute liability, liability in tort and
liabilities arising out of violation of laws or regulatory requirements of
any kind), actions, or suits; and any and all taxes (including, without
limitation, taxes on any indemnification payments and including interest,
additions to tax and penalties), liabilities, obligations, costs, expenses
and disbursements (including, without limitation, reasonable legal fees
and expenses).
"Fiscal Quarter" means (i) the period commencing on the Closing Date
and ending on June 30, 1997, and (ii) any subsequent three-month period
commencing on each of January 1, April 1, July 1 and October 1 and ending
on the next of March 31, June 30, September 30 and December 31; provided
that the last fiscal quarter shall end on the date on which all
Partnership Property is distributed pursuant to Section 12.02 and the
Certificate has been canceled pursuant to the Act.
<PAGE> 15
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"Fiscal Year" means (i) the period commencing on the Closing Date
and ending on December 31, 1997, and (ii) any subsequent period commencing
on January 1 and ending on the earlier to occur of (A) the following
December 31, or (B) the date on which all Partnership Property is
distributed pursuant to Section 12.02 and the Certificate has been
canceled pursuant to the Act.
"Form Confidentiality Agreement" has the meaning set forth in
Section 10.03(a).
"Form Transferee Certificate" has the meaning set forth in Section
10.03(f).
"Form Transferor Certificate" has the meaning set forth in Section
10.03(f).
"GAAP" means United States generally accepted accounting principles
as in effect from time to time, consistently applied.
"General Partner" means any Person who (i) is referred to as such in
the introductory statement of this Agreement or has become a General
Partner pursuant to the terms of this Agreement, and (ii) has not ceased
to be a General Partner pursuant to the terms of this Agreement.
"Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the gross value of such asset
as determined pursuant to Section 2.03(b); provided that the initial
Gross Asset Values of the assets contributed to the Partnership
pursuant to Section 2.02 shall be as set forth in such Section;
(ii) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross values as determined in
accordance with Section 10.08(b)(i) in connection with the following
events: (A) the acquisition of an additional interest in the
Partnership by any Partner in exchange for more than a de minimis
Capital Contribution; (B) the distribution by the Partnership to a
Partner of more than a de minimis amount of Partnership Property as
consideration for an interest in the Partnership; and (C) the
liquidation of the Partnership within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g);
(iii) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be the gross value of such asset as
determined in accordance with Section 10.08(b)(i) (or, in the case
of cash, shall be its face amount) as of the date of such
distribution; and
<PAGE> 16
11
(iv) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m) and subparagraph (vii) of the
definition of "Profits" and "Losses" or Section 3.04(c); provided,
however, that Gross Asset Values shall not be adjusted pursuant to
this subparagraph (iv) to the extent that an adjustment pursuant to
subparagraph (ii) is required in connection with a transaction that
would otherwise result in an adjustment pursuant to this
subparagraph (iv).
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to subparagraph (i), (ii), or (iv), such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect
to such asset for purposes of the allocations made pursuant to Article
III. For purposes of this definition of Gross Asset Value, a Capital
Contribution or distribution shall be considered de minimis if its value
is less than $1,000,000.
"Guaranty of Payment" means any guaranty given by D&B in connection
with a D&B Guaranteed Loan in the form attached hereto as Exhibit B.
"Indebtedness" of a Person means (i) any indebtedness for borrowed
money or deferred purchase price of property or services as evidenced by a
note, bond, or other instrument, (ii) obligations to pay money as lessee
under capital leases, (iii) to the extent of the fair market value of any
asset owned or held by such Person, obligations to pay money secured by
any mortgage, pledge, security interest, encumbrance, lien or charge of
any kind existing on such asset whether or not such Person has assumed or
become liable for the obligations secured thereby, (iv) obligations in
respect of any accounts payable, and (v) obligations under direct or
indirect guarantees of (including obligations (contingent or otherwise) to
assure a creditor against loss in respect of) indebtedness or obligations
of the kinds referred to in clauses (i), (ii), (iii) and (iv) above,
provided that Indebtedness shall not include obligations in respect of any
accounts payable that are incurred in the ordinary course of such Person's
business and are not delinquent or are being contested in good faith by
appropriate proceedings.
"Indemnitee" has the meaning set forth in Section 5.05(f)(i).
"Indemnitor" has the meaning set forth in Section 5.05(f)(i).
"Interest" means any interest in the Partnership representing some
or all of the Capital Contributions made by a Partner pursuant to Article
II, including any and all benefits to which the holder of such an interest
may be entitled as provided in this
<PAGE> 17
12
Agreement, together with all obligations of such Person to comply with the
terms and provisions of this Agreement.
"Involuntary Bankruptcy" has the meaning set forth in the definition
of Bankruptcy.
"Issuance Items" has the meaning set forth in Section 3.04(d).
"Lease Agreement" means that certain Software and Database Lease
Agreement dated of even date herewith, between the Partnership and DBI,
pursuant to which the Software and Databases are licensed to DBI.
"Leiden" means Leiden, Inc., a Delaware corporation.
"LIBOR" has the meaning set forth in the form Demand Note.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed
under the Uniform Commercial Code (as in effect from time to time in the
relevant jurisdiction), or any other similar recording or notice statute,
and any lease having substantially the same effect as any of the
foregoing).
"Limited Partner" means any Class A Limited Partner or Class B
Limited Partner.
"Liquidating Event" has the meaning set forth in Section 12.01.
"Liquidation Notice" has the meaning set forth in Section 14.02(a).
"Liquidator" has the meaning set forth in Section 12.09.
"Loan" means a loan that is made by the Partnership or a Partnership
Subsidiary to, and at all times the obligor under which is, D&B or any
Affiliate of D&B and the obligations of D&B with respect to which rank at
all times at least pari passu with all other senior unsecured Indebtedness
of D&B, provided that each such loan (i) is payable on demand, (ii) bears
interest at a floating rate (based on 1-month, 3-month, 6-month or
12-month LIBOR) plus the Applicable Margin, (iii) is denominated in U.S.
dollars, and (iv) is evidenced by a Demand Note including a Guaranty of
Payment by D&B in the event that the loan is made to any Affiliate of D&B.
"Losses" has the meaning set forth in the definition of "Profits"
and "Losses."
<PAGE> 18
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"Mark-to-Market Balance Sheet" has the meaning set forth in Section
8.02(d)(i).
"Mark-to-Market Value" has the meaning set forth in Section
10.08(b)(i).
"Market Value" means with respect to any Permitted Security as to
any date (i) if a Permitted Security is registered under the Exchange Act
and listed on a national securities exchange or included on the National
Association of Securities Dealers Automated Quotation System, National
Market ("NASDAQ"), the closing sales price on such date (or in the event
such date is not a Business Day, the Business Day immediately preceding
such date), and (ii) if a Permitted Security is not traded on a national
securities exchange or listed on NASDAQ or the value otherwise cannot be
determined under clause (i), the average of the firm prices bid for such
date quoted by Morgan Stanley & Co. Incorporated, Salomon Brothers Inc.
and The First Boston Corporation, in each case for the full amount of the
specific security for which the Market Value is being determined.
"Material Adverse Effect" with respect to each D&B Partner shall
mean (i) a material adverse effect on the business, operations,
properties, or condition (financial or otherwise) of the Partnership, (ii)
a material adverse effect on the ability of the Partnership or each of the
D&B Partners to perform their respective obligations hereunder and under
the agreements referred to herein to which they are a party, or (iii) the
invalidity or unenforceability of this Agreement or such other agreements
or an assertion by the Partnership, or any such D&B Partner, that this
Agreement or such other agreement is invalid or unenforceable or has an
adverse effect on the rights or remedies of any Class A Limited Partner
under this Agreement or such other agreements. "Material Adverse Effect"
with respect to any Class A Limited Partner shall mean (i) a material
adverse effect on the business, operations, properties, or condition
(financial or otherwise) of such Class A Limited Partner, (ii) a material
adverse effect on the ability of such Class A Limited Partner to perform
its obligations hereunder and under the agreements referred to herein to
which it is a party or (iii) the invalidity or unenforceability of this
Agreement or such other agreements or an assertion by such Class A Limited
Partner that this Agreement or such other agreement is invalid or
unenforceable or an adverse effect on the rights or remedies of the D&B
Partners under this Agreement or such other agreement.
"Moody's" means Moody's Investors Service, Inc. or any successor by
merger or consolidation to its business.
"Notice Events" has the meaning set forth in Section 14.01.
"OECD" means the Organization for Economic Cooperation and
Development.
"Original Partnership Agreement" has the meaning set forth in
Section 1.01 hereof.
<PAGE> 19
14
"Partners" means the General Partner and the Limited Partners.
"Partner" means any one of the Partners.
"Partnership" means the partnership continued pursuant to this
Agreement and the partnership continuing the business of this Partnership
pursuant to Section 12.01 in the event of dissolution as provided in this
Agreement.
"Partnership Property" means all real and personal property
(including cash) owned by the Partnership and any improvements thereto,
and shall include both tangible and intangible property.
"Partnership Subsidiary" means either Partnership Subsidiary I or
Partnership Subsidiary II.
"Partnership Subsidiary I" has the meaning set forth in paragraph
(ii) of the definition of "Permitted Assets."
"Partnership Subsidiary II" has the meaning set forth in paragraph
(iii) of the definition of "Permitted Assets."
"Partnership Subsidiary I Stock" has the meaning set forth in
paragraph (ii) of the definition of "Permitted Assets."
"Partnership Subsidiary II Stock" has the meaning set forth in
paragraph (iii) of the definition of "Permitted Assets."
"Percentage Interest" means, with respect to any Partner as of any
date, the ratio (expressed as a percentage) of such Partner's Capital
Account on such date to the aggregate Capital Accounts of all Partners on
such date, such Capital Accounts to be determined after giving effect to
all contributions, distributions and allocations for all Allocation Years
ending on or prior to such date. The initial Percentage Interest of each
Partner is set forth in Sections 2.01 and 2.02. In the event that it is
necessary to determine the relative Percentage Interests of the Partners
at a time when the Capital Accounts of all Partners are zero or less,
their relative Percentage Interests shall be deemed to be the Percentage
Interests set forth in Section 2.01 and 2.02.
"Permitted Assets" means:
(i) The Software and Databases contributed to the Partnership
by Holding pursuant to Section 2.02;
<PAGE> 20
15
(ii) One hundred percent (100%) of the issued and outstanding
stock ("Partnership Subsidiary I Stock") of Duns Investing
Corporation, a Delaware corporation (the "Partnership Subsidiary
I");
(iii) One hundred percent (100%) of the issued and outstanding
stock ("Partnership Subsidiary II Stock") of the corporation formed
by the Partnership pursuant to Section 5.04(i) (the "Partnership
Subsidiary II");
(iv) D&B Loans and D&B Guaranteed Loans;
(v) Cash or Cash Equivalents;
(vi) Permitted Securities; and
(vii) The computers and related equipment owned by the
Partnership on the Closing Date (the "Computer Equipment").
"Permitted Encumbrances" means, collectively, (i) "Permitted
Encumbrances" as defined in the Contribution Agreement, and (ii) Liens and
encumbrances of carriers, warehousemen, mechanics and materialmen incurred
in the ordinary course of business for sums not yet due or which are being
contested in good faith by appropriate proceedings.
"Permitted Securities" means any of the following:
(i) Direct obligations of the United States of America for the
payment of which its full faith and credit is pledged, Federal Home
Loan Mortgage Corporation participation certificates, Federal
National Mortgage Association mortgage pass-through certificates or
Government National Mortgage Association mortgage pass-through
certificates;
(ii) Short-term commercial paper issued by any corporation
organized under the laws of the United States of America or any
state thereof, rated at least "A-1" by S&P; provided that the
aggregate Market Value of all commercial paper owned by the
Partnership and issued by any Person shall not exceed 10% of the
aggregate Market Value of all Permitted Securities (other than cash)
owned by the Partnership;
(iii) Indebtedness of any Person organized under the laws of
the United States of America or any state thereof that is not D&B or
an Affiliate of D&B, rated at least "AA" by S&P; provided, that the
aggregate Market Value of all such indebtedness owned by the
Partnership and issued by any Person shall not exceed 10% of the
aggregate Market Value of all Permitted Securities (other than cash)
owned by the Partnership;
<PAGE> 21
16
(iv) Unsubordinated debt issued by D&B or unsubordinated debt
issued by an Affiliate of D&B if (and only if) such debt is
unconditionally guaranteed by D&B on an unsubordinated basis (other
than D&B Loans and D&B Guaranteed Loans); provided, that D&B has
agreed to register such debt under the Securities Act upon the
request of the holder of such debt and such agreement inures to the
benefit of any subsequent holder of such debt; or
(v) Money market mutual funds, provided that, any such money
market fund invests only in Cash Equivalents and/or Permitted
Securities described in any of subparagraphs (i) through (iv) above
and/or repurchase agreements backed by securities described in
subparagraph (i) above, and provided further that, the aggregate
value of the Permitted Securities described in this subparagraph (v)
and held by the Partnership at any given time does not exceed
$15,000,000.
"Permitted Transfer" has the meaning set forth in Section 10.02.
"Permitted Transferee" has the meaning set forth in Section 10.02.
"Person" means any individual, partnership (whether general or
limited and whether domestic or foreign), limited liability company,
corporation, trust, estate, association, custodian, nominee or other
entity.
"Priority Return" means, with respect to each Class A Limited
Partner as of any date of determination, an amount calculated as the sum
of (x) 7.47% per annum, accruing daily on a 30/360 basis and cumulative
from the Closing Date to such date of determination, of such Class A
Limited Partner's Unrecovered Capital on each such day of accrual, and (y)
8.47% per annum accruing daily on a 30/360 basis and cumulative from the
Closing Date to such date of determination, and compounded quarterly, of
each amount not distributed to such Class A Limited Partner (or its
predecessor in interest) when required pursuant to Section 4.02(a)
(without regard to whether there was on any given distribution date Cash
Available for Distribution) or Section 10.08(b)(ii) during the period from
the date such distribution was thus required to be made to the date such
distribution is made, or if such distribution is not yet made, to the date
of determination. In each instance where this Agreement requires that the
Priority Return be determined for a period less than the period beginning
on the Closing Date and ending on the date of determination, such
determination shall be made by substituting the first day of such lesser
period for the Closing Date in the preceding sentence. For purposes of
calculating the Priority Return, "30/360 day basis" means a 360-day year
comprised of twelve 30 day months.
"Profits" and "Losses" means, for each Allocation Year, an amount
equal to the Partnership's taxable income or loss for such Allocation
Year, determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss, or deduction
<PAGE> 22
17
required to be stated separately pursuant to Code Section 703(a)(1) shall
be included in taxable income or loss), with the following adjustments:
(i) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Profits
or Losses pursuant to this definition of "Profits" and "Losses"
shall be added to such taxable income or loss;
(ii) Any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B)
expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i),
and not otherwise taken into account in computing Profits or Losses
pursuant to this definition of "Profits" and "Losses" shall be
subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to subparagraphs (ii) or (iii) of the
definition of Gross Asset Value, the amount of such adjustment shall
be taken into account as gain or loss from the disposition of such
asset for purposes of computing Profits or Losses;
(iv) Gain or loss resulting from any disposition of
Partnership Property with respect to which gain or loss is
recognized for federal income tax purposes shall be computed by
reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs
from its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for
such Allocation Year, computed in accordance with the definition of
Depreciation;
(vi) To the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) is required,
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken
into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Partner's Interest, the
amount of such adjustment shall be treated as an item of gain (if
the adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) from the disposition of such asset
and shall be taken into account for purposes of computing Profits or
Losses; and
(vii) Notwithstanding anything to the contrary in
subparagraphs (i) through (vi) above, any items which are described
in Section 3.03 or specially allocated pursuant to Sections 3.04 or
3.05 shall not be taken into account in computing Profits or Losses.
<PAGE> 23
18
The amounts of the items of Partnership income, gain, loss or deduction
available to be specially allocated pursuant to Sections 3.03, 3.04 and
3.05 shall be determined by applying rules analogous to those set forth in
subparagraphs (i) through (vi) above.
"Purchase Date" has the meaning set forth in Section 8.02(e).
"Purchase Option" has the meaning set forth in Section 14.03(a).
"Purchase Price" has the meaning set forth in Section 14.03(b).
"Regulations" means the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations are amended,
modified or supplemented from time to time.
"Regulatory Allocations" has the meaning set forth in Section 3.05.
"Responsible Officers" has the meaning set forth in Section 5.04(b).
"Retirement Date" has the meaning set forth in Section
10.08(b)(iii).
"Retirement Notice" has the meaning set forth in Section
10.08(a)(ii).
"S&P" means Standard & Poor's Corporation or any successor by merger
or consolidation to its business.
"Secondary Return" means, with respect to the General Partner and
each Class B Limited Partner as of any date of determination, an amount
equal to 10% per annum, accruing daily on a 30/360 basis and cumulative
and compounded quarterly from the Closing Date to such date of
determination, of such Partner's Unrecovered Capital on each such day of
accrual. In each instance where this Agreement requires that the Secondary
Return be determined for a period less than the period beginning on the
Closing Date and ending on the date of determination, such determination
shall be made by substituting the first day of such lesser period for the
Closing Date in the preceding sentence. For purposes of calculating the
Secondary Return, "30/360 day basis" means a 360-day year comprised of
twelve 30 day months.
"Software and Databases" means the assets contributed to the
Partnership by Holding pursuant to Section 2.02.
"Tax Matters Partner" has the meaning set forth in Section 8.03(a).
<PAGE> 24
19
"Transfer" means, with respect to all or any portion of an Interest,
as a noun, any voluntary or involuntary transfer, sale, pledge or other
disposition and, as a verb, voluntarily or involuntarily to transfer,
sell, pledge or otherwise dispose of.
"Unrecovered Capital" means, for any Partner as of any date, the
remainder, if any, of (i) the sum of the balance in such Partner's Closing
Date Capital Account as set forth in Section 2.01 or 2.02, as the case may
be, plus all Additional Capital Contributions made by such Partner, minus
(ii) the cumulative amount of money and the Gross Asset Value of any
Partnership Property (other than money) distributed to such Partner (or
its predecessors in interest) pursuant to Section 10.08(b) (other than
pursuant to Section 10.08(b)(ii)) as of such date.
"Voluntary Bankruptcy" has the meaning set forth in the definition
of Bankruptcy.
"Wholly Owned Affiliate" of any Person means (i) an Affiliate of
such Person 100% of the capital stock (or its equivalent in the case of
entities other than corporations) of which is owned beneficially by such
Person, directly, or indirectly through one or more Wholly Owned
Affiliates, or by any Person who, directly or indirectly, owns
beneficially 100% of the capital stock (or its equivalent in the case of
entities other than corporations) of such Person, and (ii) an Affiliate of
such Person who, directly or indirectly, owns beneficially 100% of the
capital stock (or its equivalent in the case of entities other than
corporations) of such Person; provided that, for purposes of determining
the ownership of the capital stock of any Person, de minimis amounts of
stock held by directors, nominees and similar persons pursuant to
statutory or regulatory requirements shall not be taken into account.
SECTION 1.11. Other Terms.
Unless the content shall require otherwise:
(a) Words importing the singular number or plural number shall
include the plural number and singular number respectively;
(b) Words importing the masculine gender shall include the
feminine and neuter genders and vice versa;
(c) Reference to "include," "includes," and "including" shall
be deemed to be followed by the phrase "without limitation;"
<PAGE> 25
20
(d) Reference in this Agreement to "herein," "hereby" or
"hereunder", or any similar formulation, shall be deemed to refer to
this Agreement as a whole, including the Exhibits; and
(e) Reference to "and" and "or" shall be deemed to mean
"and/or."
ARTICLE II
PARTNERS' CAPITAL CONTRIBUTIONS
SECTION 2.01. General Partner. Simultaneously with the execution and
delivery of this Agreement, the General Partner shall make the Capital
Contribution listed below, provided that, all Capital Contributions to be made
in cash shall be made on the first Business Day after the Closing Date. The
name, address, the initial Percentage Interest and balance in the General
Partner's Capital Account immediately after making its Capital Contribution
pursuant to this Section 2.01 are as follows:
<TABLE>
<CAPTION>
Initial
Capital Contribution/ Percentage
Name and Address Capital-Account Interest
- - ------------------------------ ---------------------------------- ----------
<S> <C> <C>
Duns Investing VII Corporation Cash in an amount equal to 1%
911 Washington Street $8,519,792, resulting in a Closing
Suite 100 Date Capital Account equal to
Wilmington, Delaware 19801 $8,551,713.
Attention: Kenneth J. Kubacki
</TABLE>
SECTION 2.02. Limited Partners. Simultaneously with the execution and
delivery of this Agreement, the Limited Partners shall make the Capital
Contributions listed below, provided that, all Capital Contributions to be made
in cash shall be made on the first Business Day after the Closing Date. The
name, address, the initial Percentage Interest of each of the Limited Partners
and the balance in each Limited Partner's Capital Account immediately after
making its Capital Contribution pursuant to this Section 2.02 are as follows:
<PAGE> 26
21
<TABLE>
<CAPTION>
Initial
Capital Contribution/ Percentage
Name and Address Capital-Account Interest
- - ------------------------------ ---------------------------------- ----------
<S> <C> <C>
Duns Holding, Inc. Software and Databases with an 62.92%
911 Washington Street aggregate initial Gross Asset
Suite 250 Value equal to $523,458,000;
Wilmington, Delaware 19801 Partnership Subsidiary I Stock
Attention: Kenneth J. Kubacki with an initial Gross Asset Value
Facsimile: (302) 428-1410 equal to $1,000, and cash in an
amount equal to $14,577,000, each
contributed to the Partnership
pursuant to the Contribution
Agreement, resulting in a Closing
Date Capital Account balance equal
to $538,036,000
Dun & Bradstreet, Inc. Cash in an amount equal to 1%
One Diamond Hill Road $5,423,469, resulting in a
Murray Hill, New Jersey 07974 Closing Date Capital Account
Attention: Robert J. Levin equal to $8,551,713
Facsimile: (908) 665-1409
Utrecht-America Finance Co. Cash in an amount equal to 1%
c/o Utrecht-America Financial $8,519,792, resulting in a
Services Corp. Closing Date Capital Account
245 Park Avenue equal to $8,551,713
New York, NY 10167
Attention: Treasurer
Leiden, Inc. Cash in an amount equal to 34.08%
c/o Utrecht-America Financial $291,480,208, resulting in a
Services Corp. Closing Date Capital Account
245 Park Avenue equal to $291,480,208
New York, NY 10167
Attention: Treasurer
</TABLE>
SECTION 2.03. Additional Capital Contributions. (a) In general. Each D&B
Partner may contribute from time to time such additional cash or other property
as it may determine; provided that, any Capital Contribution of property made by
such Partner pursuant to this Section 2.03 shall consist of Permitted Assets.
The Partners agree that any additional payment required to be made, or expense
incurred, by Holding pursuant to the Contribution Agreement
<PAGE> 27
22
after the Closing Date, including any expense incurred in complying with Section
5.06 thereof, has been taken into account in determining the initial Gross Asset
Value of the Software and Databases and shall not constitute an additional
Capital Contribution to the Partnership.
(b) Initial Gross Asset Value. The initial Gross Asset Value of any
Partnership Property (other than cash) contributed pursuant to this Section 2.03
shall be determined as follows:
(i) Loans. The initial Gross Asset Value of any Loan shall be equal
to its par value;
(ii) Cash Equivalents. The initial Gross Asset Value of any Cash
Equivalent shall be equal to its face value, less unamortized discount and
plus unamortized premium, if any; and
(iii) Permitted Securities. The initial Gross Asset Value of any
Permitted Security shall be equal to its Market Value.
SECTION 2.04. Other Matters. (a) Except as otherwise provided in Section
10.08, Articles XII and XIV or in the Act, no Partner shall demand or receive a
return of its Capital Contributions or withdraw from the Partnership without the
consent of all Partners. Under circumstances requiring a return of any Capital
Contributions, no Partner shall have the right to receive property other than
cash except as may be specifically provided in this Agreement.
(b) No Partner shall receive any interest or draw with respect to its
Capital Contributions or its Capital Account, except as otherwise provided in
this Agreement.
(c) The Limited Partners shall not be liable for the debts, liabilities,
contracts or any other obligations of the Partnership. Except as otherwise
provided by mandatory provisions of applicable state law and except with respect
to the obligation of any Limited Partner to return to the Partnership a
distribution made to such Limited Partner in violation of the Act at a time when
such Limited Partner knew the distribution would violate the Act, such Limited
Partner shall be liable only to make its Capital Contribution as set forth in
Section 2.02 and shall not be required to lend any funds to the Partnership or,
after its Capital Contribution has been made, to make any additional Capital
Contributions to the Partnership. The General Partner shall not have any
personal liability for any repayment of any Capital Contributions of any Limited
Partner.
<PAGE> 28
23
ARTICLE III
ALLOCATIONS
SECTION 3.01. Profits. After giving effect to the special allocations set
forth in Sections 3.04 and 3.05, but before giving effect to the special
allocations set forth in Section 3.03, Profits for any Allocation Year shall be
allocated in the following order and priority:
(a) First, 100% to the Class A Limited Partners in proportion to and to
the extent of an amount equal to the remainder, if any, of (i) the cumulative
Priority Return of each Class A Limited Partner from the Closing Date to the
last day of such Allocation Year, minus (ii) the cumulative Profits allocated to
such Class A Limited Partner pursuant to this Section 3.01(a) for all prior
Allocation Years;
(b) Second, 100% to the Class A Limited Partners in proportion to and to
the extent of an amount equal to the remainder, if any, of (i) the sum of (A)
the cumulative Losses allocated to each Class A Limited Partner pursuant to
Section 3.02(d) for all prior Allocation Years, and (B) the cumulative items of
loss allocated to such Class A Limited Partner pursuant to Section 3.03(d) for
all prior Allocation Years, minus (ii) the cumulative Profits allocated to such
Class A Limited Partner pursuant to this Section 3.01(b) for all prior
Allocation Years;
(c) Third, 100% to the General Partner in an amount equal to the
remainder, if any, of (i) the sum of (A) the cumulative Losses allocated to the
General Partner pursuant to Section 3.02(e) for all prior Allocation Years, and
(B) the cumulative items of loss allocated to the General Partner pursuant to
Section 3.03(e) for all prior Allocation Years, minus (ii) the cumulative
Profits allocated to the General Partner pursuant to this Section 3.01(c) for
all prior Allocation Years;
(d) Fourth, to the Partners in proportion to and to the extent of an
amount equal to the remainder, if any, of (i) the sum of (A) the cumulative
Losses allocated to each Partner pursuant to Section 3.02(c) for all prior
Allocation Years, and (B) the cumulative items of loss allocated to such Partner
pursuant to Section 3.03(c) for all prior Allocation Years, minus (ii) the
cumulative Profits allocated to such Partner pursuant to this Section 3.01(d)
for all prior Allocation Years;
(e) Fifth, to the General Partner and the Class B Limited Partners in
proportion to and to the extent of an amount equal to the remainder, if any, of
(i) the sum of (A) the cumulative Secondary Return of each such Partner from the
Closing Date to the last day of such Allocation Year, and (B) the cumulative
Losses allocated to such Partner pursuant to Section 3.02(b) for all prior
Allocation Years, and (C) the cumulative items of loss allocated to such Partner
pursuant to Section 3.03(b) for all prior Allocation Years, minus (ii) the
cumulative Profits allocated to such Partner pursuant to this Section 3.01(e)
for all prior Allocation Years; and
<PAGE> 29
24
(f) Sixth, the balance, if any, 99% to the General Partner and the Class B
Limited Partners in proportion to their Percentage Interests and 1% to the Class
A Limited Partners in proportion to their Percentage Interests.
SECTION 3.02. Losses. After giving effect to the special allocations set
forth in Sections 3.04 and 3.05, but before giving effect to the special
allocations set forth in Section 3.03, Losses for any Allocation Year shall be
allocated in the following order and priority, subject to the limitations in
Section 3.06:
(a) First, to the Partners in proportion to and to the extent of the
remainder, if any, of (i) the cumulative Profits allocated to each Partner
pursuant to Section 3.01(f) for all prior Allocation Years, minus (ii) the sum
of (A) the cumulative items of loss allocated to such Partner pursuant to
Section 3.03(a) for all prior Allocation Years, and (B) the cumulative Losses
allocated to such Partner pursuant to this Section 3.02(a) for all prior
Allocation Years;
(b) Second, to the General Partner and the Class B Limited Partners in
proportion to and to the extent of the remainder, if any, of (i) the cumulative
Profits allocated to each such Partner pursuant to Section 3.01(e) for all prior
Allocation Years, minus (ii) the sum of (A) the cumulative items of loss
allocated to such Partner pursuant to Section 3.03(b) for all prior Allocation
Years, and (B) the cumulative Losses allocated to such Partner pursuant to this
Section 3.02(b) for all prior Allocation Years;
(c) Third, 99% to the General Partner and the Class B Limited Partners in
proportion to their Percentage Interests and 1% to the Class A Limited Partners
in proportion to their Percentage Interests until the Capital Account of the
General Partner and each Class B Limited Partner is equal to zero;
(d) Fourth, 100% to the Class A Limited Partners in proportion to their
Percentage Interests until the Capital Account of each Class A Limited Partner
is equal to zero; and
(e) Fifth, the balance, if any, 100% to the General Partner.
SECTION 3.03. Special Loss Allocation. After giving effect to the special
allocations set forth in Sections 3.04 and 3.05 and the allocations of Profits
or Losses set forth in Sections 3.01 or 3.02, as the case maybe, in the event
that in any Allocation Year the aggregate items of loss realized or deemed to be
realized by the Partnership from the sale, disposition or adjustment to the
Gross Asset Values of Permitted Assets is greater than the aggregate items of
gain realized or deemed to be realized by the Partnership from the sale,
disposition or adjustment to the Gross Asset Values of Permitted Assets, items
of loss equal to such excess shall be specially allocated as follows:
(a) First, to the Partners in proportion to and to the extent of the
remainder, if any, of (i) the cumulative Profits allocated to each Partner
pursuant to Section 3.01(f) for the current
<PAGE> 30
25
and all prior Allocation Years, minus (ii) the sum of (A) the cumulative Losses
allocated to such Partner pursuant to Section 3.02(a) for the current and all
prior Allocation Years, and (B) the cumulative items of loss allocated to such
Partner pursuant to this Section 3.03(a) for all prior Allocation Years;
(b) Second, to the General Partner and the Class B Limited Partners in
proportion to and to the extent of the remainder, if any, of (i) the cumulative
Profits allocated to each such Partner pursuant to Section 3.01(e) for the
current and all prior Allocation Years, minus (ii) the sum of (A) the cumulative
Losses allocated to such Partner pursuant to Section 3.02(b) for the current and
all prior Allocation Years, and (B) the cumulative items of loss allocated to
such Partner pursuant to this Section 3.03(b) for all prior Allocation Years;
(c) Third, 99% to the General Partner and the Class B Limited Partners in
proportion to their Percentage Interests and 1% to the Class A Limited Partners
in proportion to their Percentage Interests until the Capital Account of the
General Partner and each Class B Limited Partner is equal to zero;
(d) Fourth, 100% to the Class A Limited Partners in proportion to their
Percentage Interests until each Class A Limited Partner's Capital Account is
equal to zero; and
(e) Fifth, the balance, if any, 100% to the General Partner.
SECTION 3.04. Other Special Allocations. The following special allocations
shall be made in the following order:
(a) Qualified Income Offset. In the event any Limited Partner unexpectedly
receives any adjustments, allocations, or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) of
the Regulations, items of Partnership income and gain shall be specially
allocated to such Limited Partner in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, the Adjusted Capital
Account Deficit of such Limited Partner as quickly as possible; provided that an
allocation pursuant to this Section 3.04(a) shall be made only if and to the
extent that such Limited Partner would have an Adjusted Capital Account Deficit
after all other allocations provided for in this Article III have been
tentatively made as if this Section 3.04(a) were not in the Agreement.
(b) Gross Income Allocation. In the event any Limited Partner has a
deficit Capital Account at the end of any Allocation Year, such Limited Partner
shall be specially allocated items of Partnership income and gain in the amount
of such deficit as quickly as possible; provided that an allocation pursuant to
this Section 3.04(b) shall be made only if and to the extent that such Limited
Partner would have a deficit Capital Account after all other allocations
provided for in this Article III have been made as if Section 3.04(a) and this
Section 3.04(b) were not in the Agreement.
<PAGE> 31
26
(c) Section 754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Code Section 734(b) or Code
Section 743(b) is required pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4) to be taken into account in
determining Capital Accounts as the result of a distribution to a Partner in
complete liquidation of its Interest, the amount of such adjustment to Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis) and such
gain or loss shall be specially allocated to the Partners in accordance with
their interests in the Partnership in the event Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to whom such distribution was
made in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
(d) Allocations Relating to Taxable Issuance of Partnership Interests. Any
income, gain, loss or deduction realized as a direct or indirect result of the
issuance of an Interest by the Partnership to a Partner other than pursuant to
Section 707(a)(2) of the Code (the "Issuance Items") shall be allocated among
the Partners so that, to the extent possible, the net amount of such Issuance
Items, together with all other allocations under this Agreement to each Partner,
shall be equal to the net amount that would have been allocated to each such
Partner if the Issuance Items had not been realized.
SECTION 3.05. Curative Allocations. The allocations set forth in Sections
3.04(a), 3.04(b), 3.04(c) and 3.06 (the "Regulatory Allocations") are intended
to comply with certain requirements of the Regulations. It is the intent of the
Partners that, to the extent possible, all Regulatory Allocations shall be
offset either with other Regulatory Allocations or with special allocations of
other items of Partnership income, gain, loss or deduction pursuant to this
Section 3.05. Therefore, notwithstanding any other provision of this Article III
(other than the Regulatory Allocations), the General Partner shall make such
offsetting special allocations of Partnership income, gain, loss or deduction in
whatever manner it determines appropriate so that, after such offsetting
allocations are made, each Partner's Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Partner would have had if
the Regulatory Allocations were not part of the Agreement and all Partnership
items were allocated pursuant to this Article III without regard to the
Regulatory Allocations.
SECTION 3.06. Loss Limitation. The Losses allocated pursuant to Section
3.02 and the items of loss or deduction allocated pursuant to Sections 3.03,
3.04 and 3.05 shall not exceed the maximum amount of Losses and items of loss or
deduction that can be so allocated without causing any Limited Partner to have
an Adjusted Capital Account Deficit at the end of any Allocation Year. All
Losses and items of loss or deduction in excess of the limitation set forth in
this Section 3.06 shall be allocated to the General Partner.
SECTION 3.07. Other Allocation Rules. (a) Profits, Losses and any other
items of income, gain, loss or deduction shall be allocated to the Partners
pursuant to this Article III as of the last day of each Fiscal Year; provided
that Profits, Losses and such other items shall also be allocated at such times
as are required by Section 10.08(b) and at such other times as the Gross
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Asset Values of Partnership Property are adjusted pursuant to subparagraph (ii)
of the definition of Gross Asset Value in Section 1.10.
(b) In any cases in which it is necessary to determine the Profits,
Losses, or any other items allocable to any period, Profits, Losses, and any
such other items shall be determined on a daily, monthly, or other basis, as
determined by the General Partner using any permissible method under Code
Section 706 and the Regulations thereunder.
(c) The Partners hereby agree to be bound by the provisions of this
Article III in reporting their shares of Partnership income and loss for income
tax purposes, except to the extent otherwise required by law.
SECTION 3.08. Tax Allocations: Code Section 704(c). In accordance with
Code Section 704(c) and the applicable Regulations thereunder, income, gain,
loss, and deduction with respect to any property contributed to the capital of
the Partnership shall, solely for tax purposes, be allocated among the Partners
so as to take account of any variation between the adjusted basis of such
property to the Partnership for federal income tax purposes and its initial
Gross Asset Value (computed in accordance with the definition of Gross Asset
Value in Section 1.10).
In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraph (iv) of the definition of Gross Asset Value in
Section 1.10, subsequent allocations of income, gain, loss, and deduction with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and its Gross Asset Value in
the same manner as under Code Section 704(c) and the applicable Regulations
thereunder.
Any elections or other decisions relating to such allocations shall
be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement, including the election of an allocation
method permitted by the Regulations under Code Section 704(c). Allocations
pursuant to this Section 3.08 are solely for purposes of federal, state, and
local taxes and shall not affect, or in any way be taken into account in
computing, any Partner's Capital Account or share of Profits, Losses, other
items, or distributions pursuant to any provision of this Agreement.
Except as otherwise provided in this Agreement, all items of
Partnership income, gain, loss, deduction, and any other allocations not
otherwise provided for shall be divided among the Partners in the same
proportions as they share Profits or Losses, as the case may be, for the
Allocation Year.
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ARTICLE IV
DISTRIBUTIONS
SECTION 4.01. Cash Flow. Except as otherwise provided in Article XII and
Section 4.02(a), Cash Available for Distribution shall be distributed on the
last Business Day of each Fiscal Quarter commencing with June 30, 1997, 100% to
the Class A Limited Partners in proportion to and to the extent of an amount
equal to the remainder, if any, of (i) the cumulative Priority Return of each
Class A Limited Partner from the Closing Date to the last Business Day of the
Fiscal Quarter during which such distribution is made, minus (ii) all prior
distributions to such Class A Limited Partner pursuant to this Section 4.01(a).
SECTION 4.02. Amounts Withheld. All amounts withheld or required to be
withheld pursuant to the Code or any provision of any state, local or foreign
tax law with respect to any payment, distribution or allocation to the
Partnership or the Partners and treated by the Code (whether or not withheld
pursuant to the Code) or any such tax law as amounts payable by or in respect of
the Partners or any Person owning an interest, directly or indirectly, in such
Partner shall be treated as amounts paid or distributed to the Partners with
respect to which such amount was withheld pursuant to this Article IV for all
purposes under this Agreement.
ARTICLE V
MANAGEMENT
SECTION 5.01. Authority of the General Partner. Subject to the limitations
and restrictions set forth in this Agreement including without limitation those
set forth in this Article V, the General Partner shall direct the business and
affairs of the Partnership and in so doing shall manage, control and have all of
the rights and powers which may be possessed by general partners under the Act.
SECTION 5.02. Right to Rely on the General Partner. (a) Any Person dealing
with the Partnership may rely (without duty of further inquiry) upon a
certificate signed by the General Partner as to:
(i) The identity of the General Partner or any Limited Partner;
(ii) The existence or nonexistence of any fact or facts which
constitute a condition precedent to acts by the General Partner or which
are in any other manner germane to the affairs of the Partnership;
(iii) The Persons who are authorized to execute and deliver any
instrument or document of the Partnership; or
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(iv) Any act or failure to act by the Partnership or any other
matter whatsoever involving the Partnership or any Partner.
(b) The signature of the General Partner shall be sufficient to convey
title to any property owned by the Partnership, and all of the Partners agree
that a copy of this Agreement may be shown to the appropriate parties in order
to confirm the same, and further agree that the signature of the General Partner
shall be sufficient to execute any "statement of partnership" or other documents
necessary to effectuate this or any other provision of this Agreement. All of
the Partners do hereby appoint the General Partner as their attorney-in-fact for
the execution of any or all of the documents described in this Section 5.02(b).
SECTION 5.03. Restrictions on Authority of the General Partner. Except as
otherwise provided in this Agreement, without the consent of all of the Limited
Partners, the General Partner shall not have the authority to, and covenants and
agrees that it shall not:
(a) Knowingly, do any act in contravention of this Agreement or, when
acting on behalf of the Partnership, engage in activities inconsistent with the
purposes of the Partnership;
(b) Do any act which would, to the General Partner's knowledge, make it
impossible to carry on the ordinary business of the Partnership;
(c) Possess Partnership Property, or assign rights in specific Partnership
Property, for other than a Partnership purpose;
(d) Perform any act that would, to the General Partner's knowledge,
subject any Limited Partner to liability as a general partner in any
jurisdiction;
(e) Cause or permit the Partnership or any Partnership Subsidiary to
voluntarily take any action with respect to the Partnership described in clauses
(a)(iii), (b) or (c) of the definition of Bankruptcy in Section 1.10;
(f) Cause or permit the Partnership or any Partnership Subsidiary to
incur, assume or obligate itself by contract for any Indebtedness or to create,
incur, assume or permit to exist any Lien upon any Partnership Property other
than Permitted Encumbrances, provided that, in the event that the General
Partner has elected pursuant to Section 10.08(a) to cause the entire Interests
of the Class A Limited Partners to be retired, the General Partner may cause the
Partnership to borrow the funds necessary to make the distributions to the Class
A Limited Partners required by Section 10.08(b), and provided further that, in
the event that the General Partner has elected pursuant to Section 10.08(a) to
cause all or any portion of the Interests of the Class A Limited Partners to be
retired, the General Partner may cause the Partnership to borrow from any
Partnership Subsidiary the funds necessary to make the distributions to the
Class A Limited Partners required by Section 10.08(b);
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(g) Cause or permit the Partnership or any Partnership Subsidiary to
acquire, by purchase, lease or contribution any assets other than Permitted
Assets or any Permitted Asset that is in default at the time of its acquisition
by the Partnership;
(h) Cause or permit the Partnership or any Partnership Subsidiary to make
or acquire by contribution any Loan unless (i) the borrowing evidenced by such
Loan has been duly authorized by all required corporate action, such action has
been duly certified by the secretary or an assistant secretary of the borrower,
and such certification has been delivered to the Partnership together with
certificates as to incumbency and due authorization of the officers of the
borrower authorized to execute and deliver such Loan (which certified action may
be one so taken and certification may be one so delivered before that
acquisition if the certified action remains in effect at the time of, and is
applicable to, that acquisition), (ii) such Loan is legal, valid, binding and
enforceable in accordance with its terms against the borrower, (iii) the
guaranty by D&B with respect to such Loan, if any, (A) has been duly authorized
by all required corporate action, such action has been duly certified by the
secretary or an assistant secretary of D&B, and such certification has been
delivered to the Partnership together with certificates as to incumbency and due
authorization of the officers of D&B authorized to execute and deliver such
guaranty (which certified action may be one so taken and certification may be
one so delivered before that acquisition if the certified action remains in
effect at the time of, and is applicable to, that acquisition), and (B) is
legal, valid, binding and enforceable in accordance with its terms against D&B
and (iv) D&B's obligations thereunder or under any guaranty with respect
thereto, as the case may be, rank at least pari passu with all other unsecured
senior Indebtedness of D&B;
(i) Cause or permit the admission of any Limited Partner to the
Partnership other than pursuant to Article X or Section 14.03;
(j) Cause or permit the Partnership or any Partnership Subsidiary to
legally merge or consolidate with or into any corporation, limited liability
company, business trust or association, real estate investment trust, common law
trust, or unincorporated business (including a partnership, whether general or
limited);
(k) Cause the Partnership to distribute any asset other than as provided
in Article IV, Section 10.08 and Article XII;
(l) Cause or permit the Partnership or any Partnership Subsidiary to
utilize the Software and Databases or grant to any Person other than DBI
pursuant to the Lease Agreement the right to access the Software and Databases,
in each case in order to develop, distribute or market products, other than
Minor Permitted Uses (as defined in the Lease Agreement); and
(m) Cause or permit the Partnership or any Partnership Subsidiary to enter
into, permit or consent to any amendment or modification of, or supplement to,
or terminate or waive compliance with any provision of, the Lease Agreement, any
Demand Note evidencing any Loan or the Contribution Agreement.
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SECTION 5.04. Duties and Obligations of the General Partner. (a) The
General Partner shall cause the Partnership to conduct its business and
operations separate and apart from that of any D&B Partner or any of its
Affiliates, including, without limitation, (i) segregating Partnership assets
and not allowing funds or other assets of the Partnership to be commingled with
the funds or other assets of, held by, or registered in the name of, any D&B
Partner or any of its Affiliates, (ii) maintaining books and financial records
of the Partnership separate from the books and financial records of any D&B
Partner and its Affiliates (although the Partnership may be consolidated with
D&B and its Affiliates for financial reporting statement purposes), and
observing all Partnership procedures and formalities, including, without
limitation, maintaining minutes of Partnership meetings and acting on behalf of
the Partnership only pursuant to due authorization of the Partners, (iii)
causing the Partnership to pay its liabilities from assets of the Partnership,
and (iv) causing the Partnership to conduct its dealings with third parties in
its own name and as a separate and independent entity.
(b) On the Closing Date, the General Partner shall provide to the
Partnership a written statement naming those officers of the General Partner
that will be responsible for the management and operations of the Partnership in
accordance with this Article V (such individuals, the "Responsible Officers"),
until such time as the General Partner has provided to the Partnership another
written statement naming other officers as Responsible Officers, and the General
Partner hereby covenants and agrees that its Responsible Officers shall maintain
the separateness of the Partnership's operations and otherwise comply with all
of the terms of this Agreement.
(c) The General Partner shall notify the Partners of the occurrence of any
Notice Event described in Section 14.01 or any Liquidating Event described in
Section 12.01 or any event which with notice or lapse of time or both would
constitute a Notice Event or Liquidating Event (other than the events described
in Sections 12.01(a) and 14.01(a)) and the action which the General Partner has
taken or proposes to take with respect thereto, promptly, but no later than five
(5) Business Days, after any Responsible Officer has actual knowledge of such
occurrence.
(d) The General Partner shall take all actions which may be necessary or
appropriate (i) for the continuation of the Partnership's valid existence as a
limited partnership and its qualification to do business under the laws of the
State of Delaware and of each other jurisdiction in which such existence or
qualification is necessary to protect the limited liability of the Limited
Partners or to enable the Partnership to conduct the business in which it is
engaged or to perform its obligations under any agreement to which it is a
party, and (ii) for the accomplishment of the Partnership's purposes, including
the acquisition, management, maintenance, preservation, and operation of
Permitted Assets in accordance with the provisions of this Agreement and
applicable laws and regulations. Without limitation of the foregoing, the
General Partner shall cause the Partnership and each Partnership Subsidiary to
maintain all licenses, permits, registrations, authorizations, use agreements,
consents, orders or approvals of governmental or quasi-governmental agencies and
authorities (whether Federal, state, local, municipal or foreign) necessary to
own their respective properties and to conduct their respective activities in
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accordance with all applicable laws, rules, regulations and orders, except where
any failure to do so would not have a Material Adverse Effect.
(e) The General Partner shall devote to the Partnership such time as may
be necessary for the proper performance of all duties under this Agreement.
(f) Except as otherwise provided in Section 1.09 hereof, the General
Partner shall be under a fiduciary duty to conduct the affairs of the
Partnership in the best interests of the Partnership, including, without
limitation, the safekeeping and use of all of the Partnership Property and the
use thereof for the exclusive benefit of the Partnership and will not conduct
the affairs of the Partnership so as to benefit any other business now owned or
hereafter acquired by any Partner if such conduct also produces a detriment to
the Partnership.
(g) All distributions or payments to the Partners pursuant to any
provision of this Agreement shall be made no later than 11:00 a.m., Eastern
Standard Time, on the day of distribution or payment, and, at the time of any
such distribution or payment, the General Partner shall provide to the Partners
a notice identifying the nature of the distribution or payment, the Section or
Sections of this Agreement pursuant to which it is being made and the amount
being distributed or paid pursuant to each such Section.
(h) On the first Business Day after the Closing Date, the General Partner
shall cause the Partnership to contribute $330,712,330 to Partnership Subsidiary
I and shall cause Partnership Subsidiary I to loan $320,712,330 to D&B or an
Affiliate of D&B pursuant to a D&B Loan or a D&B Guaranteed Loan, as the case
may be, and invest $10,000,000 in Permitted Securities.
(i) As soon as practicable after the Closing Date, the General Partner
shall cause the Partnership to contribute all of the Computer Equipment to a
newly formed Delaware corporation in exchange for 100% of its issued and
outstanding stock.
(j) As soon as practicable after the end of each Fiscal Quarter, the
General Partner shall cause the Partnership to contribute to Partnership
Subsidiary I cash in an amount equal to Cash Available for Distribution for such
Fiscal Quarter reduced by distributions made by the Partnership during such
Fiscal Quarter.
SECTION 5.05. Indemnification of the Partners. (a) Unless otherwise
provided in Section 5.05(e) and subject to Section 5.05(f), the Partnership, its
receiver or its trustee (in the case of its receiver or trustee, to the extent
of Partnership Property) shall indemnify, save harmless, and pay all Expenses of
any Partner, any Partner's partner, any partners, stockholders, officers,
directors, employees or agents of any of them relating to any Expenses incurred
by reason of any act performed or omitted to be performed by any Partner, or
officer, director, employee or agent of any Partner in connection with the
business of the Partnership.
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(b) Unless otherwise provided in Section 5.05(e) and subject to Section
5.05(f), in the event of any action by any Limited Partner against the General
Partner or officer or director of the General Partner, including a Partnership
derivative suit, the Partnership, its receiver or its trustee (in the case of a
receiver or trustee, to the extent of Partnership Property) shall indemnify,
save harmless, and pay all Expenses of the General Partner, officer or director
incurred in the defense of such action; provided that the General Partner,
officer or director obtains a favorable final nonappealable judgment in such
action.
(c) All indemnities provided for in this Agreement shall survive the
transfer of a Partner's Interest.
(d) The Partnership and the General Partner, jointly and severally,
covenant and agree, unconditionally, absolutely and irrevocably, to indemnify
and hold harmless each Class A Limited Partner from and against any and all
Expenses arising out of or in connection with or by reason of any Person's
assertion that the liabilities, debts or other obligations of the Partnership
are liabilities, debts or other obligations of such Class A Limited Partner;
provided, however, that no such indemnification shall be required hereunder for
any such Expenses resulting from any action taken by such Class A Limited
Partner which exposes such Class A Limited Partner to liability as a general
partner under Delaware law.
(e) Sections 5.05(a), 5.05(b), 5.05(c) and 5.05(d) shall be enforced only
to the maximum extent permitted by law and no Partner shall be indemnified from
any liability for the fraud, willful misconduct, bad faith, or gross negligence
of itself or any of its Affiliates.
(f) Indemnification Procedures.
(i) In the event any claim is made by a third party against the
General Partner, any Limited Partner, or any affiliate, officer, director,
agent, employee, successor or assign of any of them (each of them being
referred to as an "Indemnitee"), with respect to an actual or potential
liability for which any such Person is otherwise entitled to be
indemnified under any provisions of Sections 5.05(a), 5.05(b), 5.05(c) and
5.05(d), and any such Person wishes to be indemnified with respect
thereto, such Person shall promptly notify the appropriate indemnitor(s)
as provided in each such section (the "Indemnitor"); provided that the
failure of any such Person to notify any Indemnitor shall not relieve such
Indemnitor from any liability which it otherwise may have to such Person
hereunder.
(ii) Each Indemnitee may by notice to the Indemnitor take control of
all aspects of the investigation and defense of all claims asserted
against it and may employ counsel of its choice and at the expense of the
Indemnitor; provided that (A) the amount of any settlement such Indemnitee
may enter into must be consented to by the Indemnitor and no Indemnitee
may in connection with any such investigation, defense or settlement,
without the consent of the Indemnitor, require the Indemnitor or any of
its subsidiaries to take or refrain from taking any action (other than
payment of such a settlement amount) or to
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make any public statement, which such Person reasonably considers to
materially adversely affect its interest, and (B) such Indemnitee may not
take control of any investigation, defense or settlement which could
entail a risk of criminal liability to the Indemnitor or any of its
subsidiaries. Upon the request of the Indemnitor, each Indemnitee shall
use its best efforts to keep the Indemnitor reasonably apprised of the
status of those aspects of such investigation and defense controlled by
such Indemnitee and shall provide such information with respect thereto as
the Indemnitor may reasonably request. The Indemnitor shall cooperate with
the Indemnitee in all reasonable respects with respect thereto.
(iii) Any Indemnitor may, by notice to the Indemnitees, take control
of all aspects of the investigation and defense of all claims asserted
against it, and may employ counsel of its choice and at its expense;
provided that (A) no Indemnitor may without the consent of any Indemnitee
agree to any settlement that requires such Indemnitee to make any payment
that is not indemnified hereunder, or does not grant a general release to
such Indemnitee, and in any event such Indemnitor may not in connection
with any such investigation, defense or settlement, without the consent of
any Indemnitee, take or refrain from taking any action which would
reasonably be expected to materially impair the indemnification of such
Indemnitee hereunder or would require such Indemnitee to take or refrain
from taking any action or to make any public statement, which such Person
reasonably considers to materially adversely affect its interests, (B) no
Indemnitor may take control of any investigation, defense or settlement,
without the consent of any Indemnitee, if the liabilities involved in such
proceedings involve any material risk of the sale, forfeiture or loss of,
or the creation of any Lien on, any property of such Indemnitee and (C) no
Indemnitor may take control of any investigation, defense or settlement
which could entail a risk of criminal liability to any Indemnitee. Upon
the request of any Indemnitee, the Indemnitor shall use its best efforts
to keep such Indemnitee reasonably apprised of the status of those aspects
of such investigation and defense controlled by such Indemnitor and shall
provide such information with respect thereto as such Indemnitee may
reasonably request. The Indemnitees shall cooperate with the Indemnitor in
all reasonable respects with respect thereto.
SECTION 5.06. Compensation and Expenses. (a) Compensation and
Reimbursement. Except as otherwise provided in Sections 1.09(c) and this Section
5.06, no Partner or Affiliate of any Partner shall receive any salary, fee, or
draw for services rendered to or on behalf of the Partnership or otherwise in
its capacity as a Partner, nor shall any Partner or Affiliate of any Partner be
reimbursed for any expenses incurred by such Partner or Affiliate on behalf of
the Partnership or otherwise in its capacity as a Partner.
(b) Management Fee. For services rendered to or on behalf of the
Partnership in satisfaction of its duties and obligations under this Agreement,
the General Partner shall be paid $500,000 per annum, quarterly in arrears, pro
rata for any partial Fiscal Quarter.
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(c) Expenses. The General Partner may charge the Partnership, and shall be
reimbursed, for any reasonable out-of-pocket expenses incurred in connection
with the Partnership's business.
ARTICLE VI
ROLE OF LIMITED PARTNERS
SECTION 6.01. Rights or Powers. The Limited Partners shall not have any
right or power to take part in the management or control of the Partnership or
its business and affairs or to act for or bind the Partnership in any way.
Notwithstanding the foregoing, the Limited Partners shall have all the rights
and powers specifically set forth in this Agreement. A Limited Partner, any
Affiliate thereof or an employee, stockholder, agent, director or officer of a
Limited Partner or any Affiliate thereof, may also be an employee or agent of
the Partnership or a stockholder, director or officer of the General Partner.
The existence of these relationships and acting in such capacities will not
result in a Limited Partner being deemed to be participating in the control of
the business of the Partnership or otherwise affect the limited liability of any
Limited Partner.
SECTION 6.02. Voting Rights. The Limited Partners shall have the right to
vote only on those matters specifically reserved for its vote (or a vote of the
Partners) which are set forth in this Agreement and as required by the Act.
SECTION 6.03. Procedure for Consent. In any circumstances requiring the
approval or consent of any Limited Partner specified in this Agreement, such
approval or consent may, except as expressly provided to the contrary in this
Agreement, be given or withheld in the sole and absolute discretion of such
Limited Partner. If the General Partner receives the necessary approval or
consent of the Limited Partners to such action, the General Partner shall be
authorized and empowered to implement such action without further authorization
by any Limited Partner.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.01. In General. As of the Closing Date, each of the Partners
hereby makes each of the representations and warranties applicable to such
Partner as set forth in Section 7.02, and such representations and warranties
shall survive the execution of this Agreement.
SECTION 7.02. Representations and Warranties. (a) Due Formation or
Incorporation; Authorization of Agreement. Each Partner hereby represents and
warrants that such Partner is a corporation or a partnership, as the case may
be, duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation as a partnership, as the case may
be, and has the partnership or corporate power and authority to own its property
and
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carry on its business as owned and carried on at the Closing Date. Each D&B
Partner hereby represents and warrants that such Partner is duly licensed or
qualified to do business and is in good standing in each of the jurisdictions in
which the failure to be so licensed or qualified would have a Material Adverse
Effect. Each Class A Limited Partner hereby represents and warrants that such
Partner is duly licensed or qualified to do business and in good standing in
each of the jurisdictions in which it would be required to be so licensed or
qualified without regard to its being a Limited Partner in the Partnership and
in which the failure to so qualify would have a Material Adverse Effect. Each
Partner hereby represents and warrants that such Partner has the corporate or
partnership power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. Each Partner hereby represents and warrants
that the execution, delivery and performance by such Partner of this Agreement
has been duly authorized by all necessary corporate or partnership action. Each
Partner hereby represents and warrants that this Agreement constitutes the
legal, valid and binding obligation of such Partner and is enforceable against
such Partner in accordance with its terms.
(b) No Conflict with Restrictions; No Default. Each Partner hereby
represents and warrants that neither the execution and delivery by such Partner
of this Agreement nor such Partner's performance and compliance with the terms
and provisions hereof (i) will conflict with, violate or result in a breach of
any of the terms, covenants, conditions or provisions of any law or governmental
regulation in effect on the date hereof applicable to, or any order, writ,
injunction, decree, determination or award of any court, governmental
department, board, agency or instrumentality, domestic or foreign, or arbitrator
directed to or binding on such Partner which conflict, violation or breach would
have a Material Adverse Effect, (ii) will conflict with, violate, result in a
breach of or constitute a default under any agreement or instrument to which
such Partner is a party or by which such Partner is or may be bound or to which
any of its properties or assets is subject which conflict, violation, breach or
default would have a Material Adverse Effect, or any of the terms or provisions
of the organizational documents or by-laws of such Partner, (iii) will conflict
with, violate, result in a breach of, constitute a default under (whether with
notice or lapse of time or both), accelerate or permit the acceleration of the
performance required by, or require any consent, authorization or approval under
any of the terms or provisions of any material indenture, mortgage, lease,
agreement or instrument to which such Partner is a party or by which such
Partner or such Partner's property or assets is or may be bound, or (iv) will
result in the creation or imposition of any material lien upon any of the
properties or assets of such Partner.
(c) Governmental Authorizations. Each Partner hereby represents and
warrants that no material registration, declaration or filing with, or consent,
approval, license, permit or other authorization or order by, any governmental
or regulatory authority, domestic or foreign, is required in connection with the
valid execution, delivery and performance by such Partner of this Agreement.
(d) Litigation.
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(i) Each D&B Partner hereby represents and warrants that (A) there
are no actions, suits, proceedings or investigations pending or, to the
knowledge of such Partner, threatened against or affecting such Partner or
any of its respective properties, assets, rights or businesses, in any
court or before or by any governmental department, board, agency or
instrumentality, domestic or foreign, or any arbitrator which would (or,
in the case of an investigation, could lead to any action, suit or
proceeding, which would) reasonably be expected to impair such Partner's
ability to perform its obligations under this Agreement or to have a
Material Adverse Effect or bring into question the validity of this
Agreement or the transactions contemplated hereby; and (B) such D&B
Partner has not received any currently effective notice of any default,
and such Partner is not in default, under any applicable order, writ,
injunction, decree, permit, determination or award of any court, any
governmental department, board, agency or instrumentality, domestic or
foreign, or any arbitrator which would reasonably be expected to impair
its ability to perform its obligations under this Agreement or to have a
Material Adverse Effect.
(ii) Each Class A Limited Partner hereby represents and warrants
that there is no action, suit, proceeding or investigation pending or, to
the knowledge of such Partner, threatened against or affecting such
Partner which seeks to question, delay or prevent the consummation of the
transactions contemplated hereby.
(e) Investment Company Act; Public Utility Holding Company Act. Each
Partner hereby represents and warrants that (i) neither such Partner nor, as a
result of the Partner's ownership of its Interest, is the Partnership an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended and (ii) such Partner is not a "holding company," an "affiliate of a
holding company," or a "subsidiary of a holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935, as
amended.
(f) Subsidiary. Each of Investing, DBI and Holding hereby represents and
warrants that 100% of the capital stock of such Partner is owned, directly or
indirectly, by D&B.
(g) Investigation; Intent. Each Partner hereby represents and warrants
that (i) such Partner is acquiring its Partnership Interest based upon its own
investigation, and the exercise by such Partner of its rights and the
performance of its obligations under this Agreement will be based upon its own
investigation, analysis and expertise, (ii) its acquisition of its Partnership
Interest is being made for its own account for investment, and not with a view
to the sale or distribution thereof, and (iii) it intends to form a partnership
for the purpose of making an economic profit from the transactions proposed to
be entered into by the Partnership.
(h) Capitalization of Class A Limited Partners. Each Class A Limited
Partner hereby represents and warrants that at all times that it is a Partner
such Class A Limited Partner shall satisfy each of the following requirements:
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(i) It shall not be an Affiliate of D&B;
(ii) It shall be capitalized with not less than three percent (3%)
equity and:
(A) Such equity shall be subordinate to all outstanding debt
of such Class A Limited Partner;
(B) Such equity shall not be funded with non-recourse debt
that is collateralized by a pledge of such equity;
(C) If funded with recourse debt, the owner of such equity
shall have other assets whose value is at least equal to the value
of such equity;
(D) Such equity shall not be backed by a letter of credit; and
(E) Such equity shall not be the subject of residual insurance
or a residual guaranty, in either case that ensures recovery of such
equity; and
(iii) Such Class A Limited Partner shall not make distributions in
excess of its earnings determined in accordance with GAAP or pay fees in
respect of the structuring of the transactions contemplated by this
Agreement or pay costs incurred in connection with such transactions, in
each case to the owners of its equity.
(i) Transaction Fees. Each D&B Partner hereby represents and warrants that
neither it nor any of its Affiliates shall pay any fees or other amounts to any
Class A Limited Partner in respect of the transactions contemplated by this
Agreement other than a fee to be paid by D&B to Utrecht on the first Business
Day after the Closing Date and any amounts to be paid or distributed to the
Class A Limited Partners pursuant to this Agreement.
ARTICLE VIII
ACCOUNTING; BOOKS AND RECORDS
SECTION 8.01. Accounting; Books and Records. (a) Maintenance of Books and
Records. The Partnership shall maintain at its principal place of business or,
upon notice to the Partners, at such other place as the General Partner shall
determine, separate books of account for the Partnership which shall include a
record of all costs and expenses incurred, all charges made, all credits made
and received, and all income derived in connection with the conduct of the
Partnership and the operation of its business in accordance with this Agreement.
<PAGE> 44
39
(b) Accounting Methods.
(i) The Partnership shall use the accrual method of accounting in
preparation of its annual reports and for tax purposes and shall keep its
books and records accordingly.
(ii) All amounts payable under any agreement between the Partnership
on the one hand and the Partners or their Affiliates on the other hand
shall be treated as occurring between the Partnership and a Person who is
not a Partner within the meaning of Section 707(a)(1) of the Code and such
amounts payable by the Partnership to any Partner or its Affiliates shall
be considered an expense or capital cost, as the case may be, of the
Partnership for income tax and financial reporting purposes, and shall not
be considered a distribution to such Partner including, without
limitation, in maintaining such Partner's Capital Account, and any such
amounts payable by any Partner or its Affiliates to the Partnership shall
not be considered a contribution to the Partnership, including, without
limitation, in maintaining such Partner's Capital Account.
(c) Access to Books, Records, etc. Subject to Section 8.04, any Partner or
any agents or representatives of such Partner, at the Partner's own expense and
upon reasonable notice and with reasonable frequency, may examine any
information it may reasonably request and make copies of and abstracts from the
financial and operating records and books of account of the Partnership, and
discuss the affairs, finances and accounts of the Partnership with the General
Partner and its Responsible Officers, directors, officers and independent
accountants of the Partnership, all at such reasonable times and as often as
such Partner or any agents or representatives of such Partner may reasonably
request. The rights granted to a Partner pursuant to this Section 8.01 are
expressly subject to compliance by such Partner with the confidentiality
procedures and guidelines of the Partnership, as such procedures and guidelines
may be established from time to time.
SECTION 8.02. Reports. (a) In General. The General Partner shall be
responsible for the preparation of financial reports of the Partnership and the
coordination of financial matters of the Partnership with the Partnership's
accountants. Each report delivered by the Partnership to the Partners pursuant
to this Article VIII shall be accompanied by a representation of a Responsible
Officer of the General Partner familiar with the affairs of the Partnership that
(x) such report has been prepared and fairly stated in all material respects in
accordance with GAAP, or to the extent inconsistent therewith, in accordance
with this Agreement, and (y) no Liquidating Event or Notice Event, or event
which with notice or lapse of time or both would constitute a Liquidating Event
or Notice Event (other than the Liquidating Event described in Section 12.01(a)
or the Notice Event described in Section 14.01(a)) has occurred and is
continuing or if any such event has occurred and is continuing, the action that
the General Partner has taken or proposes to take with respect thereto.
(b) Annual Reports. Within 120 days after the end of each Fiscal Year, the
General Partner shall cause to be prepared and each Partner to be furnished with
the following:
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(i) A balance sheet as of the last day of such Fiscal Year and an
income statement and statement of cash flows for the Partnership for such
Fiscal Year and notes associated with each; and
(ii) A statement of the Partners' Capital Accounts and changes
therein for such Fiscal Year.
(c) Quarterly Reports. Within sixty (60) days after the close of each
Fiscal Quarter beginning with the Fiscal Quarter ending June 30, 1997, the
General Partner shall cause to be prepared and each Partner shall be furnished
with a balance sheet as of the last day of such Fiscal Quarter and an income
statement and a statement of cash flows for the Partnership for such Fiscal
Quarter and the notes associated with each.
(d) Retirement/Liquidation Date Reports. On the date on which any
distribution is made pursuant to Section 10.08(b) in retirement of all or any
portion of any Class A Limited Partner's Interest and on the date on which final
distributions are made to the Partners pursuant to Section 12.02, the General
Partner shall cause to be prepared and each Partner furnished with each of the
following statements:
(i) A balance sheet as of the date of such distribution setting
forth the aggregate Mark-to-Market Values for each of the following as
individual line items: the Software and Databases, all Loans held by the
Partnership and each Partnership Subsidiary, all Permitted Securities held
by the Partnership and each Partnership Subsidiary and all Cash
Equivalents (a "Mark-to-Market Balance Sheet"); and
(ii) A statement of the Partners' Capital Accounts as adjusted
immediately prior to such distribution (x) in the case of distribution
pursuant to Section 10.08(b), pursuant to Section 3.07 and Section
10.08(b), and (y) in the case of a distribution pursuant to Section 12.02,
pursuant to Section 3.07 and Section 12.02.
(e) Purchase Option Reports. The General Partner shall cause to be
prepared and all Partners furnished with a statement of the Partners' Capital
Accounts and a Mark-to-Market Balance Sheet (x) in the case of the exercise of
the Purchase Option after delivery of a Liquidation Notice as a result of the
occurrence of the Notice Event described in Section 14.01(a), on the fourth
anniversary of the Closing Date, and setting forth the Mark-to-Market Values of
the Permitted Assets as of such fourth anniversary, and (y) in all other cases,
not later than the sixtieth (60th) day after the Election Date, and setting
forth the Mark-to-Market Values of the Permitted Assets as of the date of
delivery of such Mark-to-Market Balance Sheet (the date of delivery of the
Mark-to-Market Balance Sheet pursuant to clause (x) or (y), the "Purchase
Date").
For purposes of this Section 8.02(e), the Partners' Capital Accounts shall
be determined in accordance with Section 3.07 as of the Purchase Date taking
into account (x) the adjustments to the Gross Asset Values of the Partnership's
Property that would result from a determination
<PAGE> 46
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of the value of the Partnership's Property in accordance with Section
10.08(b)(i) as of the Purchase Date, and (y) the allocation to the Partners'
Capital Accounts that would result from an allocation pursuant to Article III of
the Profits, Losses and other items of Partnership income, gain, loss or
deduction for the period beginning on the first day of the Allocation Year
during which the Purchase Date occurs and ending on the Purchase Date.
SECTION 8.03. Tax Matters.
(a) (i) The General Partner is authorized to make any and all elections
for federal, state, and local tax purposes including, without limitation, any
election, if permitted by applicable law: (i) to adjust the basis of Partnership
Property pursuant to Code Sections 754, 734(b) and 743(b), or comparable
provisions of state or local law, in connection with Transfers of Partnership
Interests and Partnership distributions; (ii) to extend the statute of
limitations for assessment of tax deficiencies against the Partners with respect
to adjustments to the Partnership's federal, state, or local tax returns; and
(iii) to the extent provided in Code Sections 6221 through 6231, to represent
the Partnership and the Partners before taxing authorities or courts of
competent jurisdiction in tax matters affecting the Partnership or the Partners
in their capacities as Partners, and to file any tax returns and execute any
agreements or other documents relating to or affecting such tax matters,
including agreements or other documents that bind the Partners with respect to
such tax matters or otherwise affect the rights of the Partnership and the
Partners. The General Partner is specifically authorized to act as the "Tax
Matters Partner" under the Code and in any similar capacity under state or local
law.
(ii) The General Partner shall give prompt notice to each Partner
upon the receipt of (A) written notice that the Internal Revenue Service
or any state or local taxing authority intends to examine the
Partnership's income tax returns for any year; (B) written notice of
commencement of an administrative proceeding at the Partnership level
related to the Partnership under Section 6223 of the Code; (C) written
notice or any final partnership administrative adjustment relating to the
Partnership pursuant to a proceeding under Section 6223 of the Code; (D)
any request from the Internal Revenue Service or any comparable state or
local agency for waiver of any applicable statute of limitation with
respect to the filing of any tax return by the Partnership; and (E) any
Form 5701 or comparable state or local audit adjustment notices as soon as
received, with copies of such notices provided to each Partner. In
addition, each Partner will be notified of and allowed to attend any
opening and closing conferences regarding any administrative proceeding at
the Partnership level relating to the Partnership under Section 6223 of
the Code, and the General Partner will provide copies to each Partner of
any correspondence with the Internal Revenue Service or comparable state
or local agency regarding legal positions taken on audit issues by the
General Partner. Within ninety (90) days after receipt of notice of a
final partnership administrative adjustment, the General Partner shall
notify each Partner if it does not intend to file for judicial review with
respect to such adjustment.
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(b) Necessary tax information shall be delivered to each Partner as soon
as practicable after the end of each Fiscal Year of the Partnership but not
later than ninety (90) days after the end of each Fiscal Year. The General
Partner shall file tax returns for the Partnership prepared in accordance with
the Code and the Regulations. Each Partner agrees that it will report all
Partnership taxable income, gain, loss, deduction and credit for each Fiscal
Year in the manner reflected on the Partnership's U.S. Partnership Return of
Income (Form 1065) and related Schedule K-1 furnished to such Partner for such
year.
SECTION 8.04. Proprietary Information. The Limited Partners shall not have
access to (i) information which the General Partner reasonably believes to be in
the nature of trade secrets or proprietary information, (ii) information the
disclosure of which the General Partner in good faith believes is not in the
best interest of the Partnership or could damage the Partnership or its
business, (iii) any information subject to the attorney-client privilege and
(iv) any information which is required by law or contract to be kept
confidential; provided, however, nothing set forth in this Section 8.04 shall
prevent any appraiser doing an appraisal performed in accordance with this
Agreement from having access to proprietary information described in this
Section 8.04 to the extent necessary to properly perform such appraisal and the
General Partner shall provide such information to any such appraiser; provided,
further, that such appraiser signs a confidentiality agreement reasonably
acceptable to the General Partner.
ARTICLE IX
AMENDMENTS; MEETINGS
SECTION 9.01. Amendments. Amendments to this Agreement may be proposed by
the General Partner or by any Limited Partner. Following such proposal, the
General Partner shall submit to the Partners a verbatim statement of any
proposed amendment if counsel for the Partnership shall have approved of the
same in writing as to form, and the General Partner shall include in any such
submission a recommendation as to the proposed amendment. The General Partner
shall seek the written vote of the Partners on the proposed amendment or shall
call a meeting to vote thereon and to transact any other business that it may
deem appropriate. A proposed amendment shall be adopted and be effective as an
amendment to this Agreement only if it receives the affirmative vote of the
General Partner and a majority of the Class B Limited Partners, provided that,
if any amendment would adversely affect any Class A Limited Partner, it must
also receive the affirmative vote of such Class A Limited Partner.
SECTION 9.02. Meetings of the Partners. (a) Meetings of the Partners may
be called by the General Partner and shall be called upon the written request of
any other Partner. The call shall state the nature of the business to be
transacted. Notice of any such meeting shall be given to all Partners not less
than seven (7) Business Days nor more than thirty (30) days prior to the date of
such meeting. Partners may vote in person, by proxy or by telephone at such
meeting. Whenever the vote or consent of Partners is permitted or required under
the Agreement, such vote
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or consent may be given at a meeting of Partners or may be given in accordance
with the procedure prescribed in Section 9.03.
(b) For the purpose of determining the Partners entitled to vote on, or to
vote at, any meeting of the Partners or any adjournment thereof, the General
Partner or the Partner requesting such meeting may fix, in advance, a date as
the record date for any such determination. Such date shall not be more than
thirty (30) days nor less than ten (10) days before any such meeting.
(c) Each Partner may authorize any Person or Persons to act for it by
proxy on all matters in which the Partner is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Partner or its attorney-in-fact. No proxy shall be
valid after the expiration of eleven (11) months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Partner executing it.
(d) Each meeting of Partners shall be conducted by the General Partner or
such other Person as the General Partner may appoint pursuant to such rules for
the conduct of the meeting as the General Partner or such other Person deems
appropriate.
SECTION 9.03. Unanimous Consent. In the event the consent of the Partners
is required for any action to be taken by the Partnership, such consent may be
given at a meeting, which may be conducted by conference telephone call, or
provided in writing executed by all the Partners.
ARTICLE X
TRANSFERS OF INTERESTS
SECTION 10.01. Restriction on Transfers. Except as otherwise permitted by
this Agreement, no Partner shall Transfer all or any portion of its Interest.
Each Partner hereby acknowledges the reasonableness of the restrictions on
Transfer imposed by this Agreement in view of the Partnership purposes and the
relationship of the Partners. Accordingly, the restrictions on Transfer
contained herein shall be specifically enforceable.
SECTION 10.02. Permitted Transfers. Subject to the conditions and
restrictions set forth in Section 10.03, a Partner may at any time Transfer all
or any portion of its Interest to (i) any other Partner, (ii) any Wholly Owned
Affiliate of a Partner including the transferor, (iii) any Person approved by
all the Partners, or (iv) in the case of any Class A Limited Partner, (A) any
Person pursuant to Section 14.03, or (B) any Person to whom such Class A Limited
Partner's Interest is Transferred as a result of a foreclosure under that
certain Credit Agreement dated as of April 1, 1997 among Leiden, as Borrower,
Utrecht, as Initial Lender and Coopereratieve Centrale Raiffeisen-Boerenleenbank
B.A., "Rabobank Nederland", New York Branch, as Agent.
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Any Transfer permitted by this Section 10.02 shall be referred to in this
Agreement as a "Permitted Transfer," and the Person to which the Interest is
transferred shall be a "Permitted Transferee."
SECTION 10.03. Conditions to Permitted Transfers. A Transfer shall not be
treated as a Permitted Transfer under Section 10.02 unless and until the
following conditions are satisfied:
(a) The transferor and transferee shall execute and deliver to the
Partnership (i) such documents and instruments of conveyance as may be necessary
or appropriate in the opinion of counsel to the Partnership to effect such
Transfer and to confirm the agreement of the transferee to be bound by the
provisions of this Article X, and (ii) except in the case of a Transfer to a
Wholly Owned Affiliate of a D&B Partner, in the case of the transferee, a
confidentiality agreement substantially in the form of the confidentiality
agreement attached hereto as Exhibit C (the "Form Confidentiality Agreement").
In addition, unless the requirements of this sentence have been waived by the
General Partner, the Partnership shall be reimbursed by the transferor and/or
transferee for all costs and expenses that it reasonably incurs in connection
with such Transfer.
(b) The Transfer will not cause the Partnership to terminate for federal
income tax purposes, and the transferor shall provide the Partnership an opinion
of counsel to such effect. Such counsel and opinion shall be reasonably
satisfactory to the General Partner, and the General Partner and the other
Partners shall provide to such counsel any information available to the General
Partner or to such other Partners, as the case may be, and relevant to such
opinion.
(c) The transferor and transferee shall furnish the Partnership with the
transferee's taxpayer identification number, sufficient information to determine
the transferee's initial tax basis in the Interests Transferred, and any other
information reasonably necessary to permit the Partnership to file all required
federal and state tax returns and other legally required information statements
or returns. Without limiting the generality of the foregoing, the Partnership
shall not be required to make any distribution otherwise provided for in this
Agreement with respect to any Transferred Interests until it has received such
information.
(d) Such Transfer will be exempt from all applicable registration
requirements and will not violate any applicable laws regulating the Transfer of
securities, and, except in the case of a Transfer of Interests to another
Partner or to a Wholly Owned Affiliate of any Partner, including the transferor,
the transferor shall provide an opinion of counsel to such effect. Such counsel
and opinion shall be reasonably satisfactory to the General Partner.
(e) Such Transfer will not cause the Partnership to be deemed to be an
"investment company" under the Investment Company Act of 1940, as amended and
the transferor shall provide an opinion of counsel to such effect. Such counsel
and opinion shall be reasonably satisfactory to the General Partner, and the
General Partner and the other Partners shall provide
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to such counsel any information available to the General Partner or to such
other Partners, as the case may be, and relevant to such opinion.
(f) Except in the case of a Transfer to a Wholly Owned Affiliate of a D&B
Partner, each Class A Limited Partner and the transferee of such Class A Limited
Partner shall execute certificates substantially similar to the certificates
(the "Form Transferor Certificate" and the "Form Transferee Certificate")
attached hereto as Exhibit D-1 and Exhibit D-2, respectively.
SECTION 10.04. Prohibited Transfers. Any purported Transfer of Interests
that is not a Permitted Transfer shall be null and void and of no effect
whatever; provided that, if the Partnership is required to recognize a Transfer
that is not a Permitted Transfer (or if the General Partner, in its sole
discretion, elects to recognize a Transfer that is not a Permitted Transfer),
the Interest Transferred shall be strictly limited to the transferor's rights to
allocations and distributions as provided by this Agreement with respect to the
Transferred Interests, which allocations and distributions may be applied
(without limiting any other legal or equitable rights of the Partnership) to
satisfy any debts, obligations, or liabilities for damages that the transferor
or transferee of such Interests may have to the Partnership.
In the case of a Transfer or attempted Transfer of Interests that is not a
Permitted Transfer, the parties engaging or attempting to engage in such
Transfer shall be liable to indemnify and hold harmless the Partnership and the
other Partners from all cost, liability, and damage that any of such indemnified
Persons may incur (including, without limitation, incremental tax liability and
lawyers' fees and expenses) as a result of such Transfer or attempted Transfer
and efforts to enforce the indemnity granted hereby.
SECTION 10.05. Rights of Unadmitted Assignees. (a) In General. A Person
who acquires one or more Interests but who is not admitted as a substituted
Partner pursuant to Section 10.06 shall be entitled only to allocations and
distributions with respect to such Interests in accordance with this Agreement,
but shall have no right to any information or accounting of the affairs of the
Partnership, shall not be entitled to inspect the books or records of the
Partnership, and shall not have any of the rights of a General Partner or a
Limited Partner under the Act or this Agreement.
(b) General Partner. A transferee who acquires a Partnership Interest from
a General Partner under this Agreement by means of a Transfer that is permitted
under this Article X, but who is not admitted as a General Partner, shall have
no authority to act for or bind the Partnership, to inspect the Partnership's
books, or otherwise to be treated as a General Partner. Following such a
Transfer, the transferor shall not cease to be a General Partner of the
Partnership and shall continue to be a General Partner until such time as the
transferee is admitted as a General Partner.
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SECTION 10.06. Admission as Substituted Partners. Subject to the other
provisions of this Article X, a transferee of Interests may be admitted to the
Partnership as a substituted Partner only upon satisfaction of the conditions
set forth below in this Section 10.06:
(a) The Interests with respect to which the transferee is being admitted
were acquired by means of a Permitted Transfer;
(b) The transferee becomes a party to this Agreement as a Partner and
executes such documents and instruments as the General Partner may reasonably
request (including, without limitation, amendments to the Certificate) as may be
necessary or appropriate to confirm such transferee as a Partner in the
Partnership and such transferee's agreement to be bound by the terms and
conditions of this Agreement;
(c) The transferee pays or reimburses the Partnership for all reasonable
legal, filing, and publication costs that the Partnership incurs in connection
with the admission of the transferee as a Partner with respect to the
Transferred Interests;
(d) If the transferee is a partnership or a corporation, the transferee
provides the Partnership with evidence satisfactory to counsel for the
Partnership that such transferee has made each of the representations and
undertaken each of the warranties described in Section 7.02 as of the date of
the Transfer; and
(e) In the event that the transferee of a Partnership Interest from any
Partner is admitted under this Agreement, such transferee shall be deemed
admitted to the Partnership as a substituted Partner immediately prior to the
Transfer, and with respect to the transferee of a General Partner, such
transferee shall continue the business of the Partnership without dissolution.
SECTION 10.07. Distributions with Respect to Transferred Interests. If any
Partnership Interest is sold, assigned, or Transferred in compliance with the
provisions of this Article X, all distributions on or before the date of such
Transfer shall be made to the transferor, and all distributions thereafter shall
be made to the transferee. Solely for purposes of making such distributions, the
Partnership shall recognize such Transfer not later than the end of the calendar
month during which it is given notice of such Transfer; provided, however, that
if the Partnership is given notice of a Transfer at least fourteen (14) days
prior to the Transfer, the Partnership shall recognize such Transfer as of the
date of such Transfer; and provided further, that if the Partnership does not
receive a notice stating the date such Interest was Transferred and such other
information as the General Partner may reasonably require within thirty (30)
days after the end of the accounting period during which the Transfer occurs,
all distributions shall be made to the Person who, according to the books and
records of the Partnership, on the last day of the accounting period during
which the Transfer occurs, was the owner of the Interest. Neither the
Partnership nor the General Partner shall incur any liability for making
distributions in accordance
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with the provisions of this Section 10.07, whether or not the General Partner or
the Partnership has knowledge of any Transfer of ownership of any Interest.
SECTION 10.08. Retirement of Class A Limited Partners' Interests in the
Partnership; Determination of Mark-to-Market Values and Gross Asset Values.
(a) In General.
(i) The General Partner may, at any time, elect to cause all or any
portion of the Class A Limited Partners' Interests in the Partnership to
be retired in accordance with this Section 10.08 by giving written notice
of its election to the Partnership and to all other Partners; provided
that:
(A) Any single distribution made to a Class A Limited Partner
in retirement of its Interest in accordance with this Section 10.08
shall not be less than the lesser of the amount necessary to retire
the entire Interest of such Class A Limited Partner or $10,000,000
plus integral multiples of $1,000,000; and
(B) No Liquidating Event or Notice Event (or event which, with
notice or lapse of time, or both, would constitute a Liquidating
Event or Notice Event, other than the events described in Section
12.01(a) and Section 14.01(a)) shall have occurred and be
continuing, immediately before or after giving effect to such
retirement.
(ii) Any notice given pursuant to this Section 10.08(a) (a
"Retirement Notice") shall include the following:
(A) Either a statement that the entire Interests of the Class
A Limited Partners are to be retired or a statement of the amount to
be distributed in retirement of each Class A Limited Partner's
Interest; and
(B) The Retirement Date (as defined in and selected in
accordance with Section 10.08(b)(iii)) on which retirement
distributions shall be made to the Class A Limited Partners.
(b) Distributions Upon Retirement. In the event that any portion of the
Class A Limited Partner's Interests in the Partnership are retired pursuant to
this Section 10.08, (x) the value of the Partnership's assets shall be
determined in accordance with Section 10.08(b)(i) and the Gross Asset Values of
all Partnership assets shall be adjusted pursuant to subparagraph (ii) of the
definition of Gross Asset Value in Section 1.10 as of the applicable Retirement
Date, and (y) Profits, Losses and other items of Partnership income, gain, loss
or deduction for the period beginning on the first day of the Allocation Year
during which the Retirement Date occurs and ending on the Retirement Date shall
be allocated pursuant to Article III. On the applicable
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Retirement Date, the Partnership shall distribute to each Class A Limited
Partner an amount of cash, (A) in the event that the entire Interest of such
Class A Limited Partner is to be retired, equal to the balance in such Class A
Limited Partner's Capital Account immediately after giving effect to the
adjustments and allocations required by the first sentence of this Section
10.08(b) and as reflected on the statement of Capital Accounts provided to the
Partners pursuant to Section 8.02(d)(ii), or (B) in all other cases, equal to
the amount stated in the applicable Retirement Notice.
(i) For purposes of determining the amount of any adjustment to the
Gross Asset Values of Partnership assets pursuant to subparagraph (ii) of
the definition of Gross Asset Value in Section 1.10, the value of each of
the Permitted Assets will be determined in accordance with this Section
10.08(b)(i) (the "Mark-to-Market Value").
(A) The Mark-to-Market Value of any Loan shall be equal to the
par value of such Loan; provided that if there has occurred and is
continuing any payment or other material default with respect to any
such Loan at the time such value is being determined, the
Mark-to-Market Value of such Loan shall be determined by an
investment or commercial bank of national recognition selected by
the General Partner with the consent of the Class A Limited Partner
(which consent shall not be unreasonably withheld).
(B) The Mark-to-Market Value of the Software and Databases
shall be determined by appraisal by Coopers & Lybrand or, if Coopers
& Lybrand is unavailable or unwilling to do such appraisal, the
Alternative Appraiser, in each case using substantially the same
valuation methodology as was used in determining the initial Gross
Asset Value of the Software and Databases.
(C) The Mark-to-Market Value of any Cash or Cash Equivalents
shall be valued at their face value less unamortized discounts and
plus unamortized premium, if any.
(D) The Mark-to-Market Value of any Permitted Security shall
be equal to its Market Value.
(E) The Mark-to-Market Value of Partnership Subsidiary I Stock
or Partnership Subsidiary II Stock shall be equal to the aggregate
Mark-to-Market Values of all Permitted Assets held by Partnership
Subsidiary I or Partnership Subsidiary II, as the case may be.
(F) The Mark-to-Market Value of the Computer Equipment shall
be determined by appraisal by Coopers & Lybrand or, if Coopers &
Lybrand is
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unavailable or unwilling to do such appraisal, the Alternative
Appraiser, in each case using substantially the same valuation
methodology as was used in determining the initial Gross Asset Value
of the Computer Equipment.
(ii) If all or any portion of the Class A Limited Partners'
Interests in the Partnership are retired prior to the fourth anniversary
of the Closing Date, the Partnership shall pay to each Class A Limited
Partner on the applicable Retirement Date cash in an amount equal to such
Class A Limited Partner's Early Liquidation Premium, if any. Amounts
payable under this Section 10.08(b)(ii) shall be treated as guaranteed
payments within the meaning of Code Section 707(c), shall be considered an
expense of the Partnership for income tax purposes and an expense or
capital item for financial reporting purposes, as the case may be, and
shall not be considered a distribution of money to any Class A Limited
Partner that would reduce its Capital Account.
(iii) In the event that the General Partner has elected to retire
all or any portion of the Class A Limited Partners' Interests in the
Partnership pursuant to Section 10.08(a), distributions shall be made to
each Class A Limited Partner, and such portion of each Class A Limited
Partner's Interest in the Partnership shall be retired, at 11:00 a.m. on
the date (the "Retirement Date") specified in the Retirement Notice, which
date shall not be less than five (5) Business Days or more than fifteen
(15) Business Days after the date on which the Retirement Notice was given
pursuant to Section 10.08(a).
ARTICLE XI
GENERAL PARTNER
SECTION 11.01. Covenant Not to Withdraw, Transfer, or Dissolve. Except as
otherwise permitted by this Agreement, the General Partner hereby covenants and
agrees not to (i) take any action to file a certificate of dissolution or its
equivalent with respect to itself, (ii) withdraw or attempt to withdraw from the
Partnership, (iii) exercise any power under the Act to dissolve the Partnership,
(iv) Transfer all or any portion of its Interest in the Partnership as a General
Partner, or (v) petition for judicial dissolution of the Partnership. Further,
the General Partner hereby covenants and agrees to continue to carry out the
duties of the General Partner under this Agreement until the Partnership is
dissolved and liquidated pursuant to Article XII.
SECTION 11.02. Termination of Status as General Partner. (a) The General
Partner shall cease to be a General Partner upon the first to occur of (i) the
Bankruptcy of such Partner, (ii) the Transfer of the General Partner's entire
Interest as a General Partner, provided that the transferee is admitted as a
substituted General Partner pursuant to Section 10.06 hereof, (iii) the
involuntary Transfer by operation of law of the General Partner's Interest in
the Partnership, or (iv) the vote of all of the Partners to approve a request by
the General Partner to withdraw. In
<PAGE> 55
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the event the General Partner ceases to be a General Partner without having
Transferred its entire Interest as a General Partner, such Person shall be
treated as an unadmitted transferee of a Partnership Interest as a result of a
Transfer (other than a Permitted Transfer) of an Interest pursuant to Section
10.04.
If the General Partner ceases to be a Partner for any reason under this
Agreement, such Person shall continue to be liable as a Partner for all debts
and obligations of the Partnership existing at the time such Person ceases to be
a General Partner, regardless of whether, at such time, such debts or
liabilities were known or unknown, actual or contingent provided, however, that
the assets of such Person shall be subject to the protection of Section
17-403(d) of the Act. A Person shall not be liable as a General Partner for
Partnership debts and obligations arising after such Person ceases to be a
General Partner. Any debts, obligations, or liabilities in damages to the
Partnership of any Person who ceases to be a General Partner shall be
collectible by any legal means and the Partnership is authorized, in addition to
any other remedies at law or in equity, to apply any amounts otherwise
distributable or payable by the Partnership to such Person to satisfy such
debts, obligations, or liabilities.
(b) If at the time a Person ceases to be a General Partner, such Person is
also a Limited Partner with respect to Interests other than its Interest as a
General Partner, such cessation shall not affect such Person's rights and
obligations with respect to such Limited Partner Interests.
SECTION 11.03. Election of New General Partners. Provided the Partnership
has one General Partner, any Partner may nominate one or more Persons described
in Section 10.02 for election as additional General Partners; provided that any
such Person satisfies the requirements in Sections 10.03 and 10.06 applicable to
the transferee in a Permitted Transfer and the admission of a transferee as a
substituted General Partner. The election of an additional General Partner shall
require an affirmative vote of all of the Partners.
ARTICLE XII
DISSOLUTION AND WINDING UP
SECTION 12.01. Liquidating Events. The Partnership shall dissolve and
commence winding up and liquidating upon the first to occur of any of the
following ("Liquidating Events"):
(a) The twentieth anniversary of the Closing Date;
(b) The date on which, pursuant to Section 14.02, a Liquidation
Notice becomes effective to cause a Notice Event to become a Liquidating
Event;
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51
(c) In the event any one or more of the D&B Partners has elected
pursuant to Section 14.03 to purchase any Class A Limited Partner's
Interest, the failure of any of such D&B Partners, or their designees, to
pay the Purchase Price as required pursuant to such Section 14.03;
(d) The unanimous vote of the Partners to dissolve, wind up, and
liquidate the Partnership;
(e) The happening of any other event that makes it unlawful,
impossible, or impractical to carry on the business of the Partnership or
the Delaware Court of Chancery has entered a decree pursuant to Section
17-802 of the Act, and such decree has become final; or
(f) The withdrawal or removal of the General Partner, the assignment
by the General Partner of its entire Interest in the Partnership or any
other event that causes the General Partner to cease to be a general
partner under the Act; provided that any such event shall not constitute a
Liquidating Event if the Partnership is continued pursuant to this Section
12.01.
The Partners hereby agree that, notwithstanding any provision of the Act or the
Delaware Uniform Partnership Act, the Partnership shall not dissolve prior to
the occurrence of a Liquidating Event. Upon the occurrence of any event set
forth in Section 12.01(f) (so long as no other Liquidating Event has occurred),
the Partnership shall not be dissolved or required to be wound up if at the time
of such event there is at least one remaining General Partner and that General
Partner carries on the business of the Partnership (any such remaining General
Partner being hereby authorized to carry on the business of the Partnership). If
at such time there is not at least one remaining General Partner or the
remaining General Partner does not carry on the business of the Partnership, the
Partnership shall be liquidated in accordance with this Article XII.
SECTION 12.02. Winding Up. Upon the occurrence of a Liquidating Event, the
Partnership shall continue solely for the purposes of winding up its affairs in
an orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Partners, and no Partner shall take any action with respect to the
Partnership that is inconsistent with the winding up of the Partnership's
business and affairs; provided that all covenants contained in this Agreement
and obligations provided for in this Agreement shall continue to be fully
binding upon the Partners until such time as the Partnership Property has been
distributed pursuant to this Section 12.02 and the Certificate has been canceled
pursuant to the Act. The Liquidator shall be responsible for overseeing the
winding up and dissolution of the Partnership. The Liquidator shall take full
account of the Partnership's liabilities and Partnership Property and, except as
otherwise provided in Section 12.03, shall, within sixty (60) days of the
occurrence of a Liquidating Event cause the Partnership Property or the proceeds
from the sale or disposition thereof (as determined pursuant
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to Section 12.10), to the extent sufficient therefor, to be applied and
distributed, to the maximum extent permitted by law and notwithstanding anything
in this Agreement to the contrary, in the following order:
(a) First, to creditors (including the Class A Limited Partners to
the extent such Partners are creditors, to the extent otherwise permitted
by law) other than the D&B Partners and their Affiliates, in satisfaction
of all of the Partnership's debts and liabilities (including claims and
obligations as required by Section 17-804(b) of the Act) other than
liabilities for which reasonable provision for payment has been made and
liabilities for distributions to Partners under Section 17-601 or 17-604
of the Act;
(b) Second, to the Class A Limited Partners in an amount equal to
the amount of any Early Liquidation Premium that is then due and unpaid;
(c) Third, to the payment and discharge of all of the Partnership's
debts and liabilities to the D&B Partners and their Affiliates to the
extent adequate provision therefor has not been made; and
(d) The balance, if any, to the Partners in accordance with their
positive Capital Accounts, after giving effect to all contributions,
distributions, and allocations for all periods.
In the event that any payment or distribution made under this Section 12.02 is
made in-kind, the amount of the payment or distribution will be equal to the
Mark-to-Market Value of the Partnership Property paid or distributed at the time
of such payment or distribution.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article XII.
The D&B Partners understand and agree that by accepting the provisions of this
Section 12.02 setting forth the priority of the distribution of the assets of
the Partnership to be made upon its liquidation, the D&B Partners expressly
waive any right which they, as creditors of the Partnership, might otherwise
have under the Act to receive distributions of assets pari passu with the other
creditors of the Partnership in connection with a distribution of assets of the
Partnership in satisfaction of any liability of the Partnership, and hereby
subordinate to said creditors any such right.
SECTION 12.03. Restoration of Deficit Capital Accounts; Compliance With
Timing Requirements of Regulations. In the event the Partnership is "liquidated"
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), (x)
distributions shall be made pursuant to this Article XII to the Partners who
have positive Capital Accounts in compliance with Regulations
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Section 1.704-1(b)(2)(ii)(b)(2), and (y) if the General Partner's Capital
Account has a deficit balance (after giving effect to all contributions,
distributions, and allocations for all taxable years, including the taxable year
during which such liquidation occurs), the General Partner shall contribute to
the capital of the Partnership the amount necessary to restore such deficit
balance to zero in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3).
If any Limited Partner has a deficit balance in its Capital Account (after
giving effect to all contributions, distributions and allocations for all
taxable years, including the taxable year during which such liquidation occurs),
such Limited Partner shall have no obligation to make any contribution to the
capital of the Partnership with respect to such deficit, and such deficit shall
not be considered a debt owed to the Partnership or to any other Person for any
purpose whatsoever. In the discretion of the Liquidator, with the consent of the
Class A Limited Partners, a portion (determined in the manner provided below) of
the distributions that may otherwise be made to the Partners pursuant to this
Article XII may be:
(a) Distributed to a trust established for the benefit of the
Partners solely for the purposes of liquidating Partnership Property,
collecting amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership. The assets
of any such trust shall be distributed to the Partners from time to time,
in the reasonable discretion of the Liquidator, in the same proportions
(as determined below) as the amount distributed to such trust by the
Partnership would otherwise have been distributed to the Partners pursuant
to Section 12.02; or
(b) Withheld to provide a reasonable reserve for Partnership
liabilities (contingent or otherwise) and to allow for the collection of
the unrealized portion of any installment obligations owed to the
Partnership, provided that such withheld amounts shall be distributed to
the Partners as soon as practicable.
The portion of the distributions that would otherwise have been made to each of
the Partners that is instead distributed to a trust pursuant to Section 12.03(a)
or withheld to provide a reserve pursuant to Section 12.03(b) shall be
determined in the same manner as the expense or deduction would have been
allocated if the Partnership had realized an expense equal to such amounts
immediately prior to distributions being made pursuant to Section 12.02.
SECTION 12.04. Deemed Distribution and Recontribution. In the event the
Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership
Property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged, and the Partnership's affairs shall not be wound up.
Instead, solely for federal income tax purposes, the Partnership shall be deemed
to have distributed the Partnership Property in-kind to the Partners, who shall
be deemed to have taken subject to all Partnership liabilities, all in
accordance with their respective Capital Accounts. Immediately
<PAGE> 59
54
thereafter, the Partners shall be deemed to have recontributed the Partnership
Property in-kind to the Partnership, which shall be deemed to have taken subject
to all such liabilities.
SECTION 12.05. Rights of Partners. Each Partner shall look solely to the
Partnership Property for the return of its Capital Contribution and, except as
otherwise provided in Section 12.10, shall have no right or power to demand or
receive property other than cash from the Partnership.
SECTION 12.06. Notice of Dissolution. In the event a Liquidating Event
occurs or an event occurs that would, but for provisions of Section 12.01,
result in a dissolution of the Partnership, the General Partner shall, within
thirty (30) days thereafter, provide written notice thereof to each of the
Partners and to all other parties with whom the Partnership regularly conducts
business (as determined in the discretion of the General Partner) and shall
publish notice thereof in a newspaper of general circulation in each place in
which the Partnership regularly conducts business (as determined in the
discretion of the General Partner).
SECTION 12.07. Liquidation Guaranteed Payment. On the date on which all of
the assets of the Partnership are distributed to the Partners pursuant to
Section 12.02, the Partnership shall pay to each Class A Limited Partner an
amount equal to such Class A Limited Partner's Early Liquidation Premium, if
any. Amounts payable under this Section 12.07 shall be paid in cash, unless, at
such time as the Partnership has failed to pay all or any portion of such amount
then due and payable, the Class A Limited Partners elect to have such amounts
paid in-kind. In the event the Class A Limited Partners have made such an
election, such payments shall be made in the form of Loans and/or Cash
Equivalents (as determined by the Class A Limited Partners in their sole
discretion subject only to the Partnership holding any such asset in the amounts
requested) with an aggregate Mark-to-Market Value equal to the amount due and
payable. In addition, amounts payable under this Section 12.07 shall be treated
as guaranteed payments within the meaning of Code Section 707(c), shall be
considered an expense of the Partnership for income tax purposes and an expense
or capital item for financial reporting purposes, as the case may be, and shall
not be considered a distribution to any Class A Limited Partner for all purposes
of this Agreement, including, without limitation, in maintaining any Class A
Limited Partner's Capital Account.
SECTION 12.08. Character of Liquidating Distributions. All payments made
in liquidation of the Interest of a retiring Partner (whether pursuant to
Article X or Article XII) shall be made in exchange for the interest of such
Partner in Partnership Property pursuant to Section 736(b)(1) of the Code,
including the interest of such Partner in Partnership goodwill.
SECTION 12.09. The Liquidator. The "Liquidator" shall mean the General
Partner, provided that, if at the time a Liquidating Event has occurred there is
no remaining General Partner, the "Liquidator" shall be appointed by the Class A
Limited Partners.
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SECTION 12.10. Form of Liquidating Distributions. (a) In general. Except
as provided in this Section 12.10, for purposes of making distributions required
by Section 12.02, the Liquidator may determine whether to distribute all or any
portion of the Partnership Property in-kind or to sell all or any portion of the
Partnership Property and distribute the proceeds therefrom, provided that the
Liquidator shall not distribute Partnership Property other than cash to any
Class A Limited Partner without its consent, and the Liquidator shall be
required to reduce the Partnership Property to cash to the extent necessary to
make distributions to the Class A Limited Partners pursuant to Section 12.02 in
cash.
(b) Class A Limited Partner In-Kind Election. At the election of the Class
A Limited Partners, the Liquidator may be required to distribute all of the
Partnership Property in-kind. In such event, the Property to be distributed to
each Partner shall be determined by the Liquidator; provided that, subject to
Section 12.10(c), distribution of any Partnership Property to any Class A
Limited Partner other than Loans or Cash Equivalents shall require the consent
of all of the Partners.
(c) Other Permitted Assets. In no event shall the Software and Databases
be distributed to the Class A Limited Partners in kind.
ARTICLE XIII
POWER OF ATTORNEY
SECTION 13.01. General Partner as Attorney-In-Fact. Each Partner hereby
makes, constitutes, and appoints the General Partner, each successor General
Partner, and the Liquidator, severally, with full power of substitution and
resubstitution, its true and lawful attorney-in-fact for it and in its name,
place, and stead and for its use and benefit, to sign, execute, certify,
acknowledge, swear to, file, publish and record (i) all certificates of limited
partnership, amended name or similar certificates, and other certificates and
instruments (including counterparts of this Agreement) which the General Partner
or Liquidator may deem necessary to be filed by the Partnership under the laws
of the State of Delaware or any other state or jurisdiction in which the
Partnership is doing or intends to do business, (ii) any and all amendments,
restatements or changes to this Agreement and the instruments described in (i),
as now or hereafter amended, which the General Partner may deem necessary to
effect a change or modification of the Partnership approved by the Partners in
accordance with the terms of this Agreement, including, without limitation,
amendments, restatements or changes to reflect (A) the exercise by the General
Partner of any power granted to it under this Agreement, (B) any amendments
adopted by the Partners in accordance with the terms of this Agreement; (C) the
admission of any substituted Partner, and (D) the disposition by any Partner of
its Interest in the Partnership, (iii) all certificates of cancellation and
other instruments which the General Partner or Liquidator deem necessary or
appropriate to effect the dissolution and termination of the Partnership
pursuant to
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the terms of this Agreement, and (iv) any other instrument which is now or may
hereafter be required by law to be filed on behalf of the Partnership or is
deemed necessary by the General Partner or Liquidator to carry out fully the
provisions of this Agreement in accordance with its terms. Each Partner
authorizes each such attorney-in-fact to take any further action which such
attorney-in-fact shall consider necessary in connection with any of the
foregoing, hereby giving each such attorney-in-fact full power and authority to
do and perform each and every act or thing whatsoever requisite to be done in
connection with the foregoing as fully as such Partner might or could do
personally, and hereby ratifying and confirming all that any such
attorney-in-fact shall lawfully do or cause to be done by virtue thereof or
hereof.
SECTION 13.02. Nature of Special Power. The power of attorney granted
pursuant to this Article XIII:
(a) Is a special power of attorney coupled with an interest and is
irrevocable;
(b) May be exercised by any such attorney-in-fact by listing the
Partners executing any agreement, certificate, instrument, or other
document with the single signature of any such attorney-in-fact acting as
attorney-in-fact for such Partners; and
(c) Shall survive and not be affected by the subsequent Bankruptcy,
insolvency, dissolution, or cessation of existence of a Partner and shall
survive the delivery of an assignment by a Partner of the whole or a
portion of its Interest in the Partnership (except that where the
assignment is of such Partner's entire Interest in the Partnership and the
assignee is admitted as a substituted Partner, the power of attorney shall
survive the delivery of such assignment for the sole purpose of enabling
any such attorney-in-fact to effect such substitution) and shall extend to
such Partner's or assignee's successors and assigns.
ARTICLE XIV
NOTICE EVENTS
SECTION 14.01. Notice Events. In the event that any of the following
events ("Notice Events") shall occur, the Partners shall have the rights
described in Section 14.02:
(a) The occurrence of the 110th day prior to the fourth anniversary
of the Closing Date;
(b) The General Partner, DBI or D&B shall (i) fail to remain in
substantial compliance with the terms, covenants and obligations required
on its part to be performed or observed under Sections 5.04(a) and
5.04(b), or (ii) fail to perform or observe any
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material term, covenant or obligation on its part to be performed or
observed (except such terms, covenants or obligations as are described in
clause (i) above) under (A) this Agreement (except for specific violations
the cure periods for which are specifically provided for as Notice Events
hereunder), (B) the Lease Agreement, or (C) the D&B Guaranty, in each case
if such failure under either clause (i) or clause (ii) of this Section
14.01(b) is not cured within thirty (30) days of a Responsible Officer
obtaining actual knowledge of such failure;
(c) The failure of the Partnership to distribute to each Class A
Limited Partner in immediately available funds on the last Business Day of
each Fiscal Quarter an amount equal to the remainder, if any, of (i) the
cumulative Priority Return of such Class A Limited Partner from the
Closing Date to the last Business Day of the Fiscal Quarter during which
such distribution is made, minus (ii) all prior distributions to such
Class A Limited Partner pursuant to Section 4.01, if such failure is not
cured within ten (10) Business Days of receipt by the General Partner of
notice thereof;
(d) The Bankruptcy of the Partnership, the General Partner, DBI or
D&B; and
(e) A D&B Event shall occur.
SECTION 14.02. Liquidation Notice. (a) Liquidation Notice. At any time on
or after the occurrence of a Notice Event, each Class A Limited Partner may
elect to cause such Notice Event to result in a Liquidating Event by delivering
to the General Partner a notice (a "Liquidation Notice") of such election;
provided that: (i) such Notice Event shall not result in a Liquidating Event
until the expiration of ten (10) Business Days following such delivery, (ii)
such Class A Limited Partner may rescind such Liquidation Notice by delivering
to the General Partner a notice prior to such tenth (10th) Business Day, and
(iii) a Liquidation Notice automatically will be deemed rescinded upon the
election within such ten (10) Business Day period by any one or more of the D&B
Partners pursuant to the Purchase Option to purchase all Class A Limited
Partners' Interests.
SECTION 14.03. Electing Partners' Purchase Option. (a) Election of
Purchase Option. Any one or more of the D&B Partners or their designees
(referred to in this Section 14.03 as the "Electing Partners") may elect
pursuant to a purchase option (the "Purchase Option") to purchase the Class A
Limited Partners' entire Interests in such proportions as they shall agree (i)
within the ten (10) Business Day period prior to the effectiveness of any
Liquidation Notice delivered to the General Partner pursuant to Section 14.02,
or (ii) at any time after the fourth anniversary of the Closing Date upon ten
(10) Business Days' prior notice (the "Election Notice"). The day on which a
Liquidation Notice is delivered to the General Partner shall be the "Election
Date," provided that, if no Liquidation Notice has been delivered, the day on
which the
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Election Notice is given shall be the "Election Date." An Election Notice given
pursuant to this Section 14.03 shall be irrevocable and binding on the Electing
Partners.
(b) Purchase Price. The purchase price (the "Purchase Price") of each
Class A Limited Partner's Interest shall equal the sum of (A) the balance in
such Class A Limited Partner's Capital Account as stated on the statement of
Capital Accounts determined in accordance with this Agreement and provided to
the Partners pursuant to Section 8.02(e); and (B) an amount equal to such Class
A Limited Partner's Early Liquidation Premium, if any.
(c) Purchase. (i) The Purchase Price shall be payable in immediately
available funds, and the closing of the purchase and sale of each Class A
Limited Partner's Interest shall occur, on the Purchase Date.
(ii) The closing shall occur at such place as is mutually agreeable
to the Partners, or upon the failure to agree, at the principal place of
business of the Partnership. On the Purchase Date, each Class A Limited
Partner shall deliver to the Electing Partners good title, free and clear
of any liens, claims, encumbrances, security interests or options, to its
Interest thus purchased. The Electing Partners shall remain obligated to
pay any and all reasonable out-of-pocket expenses (including attorneys'
fees and expenses) incurred by each Class A Limited Partner in enforcing
any rights under this Section 14.03.
(iii) On the Purchase Date, the Partners shall execute such
documents and instruments of conveyance as may be necessary or appropriate
to effectuate the transaction contemplated hereby, including, without
limitation, the Transfer of the Interests of the Class A Limited Partners.
The reasonable costs of such Transfer and closing, including, without
limitation, attorneys' fees and filing fees, shall be paid by the Electing
Partners.
(d) Treatment as Purchase Under Section 741. The Partners agree to treat
the Transfer of the Class A Limited Partners' Interests to the Electing Partners
pursuant to this Section 14.03 as a purchase and sale under Section 741 of the
Code and not as a retirement under Section 736 of the Code.
ARTICLE XV
MISCELLANEOUS
SECTION 15.01. Notices. Any notice, payment, demand, or communication
required or permitted to be given by any provision of this Agreement shall be in
writing or by facsimile and shall be deemed to have been delivered, given, and
received for all purposes (i) if delivered personally to the Person or to an
officer of the Person to whom the same is directed, or (ii) when the same is
actually received, if sent either by registered or certified mail, postage and
charges
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prepaid, or by facsimile, if such facsimile is followed by a hard copy of the
facsimiled communication sent by registered or certified mail, postage and
charges prepaid, addressed as follows, or to such other address as such Person
may from time to time specify by notice to the Partners:
(a) If to the Partnership, to the address set forth in the first
sentence of Section 1.04, with a copy sent to the General Partner at its
address set forth in Section 2.01;
(b) If to the General Partner, to the addresses set forth in Section
2.01; and
(c) If to any Limited Partner, to its address set forth in Section
2.02.
Any such notice shall be deemed to be delivered, given, and received for all
purposes as of the date so delivered, if delivered personally, or otherwise as
of the date on which the same was received. Any Person may from time to time
specify a different address by notice to the Partnership and the Partners.
SECTION 15.02. Binding Effect. Except as otherwise provided in this
Agreement, every covenant, term, and provision of this Agreement shall be
binding upon and inure to the benefit of the Partners and their respective
successors, transferees and assigns.
SECTION 15.03. Construction. Every covenant, term, and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any Partner.
SECTION 15.04. Headings. Section and other headings contained in this
Agreement are for reference purposes only and are not intended to describe,
interpret, define, or limit the scope, extent, or intent of this Agreement or
any provision of this Agreement.
SECTION 15.05. Severability. Except as otherwise provided in the
succeeding sentence, every provision of this Agreement is intended to be
severable, and, if any term or provision of this Agreement is illegal or invalid
for any reason whatsoever, such illegality or invalidity shall not affect the
validity or legality of the remainder of this Agreement. The preceding sentence
of this Section 15.05 shall be of no force or effect if the consequence of
enforcing the remainder of this Agreement without such illegal or invalid term
or provision would be to cause any Partner to lose the benefit of its economic
bargain.
SECTION 15.06. Variation of Pronouns. All pronouns and any variations
thereof shall be deemed to refer to masculine, feminine, or neuter, singular or
plural, as the identity of the Person or Persons may require.
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SECTION 15.07. Governing Law. The laws of the State of Delaware shall
govern the validity of this Agreement, the construction of its terms, and the
interpretation of the rights and duties of the Partners.
SECTION 15.08. Waiver of Action for Partition. Each of the Partners
irrevocably waives any right that it may have to maintain any action for
partition with respect to any of the Partnership Property.
SECTION 15.09. Waiver of Jury Trial. Each of the Partners irrevocably
waives to the extent permitted by law all rights to trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Agreement.
SECTION 15.10. Consent to Jurisdiction. Each Partner (i) irrevocably
submits to the jurisdiction of any New York State or Delaware State court or
Federal court sitting in New York County or Wilmington, Delaware in any action
arising out of this Agreement, (ii) agrees that all claims in such action may be
decided in such court, (iii) waives, to the fullest extent it may effectively do
so, the defense of an inconvenient forum, and (iv) consents to the service of
process by mail. A final judgment in any such action shall be conclusive and may
be enforced in other jurisdictions. Nothing herein shall affect the right of any
party to serve legal process in any manner permitted by law or affect its right
to bring any action in any other court.
SECTION 15.11. Counterpart Execution. This Agreement may be executed in
any number of counterparts with the same effect as if all of the Partners had
signed the same document. All counterparts shall be construed together and shall
constitute one agreement.
SECTION 15.12. Sole and Absolute Discretion. Except as otherwise provided
in this Agreement, all actions which the General Partner may take and all
determinations which the General Partner may make pursuant to this Agreement may
be taken and made at the sole and absolute discretion of the General Partner.
SECTION 15.13. Specific Performance. Each Partner agrees with the other
Partners that the other Partners would be irreparably damaged if any of the
provisions of this Agreement are not performed in accordance with their specific
terms and that monetary damages would not provide an adequate remedy in such
event. Accordingly, it is agreed that, in addition to any other remedy to which
the nonbreaching Partners may be entitled, at law or in equity, the nonbreaching
Partners shall be entitled to injunctive relief to prevent breaches of the
provisions of this Agreement and specifically to enforce the terms and
provisions of this Agreement in any action instituted in any court of the United
States or any state thereof having subject matter jurisdiction thereof.
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61
IN WITNESS WHEREOF, the parties have entered into this Amended and
Restated Agreement of Limited Partnership as of the day first above set forth.
[signatures follow on separate pages]
<PAGE> 67
GENERAL PARTNER:
DUNS INVESTING VII CORPORATION
By: /s/ Philip C. Danford
---------------------------------
Name: Philip C. Danford
Title: VP & Treasurer
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
D&B INVESTORS L.P.
AND IS EXECUTED BY THE PARTY NAMED ABOVE.
<PAGE> 68
LIMITED PARTNERS:
DUN & BRADSTREET, INC.
By: /s/ Philip C. Danford
---------------------------------
Name: Philip C. Danford
Title: VP & Treasurer
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
D&B INVESTORS L.P.
AND IS EXECUTED BY THE PARTY NAMED ABOVE.
<PAGE> 69
DUNS HOLDING, INC.
By: /s/ J.N. Denholm
---------------------------------
Name: J.N. Denholm
Title: President
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
D&B INVESTORS L.P.
AND IS EXECUTED BY THE PARTY NAMED ABOVE.
<PAGE> 70
UTRECHT-AMERICA FINANCE CO.
By: /s/ J.W. den Baas
------------------------------------
Name: J.W. den Baas
Title: Vice President
/s/ David I. Dietz
------------------------------------
Name: David I. Dietz
Title: Assistant Treasurer
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
D&B INVESTORS L.P.
AND IS EXECUTED BY THE PARTY NAMED ABOVE.
<PAGE> 71
LEIDEN, INC.
By: /s/ Reinier Mesritz
----------------------------------------
Name: Reinier Mesritz
Title: Chairman of the Board & President
THIS IS A SIGNATURE PAGE TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
D&B INVESTORS L.P.
AND IS EXECUTED BY THE PARTY NAMED ABOVE.
<PAGE> 1
Exhibit 10.15
AMENDMENT NO. 1, dated as of July 14, 1997 ("Amendment No. 1"), to the
Amended and Restated Agreement of Limited Partnership of D&B Investors L.P.,
dated as of April 1, 1997 (the "Partnership Agreement"), among Duns Investing
VII Corporation, Dun & Bradstreet, Inc., Duns Holding, Inc., Utrecht-America
Finance Co. and Leiden, Inc.
WHEREAS, the parties hereto desire to amend the terms of the Partnership
Agreement to reflect certain additional understandings.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Amendment to Definition of "Permitted Securities." The definition of
"Permitted Securities" shall be amended by deleting the amount "$15,000,000" set
forth in clause (v) thereof and inserting "$50,000,000" in lieu thereof.
2. Amendment to Definition of "Priority Return." The definition of
"Priority Return" shall be amended by deleting the reference to "Section
4.02(a)" set forth therein and inserting "Section 4.01" in lieu thereof.
3. Amendment to Section 4.01. Section 4.01 shall be amended by (i)
deleting the reference to "Section 4.02(a)" set forth therein and inserting
"Section 4.02" in lieu thereof, and (ii) deleting the reference to "Section
4.01(a)" set forth therein and inserting "Section 4.01" in lieu thereof.
4. Reaffirmation. Except as expressly amended by this Amendment No. 1, the
Partnership Agreement is and shall continue to be in full force and effect as
originally written.
5. Execution in Counterparts; Effectiveness. This Amendment No. 1 may be
executed in any number of counterparts and by any combination of the parties
hereto in separate counterparts, each of which counterpart shall be an original
and all of which when taken together shall constitute one and the same Amendment
No. 1. This Amendment No. 1 shall become effective as of the date first above
written when and if counterparts of this Amendment No. 1 shall have been
executed by the parties hereto.
On and after the effective date of this Amendment No. 1, each
reference in the Partnership Agreement to "this Agreement," "hereunder,"
"hereof" or words of like import referring to the Partnership Agreement shall
mean and be a reference to the Partnership Agreement as amended by this
Amendment No. 1.
6. Governing Law. This Amendment No. 1 shall be governed by, and construed
and interpreted in accordance with, the laws of the State of Delaware, without
reference to its conflicts of law principles.
<PAGE> 2
S-1
IN WITNESS WHEREOF, the undersigned have executed this Amendment No. 1 as
of the day and year first above written.
DUNS INVESTING VII CORPORATION
By /s/ Kenneth J. Kubacki
-----------------------------
Kenneth J. Kubacki
Executive Vice President and
Assistant Treasurer
DUNS HOLDING, INC.
By /s/ Kenneth J. Kubacki
-----------------------------
Kenneth J. Kubacki
Executive Vice President and
Assistant Treasurer
DUN & BRADSTREET, INC.
By /s/ Philip C. Danford
-----------------------------
Philip C. Danford
Vice President and Treasurer
THIS IS A SIGNATURE PAGE TO AMENDMENT NO. 1 TO
THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
D&B INVESTORS L.P.
<PAGE> 3
S-2
UTRECHT-AMERICA FINANCE CO.
By /s/ David I. Dietz
-----------------------------
Name: David I. Dietz
Title: Assistant Treasurer
By /s/ J.W. den Baas
-----------------------------
Name: J.W. den Baas
Title: Vice President
LEIDEN, INC.
By /s/ J.W. den Baas
-----------------------------
Name: J.W. den Baas
Title: Vice President
By /s/ David I. Dietz
-----------------------------
Name: David I. Dietz
Title: Assistant Treasurer
THIS IS A SIGNATURE PAGE TO AMENDMENT NO. 1 TO
THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
D&B INVESTORS L.P.
<PAGE> 1
Exhibit 10.16
AGREEMENT TO RETIRE GENERAL PARTNER INTEREST (IMS AMERICA, LTD)
THIS AGREEMENT TO RETIRE GENERAL PARTNER INTEREST (this "Agreement"), is entered
into and effective this 21st day of October, 1996, by and between D&B Investors
L.P., a Delaware limited partnership (the "Partnership"), and IMS America, Ltd.,
a New Jersey corporation (the "Retiring General Partner").
WHEREAS, the Retiring General Partner, The Reuben H. Donnelley Corporation, a
Delaware corporation, Dun & Bradstreet, Inc., a Delaware corporation, and RBDB,
LLC, a Delaware limited liability company, formed the Partnership pursuant to
that certain Agreement of Limited Partnership of D&B Investors L.P., dated
October 14, 1993, as amended by that certain Partnership Agreement Amendment No.
1, dated as of October 14, 1993, and that certain Amendment No. 2 to the
Agreement of Limited Partnership of D&B Investors L.P., dated October 5, 1995
(collectively the "Partnership Agreement," terms not otherwise defined herein
are used herein as therein defined); and
WHEREAS, on October 5, 1995, the Reuben H. Donnelley Corporation retired from
the Partnership, and on October 1, 1996, Duns Investing VII Corporation, a
Delaware corporation, was assigned a portion of the interest of Dun &
Bradstreet, Inc. and admitted to the Partnership as a Limited Partner, and RBDB,
LLC retired from the Partnership, and on October 18, 1996, Utrecht-America
Finance Co., a Delaware corporation, was assigned a portion of the interest of
Dun & Bradstreet, Inc. and admitted to the Partnership as a Limited Partner; and
WHEREAS, the Retiring General Partner has elected to withdraw from the
Partnership and to require its entire Interest in the Partnership (the
"Redemption Interest") to be retired and redeemed by the Partnership in
accordance with the terms of this Agreement and Section 11.2 of the Partnership
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE I
RETIREMENT, REDEMPTION AND ASSIGNMENT; CLOSING
SECTION 1.01. RETIREMENT AND REDEMPTION Subject to the terms and conditions set
forth herein and Section 11.2 of the Partnership Agreement, the Retiring General
Partner hereby assigns and transfers to the Partnership, and the Partnership
hereby retires and redeems, the Redemption Interest. The closing of the
transactions contemplated hereby (the "Closing") shall take place on the date
first set forth above (the "Retirement Date") at 4:00 p.m.
(Delaware time).
SECTION 1.02. REDEMPTION CONSIDERATION. The assets to be conveyed by the
Partnership to the Retiring General Partner as consideration for the retirement
and redemption of the Redemption Interest shall be (a) 800,000 shares of common
stock of The Dun & Bradstreet Corporation and (b) warrants representing the
right to purchase 2,214,799 shares of common stock of The Dun & Bradstreet
Corporation (collectively the "REDEMPTION CONSIDERATION"). In addition, the
Retiring General Partner shall assume the UAF Obligation (as defined and further
described in Section 2.01 hereof). The parties hereto acknowledge that the
Redemption Consideration has been determined in accordance with Section 11.2(b)
of the Partnership Agreement and further acknowledge that the aggregate fair
market value of the Redemption Consideration (net of the UAF Obligation, as
hereafter defined) equals the positive balance in the Retiring General Partner's
Capital Account (taking into account the adjustments and allocations required by
the first sentence of Section 11.2(b)(x) of the Partnership Agreement).
SECTION 1.03. DELIVERIES AT CLOSING. At the Closing, (a) each of the parties
hereto shall deliver an executed counterpart of this Agreement, (b) the
Partnership shall deliver the Redemption Consideration to the Retiring General
Partner, including such documents and instruments as may be necessary to
effectuate the transfer of the stock and warrants that comprise the Redemption
Consideration to the Retiring General Partner as of the Retirement Date, and (c)
the Retiring
<PAGE> 2
General Partner shall deliver to the Partnership such documents and instruments
as may be necessary to effectuate the assumption of the UAF Obligation by the
Retiring General Partner in accordance with Section 2.01 hereof.
ARTICLE II
ASSUMPTION OF UAF OBLIGATION;
CONTINUING LIABILITY
2.01. ASSUMPTION OF UAF OBLIGATION. The parties acknowledge that the
Partnership's outstanding liabilities consist solely of an obligation to
Utrecht-America Finance Co. in the amount of $50 million Investment Principal
and accrued Investment Return thereon (the "UAF Obligation"), which is governed
by that certain Purchase Agreement, dated October 14, 1993, as amended, by that
certain Purchase Agreement Amendment, dated as of October 14, 1993, that certain
Amendment and Waiver to Purchase Agreement, dated April 15, 1994, that certain
Third Amendment to Purchase Agreement, dated September 18, 1995, and that
certain Fourth Amendment to Purchase Agreement dated October 3, 1996. In
connection with the redemption and retirement of the Redemption Interest, the
Partnership hereby assigns to the Retiring General Partner and the Retiring
General Partner hereby assumes from the Partnership, as of the Retirement Date,
the UAF Obligation. The Retiring General Partner hereby agrees, as of the
Retirement Date, to indemnify, defend, protect and hold harmless the
Partnership, the other original General Partners, and the Parent from any loss
or liability relating to the UAF Obligation.
SECTION 2.02. CONTINUING LIABILITY. As among the Partners, the Retiring General
Partner shall be relieved of all liabilities and obligations of the Partnership,
whether contingent or otherwise, as of the Retirement Date, excluding only (a)
the UAF Obligation and (b) any liability or obligation owing to the fraud, bad
faith, wilful misconduct, or gross negligence of the Retiring Limited Partner.
The Partnership and its remaining General Partner shall, as of the Retirement
Date, indemnify, defend, protect, and hold harmless the Retiring General Partner
from all liabilities and obligations from which the Retiring General Partner is,
or is intended to be, relieved under this Section 2.02.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01. REPRESENTATIONS AND WARRANTIES OF PARTIES. Each party hereto
represents and warrants to each of the other parties as follows:
(a) ORGANIZATION AND AUTHORIZATION. Such party is duly organized, validly
existing and in good standing under the laws of the state of its organization
and has all necessary power and authority to enter into this Agreement, to carry
out its obligations hereunder and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the performance by such
party of the transactions contemplated hereby have been duly authorized by all
requisite action on the part of such party. This Agreement has been duly
executed and delivered by such party. Assuming due authorization, execution and
delivery by the other parties, this Agreement constitutes a legal, valid and
binding obligation of such party enforceable against such party in accordance
with its terms, subject to applicable bankruptcy, insolvency or other laws
affecting creditors' rights generally and to general equity principles.
(b) NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The execution and delivery of
this Agreement by such party does not, and the performance of this Agreement by
such party will not conflict with or violate any law, rule or regulation
applicable to such party or by which any of such party's properties is bound or
affected, the result of which would have a material adverse effect on such
party's ability to perform its obligations under this Agreement, (i) result in
any breach of or constitute a default under any note, bond, mortgage, indenture,
contract or other instrument or obligation to which such party is a party or by
which any of its properties is bound or affected, the result of which would have
a material adverse effect on such party's ability to perform its obligations
under this Agreement, or (ii) require any consent, approval, exemption,
authorization or permit of, or filing with or notification to, or other action
by, any court, administrative agency, or governmental or regulatory authority.
<PAGE> 3
(c) ABSENCE OF LITIGATION. There is no pending or, to the best knowledge of such
party, threatened claim, action, litigation, arbitration or governmental
investigation or legal, administrative or regulatory proceeding against such
party which purports to affect or challenge the legality, validity or
enforceability of this Agreement or the consummation of the transactions
contemplated hereunder.
SECTION 3.02 ADDITIONAL REPRESENTATION AND WARRANTY OF RETIRING GENERAL
PARTNER. The Retiring General Partner represents and warrants to each of the
other parties hereto that it is the legal and beneficial owner of the Redemption
Interest, that such ownership will be conveyed to the Partnership hereunder, and
that such ownership is free and clear of any security interest, pledge,
mortgage, lien (including environmental and tax liens), charge, adverse claim,
option or other right to purchase, or other encumbrance (collectively an
"Encumbrance").
SECTION 3.03. ADDITIONAL REPRESENTATION AND WARRANTY OF PARTNERSHIP. The
Partnership represents and warrants to the Retiring General Partner that it is
the legal and beneficial owner of the stock and warrants that comprise the
Redemption Consideration, and that such ownership will be conveyed to the
Retiring General Partner hereunder free and clear of any Encumbrance other than
the UAF Obligation that the Retiring General Partner has assumed hereunder.
ARTICLE IV
INDEMNIFICATION; SURVIVAL
SECTION 4.01 INDEMNIFICATION. Each of the parties hereto thereby agrees to
indemnify each other party against, and hold each other party harmless from,any
and all damage, loss, liability, tax, interest, penalties, and any other expense
(including, without limitation, investigation and attorneys' fees and expenses
in connection with any action, suit, proceeding, claim, investigation, or other
loss) arising out of any inaccuracy or omission in any representation or
warranty made by such party, any violation or breach of any covenant or
agreement of such party, or any default with respect to any obligation of such
party, under this Agreement, which, in the case of any of the foregoing, has a
material adverse effect on the economic benefits to the other party of the
transactions contemplated hereby.
SECTION 4.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, covenants and agreement of each of the parties hereto shall survive
and remain in full force and effect until performance in accordance with the
terms hereof.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be made in accordance with the provisions of the
Partnership Agreement, as amended from time to time.
SECTION 5.02 FURTHER ASSURANCES. Each party hereto agrees to execute and
deliver, at its own expense, such other documents and instruments, including,
without limitation, an amendment to or restatement of the Partnership Agreement,
and take such other action, as any other party requests, to (a) consummate more
effectively the transactions contemplated hereby, (b) carry out the terms and
purposes of this Agreement, and (c) respond to or cooperate with any court,
administrative agency, or governmental or regulatory authority.
SECTION 5.03 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the transferees, successors, assigns, heirs,
beneficiaries, executors, administrators, partners, agents, employees, and
representatives of each party hereto.
SECTION 5.04 NO THIRD-PARTY BENEFICIARIES. Nothing in this Agreement, expressed
or implied, is intended or shall be construed to confer upon any person other
than the parties hereto, and their successors and assigns, heirs, beneficiaries,
executors, administrators, partners, agents, employees, and
<PAGE> 4
representatives, any rights, remedies, or claims under or by reason of this
Agreement.
SECTION 5.05 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to the
conflict of laws provisions thereof. Any and all suits, legal actions or
proceedings against any party hereto arising out of this Agreement shall be
brought in the state courts of the State of Delaware, or, if such court shall
not have jurisdiction, the court of appropriate jurisdiction sitting in
Wilmington, Delaware, and each party hereby submits to and accepts the exclusive
jurisdiction of such courts for the purpose of such suits, legal action or
proceedings. Each party hereto hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any such suit, legal action
or proceeding in any such court and hereby further waives any claim that any
suit, legal action or proceeding brought in any such court has been brought in
an inconvenient forum.
SECTION 5.06 MODIFICATIONS AND WAIVERS. No supplement, modification, waiver or
termination of this Agreement or any provisions hereof shall be binding unless
executed in writing by all parties hereto. No waiver of any of the provisions of
this Agreement shall constitute a waiver of any other provision (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided
SECTION 5.07 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement.
SECTION 5.08 SEVERABILITY. Each provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the legality or
validity of the remainder of this Agreement.
SECTION 5.09 INCORPORATION BY REFERENCE. Every schedule attached to this
Agreement and referred to herein is hereby incorporated in this Agreement by
reference.
SECTION 5.10 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements and undertakings, both written and oral, between the parties
with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
PARTNERSHIP:
D&B INVESTORS L.P.
By: Dun & Bradstreet, Inc.
Title: Managing General Partner
By: /s/ [ILLEGIBLE]
--------------------------------
Title:
--------------------------------
RETIRING GENERAL PARTNER:
By: IMS America, Ltd.
Title: General Partner
By: /s/ [ILLEGIBLE]
--------------------------------
Title: Asst. V.P.
--------------------------------
<PAGE> 5
SIGNATURE PAGE TO AGREEMENT TO RETIRE GENERAL PARTNER INTEREST
(IMS AMERICA, LTD.)
OFFICER'S CERTIFICATE
The undersigned, Stephen J. Boatti, Assistant Vice President of IMS AMERICA,
LTD. (the "Company"), hereby certifies that the Company is within the definition
of a qualified institutional buyer as defined in Rule 144A of the Securities Act
of 1933, as amended.
IN WITNESS WHEREOF, I have hereunto signed my name on the 21st day of October,
1996.
/s/ Stephen J. Boatti
-------------------------------
Name: Stephen J. Boatti
Title: Assistant Vice President
WARRANT ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby assigns and transfers unto IMS
AMERICA, LTD., 100 Campus Road, Totown, New Jersey, 07512, the within Warrant,
hereby irrevocably constituting and appointing the appropriate officer of The
Dun & Bradstreet Corporation as attorney to transfer said Warrant on the books
of The Dun & Bradstreet Corporation, with full power of substitution in the
premises.
DATED: October 21, 1996
Signature of Registered Holder:
D&B INVESTORS L.P.
By: DUN & BRADSTREET, INC.
its Managing General Partner
By: /s/ [ILLEGIBLE]
---------------------------
Name:
Title:
<PAGE> 6
IMS AMERICA, LTD.
September 30, 1996
To: Dun & Bradstreet, Inc.,
General Partner
RBDB, LLC, Limited Partner
Re: D&B Investors L.P.
Dear Sirs:
Pursuant to Section 11.2 of the Agreement of Limited Partnership of D&B
Investors L.P. (the "Partnership"), dated October 14, 1993, as amended (the
"Partnership Agreement"), we hereby elect to withdraw from the Partnership and
require that our entire Interest be retired.
The General Partnership Withdrawal Date shall be a date in early October 1996
mutually agreeable to you and to us.
Capitalized terms not defined herein shall have the meanings assigned to them in
the Partnership Agreement.
IMS AMERICA, LTD.
By: /s/ Alan J. Klutch
- - --------------------------
Alan J. Klutch
Vice President
<PAGE> 1
Exhibit 10.17
ASSIGNMENT OF LIMITED PARTNER INTEREST
ASSIGNMENT OF LIMITED PARTNER INTEREST, dated as of June 15, 1998 (the
"Assignment"), between DUN & BRADSTREET, INC., a Delaware corporation
("Assignor") and THE NEW DUN & BRADSTREET CORPORATION, a Delaware corporation
("Assignee").
INTRODUCTION
Duns Investing VII Corporation ("Duns VII"), Assignor, Duns Holding,
Inc. ("DHI"), Utrecht-America Finance Co. and Leiden, Inc. are partners in D&B
Investors, L.P., a Delaware limited partnership (the "Partnership"), pursuant to
the Amended and Restated Agreement of Limited Partnership of the Partnership,
dated as of April 1, 1997 (as amended or otherwise modified from time to time,
the "Partnership Agreement"). Capitalized terms not otherwise defined herein
shall have the meanings set forth in the Partnership Agreement. Each of Duns
VII, Assignor and DHI is a Wholly Owned Affiliate of The Dun & Bradstreet
Corporation ("D&B").
On June 30, 1998, D&B will undergo a reorganization (the "D&B
Restructuring") and separate its principal operating businesses into two
publicly traded corporations. In connection with the D&B Restructuring, Assignor
is required to assign, transfer and convey its Interest to Assignee and withdraw
from the Partnership as a Limited Partner, and Assignee is required to acquire
and accept Assignor's Interest and be acknowledged by the Partnership as a
substituted Class B Limited Partner.
NOW, THEREFORE, in consideration of the premises and agreements
contained herein, the parties hereto agree as follows:
1. ASSIGNMENT; WITHDRAWAL FROM PARTNERSHIP. Assignor hereby assigns,
transfers and conveys its Interest to Assignee and withdraws as a Limited
Partner from the Partnership.
2. AGREEMENT TO BE BOUND. Upon acquisition of Assignor's Interest,
Assignee hereby agrees to be bound by the terms and conditions of the
Partnership Agreement as a substituted Limited Partner.
3. FUTURE COOPERATION. Each of the parties hereto agrees to cooperate
at all reasonable times from and after the date hereof with respect to all of
the matters described herein, and to execute such further assignments, releases,
assumptions, amendments, notifications and
<PAGE> 2
2
other documents as may be reasonably requested for the purpose of giving effect
to, or evidencing or giving notice of, the transactions contemplated by this
Assignment.
4. BINDING EFFECT. This Assignment shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
5. EXECUTION IN COUNTERPARTS. This Assignment may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
6. GOVERNING LAW. This Assignment shall be governed by, and construed
in accordance with, the laws of the State of Delaware without regard to
conflicts of law principles.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be duly executed as of the date first above written.
ASSIGNOR:
DUN & BRADSTREET, INC.
By /s/ Nancy L. Henry
--------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
ASSIGNEE:
THE NEW DUN & BRADSTREET CORPORATION
By /s/ Nancy L. Henry
--------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
<PAGE> 3
CONFORMED COPY
SECOND ASSIGNMENT OF LIMITED PARTNER INTEREST
SECOND ASSIGNMENT OF LIMITED PARTNER INTEREST, dated as of June 15,
1998 (the "Assignment"), between THE NEW DUN & BRADSTREET CORPORATION, a
Delaware corporation ("Assignor") and NEW DUN & BRADSTREET, INC., a Delaware
corporation ("Assignee").
INTRODUCTION
Duns Investing VII Corporation ("Duns VII"), Dun & Bradstreet, Inc.
("DBI"), Duns Holding, Inc. ("DHI"), Utrecht-America Finance Co. and Leiden,
Inc. were partners in D&B Investors, L.P., a Delaware limited partnership (the
"Partnership"), pursuant to the Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of April 1, 1997 (as amended or
otherwise modified from time to time, the "Partnership Agreement"). Prior to the
execution and delivery of this Assignment, DBI assigned its Interest in the
Partnership to Assignor pursuant to that certain Assignment of Limited Partner
Interest, dated as of June 15, 1998. Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Partnership Agreement. Each of
Duns VII, Assignor and DHI is a Wholly Owned Affiliate of The Dun & Bradstreet
Corporation ("D&B").
On June 30, 1998, D&B will undergo a reorganization (the "D&B
Restructuring") and separate its principal operating businesses into two
publicly traded corporations. In connection with the D&B Restructuring, Assignor
is required to assign, transfer and convey its Interest to Assignee and withdraw
from the Partnership as a Limited Partner, and Assignee is required to acquire
and accept Assignor's Interest and be acknowledged by the Partnership as a
substituted Class B Limited Partner.
NOW, THEREFORE, in consideration of the premises and agreements
contained herein, the parties hereto agree as follows:
1. ASSIGNMENT; WITHDRAWAL FROM PARTNERSHIP. Assignor hereby assigns,
transfers and conveys its Interest to Assignee and withdraws as a Limited
Partner from the Partnership.
2. AGREEMENT TO BE BOUND. Upon acquisition of Assignor's Interest,
Assignee hereby agrees to be bound by the terms and conditions of the
Partnership Agreement as a substituted Limited Partner.
<PAGE> 4
2
3. FUTURE COOPERATION. Each of the parties hereto agrees to cooperate
at all reasonable times from and after the date hereof with respect to all of
the matters described herein, and to execute such further assignments, releases,
assumptions, amendments, notifications and other documents as may be reasonably
requested for the purpose of giving effect to, or evidencing or giving notice
of, the transactions contemplated by this Assignment.
4. BINDING EFFECT. This Assignment shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
5. EXECUTION IN COUNTERPARTS. This Assignment may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
6. GOVERNING LAW. This Assignment shall be governed by, and construed
in accordance with, the laws of the State of Delaware without regard to
conflicts of law principles.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be duly executed as of the date first above written.
ASSIGNOR:
THE NEW DUN & BRADSTREET CORPORATION
By /s/ Nancy L. Henry
------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
ASSIGNEE:
NEW DUN & BRADSTREET, INC.
By /s/ Nancy L. Henry
------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
<PAGE> 5
CONFORMED COPY
ASSIGNMENT OF LESSEE INTEREST
ASSIGNMENT OF LESSEE INTEREST, dated as of June 15, 1998 (the
"Assignment"), between DUN & BRADSTREET, INC., a Delaware corporation
("Assignor") and THE NEW DUN & BRADSTREET CORPORATION, a Delaware corporation
("Assignee").
INTRODUCTION
Assignor, a wholly owned Affiliate of The Dun & Bradstreet Corporation
("D&B"), is the lessee of certain software and database assets pursuant to that
certain Software and Database Lease Agreement with D&B Investors, L.P., dated as
of April 1, 1997 (the "DBI Lease"). Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the DBI Lease.
On June 30, 1998, D&B will undergo a reorganization (the "D&B
Restructuring") and separate its principal operating businesses into two
publicly traded corporations. In connection with the D&B Restructuring, Assignor
is required to assign to Assignee all of Assignor's rights and obligations under
the DBI Lease, and Assignee is required to accept such rights and assume all
related obligations.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns and transfers to
Assignee all of Assignor's rights and obligations under the DBI Lease, and
Assignee hereby accepts and assumes all such rights and obligations and agrees
to be bound by the terms and conditions of the DBI Lease as lessee.
2. BINDING EFFECT. This Assignment shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
3. EXECUTION AS COUNTERPARTS. This Assignment may be executed in
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
4. GOVERNING LAW. This Assignment shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to conflicts of
law principles.
<PAGE> 6
2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be duly executed as of the date first above written.
ASSIGNOR:
DUN & BRADSTREET, INC.
By /s/ Nancy L. Henry
------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
ASSIGNEE:
THE NEW DUN & BRADSTREET CORPORATION
By /s/ Nancy L. Henry
------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
<PAGE> 7
CONFORMED COPY
SECOND ASSIGNMENT OF LESSEE INTEREST
SECOND ASSIGNMENT OF LESSEE INTEREST, dated as of June 15, 1998 (the
"Assignment"), between THE NEW DUN & BRADSTREET CORPORATION, a Delaware
corporation ("Assignor") and NEW DUN & BRADSTREET, INC., a Delaware corporation
("Assignee").
INTRODUCTION
Dun & Bradstreet, Inc. ("DBI") was the lessee of certain software and
database assets pursuant to that certain Software and Database Lease Agreement
with D&B Investors, L.P., dated as of April 1, 1997 (the "DBI Lease"). Prior to
the execution and delivery of this Assignment, DBI assigned its rights and
obligations under the DBI Lease to Assignor pursuant to that certain Assignment
of Lessee Interest, dated as of June 15, 1998. Capitalized terms not otherwise
defined herein shall have the meanings ascribed to them in the DBI Lease.
On June 30, 1998, The Dun & Bradstreet Corporation will undergo a
reorganization (the "D&B Restructuring") and separate its principal operating
businesses into two publicly traded corporations. In connection with the D&B
Restructuring, Assignor is required to assign to Assignee all of Assignor's
rights and obligations under the DBI Lease, and Assignee is required to accept
such rights and assume all related obligations.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns and transfers to
Assignee all of Assignor's rights and obligations under the DBI Lease, and
Assignee hereby accepts and assumes all such rights and obligations and agrees
to be bound by the terms and conditions of the DBI Lease as lessee.
2. BINDING EFFECT. This Assignment shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
3. EXECUTION AS COUNTERPARTS. This Assignment may be executed in
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
4. GOVERNING LAW. This Assignment shall be governed by and construed in
accordance with the laws of the State of Delaware without regard to conflicts of
law principles.
<PAGE> 8
2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be duly executed as of the date first above written.
ASSIGNOR:
THE DUN & BRADSTREET CORPORATION
By /s/ Nancy L. Henry
------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
ASSIGNEE:
NEW DUN & BRADSTREET, INC.
By /s/ Nancy L. Henry
------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
<PAGE> 9
CONFORMED COPY
ASSIGNMENT OF DEMAND NOTE OBLIGATIONS
ASSIGNMENT OF DEMAND NOTE OBLIGATIONS, dated as of June 15, 1998 (the
"Assignment"), between THE DUN & BRADSTREET CORPORATION, a Delaware corporation
("Assignor" or "D&B") and THE NEW DUN & BRADSTREET CORPORATION, a Delaware
corporation ("Assignee").
INTRODUCTION
Assignor is the maker under that certain Demand Promissory Note made on
April 2, 1997 to the order of Duns Investing Corporation ("DIC") with a current
principal balance of $434,212,330 (the "Demand Note").
On June 30, 1998, D&B will undergo a reorganization (the "D&B
Restructuring") and separate its principal operating businesses into two
publicly traded corporations. In connection with the D&B Restructuring, Assignor
is required to assign to Assignee all of Assignor's rights and obligations under
the Demand Note, and Assignee is required to accept such rights and assume all
related obligations.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns and transfers to
Assignee all of Assignor's rights and obligations under the Demand Note, and
Assignee hereby accepts and assumes all such rights and obligations and agrees
to be bound by the terms and conditions thereof with the same force and effect
as if it had executed the Demand Note itself.
2. BINDING EFFECT. This Assignment shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
3. EXECUTION IN COUNTERPARTS. This Assignment may be executed in
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
4. GOVERNING LAW. This Assignment shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 10
2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be duly executed as of the date first above written.
ASSIGNOR:
THE DUN & BRADSTREET CORPORATION
By /s/ Nancy L. Henry
-------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
ASSIGNEE:
THE NEW DUN & BRADSTREET CORPORATION
By /s/ Nancy L. Henry
-------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
<PAGE> 11
[TO BE ATTACHED TO ASSIGNMENT OF DEMAND NOTE OBLIGATIONS]
DUNS INVESTING CORPORATION
CONSENT AND RELEASE
Reference is hereby made to (i) that certain Demand Promissory Note,
dated April 2, 1997 (the "Demand Note"), pursuant to which, as of the date
hereof, The Dun & Bradstreet Corporation ("D&B") is obligated to pay to Duns
Investing Corporation (the "Payee") the principal amount of U.S.$434,212,330
plus accrued interest thereon; and (ii) that certain Assignment of Demand Note
Obligations, dated as of June 15, 1998 (the "Demand Note Assignment"), pursuant
to which D&B assigns and transfers, and The New Dun & Bradstreet Corporation
("Assignee") accepts and assumes, D&B's rights and obligations under the Demand
Note.
The undersigned, Payee under the Note, hereby consents to the execution
and performance by D&B and Assignee of the Demand Note Assignment and, upon
execution thereof by the parties thereto, hereby releases and discharges D&B
from any and all of its obligations under the Demand Note.
Dated: June 15, 1998 DUNS INVESTING CORPORATION
By /s/ Kenneth J. Kubacki
-------------------------------
Name: Kenneth J. Kubacki
Title: Executive Vice President
<PAGE> 12
CONFORMED COPY
ASSIGNMENT OF GUARANTOR OBLIGATIONS
ASSIGNMENT OF GUARANTOR OBLIGATIONS, dated as of June 15, 1998 (the
"Assignment"), between THE DUN & BRADSTREET CORPORATION, a Delaware corporation
("Assignor" or "D&B") and THE NEW DUN & BRADSTREET CORPORATION, a Delaware
corporation ("Assignee").
INTRODUCTION
Assignor is the guarantor (the "Guarantor") under that certain D&B
Guaranty (the "D&B Guaranty") made by D&B as of April 1, 1997 in favor of
Utrecht-America Finance Co. and Leiden, Inc.
On June 30, 1998, D&B will undergo a reorganization (the "D&B
Restructuring") and separate its principal operating businesses into two
publicly traded corporations. In connection with the D&B Restructuring, Assignor
is required to assign to Assignee all of Assignor's rights and obligations as
Guarantor under the D&B Guaranty, and Assignee is required to accept such rights
and assume all related obligations.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. ASSIGNMENT AND ASSUMPTION. Assignor hereby assigns and transfers to
Assignee all of Assignor's rights and obligations under the D&B Guaranty, and
Assignee hereby accepts and assumes all such rights and obligations and agrees
to be bound by the terms and conditions of the D&B Guaranty.
2. BINDING EFFECT. This Assignment shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
3. EXECUTION AS COUNTERPARTS. This Assignment may be executed in
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.
4. GOVERNING LAW. This Assignment shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 13
2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to
be duly executed as of the date first above written.
ASSIGNOR:
THE DUN & BRADSTREET CORPORATION
By /s/ Nancy L. Henry
------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
ASSIGNEE:
THE NEW DUN & BRADSTREET CORPORATION
By /s/ Nancy L. Henry
------------------------------
Name: Nancy L. Henry
Title: Senior Vice President &
Chief Legal Officer
<PAGE> 14
[TO BE ATTACHED TO ASSIGNMENT OF GUARANTOR OBLIGATIONS]
CONSENT AND RELEASE
Reference is hereby made to that (i) certain D&B Guaranty (the "D&B
Guaranty") made by The Dun & Bradstreet Corporation ("D&B") as of April 1, 1997
in favor of Utrecht-America Finance Co. and Leiden, Inc. (collectively, the
"Investors"); and (ii) that certain Assignment of Guarantor Obligations, dated
as of June 15, 1998 (the "Guarantor Assignment"), pursuant to which D&B assigns
and transfers, and The New Dun & Bradstreet Corporation ("Assignee") accepts and
assumes, D&B's rights and obligations under the D&B Guaranty.
The undersigned, the Investors under the D&B Guaranty, hereby consent
to the execution and performance by D&B and Assignee of the Guarantor Assignment
and, upon execution thereof by the parties thereto, hereby release and
discharges D&B from any and all of its obligations under the D&B Guaranty.
Dated: June 15, 1998 UTRECHT-AMERICA FINANCE CO.
By /s/ David I. Dietz
-------------------------------------
Name: David I. Dietz
Title: Assistant Treasurer
By /s/ J.W. den Baas
-------------------------------------
Name: J.W. den Baas
Title: Vice President
LEIDEN, INC.
By /s/ David I. Dietz
-------------------------------------
Name: David I. Dietz
Title:
By /s/ J.W. den Baas
-------------------------------------
Name: J.W. den Baas
Title: Vice President
<PAGE> 1
Exhibit 10.18
THE DUN & BRADSTREET CORPORATION
NONFUNDED DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
1. Directors who are not employees of the Company, or any of its subsidiaries
("Non-Employee Directors") may elect on or before December 31 of any year to
have payment of all or a specified part of all fees payable to them for their
services as Directors (including fees payable to them for services as members of
a committee of the Board) during the calendar year following such election and
succeeding calendar years deferred until they cease to be Directors of the
Company. Any person, not an employee, who shall become a Director during any
calendar year, and who was not a Director of the Company on the preceding
December 31, may elect, within 30 days of the date on which his or her term as a
Director begins, to have payment of all or a specified part of such fees for the
remainder of such calendar year and for succeeding calendar years so deferred.
Any such election shall be made by written notice delivered to the Secretary of
the Company. The "Company" means The New Dun & Bradstreet Corporation, to be
renamed "The Dun & Bradstreet Corporation" after the shares of the New Dun &
Bradstreet Corporation are distributed as a dividend to the shareholders of The
Dun & Bradstreet Corporation ("D&B") (the "Spinoff").
2. All deferred fees shall be held in the general funds of the Company, shall be
credited to the Director's account and shall be deemed to have been invested in
one or more of the funds (as set forth on the Deferred Compensation Election
Form attached hereto as Exhibit A) in the Addendum to the Company's Profit
Participation Plan (or successor plan) (the "Employee Plan") as such Director
shall have most recently elected. Such election shall be made on a Deferred
<PAGE> 2
2
Compensation Election Form filed with the Secretary of the Company. The
Director's account shall be credited with deferred fees and with the investment
performance of the respective funds in which the account is invested on the same
basis and in the same manner as is applicable to employees participating in the
Employee Plan. Directors may elect to have deferred amounts held and invested in
one or more of the funds in multiples of 10%, except that no Director may elect
to have more than 50% of his or her account invested in the Dun & Bradstreet
Common Stock Fund. Subject to the foregoing investment limitation in the Dun &
Bradstreet Common Stock Fund and to the limitation on multiples of 10%, each
Director may, at any time, make a revised investment election applicable to
amounts deferred, or elect to have the amount credited to his or her account
reallocated among the investment funds, such revised election or reallocation to
be effective from and after the first day of the month following receipt of a
Deferred Compensation Election Form by the Secretary of the Company. In the
event a Director fails to make an investment election, his or her entire account
shall be credited to the Special Fixed Income Fund.
3. With respect to each Non-Employee Director who was a non-employee director of
The Dun & Bradstreet Corporation prior to the Spinoff, each such Director's
account shall be credited with the balance in the Director's account as of the
effective date of the Spinoff under The Dun & Bradstreet Corporation Nonfunded
Deferred Compensation Plan for Non-Employee Directors, as amended effective July
16, 1997 ("Prior Plan"), giving effect to the funds such account was invested in
under the Prior Plan; provided, however, that with respect to amounts deemed to
be invested in the Dun & Bradstreet Common Stock Fund under the Prior Plan (the
"D&B Fund"), each Director shall have an amount of Company stock credited to the
Dun & Bradstreet Common Stock Fund under the Plan equal to (i) the number of
shares of Company stock such Director
<PAGE> 3
3
would have received pursuant to the Spinoff if such Director owned the D&B stock
credited to the D&B Fund plus (ii) the number of deemed shares of D&B stock such
Director held under the D&B Fund multiplied by a fraction, the numerator of
which equals the average of high and low trading prices of a share of R.H.
Donnelley Corporation common stock for the five trading days starting on the
ex-dividend date, and the denominator of which equals the average of high and
low trading prices of a share of Company common stock for the five trading days
starting on the regular way trading date.
4. The aggregate balance in the Director's account, giving effect to the
investment performance of the fund(s) to which deferred fees were credited,
shall be paid to the Director in five or ten annual installments or in a lump
sum, as the Director shall elect in the notice referred to in Paragraph 1 above.
The first installment (or lump sum payment if the Director so elects) shall be
paid on the tenth day of the calendar year immediately following the calendar
year in which the Director ceases to be a Director of the Company, and
subsequent installments shall be made on the tenth day of each succeeding
calendar year until the entire amount credited to the Director's account shall
have been paid. The amount of each installment shall be determined by
multiplying the balance credited to the Director's account as of the December 31
immediately preceding the installment payment date by a fraction, the numerator
of which shall be one and the denominator of which shall be the number of
installment payments over which payment of such amount is to be made, less the
number of installments theretofore made. Thus, if payment is to be made in ten
installments, the fraction for the first installment shall be 1/10th, for the
second installment 1/9th, and so on.
5. If a Director should die before full payment of all amounts credited to the
Director's
<PAGE> 4
4
account, the full amount credited to the account as of December 31 of the year
of the Director's death shall be paid on the tenth day of the calendar year
following the year of death to the Director's estate or to such beneficiary or
beneficiaries as previously designated by the Director in a written notice
delivered to the Secretary of the Company.
6. A Director's election to defer compensation shall continue until a Director
ceases to be a Director or until the Director changes or terminates such
election by written notice delivered to the Secretary of the Company. Any such
notice of change or termination shall become effective as of the end of the
calendar year in which such notice is given. Amounts credited to the account of
a Director prior to the effective date of such change or termination shall not
be affected thereby and shall be paid to the Director only in accordance with
paragraph 3 (or Paragraph 4 in the event of death) above.
7. The right of a Director to any deferred fees and/or the interest thereon
shall not be subject to assignment by the Director. If a Director does make an
assignment of any deferred fees and/or the interest thereon, the Company may
disregard such assignment and discharge its obligation hereunder by making
payment as though no such assignment has been made.
8. If there is a "Change in Control" of the Company, as defined in Paragraph 9:
a) The total amount to the credit of each Director's account under
the Plan shall be paid to the Director in a lump sum within 30 days from
the date of such Change in Control; provided, however, if such payment is
not made within such 30-day period, the amount to the credit of the
Director's account shall be credited with interest from the date of such
Change in Control until the actual payment date at an annual rate equal to
the yield on 90-day U.S. Treasury Bills plus one percentage point. For
this purpose the yield on U.S. Treasury Bills shall be the rate published
in The Wall Street Journal on the first business day of the calendar month
in which the Change in Control occurred.
<PAGE> 5
5
b) The total amount credited to each Director's account under the
Plan from the date of the Change in Control until the date the Director
ceases to be a Director shall be paid to the Director in a lump sum within
30 days from the date the Director ceases to be a Director.
c) If a Director elects to change or terminate an election with
respect to the deferral of fees by written notice delivered to the
Secretary of the Company, and such notice is given during the calendar
year in which a Change in Control occurs and on or before the date of the
Change in Control, the change or termination of election shall become
effective as of the date of the Change in Control. If such notice is given
subsequent to the date of the Change in Control, it shall become effective
as of the end of the calendar year in which the notice is given.
9. A "Change in Control" of the Company shall mean the occurrence of any of the
following events:
a) any "Person," as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any corporation owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), is or becomes the "Beneficial Owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the
Company's then outstanding securities;
b) during any period of twenty-four months (not including any period
prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new Director (other
than (1) a Director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(a), (c) or (d) of this Section, (2) a Director designated by any Person
(including the Company) who publicly announces an intention to take or to
consider taking actions (including, but not limited to, an actual or
threatened proxy contest) which if consummated would constitute a Change
in Control or (3) a Director designated by any Person who is the
Beneficial Owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's
securities) whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds (2/3)
of the Directors then still in office who either were Directors at the
beginning of the period or whose election or nomination for election was
previously so approved cease for any reason to constitute at least a
majority thereof;
c) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or
consolidation (1) which would result in the voting securities of the
Company outstanding immediately prior
<PAGE> 6
6
thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation and (2) after which no Person would hold 20% or more of the
combined voting power of the then outstanding securities of the Company or
such surviving entity; or
d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets.
10. Notwithstanding any provision herein to the contrary, amounts payable under
this Plan shall not be funded and shall be made out of the general funds of the
Company; provided, however, that the Company reserves the right to establish one
or more trusts to provide alternate sources of benefit payments under this Plan;
provided, further, however, that upon the occurrence of a "Potential Change in
Control" of the Company, as defined below, the appropriate officers of the
Company are authorized to make transfers to such a trust fund, established as an
alternate source of benefits payable under the Plan, as are necessary to fund
the lump sum payments to Directors required pursuant to Paragraph 8 of this Plan
in the event of a Change in Control of the Company; provided, further, however,
that if payments are made from such trust fund, such payments will satisfy the
Company's obligations under this Plan to the extent made from such trust fund.
For the purposes of this Plan, "Potential Change in Control" means:
a) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control of the Company;
b) any person (including the Company) publicly announces an
intention to take or to consider taking actions which if consummated would
constitute a Change in Control of the Company;
c) any person, other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company (or a company
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership
<PAGE> 7
7
of stock of the Company), who is or becomes the beneficial owner, directly
or indirectly, of securities of the Company representing 9.5% or more of
the combined voting power of the Company's then outstanding securities,
increases such person's beneficial ownership of such securities by 5% or
more over the percentage so owned by such person; or
d) the Board of Directors of the Company adopts a resolution to the
effect that, for purposes of this Plan, a Potential Change in Control of
the Company has occurred.
11. The Compensation and Benefits Committee of the Board (the "Committee") shall
be responsible for the administration of the Plan and may delegate to any
management committee, employee, Director or agent its responsibility to perform
any act hereunder, including without limitation those matters involving the
exercise of discretion, provided that such delegation shall be subject to
revocation at any time at its discretion. The Committee shall have full
authority to interpret the provisions of the Plan and construe all of its terms,
to adopt, amend and rescind rules and regulations for the administration of the
Plan, and generally to conduct and administer the Plan and to make all
determinations in connection with the Plan as may be necessary or advisable,
other than those determinations delegated to management employees or independent
third parties by the Board. All of its rules, interpretations and decisions
shall be applied in a uniform manner to all Directors similarly situated and
decisions of the Committee shall be conclusive and binding on all persons. Any
action permitted to be taken by the Committee may be taken by the Board of
Directors, in its discretion.
12. Neither participation in the Plan nor any action under the Plan shall be
construed to give any Director a right to be retained in the service of the
Company.
13. The Plan may be modified, amended or revoked at any time by the Board of
Directors of
<PAGE> 8
8
the Company.
14. The Plan shall be governed by and construed in accordance with the laws of
the State of Delaware applicable to contracts made and to be performed in the
State of Delaware.
<PAGE> 1
Exhibit 10.19
1998 DUN & BRADSTREET CORPORATION REPLACEMENT PLAN
FOR CERTAIN NON-EMPLOYEE DIRECTORS HOLDING DUN & BRADSTREET
CORPORATION EQUITY-BASED AWARDS
1. Purpose of the Plan
The purpose of the 1998 Dun & Bradstreet Corporation Replacement Plan for
Certain Nonemployee Directors Holding Dun & Bradstreet Corporation Equity-Based
Awards (the "Plan") is to provide for the award of substantially identical
replacement stock options, replacement restricted stock, replacement phantom
stock units and replacement deferred performance share units to certain
non-employee directors of The New Dun & Bradstreet Corporation, a Delaware
corporation to be renamed "The Dun & Bradstreet Corporation" after the Spinoff
(the "Company") whose awards under the 1996 The Dun & Bradstreet Corporation
Non-Employee Directors' Stock Incentive Plan and The Dun & Bradstreet
Corporation Non-Employee Directors' Restricted Stock Plan (the "D&B Plans") were
cancelled pursuant to the spinoff of the Company from The Dun & Bradstreet
Corporation, a Delaware corporation to be renamed "R.H. Donnelley Corporation"
after the Spinoff ("D&B") (the "Spinoff") and to certain retired non-employee
directors who elect, pursuant to the Spinoff, to have the awards granted under
the D&B Plans cancelled (the "Eligible Holders"). The Company expects that the
Plan will aid the Company in attracting, retaining and compensating non-employee
Directors and to enable them to increase their ownership of Shares. The Plan
will be beneficial to the Company and its shareholders since it will allow
non-employee Directors to have a greater personal financial stake in the Company
through the ownership of Shares, in addition to underscoring their common
interest with shareholders in increasing the value of the Shares on a long-term
basis. It is the intention of the Company that the terms of the replacement
awards will (i) substantially preserve the economic value of the cancelled D&B
awards and (ii) except for the terms described in Section 7, 8, 9 and 10 of this
Plan, remain substantially identical to the terms of the cancelled D&B awards.
2. Definitions
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or any
successor thereto.
(b) Awards: Replacement options, replacement restricted stock and
replacement phantom stock units granted pursuant to the Plan.
(c) Beneficial Owner: As defined in rule 13d-3 under the Act (or any
successor rule thereto).
<PAGE> 2
2
(d) Board: The Board of Directors of the Company.
(e) Change in Control: The occurrence of any of the following
events:
(i) any "Person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company), is or becomes the
"Beneficial Owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities;
(ii) during any period of twenty-four months (not including
any period prior to the execution of this Agreement), individuals
who at the beginning of such period constitute the Board, and any
new Director (other than (1) a Director designated by a person who
has entered into an agreement with the Company to effect a
transaction described in clause (a), (c) or (d) of this Section, (2)
a Director designated by any Person (including the Company) who
publicly announces an intention to take or to consider taking
actions (including, but not limited to, an actual or threatened
proxy contest) which if consummated would constitute a Change in
Control or (3) a Director designated by any Person who is the
Beneficial Owner, directly or indirectly, of securities of the
Company representing 10% or more of the combined voting power of the
Company's securities) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of at
least two-thirds (2/3) of the Directors then still in office who
either were Directors at the beginning of the period or whose
election or nomination for election was previously so approved cease
for any reason to constitute at least a majority thereof;
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
(1) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation and (2) after which no Person holds 20% or
more of the combined voting power of the then outstanding securities
of the Company or such surviving entity; or
(iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
<PAGE> 3
3
(f) Code: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
(g) Committee: The Compensation and Benefits Committee of the Board.
(h) Company: The New Dun & Bradstreet Corporation, a Delaware
corporation to be renamed "The Dun & Bradstreet Corporation" after the
Spinoff.
(i) D&B Deferred Performance Share Units: A bookkeeping entry,
equivalent in value to the number of deferred performance shares of D&B
stock credited to an Eligible Holder's account as of the opening of
business on the Spinoff Date, pursuant to the D&B Plans.
(j) D&B Restricted Stock: Restricted stock held by an Eligible
Holder that was granted under the D&B Plans.
(k) D&B Phantom Stock Units: A bookkeeping entry, equivalent in
value to the number of phantom shares of D&B stock credited to an Eligible
Holder's account as of the opening of business on the Spinoff Date,
pursuant to the D&B Plans.
(l) Daily Average Trading Prices: The average of the high and low
trading prices for stock on a given day.
(m) Deferred Performance Share Unit: A bookkeeping entry, equivalent
in value to one Share, credited in accordance with Section 10(a) of the
Plan.
(n) Determination Day: As such term is defined in Section 9(b) of
the Plan.
(o) Disability: Inability to continue to serve as a non-employee
Director of the Board due to a medically determinable physical or mental
impairment which constitutes a permanent and total disability, as
determined by the Committee (excluding any member thereof whose own
Disability is at issue in a given case) based upon such evidence as it
deems necessary and appropriate. An Eligible Holder shall not be
considered disabled unless he or she furnished such medical or other
evidence of the existence of the Disability as the Committee, in its sole
discretion, may require.
(p) Effective Date: The date on which the Plan takes effect, as
defined pursuant to Section 15 of the Plan.
(q) Fair Market Value: On a given date, the average of the high and
low prices of the Shares as reported on such date on the Composite Tape of
the principal national securities exchange on which such Shares are listed
or admitted to trading, or, if no Composite Tape exists for such national
securities exchange on such date, then ont he principal national
securities exchange on which such Shares are listed or admitted to
trading, or, if the Shares are not listed or admitted on a national
securities exchange, the average o the per Share closing bid price and per
Share closing asked price on such date as quoted on the National
association of Securities Dealers Automated Quotation System
<PAGE> 4
4
(or such market in which such prices are regularly quoted), or, if there
is no market on which the Shares are regularly quoted, the Fair Market
Value shall be the value established by the Committee in good faith. If no
sale of Shares shall have been reported on such Composite Tape or such
national securities Exchange on such date or quoted on the National
Association of Securities Dealers Automated Quotation System on such date,
then the immediately preceding date on which sales of the Shares have been
so reported or quoted shall be used.
(r) New D&B Deferred Performance Share Units: A bookkeeping entry,
equivalent in value to the number of phantom performance shares credited
to an Eligible Holder's account as a dividend on such Eligible Holder's
D&B Deferred Performance Share Units pursuant to the Spinoff.
(s) New D&B Restricted Stock: Restricted Stock received by an
Eligible Holder as a result of the Spinoff.
(t) New D&B Phantom Stock Units: A bookkeeping entry, equivalent in
value to the number of phantom Shares credited to an Eligible Holder's
account as a dividend on such Eligible Holder's D&B Phantom Stock Units
pursuant to the Spinoff.
(u) Option: A stock option granted pursuant to Section 7 of the
Plan.
(v) Payment Day: As such term is defined in Section 9(b) of the
Plan.
(w) Person: As such term is used in Section 13(d) or 14(d) of the
Act (or any successor section thereto).
(x) Phantom Stock Unit: A bookkeeping entry, equivalent in value to
one Share, credited in accordance with Section 9(a) of the Plan.
(y) Plan: The 1998 Dun & Bradstreet Corporation Replacement Plan for
Certain Non-Employees Directors Holding Dun & Bradstreet Corporation
Equity-Based Awards.
(z) Retirement: Termination of service with the Company after such
Eligible Holder has attained age 70, regardless of the length of such
Eligible Holder's service.
(aa) Shares: Shares of common stock, par value $.01 per share, of
the Company.
(bb) Spinoff Date: The date on which the Shares are first
distributed to the public shareholders.
(cc) Subsidiary: A subsidiary corporation, as defined in Section
424(f) of the Code (or any successor section thereto).
(dd) Termination Date: As such term is defined in Section 9(b) of
the Plan.
3. Shares Subject to the Plan
<PAGE> 5
5
The total number of Shares which may be issued under the Plan is equal to
the aggregate number of shares to be issued as replacement awards, as calculated
pursuant to Sections 7, 8 and 10 of this Plan. The shares may consist, in whole
or in part, of unissued shares or treasury shares. After the initial grant of
awards, no further awards shall be granted under the Plan.
4. Administration
The Plan shall be administered by the Committee, which may delegate its
duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two "non-employee directors" within the meaning of Rule 16b-3
under the act (or any successor rule thereto); provided, however, that any
action permitted to be taken by the Committee may be taken by the Board, in its
discretion. The Committee is authorized to interpret the Plan, to establish,
amend and rescind any rules and regulations relating to the Plan, and to make
any other determinations that it deems necessary or desirable for the
administration of the Plan. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan in the manner and to the
extent the Committee deems necessary or desirable. Any decision of the Committee
in the interpretation and administration of the Plan, as described herein, shall
lie within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Eligible
Holders and their beneficiaries or successors).
5. Eligibility
Only Eligible Holders shall receive grants of replacement stock options,
replacement restricted stock, replacement phantom stock units and replacement
deferred performance share units under the Plan.
6. Limitations
Options hereunder shall only be granted in replacement of D&B Stock
Options (as defined in Section 7(a) of the Plan) held by Eligible Holders
immediately prior to the Spinoff Date.
7. Terms and Conditions of Options
Options granted under the Plan shall be non-qualified stock options for
federal income tax purposes, as evidenced by the related Option agreements, and
shall be subject to the foregoing and the following terms and conditions and to
such other terms and conditions, not inconsistent therewith, as the Committee
shall determine:
(a) Generally. As of the Spinoff, each unexercised stock option held
by an Eligible Holder that was granted under the D&B Plans (a "D&B Stock
Option") shall be cancelled, and such Eligible Holder shall receive a
replacement stock option pursuant to this Plan. The number of Shares
covered by each replacement stock option shall be determined by (i)
multiplying the number of shares of D&B common stock covered by the
cancelled D&B Stock Option by a fraction, the numerator of which is the
average of the Daily Average Trading Prices of D&B common stock for the
five consecutive trading days immediately preceding the first date on
which D&B common stock is traded ex-
<PAGE> 6
6
dividend, and the denominator of which is the average of the Daily Average
Trading Prices of the Shares for the five consecutive trading days
starting on the first date on which the Shares are traded regular way (the
"D&B Ratio") and (ii) rounding down the result to a whole number of
shares. The option price of each replacement stock option shall be
determined by dividing the option price of the cancelled D&B Stock Option
by the D&B Ratio. Unless otherwise specified in this Plan, all other terms
of the replacement stock options shall remain substantially identical to
those of the cancelled D&B Stock Options as set forth in the D&B Plans and
related option agreement(s).
(b) Exercisability. Except as set forth in the Plan, stock options
granted under the Plan shall have substantially identical terms as those
of the stock options originally granted under the D&B Plans; provided,
however, that in no event shall a replacement stock option be exercisable
more than ten years after the date the original option was granted under
the D&B Plans.
(c) Exercisability of Options. An Option granted under the Plan
shall be fully exercisable on the first anniversary of the date on which
the original option was granted under the D&B Plans. An Option shall
expire on the tenth anniversary of the date on which the original option
was granted under the D&B Plans.
(d) Exercise of Options. Except as otherwise provided in the Plan or
in a related Option agreement, an Option may be exercised for all, or from
time to time any part, of the Shares for which it is then exercisable. The
purchase price for the Shares as to which an option is exercised shall be
paid to the Company in full at the time of exercise at the election of the
Participation (i) in cash, (ii) in Shares having a Fair Market Value equal
to the aggregate option price for the Shares being purchased and
satisfying such other requirements as may be imposed by the Committee or
(iii) partly in cash and partly in such Shares. No Eligible Holder shall
have any rights to dividends or other rights of a shareholder with respect
to Shares subject to an Option until the Eligible Holder has given written
notice of exercise of the Option, paid in full for such Shares and, if
applicable, has satisfied any other conditions imposed by the Committee
pursuant to the Plan.
(e) Exercisability Upon Termination of Service by Death. If an
Eligible Holder's service with the Company and its Subsidiaries terminates
by reason of death after the first anniversary of the date on which the
original option was granted under the D&B Plans, the unexercised portion
of such Option may thereafter be exercised during the shorter of (A) the
remaining term of the Option or (B) five years after the date of death.
(f) Exercisability Upon Termination of Service by Disability or
Retirement. If an Eligible Holder's service with the Company and its
Subsidiaries terminates by reason of Disability or Retirement after the
first anniversary of the date on which the original option was granted
under the D&B Plans, the unexercised portion of such Option may thereafter
be exercised during the shorter of (C) the remaining term of the Option or
(D) five years after the date of such termination of service; provided,
however, that if an Eligible Holder dies within a period of five years
after such termination of service, the unexercised portion of the Option
may thereafter be exercised, during the shorter of (iv)
<PAGE> 7
7
the remaining term of the Option or (v) the period that is the longer of
(A) five years after the Date of such termination of service or (B) one
year after the date of death.
(g) Effect of Other Termination of Service. If an Eligible Holder's
service with the Company and its Subsidiaries terminates by reason of
Disability or Retirement prior to the first anniversary of the date on
which an Option is granted (as described above), then, to the extent the
Committee, in its sole discretion, so permits, such Option may be
exercised thereafter, during the shorter of (A) the remaining term of such
Option or (B) five years after the date of such termination of service,
for a prorated number of Shares (rounded down to the nearest whole number
of Shares), equal to (i) the number of Shares subject to such Option
multiplied by (ii) a fraction the numerator of which is the number of days
the Eligible Holder served on the Board subsequent to the date on which
such Option was granted and the denominator of which is 365. The portion
of such Option which is not so exercisable shall terminate as of the date
of Disability or Retirement. If an Eligible Holder's service with the
Company and its Subsidiaries terminates for any other reason prior to the
first anniversary of the date on which the original option was granted
under the D&B Plans (as described above), the Option shall thereupon
terminate. If an Eligible Holder's service with the Company and its
Subsidiaries terminates for any reason other than death, Disability or
Retirement after the first anniversary of the date on which the original
option was granted under the D&B Plans (as described above), the
unexercised portion of the Option shall thereupon terminate.
(h) Nontransferability of Stock Options. Except as otherwise
provided in this Section 7(h), a stock option shall not be transferable by
the optionee otherwise than by will or by the laws of descent and
distribution and during the lifetime of an optionee an option shall be
exercisable only by the optionee. An option exercisable after the death of
an optionee or a transferee pursuant to the following sentence may be
exercised by the legatees, personal representatives or distributees of the
optionee or such transferee. The Committee may, in its discretion,
authorize all or a portion of the options previously granted or to be
granted to an optionee to be on terms which permit irrevocable transfer
for no consideration by such optionee to any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, of the optionee, trusts
for the exclusive benefit of these persons, and any other entity owned
solely by these persons ("Eligible Transferees"), provided that (x) the
stock option agreement pursuant to which such options are granted must be
approved by the Committee, and must expressly provide for transferability
in a manner consistent with this Section and (y) subsequent transfers of
transferred options shall be prohibited except those in accordance with
the first sentence of this Section 7(h). The Committee may, in its
discretion, amend the definition of Eligible Transferees to conform to the
coverage rules of Form S-8 under the Securities Act of 1933 or any
comparable Form from time to time in effect. Following transfer, any such
options shall continue to be subject to the same terms and conditions as
were applicable immediately prior to transfer. The events of termination
of service of Sections 7(e), 7(f) and 7(g) hereof shall continue to be
applied with respect to the original optionee, following which the options
shall be exercisable by the transferee only to the extent, and for the
periods specified, in Sections 7(e), 7(f) and 7(g). The Committee may
delegate to a committee consisting of employees of the Company the
authority to authorize transfers, establish terms and conditions upon
<PAGE> 8
8
which transfers may be made and establish classes of options eligible to
transfer options, as well as to make other determinations with respect to
option transfers.
8. Terms and Conditions of Restricted Stock
As of the Spinoff Date, D&B Restricted Stock and New D&B Restricted
Stock shall be forfeited, and such Eligible Holder shall receive
replacement restricted stock pursuant to this Plan. The number of shares
of restricted stock shall equal (i) the number of Shares of forfeited New
D&B Restricted Stock plus (ii) the number of shares of forfeited D&B
Restricted Stock multiplied by a fraction, the numerator of which is the
average of the Daily Average Trading Prices of D&B common stock for the
five consecutive trading days starting on the ex-dividend trading date,
and the denominator of which is the average of the Daily Average Trading
Prices of the Shares for the five consecutive trading days starting on the
first date on which the Shares are traded regular way. Unless otherwise
specified in this Plan, all other terms of the replacement restricted
stock shall remain substantially identical to those of the forfeited D&B
Restricted Stock as set forth in the applicable D&B Plans and related D&B
Restricted Stock agreement(s).
9. Terms and Conditions of Phantom Stock Units
(a) Phantom Stock Units. As of the Spinoff Date, D&B Phantom Stock
Units and New D&B Phantom Stock Units then held by each Eligible Holder
shall be forfeited, and such Eligible Holder shall receive replacement
Phantom Stock Units pursuant to this Plan. The number of Shares credited
as Phantom Stock Units shall equal (i) the number of forfeited New D&B
Phantom Stock Units plus (ii) the number of forfeited D&B Phantom Stock
Units multiplied by a fraction, the numerator of which equals the average
of the high and low trading prices of a share of R.H. Donnelley
Corporation common stock for the five trading days starting on the
ex-dividend date, and the denominator of which equals the average of the
high and low trading prices of a Share for the five trading days starting
on the regular way trading date. Phantom Stock Units shall be credited
with dividend equivalents when dividends are deemed paid on balances held
by employees of the Company (the "Employee Balances") in the Dun &
Bradstreet Common Stock Fund of the Company's Profit Participation Plan
(or successor plan), and such dividend equivalents shall be converted into
additional Phantom Stock Units (including fractional Phantom Stock Units)
in a manner consistent with the treatment of the Employee Balances. Unless
otherwise specified in this Plan, all other terms of the replacement
Phantom Stock Units shall remain substantially identical to those of the
forfeited D&B Phantom Stock Units as set forth in the applicable D&B Plans
and related agreement(s).
(b) Payment in Cash Upon Termination of Service. On the tenth day
(the "Payment Day") of the calendar year immediately following the
calendar year containing the date on which an Eligible Holder terminates
service with the Company (the "Termination Date"), the Eligible Holder
shall receive a lump sum payment in cash equal to the Fair Market Value of
the number of Phantom Stock Units (including fractional Phantom Stock
Units) credited to the Eligible Holder's Phantom Stock Unit account on the
December 31 immediately preceding the Payment Day (the "Determination
Day"). Between the Termination Date and the Determination Day the Eligible
Holder's Phantom
<PAGE> 9
9
Stock Units shall continue to be credited with dividend equivalents and
such dividend equivalents shall continue to be converted into additional
Phantom Stock Units (including fractional Phantom Stock Units) in the
manner set forth above. As an alternative to receiving such payment on the
Payment Day, the Eligible Holder may elect to receive his or her payment
in such forms of payments (and on such terms and conditions) as are
established by the Committee in its sole discretion.
(c) Crediting of Stock Dividends. When non-cash dividends are paid
on Shares, an Eligible Holder's Phantom Stock Units shall be credited with
dividend equivalents by crediting the Eligible Holder's account in a
manner consistent with the treatment of the Employee Balances.
10. Terms and Conditions of Deferred Performance Share Units
As of the Spinoff Date, D&B Deferred Performance Share Units and New
D&B Deferred Performance Share Units then held by each Eligible Holder shall be
forfeited, and such Eligible Holder shall receive replacement Deferred
Performance Share Units pursuant to this Plan. The number of Shares credited as
Deferred Performance Share Units shall equal (i) the number of forfeited New D&B
Deferred Performance Share Units plus (ii) the number of forfeited D&B Deferred
Performance Share Units multiplied by a fraction, the numerator of which equals
the average of the high and low trading prices of a share of R.H. Donnelley
Corporation common stock for the five trading days starting on the ex-dividend
date, and the denominator of which equals the average of the high and low
trading prices of a Share for the five trading days starting on the regular way
trading date. Deferred Performance Share Units shall be credited with dividend
equivalents when dividends are deemed paid on balances held by employees of the
Company (the "Employee Balances") in the Dun & Bradstreet Common Stock Fund of
the Company's Profit Participation Plan (or successor plan), and such dividend
equivalents shall be converted into additional Deferred Performance Share Units
(including fractional Deferred Performance Share Units) in a manner consistent
with the treatment of the Employee Balances. Unless otherwise specified in this
Plan, all other terms of the replacement Deferred Performance Share Units shall
remain substantially identical to those of the forfeited D&B Deferred
Performance Share Units as set forth in the applicable D&B Plans and related
agreement(s).
11. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the contrary, the
following provisions shall apply to all Awards granted under the Plan:
(a) With respect to Stock Options, Stock Appreciation Rights,
Restricted Stock, Phantom Stock Units and Deferred Performance Share Units
originally granted under the 1996 The Dun & Bradstreet Corporation
Non-Employee Directors' Stock Incentive Plan:
(i) Generally. In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share dividend or
split, reorganization, recapitalization, merger, consolidation,
spin-off, combination or exchange of Shares or other corporate
exchange, or any distribution to shareholders of Shares
<PAGE> 10
10
other than regular cash dividends, the Committee, in its sole
discretion, and without liability to any person, may make such
substitution or adjustment, if any, as it deems to be equitable, as
to (A) the number or kind of shares or other securities issued or
reserved for issuance pursuant to the Plan or pursuant to
outstanding Awards, (B) the option price and/or (C) any other
affected terms of such Awards.
(ii) Change in Control. Upon the occurrence of a Change in
Control, (A) all restrictions on Shares of Restricted Stock shall
lapse, (B) all Phantom Stock Units shall become payable to Eligible
Holders in cash and (C) all Options shall vest and become
exercisable.
(b) With respect to Restricted Stock originally granted under The
Dun & Bradstreet Corporation Non-Employee Directors' Restricted Stock
Plan:
(i) Generally. Upon changes in the outstanding Shares by
reason of a stock dividend, stock split, reverse split,
recapitalization, merger, consolidation, combination or exchange of
shares, separation, reorganization or liquidation, the number and
class of shares available under the Plan as to which Awards may be
granted and the number and class of shares under each Award shall be
correspondingly adjusted by the Committee.
(ii) Change in Control. Except as otherwise specifically
provided in an award agreement relating to any Award, in the event
of a Change in Control, merger, consolidation, combination,
reorganization or other transaction in which the shareholders of the
Company will receive cash or securities (other than common stock) or
in the event that an offer is made to the holders of Shares to sell
or exchange such Shares for cash, securities or stock of another
corporation and such offer, if accepted, would result in the offeror
becoming the owner of (a) at least 50% of the outstanding Shares or
(b) such lesser percentage of the outstanding Shares which the
Committee in its sole discretion determines will materially
adversely affect the market value of the Common Stock after the
tender or exchange offer, the Committee shall, prior to the
shareholders' vote on such transaction or prior to the expiration
date of the tender or exchange offer (i) accelerate the termination
of the Restriction Period (as defined in The Dun & Bradstreet
Corporation Non-Employee Directors' Restricted Stock Plan as in
effect on the date on which the Plan becomes effective) so that all
restrictions with respect to a Eligible Holder's restricted stock
shall immediately lapse without regard to any limitations of time or
amount otherwise contained in the D&B Plans or an award agreement
and/or (ii) determine that the Awards shall be adjusted and make
such adjustments by substituting for the Shares subject to Awards,
common stock of the surviving corporation or offeror if such stock
of such corporation is publicly traded or, if such stock is not
publicly traded, by substituting common stock of a parent of the
surviving corporation or offeror if the stock of such parent is
publicly traded, in which event the number of shares subject to an
Award shall be the number of shares which could have been purchased
on the closing day of such transaction or the expiration date of the
offer with the proceeds which would have been received by the
Eligible Holder if the Eligible Holder had exchanged all of such
shares in the transaction or sold or exchanged all of such shares
pursuant to the tender or exchange offer.
<PAGE> 11
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12. Successors and Assigns
The Plan shall be binding on all successors and assigns of the Company and
an Eligible Holder, including without limitation, the estate of such Eligible
Holder and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Eligible Holder's
creditors.
13. Amendments or Termination
The Board may amend, alter or discontinue the Plan, but no amendment,
alteration or discontinuation shall be made which would impair the rights of any
Eligible Holder under any Award theretofore granted without such Eligible
Holder's consent.
14. Nontransferability of Awards
Except as provided in Section 7(h) of the Plan, an Award shall not be
transferable or assignable by the Eligible Holder otherwise than by will or by
the laws of descent and distribution. During the lifetime of an Eligible Holder,
an Award shall be exercisable only by such Eligible Holder. An Award exercisable
after the death of an Eligible Holder may be exercised by the legatees, personal
representatives or distributees of the Eligible Holder. Notwithstanding anything
to the contrary herein, the Committee, in its sole discretion, shall have the
authority to waive this Section 14 (or any part thereof) to the extent that this
Section 14 (or any part thereof) is not required under the rules promulgated
under any law, rule or regulation applicable to the Company.
15. Choice of Law
The Plan shall be governed by and construed in accordance with the laws of
the State of New York applicable to contracts made and to be performed in the
State of New York.
16. Effectiveness of the Plan
The Plan shall be effective as of the Spinoff Date.
<PAGE> 1
Exhibit 10.20
1998 DUN & BRADSTREET CORPORATION
NON-EMPLOYEE DIRECTORS' STOCK INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to aid the Company in attracting,
retaining and compensating non-employee directors and to enable them to increase
their ownership of Shares. The Plan will be beneficial to the Company and its
stockholders since it will allow non-employee directors of the Board to have a
greater personal financial stake in the Company through the ownership of Shares,
in addition to underscoring their common interest with stockholders in
increasing the value of the Shares on a long-term basis.
2. Definitions
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or any
successor thereto.
(b) Award: An Option, Share of Restricted Stock or Performance Share
granted pursuant to the Plan.
(c) Beneficial Owner: As such term is defined in Rule 13d-3 under
the Act (or any successor rule thereto).
(d) Board: The Board of Directors of the Company.
(e) Change in Control: The occurrence of any of the following
events:
(i) any "Person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions as
their ownership of stock of the Company), is or becomes the
"Beneficial Owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities.
(ii) during any period of twenty-four months (not including
any period prior to the execution of this Agreement), individuals
who at the beginning
<PAGE> 2
2
of such period constitute the Board, and any new Director (other
than a Director designated by a person who has entered into an
agreement with the Company to effect a transaction described in
clause (a), (c) or (d) of this Section, a Director designated by any
Person (including the Company) who publicly announces an intention
to take or to consider taking actions (including, but not limited
to, an actual or threatened proxy contest) which if consummated
would constitute a Change in Control or a Director designated by any
Person who is the Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined
voting power of the Company's securities) whose election by the
Board or nomination for election by the Company's shareholders was
approved by a vote of at least two-thirds (2/3) of the Directors
then still in office who either were Directors at the beginning of
the period or whose election or nomination for election was
previously so approved cease for any reason to constitute at least a
majority thereof.
(iii) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation and after which no Person holds 20% or more
of the combined voting power of the then outstanding securities of
the Company or such surviving entity; or
(iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
(f) Code: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
(g) Committee: The Compensation and Benefits Committee of the Board,
or any successor thereto or other committee designated by the Board to assume
the obligations of the Committee hereunder.
(h) Company: The New Dun & Bradstreet Corporation, a Delaware
corporation, to be renamed "The Dun & Bradstreet Corporation" after the Spinoff
Date.
(i) D&B: The Dun & Bradstreet Corporation, a Delaware corporation.
(j) Disability: Inability to continue to serve as a non-employee
director of the Board due to a medically determinable physical or mental
impairment which constitutes a permanent and total disability, as determined by
the Committee (excluding any member thereof whose own Disability is at issue in
a given case) based upon such evidence as it deems necessary and appropriate. A
Participant shall not be considered disabled unless he or she furnishes such
medical or other evidence of the existence of the Disability as the Committee,
in its sole
<PAGE> 3
3
discretion, may require.
(k) Effective Date: The date on which the Plan takes effect, as
defined pursuant to Section 14 of the Plan.
(l) Fair Market Value: On a given date, the arithmetic mean of the
high and low prices of the Shares as reported on such date on the Composite Tape
of the principal national securities exchange on which such Shares are listed or
admitted to trading, or, if no Composite Tape exists for such national
securities exchange on such date, then on the principal national securities
exchange on which such Shares are listed or admitted to trading, or, if the
Shares are not listed or admitted on a national securities exchange, the
arithmetic mean of the per Share closing bid price and per Share closing asked
price on such date as quoted on the National Association of Securities Dealers
Automated Quotation System (or such market in which such prices are regularly
quoted), or, if there is no market on which the Shares are regularly quoted, the
Fair Market Value shall be the value established by the Committee in good faith.
If no sale of Shares shall have been reported on such Composite Tape or such
national securities exchange on such date or quoted on the National Association
of Securities Dealers Automated Quotation System on such date, then the
immediately preceding date on which sales of the Shares have been so reported or
quoted shall be used.
(m) Option: A stock option granted pursuant to Section 6 of the
Plan.
(n) Option Price: The purchase price per Share of an Option, as
determined pursuant to Section 6(b) of the Plan.
(o) Participant: Any director of the Company who is not an employee
of the Company or any Subsidiary of the Company as of the date that an Award is
granted.
(p) Performance Period: The calendar year or such other period of
time as shall be designated by the Committee from time to time.
(q) Performance Share: A periodic bonus award, payable in
unrestricted Shares, granted pursuant to Section 8(a) of the Plan.
(r) Person: As such term is used for purposes of Section 13(d) or
14(d) of the Act (or any successor section thereto).
(s) Plan: The 1998 Dun & Bradstreet Corporation Non-Employee
Directors' Stock Incentive Plan.
(t) Restricted Stock: A Share of restricted stock granted pursuant
to Section 7 of the Plan.
(u) Retirement: Termination of service with the Company after such
Participant has attained age 70, regardless of the length of such Participant's
service; or, with the prior written consent of the Committee (excluding any
member thereof whose own Retirement is at issue in a given case), termination of
service at an earlier age after the Participant has completed six or more years
of service with the Company.
<PAGE> 4
4
(v) Shares: Shares of common stock, par value $0.01 per share, of
the Company.
(w) Spinoff Date: The date on which the Shares that are owned by D&B
are distributed to the holders of record of shares of D&B.
(x) Subsidiary: A subsidiary corporation, as defined in Section
424(f) of the Code (or any successor section thereto).
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan is
200,000. The Shares may consist, in whole or in part, of unissued Shares or
treasury Shares. The issuance of Awards shall reduce the total number of Shares
available under the Plan. Shares which are subject to Awards which terminate or
lapse may be granted again under the Plan.
4. Administration
The Plan shall be administered by the Committee, which may delegate
its duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two "non-employee directors" within the meaning of Rule 16b-3
under the Act (or any successor rule thereto); provided, however, that any
action permitted to be taken by the Committee may be taken by the Board, in its
discretion. The Committee is authorized to interpret the Plan, to establish,
amend and rescind any rules and regulations relating to the Plan, and to make
any other determinations that it deems necessary or desirable for the
administration of the Plan. The Committee may correct any defect or omission or
reconcile any inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the Committee in the
interpretation and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries or successors).
5. Eligibility
All Participants shall be eligible to participate under this Plan.
6. Terms and Conditions of Options
Options granted under the Plan shall be non-qualified stock options
for federal income tax purposes, as evidenced by the related Option agreements,
and shall be subject to the foregoing and the following terms and conditions and
to such other terms and conditions, not inconsistent therewith, as the Committee
shall determine:
(a) Grants. A Participant may receive, on such dates as determined
by the
<PAGE> 5
5
Committee in its sole discretion, grants consisting of such number of Options as
determined by the Committee in its sole discretion.
(b) Option Price. The Option Price per Share shall be determined by
the Committee, but shall not be less than 100% of the Fair Market Value of the
Shares on the date an Option is granted.
(c) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be determined
by the Committee, but in no event shall an Option be exercisable more than ten
years after the date it is granted.
(d) Exercise of Options. Except as otherwise provided in the Plan or
in a related Option agreement, an Option may be exercised for all, or from time
to time any part, of the Shares for which it is then exercisable. For purposes
of Section 6 of the Plan, the exercise date of an Option shall be the later of
the date a notice of exercise is received by the Company and, if applicable, the
date payment is received by the Company pursuant to clauses (i), (ii) or (iii)
in the following sentence. The purchase price for the Shares as to which an
Option is exercised shall be paid to the Company in full at the time of exercise
at the election of the Participant (i) in cash, (ii) in Shares having a Fair
Market Value equal to the aggregate Option Price for the Shares being purchased
and satisfying such other requirements as may be imposed by the Committee, (iii)
partly in cash and partly in such Shares or (iv) through the delivery of
irrevocable instructions to a broker to deliver promptly to the Company an
amount equal to the aggregate Option Price for the Shares being purchased. No
Participant shall have any rights to dividends or other rights of a stockholder
with respect to Shares subject to an Option until the occurrence of the exercise
date (determined as set forth above) and, if applicable, the satisfaction of any
other conditions imposed by the Committee pursuant to the Plan.
(e) Exercisability Upon Termination of Service by Death. If a
Participant's service with the Company and its Subsidiaries terminates by reason
of death after the first anniversary of the date on which an Option is granted,
the unexercised portion of such Option shall immediately vest in full and may
thereafter be exercised during the shorter of the remaining term of the Option
or five years after the date of death.
(f) Exercisability Upon Termination of Service by Disability or
Retirement. If a Participant's service with the Company and its Subsidiaries
terminates by reason of Disability or Retirement after the first anniversary of
the date on which an Option is granted, the unexercised portion of such Option
may thereafter be exercised during the shorter of the remaining term of the
Option or five years after the date of such termination of service; provided,
however, that if a Participant dies within a period of five years after such
termination of service, the unexercised portion of the Option shall immediately
vest in full and may thereafter be exercised, during the shorter of the
remaining term of the Option or the period that is the longer of five years
after the Date of such termination of service or one year after the date of
death.
(g) Effect of Other Termination of Service. If a Participant's
service with the Company and its Subsidiaries terminates by reason of Disability
or Retirement prior to the first anniversary of the date on which an Option is
granted (as described above), then, a pro rata portion of such Option shall
immediately vest in full and may be exercised thereafter, during the shorter of
(A) the remaining term of such Option or (B) five years after the date of such
<PAGE> 6
6
termination of service, for a prorated number of Shares (rounded down to the
nearest whole number of Shares), equal to (i) the number of Shares subject to
such Option multiplied by (ii) a fraction the numerator of which is the number
of days the Participant served on the Board subsequent to the date on which such
Option was granted and the denominator of which is 365. The portion of such
Option which is not so exercisable shall terminate as of the date of Disability
or Retirement. If a Participant's service with the Company and its Subsidiaries
terminates for any other reason prior to the first anniversary of the date on
which an Option is granted, such Option shall thereupon terminate. If a
Participant's service with the Company and its Subsidiaries terminates for any
reason other than death, Disability or Retirement after the first anniversary of
the date on which an Option is granted, the unexercised portion of such Option
shall thereupon terminate.
(h) Nontransferability of Stock Options. Except as otherwise
provided in this Section 6(h), a stock option shall not be transferable by the
optionee otherwise than by will or by the laws of descent and distribution and
during the lifetime of an optionee an option shall be exercisable only by the
optionee. An option exercisable after the death of an optionee or a transferee
pursuant to the following sentence may be exercised by the legatees, personal
representatives or distributees of the optionee or such transferee. The
Committee may, in its discretion, authorize all or a portion of the options
previously granted or to be granted to an optionee to be on terms which permit
irrevocable transfer for no consideration by such optionee to any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, of the optionee, trusts for the
exclusive benefit of these persons, and any other entity owned solely by these
persons ("Eligible Transferees"), provided that (x) the stock option agreement
pursuant to which such options are granted must be approved by the Committee,
and must expressly provide for transferability in a manner consistent with this
Section and (y) subsequent transfers of transferred options shall be prohibited
except those in accordance with the first sentence of this Section 6(h). The
Committee may, in its discretion, amend the definition of Eligible Transferees
to conform to the coverage rules of Form S-8 under the Securities Act of 1933 or
any comparable Form from time to time in effect. Following transfer, any such
options shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. The events of termination of service
of Sections 6(e), 6(f) and 6(g) hereof shall continue to be applied with respect
to the original optionee, following which the options shall be exercisable by
the transferee only to the extent, and for the periods specified, in Sections
6(e), 6(f) and 6(g). The Committee may delegate to a committee consisting of
employees of the Company the authority to authorize transfers, establish terms
and conditions upon which transfers may be made and establish classes of options
eligible to transfer options, as well as to make other determinations with
respect to option transfers.
7. Terms and Conditions of Restricted Stock
Restricted Stock granted under the Plan shall be subject to the
foregoing and the following terms and conditions and to such other terms and
conditions, not inconsistent therewith, as the Committee shall determine:
(a) Grants. A Participant may receive, on such dates as determined
by the Committee in its sole discretion, grants consisting of such amounts of
Restricted Stock as
<PAGE> 7
7
determined by the Committee in its sole discretion.
(b) Restrictions. Restricted Stock granted under the Plan may not be
sold, transferred, pledged, assigned or otherwise disposed of under any
circumstances; provided, however, that the foregoing restrictions shall lapse at
such time and upon such terms and conditions as may be specified by the
Committee in the related Award agreement(s).
(c) Forfeiture of Grants. Except to the extent otherwise specified
by the Committee in a related Award agreement(s), all Shares of Restricted Stock
as to which restrictions have not previously lapsed pursuant to Section 7(b) of
the Plan shall be forfeited upon the termination of a Participant's service with
the Company for any reason (including, without limitation, by reason of death,
Disability or Retirement).
(d) Other Provisions. During the period prior to the date on which
the foregoing restrictions lapse, Shares of Restricted Stock shall be registered
in the Participant's name and such Participant shall have voting rights and
receive dividends with respect to such Restricted Stock.
8. Terms and Conditions of Performance Shares
(a) Establishment of Annual Performance Target Levels and Number of
Performance Shares. Prior to the commencement of a given Performance Period, the
Committee shall establish performance goals for the Company for such performance
period. The Committee shall also establish the number of Performance Shares that
would be payable to Participants upon the attainment of various performance
goals during such Performance Period.
(b) Payment in Unrestricted Shares. As soon as practicable following
a given Performance Period, Participants shall receive unrestricted Shares equal
to the number of Performance Shares earned by such Participant during such
Performance Period. A Participant who did not serve on the Board during an
entire Performance Period shall receive a prorated number of Shares (rounded
down to the nearest whole number of Shares) based upon (i) the number of days
during the Performance Period during which such Participant served on the Board
and (ii) the actual performance results.
(c) Authorization for Committee to Permit Deferral. Notwithstanding
Section 8(b) of the Plan, a Participant may, if and to the extent permitted by
the Committee, elect to defer payment of any unrestricted Shares payable as a
result of any Performance Shares earned by such Participant; provided, however,
that any such election must be made (i) no later than June 30 of the year
immediately preceding the year in which any such unrestricted Shares are to be
paid and (ii) in accordance with such terms and conditions as are established by
the Committee in its sole discretion.
9. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the contrary,
the following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding Shares
after the
<PAGE> 8
8
Effective Date by reason of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination or exchange of
Shares or other corporate exchange, or any distribution to stockholders of
Shares other than regular cash dividends, the Committee in its sole discretion
and without liability to any person may make such substitution or adjustment, if
any, as it deems to be equitable, as to (i) the number or kind of Shares or
other securities issued or reserved for issuance pursuant to the Plan or
pursuant to outstanding Awards, (ii) the Option Price and/or (iii) any other
affected terms of such Awards.
(b) Change in Control. Upon the occurrence of a Change in Control,
(i) all restrictions on Shares of Restricted Stock shall lapse, (ii) each
Participant shall receive the target number of Performance Shares for the
Performance Period in which the Change in Control occurs (or, if no target
number has been established for such Performance Period, the target number for
the immediately preceding Performance Period shall be used) and (iii) all Stock
Options shall vest and become exercisable.
10. Successors and Assigns
The Plan shall be binding on all successors and assigns of the
Company and a Participant, including without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Participant's
creditors.
11. Amendments or Termination
The Committee may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which would impair the
rights of any Participant under any Award theretofore granted without such
Participant's consent.
12. Nontransferability of Awards
Except as provided in Section 6(h) of the Plan, an Award shall not
be transferable or assignable by the Participant otherwise than by will or by
the laws of descent and distribution. During the lifetime of a Participant, an
Award shall be exercisable only by such Participant. An Award exercisable after
the death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant. Notwithstanding anything to
the contrary herein, the Committee, in its sole discretion, shall have the
authority to waive this Section 12 (or any part thereof) to the extent that this
Section 12 (or any part thereof) is not required under the rules promulgated
under any law, rule or regulation applicable to the Company.
13. Choice of Law
The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed
in the State of Delaware.
<PAGE> 9
9
14. Effectiveness of the Plan
The Plan shall be effective as of the Spinoff Date.
<PAGE> 1
Exhibit 10.21
THE DUN & BRADSTREET CORPORATION
CASH INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to advance the interests of the Company
and its stockholders by providing incentives in the form of periodic cash bonus
awards to certain management employees of the Company and its Subsidiaries,
thereby motivating such employees to attain performance goals articulated under
the Plan.
2. Definitions
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or any
success thereto.
(b) Award: A periodic cash bonus award granted pursuant to the Plan.
(c) Beneficial Owner: As such term is defined in Rule 13d-3 under
the Act (or any successor rule thereto).
(d) Board: The Board of Directors of the Company.
(e) Change in Control: The occurrence of any of the following
events:
(i) any "Person" as such term is used in Section 13(d) and
14(d) of the Act (other than the Company, any trustee or other
fiduciary holding securities under an indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company), becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities;
(ii) during any period of twenty-four months (not including
any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board, and any new director
(other than (A) a director nominated by a Person who has entered
into an agreement with the Company to effect a transaction described
in Sections 2(e)(i), (iii) or (iv) of the Plan, (B) a director
nominated by any Person (including the Company) who publicly
announces an intention to take or to consider taking actions
(including, but not limited to, an actual or threatened proxy
contest) which if consummated would constitute a Change in Control
or (C) a director designated by any Person who is the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the
Company's securities) whose election
<PAGE> 2
2
by the Board or nomination for election by the Company's
stockholders was approved in advance by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation (A) which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation and (B) after which no Person would hold 20%
or more of the combined voting power of the then outstanding
securities of the Company or such surviving entity; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
(f) Code: The internal Revenue Code of 1986, as amended, or any
successor thereto.
(g) Committee: The Compensation and Benefits Committee of the Board,
or any successor thereto or any other committee designated by the Board to
assume the obligations of the Committee hereunder.
(h) Company: The New Dun & Bradstreet Corporation, a Delaware
corporation to be renamed "The Dun & Bradstreet Corporation" on the Effective
Date.
(i) Effective Date: The date on which the Plan takes effect, as
defined pursuant to Section 13 of the Plan.
(j) Participant: An employee of the Company or any of its
Subsidiaries who is selected by the Committee to participate in the Plan
pursuant to Section 4 of the Plan.
(k) Performance Period: The calendar year or any other period that
the Committee, in its sole discretion, may determine.
(l) Person: As such term is used for purposes of Section 13(d) or
14(d) of the Act or any successor sections thereto.
(m) Plan: The Dun & Bradstreet Corporation Cash Incentive Plan.
(n) Shares: Shares of common stock, par value $0.01 per Share, of
the Company.
(o) Spinoff Date: The date on which the Shares are distributed to
the
<PAGE> 3
3
shareholders.
(p) Subsidiary: A subsidiary corporation, as defined in Section
424(f) of the Code (or any successor section thereto).
3. Administration
The Plan shall be administered by the Committee or such other
persons designated by the Board. The Committee shall have the authority to
select the employees to be granted Awards under the Plan, to determine the size
and terms of an Award (subject to the limitations imposed on Awards in Section 5
below), to modify the terms of any Award that has been granted, to determine the
time when Awards will be made and the Performance Period to which they relate,
to establish performance objectives in respect of such Performance Periods and
to determine whether such performance objectives were attained. The Committee is
authorized to interpret the Plan, to establish, amend and rescind any rules and
regulations relating to the Plan, and to make any other determinations that it
deems necessary or desirable for the administration of the Plan; provided,
however, that any action permitted to be taken by the Committee may be taken by
the Board, in its discretion. The Committee may correct any defect or omission
or reconcile any inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the Committee in the
interpretation and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned. Determinations made by the Committee under the
Plan need not be uniform and may be made selectively among Participants, whether
or not such Participants are similarly situated. The Committee shall have the
right to deduct from any payment made under the Plan any federal, state, local
or foreign income or other taxes required by law to be withheld with respect to
such payment. The Committee may delegate to one or more employees of the Company
or any of its Subsidiaries the authority to take actions on its behalf pursuant
to the Plan.
4. Eligibility and Participation
The Committee shall designate, from employees recommended by Company
management, those persons who shall be Participants for each Performance Period.
Participants shall be selected from among the employees of the Company and any
of its Subsidiaries who are in a position to have a material impact on the
results of the operations of the Company or of one or more of its Subsidiaries.
The designation of Participants may be made individually or by groups or
classifications of employees, as the Committee deems appropriate.
<PAGE> 4
4
5. Awards
(a) Performance Goals. A Participant's Award shall be determined
based on the attainment of written performance goals recommended by the Chief
Executive Officer and approved by the Committee for a Performance Period
established by the Committee. The performance goals shall be based on criteria
which may or may not be objective. Objective criteria include, but are not
limited to, the following: (i) earnings before or after taxes (including
earnings before interest, taxes, depreciation and amortization); (ii) net
income; (iii) operating income; (iv) earnings per Share; (v) book value per
Share; (vi) return on stockholders' equity; (vii) expense management; (viii)
return on investment before or after the cost of capital; (iv) improvements in
capital structure; (x) profitability of an identifiable business unit or
product; (xi) maintenance or improvement of profit margins; (xii) stock price;
(xiii) market share; (xiv) revenues or sales; (xv) costs; (xvi) cash flow;
(xvii) working capital (xviii) return on assets; (xix) economic value added;
(xx) customer satisfaction; (xxi) changes in net assets (whether or not
multiplied by a constant percentage intended to represent the cost of capital)
and (xxii) employee satisfaction. The foregoing criteria may relate to the
Company, one or more of its Subsidiaries or one or more of its divisions, units,
partnerships, joint ventures or minority investments, product lines or products
or any combination of the foregoing, and may be applied on an absolute basis
and/or be relative to one or more peer group companies of indices, or any
combination thereof, all as the Committee shall determine. In addition, the
performance goals may be calculated without regard to extraordinary items.
(b) Payment. The amount of the Award actually paid to a given
Participant may be less or more than the amount determined by the applicable
performance goal formula, at the discretion of the Chief Executive Officer. The
amount of the Award determined by the Committee for a Performance Period shall
be paid to the participant at such time as determined by the Committee in its
sole discretion after the end of such Performance Period.
(c) Termination of Employment. If a Participant dies, retires, is
assigned to a different position or is granted a leave of absence, or if the
Participant's employment is otherwise t terminated (except with cause by the
Company, as determined by the Committee in its sole discretion) during a
Performance Period, a pro rata share of the Participant's award based on the
period of actual participation may, at the Committee's or the Chief Executive
Officer's discretion, be paid to the Participant after the end of the
Performance Period if it would have become earned and payable had the
Participant's employment status not changed.
6. Amendments or Termination
The Board or the Committee may amend, alter or discontinue the Plan,
but no amendment, alteration or discontinuation shall be made which would impair
any of the rights or obligations under any Award theretofore granted to a
Participant under the Plan without such Participant's consent; provided,
however, that the Board or the Committee may amend the Plan in such manner as it
deems necessary to permit the granting of Awards meeting the requirements of the
Code or other applicable laws. Notwithstanding anything to the contrary herein,
the Board may not amend, alter or discontinue the provisions relating to Section
10(b)(ii) of the Plan after the occurrence of a Change in Control.
7. No Right to Employment
<PAGE> 5
5
Neither the Plan nor any action taken hereunder shall be construed
as giving any Participant or other person any right to continue to be employed
by or perform services for the Company or any Subsidiary, and the right to
terminate the employment of or performance of services by any Participant at any
time and for any reason is specifically reserved to the Company and its
Subsidiaries.
8. Nontransferability of Awards
An award shall not be transferable or assignable by the Participant
otherwise than by will or by the laws of descent and distribution.
9. Reduction of Awards
Notwithstanding anything to the contrary herein, the Committee or
the Chief Executive Officer, in its, his or her sole discretion (but subject to
applicable law), may reduce any amounts payable to any Participant hereunder in
order to satisfy any liabilities owed to the Company or any of its Subsidiaries
by the Participant.
10. Adjustments Upon Certain Events
(a) Generally. In the event of any change in the outstanding Shares
by reason of any Share dividend or split, reorganization, recapitalization,
merger, consolidation, spin-off, combination or exchange of Shares or other
corporate exchange, or any distribution to stockholders of Shares other than
regular cash dividends, the Committee in its sole discretion and without
liability to any person may make such substitution or adjustment, if any, as it
deems to be equitable, as to any affected terms of outstanding Awards.
(b) Change in Control. In the event that (i) a Participant's
employment is actually or constructively terminated during a given Performance
Period (the "Affected Performance Period") and (ii) a Change in Control shall
have occurred within the 365 days immediately preceding the date of such
termination, then such Participant shall receive, promptly after the date of
such termination, an Award for the Affected Performance Period as if the
performance goals for such Performance Period had been achieved at 100%.
11. Miscellaneous Provisions
The Company is the sponsor and legal obligor under the Plan and
shall make all payments hereunder, other than any payments to be made by any of
the Subsidiaries (in which case payment shall be made by such Subsidiary, as
appropriate). The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to ensure the payment
of any amounts under the Plan, and the Participants' rights to the payment
hereunder shall be no greater than the rights of the Company's (or Subsidiary's)
unsecured creditors. All expenses involved in administering the Plan shall be
borne by the Company.
12. Choice of Law
The Plan shall be governed by and construed in accordance with the
laws of the
<PAGE> 6
6
State of Delaware applicable to contracts made and to be performed in the State
of Delaware.
13. Effectiveness of the Plan
The Plan shall be effective as of the Spinoff Date.
<PAGE> 1
Exhibit 10.22
THE DUN & BRADSTREET CORPORATION
COVERED EMPLOYEE CASH INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to advance the interests of the Company
and its stockholders by providing incentives in the form of periodic cash bonus
awards to certain management employees of the Company and its Subsidiaries,
thereby motivating such employees to attain performance goals articulated under
the Plan.
2. Definitions
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, (or any
successor thereto).
(b) Award: A periodic cash bonus award granted pursuant to the Plan.
(c) Beneficial Owner: As such term is defined in Rule 13d-3 under
the Act (or any successor rule thereto).
(d) Board: The Board of Directors of the Company.
(e) Change in Control: The occurrence of any of the following
events:
(i) any "Person" as such term is used in Section 13(d) and
14(d) of the Act (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company), becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities;
(ii) during any period of twenty-four months (not including
any period prior to the Effective Date), individuals who at the
beginning of such period constitute the Board, and any new director
(other than (A) a director nominated by a Person who has entered
into an agreement with the Company to effect a transaction described
in Sections 2(e)(i), (iii) or (iv) of the Plan, (B) a director
nominated by any Person (including the Company) who publicly
announces an intention to take or to consider taking actions
(including, but not limited to, an actual or threatened proxy
contest) which if consummated would constitute a Change in Control
or (C) a director designated by any Person who is the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 10% or
<PAGE> 2
2
more of the combined voting power of the Company's securities) whose
election by the Board or nomination for election by the Company's
stockholders was approved in advance by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation (A) which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation and (B) after which no Person would hold 20%
or more of the combined voting power of the then outstanding
securities of the Company or such surviving entity; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
(f) Code: The internal Revenue Code of 1986, as amended, or any
successor thereto.
(g) Committee: The Compensation and Benefits Committee of the Board,
or any successor thereto or any other committee designated by the Board to
assume the obligations of the Committee hereunder.
(h) Company: The New Dun & Bradstreet Corporation, a Delaware
corporation to be renamed "The Dun & Bradstreet Corporation" on the Effective
Date.
(i) Covered Employee: An employee who is, or who is anticipated to
become, a covered employee, as such term is defined in Section 162(m) of the
Code (or any successor section thereto).
(j) Effective Date: The date on which the Plan takes effect, as
defined pursuant to Section 13 of the Plan.
(k) Participant: A Covered Employee of the Company or any of its
Subsidiaries who is selected by the Committee to participate in the Plan
pursuant to Section 4 of the Plan.
(l) Performance Period: The calendar year or any other period that
the Committee, in its sole discretion, may determine.
(m) Person: As such term is used for purposes of Section 13(d) or
14(d) of the Act or any successor sections thereto.
<PAGE> 3
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(n) Plan: The Dun & Bradstreet Corporation Covered Employee Cash
Incentive Plan.
(o) Shares: Shares of common stock, par value $0.01 per Share, of
the Company.
(p) Spinoff Date: The date on which the Shares are distributed to
the shareholders.
(q) Subsidiary: A subsidiary corporation, as defined in Section
424(f) of the Code (or any successor section thereto).
3. Administration
The Plan shall be administered by the Committee or such other
persons designated by the Board. The Committee may delegate its duties and
powers in whole or in part to any subcommittee thereof consisting solely of at
least two-individuals who are each "non-employee directors" within the meaning
of Rule 16b-3 of the Act (or any successor rule thereto) and "outside directors"
within the meaning of Section 162(m) of the Code (or any successor section
thereto). The Committee shall have the authority to select the Covered Employees
to be granted Awards under the Plan, to determine the size and terms of an Award
(subject to the limitations imposed on Awards in Section 5 below), to modify the
terms of any Award that has been granted (except for any modification that would
increase the amount of the Award), to determine the time when Awards will be
made and the Performance Period to which they relate, to establish performance
objectives in respect of such Performance Periods and to certify that such
performance objectives were attained; provided, however, that any such action
shall be consistent with the applicable provisions of Section 162(m) of the
Code. The Committee is authorized to interpret the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or desirable for the administration of
the Plan; provided, however, that any action permitted to be taken by the
Committee may be taken by the Board, in its discretion. The Committee may
correct any defect or omission or reconcile any inconsistency in the Plan in the
manner and to the extent the Committee deems necessary or desirable. Any
decision of the Committee in the interpretation and administration of the Plan,
as described herein, shall lie within its sole and absolute discretion and shall
be final, conclusive and binding on all parties concerned. Determinations made
by the Committee under the Plan need not be uniform and may be made selectively
among Participants, whether or not such Participants are similarly situated. The
Committee shall have the right to deduct from any payment made under the Plan
any federal, state, local or foreign income or other taxes required by law to be
withheld with respect to such payment. To the extent consistent with the
applicable provisions of Sections 162(m) of the Code, the Committee may delegate
to one or more employees of the Company or any of its Subsidiaries the authority
to take actions on its behalf pursuant to the Plan.
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4. Eligibility and Participation
The Committee shall designate those persons who shall be
Participants for each Performance Period. Participants shall be selected from
among the Covered Employees of the Company and any of its Subsidiaries who are
in a position to have a material impact on the results of the operations of the
Company or of one or more of its Subsidiaries.
5. Awards
(a) Performance Goals. A Participant's Award shall be determined
based on the attainment of written performance goals approved by the Committee
for a Performance Period established by the Committee (i) while the outcome for
the Performance Period is substantially uncertain and (ii) no more than 90 days
after the commencement of the Performance Period to which the performance goal
relates or, if less than 90 days, the number of days which is equal to 25
percent of the relevant Performance Period. The performance goals, which must be
objective, shall be based upon one or more or the following criteria: (i)
earnings before or after taxes (including earnings before interest, taxes,
depreciation and amortization); (ii) net income; (iii) operating income; (iv)
earnings per Share; (v) book value per Share; (vi) return on stockholders'
equity; (vii) expense management (viii) return on investment before or after the
cost of capital; (iv) improvements in capital structure; (x) profitability of an
identifiable business unit or product; (xi) maintenance or improvement of profit
margins (xii) stock price; (xiii) market share; (xiv) revenues or sales; (xv)
costs; (xvi) cash flow; (xvii) working capital; (xviii) changes in net assets
(whether or not multiplied by a constant percentage intended to represent the
cost of capital) and (xix) return on assets. The foregoing criteria may relate
to the Company, one or more of its Subsidiaries or one or more of its divisions,
units, partnerships, joint ventures or minority investments, product lines or
products or any combination of the foregoing, and may be applied on an absolute
basis and/or be relative to one or more peer group companies of indices, or any
combination thereof, all as the Committee shall determine. In addition, to the
degree consistent with Section 162(m) of the Code (or any successor section
thereto), the performance goals may be calculated without regard to
extraordinary items. The maximum amount of an Award to any Participant with
respect to a fiscal year of the Company shall be $3,000,000.
(b) Payment. The Committee shall determine whether, with respect to
a Performance Period, the applicable performance goals have been met with
respect to a given Participant and, if they have, to so certify and ascertain
the amount of the applicable Award. No Awards will be paid for such Performance
Period until such certification is made by the Committee. The amount of the
Award actually paid to a given Participant may be less than the amount
determined by the applicable performance goal formula (including zero), at the
discretion of the Committee. The amount of the Award determined by the Committee
for a Performance Period shall be paid to the Participant at such time as
determined by the Committee in its sole discretion after the end of such
Performance Period.
(c) Compliance with Section 162(m) of the Code. The provisions of
this Section 5 shall be administered and interpreted in accordance with Section
162(m) of the Code to ensure the deductibility by the Company or its
Subsidiaries of the payment of Awards; provided, however, that the Committee
may, in its sole discretion, administer the Plan in violation of Section 162(m)
of the Code.
<PAGE> 5
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(d) Termination of Employment. If a Participant dies, retires, is
assigned to a different position, is granted a leave of absence, or if the
Participant's employment is otherwise terminated (except with cause by the
Company, as determined by the Committee in its sole discretion) during a
Performance Period (other than a Performance Period in which a Change in Control
occurs), a pro rata share of the Participant's award based on the period of
actual participation shall be paid to the Participant after the end of the
Performance Period if it would have become earned and payable had the
Participant's employment status not changed; provided, however, that the amount
of the Award actually paid to a given Participant may be less than the amount
determined by the applicable performance goal formula (including zero), at the
discretion of the Committee.
6. Amendments or Termination
The Board or the Committee may amend, alter or discontinue the Plan,
but no amendment, alteration or discontinuation shall be made which would impair
any of the rights or obligations under any Award theretofore granted to a
Participant under the Plan without such Participant's consent; provided,
however, that the Board of the Committee may amend the Plan in such manner as it
deems necessary to permit the granting of Awards meeting the requirements of the
Code or other applicable laws. Notwithstanding anything to the contrary herein,
the Board may not amend, alter or discontinue the provisions relating to Section
10(b) of the Plan after the occurrence of a Change in Control.
7. No Right to Employment
Neither the Plan nor any action taken hereunder shall be construed
as giving any Participant or other person any right to continue to be employed
by or perform services for the Company or any Subsidiary, and the right to
terminate the employment of or performance of services by any Participant at any
time and for any reason is specifically reserved to the Company and its
Subsidiaries.
8. Nontransferability of Awards
An award shall not be transferable or assignable by the Participant
otherwise than by will or by the laws of descent and distribution.
9. Reduction of Awards
Notwithstanding anything to the contrary herein, the Committee, in
its sole discretion (but subject to applicable law), may reduce any amounts
payable to any Participant hereunder in order to satisfy any liabilities owed to
the Company or any of its Subsidiaries by the Participant.
10. Adjustments Upon Certain Events
(a) Generally. In the event of any change in the outstanding Shares
by reason of any Share dividend or split, reorganization, recapitalization,
merger, consolidation, spin-off, combination or exchange of Shares or other
corporate exchange, or any distribution to stockholders of Shares other than
regular cash dividends, the Committee in its sole discretion and
<PAGE> 6
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without liability to any person may make such substitution or adjustment, if
any, as it deems to be equitable, as to any affected terms of outstanding
Awards.
(b) Change in Control. In the event that (i) a Participant's
employment is actually or constructively terminated during a given Performance
Period (the "Affected Performance Period") and (ii) a Change in Control shall
have occurred within the 365 days immediately preceding the date of such
termination, then such Participant shall receive, promptly after the date of
such termination, an Award for the Affected Performance Period as if the
performance goals for such Performance Period had been achieved at 100%.
11. Miscellaneous Provisions
The Company is the sponsor and legal obligor under the Plan and
shall make all payments hereunder, other than any payments to be made by any of
the Subsidiaries (in which case payment shall be made by such Subsidiary, as
appropriate). The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to ensure the payment
of any amounts under the Plan, and the Participants' rights to the payment
hereunder shall be no greater than the rights of the Company's (or Subsidiary's)
unsecured creditors. All expenses involved in administering the Plan shall be
borne by the Company.
12. Choice of Law
The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed
in the State of Delaware.
13. Effectiveness of the Plan
The Plan shall be effective as of the Spinoff Date.
<PAGE> 1
Exhibit 10.23
1998 DUN & BRADSTREET CORPORATION REPLACEMENT PLAN
FOR CERTAIN EMPLOYEES HOLDING DUN & BRADSTREET CORPORATION
EQUITY-BASED AWARDS
1. Purpose of the Plan
The purpose of the 1998 Dun & Bradstreet Corporation Replacement
Plan for Certain Employees Holding Dun & Bradstreet Corporation Equity-Based
Awards (the "Plan") is to provide for the award of substantially identical
replacement stock options, replacement stock appreciation rights and replacement
restricted stock awards to certain employees of The New Dun & Bradstreet
Corporation, a Delaware corporation to be renamed "The Dun & Bradstreet
Corporation" after the Spinoff (the "Company") whose awards under the 1991 Key
Employees Stock Option Plan for The Dun & Bradstreet Corporation and
Subsidiaries, the 1982 Key Employees Stock Option Plan for The Dun & Bradstreet
Corporation and Subsidiaries and the 1989 Key Employees Restricted Stock Plan
for The Dun & Bradstreet Corporation and Subsidiaries (the "D&B Plans") were
cancelled pursuant to the spinoff of the Company from The Dun & Bradstreet
Corporation, a Delaware corporation to be renamed "R.H. Donnelley Corporation"
after the Spinoff ("D&B") (the "Spinoff") and to certain retired employees who
elect, pursuant to the Spinoff, to have the awards granted under the D&B Plans
cancelled (the "Eligible Holders"). The Company expects that the Plan will allow
it to retain such employees and to motivate them to exert their best efforts on
behalf of the Company and its subsidiaries by providing incentives through the
replacement awards. The Company also expects that it will benefit from the added
interest which such employees will have in the welfare of the Company as a
result of their proprietary interest in the Company's success. It is the
intention of the Company that the terms of the replacement awards will (i)
substantially preserve the economic value of the cancelled D&B awards and (ii)
except for the terms described in Sections 6, 7, 8 and 10 of this Plan, remain
substantially identical to the terms of the cancelled D&B awards.
2. Stock Subject to the Plan
The total number of shares of common stock of the Company ("Shares")
which may be issued under the Plan is equal to the aggregate number of Shares to
be issued as replacement awards, as calculated pursuant to Sections 6(a), 7(a),
8 and 10 of this Plan. The Shares may consist, in whole or in part, of unissued
Shares or treasury shares. After the initial grant of options and stock
appreciation rights, no further grant shall be made under the Plan.
<PAGE> 2
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3. Administration
The Board of Directors of the Company shall appoint a Compensation
and Benefits Committee (herein called the "Committee") consisting of at least
three members of the Board of Directors who shall administer the Plan and serve
at the pleasure of the Board; provided, however, that any action permitted to be
taken by the Committee may be taken by the Board, in its discretion. The
Committee shall have the authority, consistent with the Plan, to determine the
provisions of the stock options and stock appreciation rights to be granted, to
interpret the Plan and the stock options and the stock appreciation rights
granted under the Plan, to adopt, amend and rescind rules and regulations for
the administration of the Plan, the stock options and the stock appreciation
rights and generally to conduct and administer the Plan and to make all
determinations in connection therewith which may be necessary or advisable, and
all such actions of the Committee shall be binding upon all Eligible Holders.
The Committee shall require payment of any amount the Company may determine to
be necessary to withhold for federal, state or local taxes as a result of the
exercise of a stock option or a stock appreciation right. Fair market value of
the Shares as of a given date shall be determined in accordance with procedures
established by the Committee.
4. Eligibility
Only Eligible Holders shall receive grants of replacement stock
options, replacement stock appreciation rights and replacement restricted stock
under the Plan. The granting of a stock option, stock appreciation right or a
share of restricted stock under the Plan shall impose no obligation on the
Company or any Subsidiary to continue the employment of an Eligible Holder and
shall not lessen or affect the right to terminate the employment of such
Eligible Holder.
5. Limitations
Options hereunder shall only be granted in replacement of D&B Stock
Options (as defined in Section 6(a) of the Plan) held by Eligible Holders
immediately prior to the Spinoff.
6. Terms and Conditions of Stock Options
Stock options granted under the Plan shall be non-qualified, and
shall be subject to the foregoing and the following terms and conditions and to
such other terms and conditions, not inconsistent therewith, as the Committee
shall determine:
(a) Generally. As of the Spinoff, each unexercised stock option held
by an Eligible Holder that was granted under the D&B Plans (a "D&B Stock
Option") shall be cancelled, and such Eligible Holder shall receive a
replacement stock option pursuant
<PAGE> 3
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to this Plan. The number of Shares covered by each replacement stock option
shall be determined by (i) multiplying the number of shares of D&B common stock
covered by the cancelled D&B Stock Option by a fraction, the numerator of which
is the average of the Daily Average Trading Prices of D&B common stock for the
five consecutive trading days immediately preceding the first date on which D&B
common stock is traded ex-dividend, and the denominator of which is the average
of the Daily Average Trading Prices of the Shares for the five consecutive
trading days starting on the first date on which the Shares are traded regular
way (the "D&B Ratio") and (ii) rounding down the result to a whole number of
Shares. The option price of each replacement stock option shall be determined by
dividing the option price of the cancelled D&B Stock Option by the D&B Ratio.
Unless otherwise specified in this Plan, all other terms of the replacement
stock options shall remain substantially identical to those of the cancelled D&B
Stock Options as set forth in the applicable D&B Plan and related option
agreement(s). For purposes of this paragraph, the "Daily Average Trading Price"
shall mean the average of the high and low trading prices for stock on a given
day.
(b) Exercisability. Except as set forth in the Plan, stock options
granted under the Plan shall have substantially identical terms as those of the
stock options originally granted under the D&B Plans; provided, however, that in
no event shall a replacement stock option be exercisable more than ten years
after the date the original option was granted under the D&B Plans.
(c) First Year Non-Exercisability. Except as provided in Paragraph
10 of the Plan, no stock option shall be exercisable during the year ending on
the first anniversary date of the granting of the original option under the D&B
Plans.
(d) Exercise of Stock Options. Except as otherwise provided in the
Plan or the option, a stock option may be exercised for all, or from time to
time any part, of the Shares for which it is then exercisable. The purchase
price for the Shares as to which an option is exercised shall be paid to the
Company in full at the time of exercise at the election of the Eligible Holder
(i) in cash, (ii) in Shares of the Company having a fair market value equal to
the option price for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee or (iii) partly in cash and
partly in such Shares of the Company. The Committee may permit the Eligible
Holder to elect, subject to such terms and conditions as the Committee shall
determine, to have the number of Shares deliverable to the Eligible Holder as a
result of the exercise reduced by a number sufficient to pay the amount the
Company determines to be necessary to withhold for federal, state or local taxes
as a result of the exercise of the option. No Eligible Holder shall have any
rights to dividends or other rights of a shareholder with respect to Shares
subject to an option until the Eligible Holder has given written notice of
exercise of the option, paid in full for such Shares and, if requested, given
the representation described in Paragraph 6(h) of the Plan.
<PAGE> 4
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(e) Exercisability Upon Termination of Employment by Death. If an
Eligible Holder's employment by the Company or a subsidiary terminates by reason
of death one year or more after the date of grant of the original stock option
under the D&B Plans, the option thereafter may be exercised, during the three
years after the date of death or the remaining stated period of the option,
whichever period is shorter, to the extent to which such option was exercisable
at the time of death or thereafter would become exercisable during the
three-year period after the date of death in accordance with its terms.
(f) Exercisability Upon Termination of Employment by Disability or
Retirement. If an Eligible Holder's employment by the Company or a subsidiary
terminates by reason of disability or retirement one year or more after the date
of grant of the original option under the D&B Plans, the option thereafter may
be exercised, during the five years after the date of such termination of
employment or the remaining stated period of the option, whichever period is
shorter, to the extent to which such option was exercisable at the time of such
termination of employment or thereafter would become exercisable during such
period in accordance with its terms; provided, however, that if the Eligible
Holder dies within a period of five years after such termination of employment,
any unexercised stock option may be exercised thereafter, during either (1) the
period ending on the later of (i) five years after such termination of
employment and (ii) one year after the date of death or (2) the period remaining
in the stated term of the option, whichever period is shorter, to the extent to
which such option was exercisable at the time of death or thereafter would
become exercisable during the remainder of the five-year period after such
termination of employment in accordance with its terms. For purposes of this
Paragraph 6, "retirement" shall mean termination of employment with the Company
or a subsidiary after the Eligible Holder has attained age 55 and completed ten
or more years of employment; or after the Eligible Holder has attained age 65,
regardless of the length of such Eligible Holder's employment. An Eligible
Holder shall not be considered disabled for purposes of this Paragraph 6, unless
he or she furnishes such medical or other evidence of the existence of the
disability as the Committee, in its sole discretion, may require.
(g) Effect of Other Termination of Employment. If an Eligible
Holder's employment terminates for any reason, other than disability, death or
retirement one year or more after the date of grant of the original stock option
or stock appreciation right under the D&B Plans as described above, each stock
option and stock appreciation right held by such Eligible Holder shall thereupon
terminate.
(h) Additional Agreements of Eligible Holder and Restrictions on
Transfer. The Committee may require each person purchasing Shares pursuant to
exercise of a stock option to represent to and agree with the Company in writing
that the Shares are being acquired without a view to distribution thereof.
<PAGE> 5
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The certificates for Shares so purchased may include any legend which the
Committee deems appropriate to reflect any restrictions on transfers. The
Committee also may impose, in its discretion, as a condition of any option, any
restrictions on the transferability of Shares acquired through the exercise of
such option as it may deem fit. Without limiting the generality of the
foregoing, the Committee may impose conditions restricting absolutely the
transferability of Shares acquired through the exercise of options for such
periods as the Committee may determine and, further, in the event the Eligible
Holder's employment by the Company or a subsidiary terminates during the period
in which such Shares are nontransferable, the Eligible Holder may be required,
if required by the related option agreement, to sell such Shares back to the
Company at such price and on such other terms as the Committee may have
specified in the option agreement.
(i) Nontransferability of Stock Options. Except as otherwise
provided in this Paragraph 6(i), a stock option shall not be transferable by the
Eligible Holder otherwise than by will or by the laws of descent and
distribution and during the lifetime of an Eligible Holder an option shall be
exercisable only by the Eligible Holder. An option exercisable after the death
of an Eligible Holder or a transferee pursuant to the following sentence may be
exercised by the legatees, personal representatives or distributees of the
Eligible Holder or such transferee. The Committee may, in its discretion,
authorize all or a portion of the options previously granted or to be granted to
an Eligible Holder to be on terms which permit irrevocable transfer for no
consideration by such Eligible Holder to any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
adoptive relationships, of the Eligible Holder, trusts for the exclusive benefit
of these persons, and any other entity owned solely by these persons ("Eligible
Transferees"), provided that (x) the stock option agreement pursuant to which
such options are granted must be approved by the Committee, and must expressly
provide for transferability in a manner consistent with this Section and (y)
subsequent transfers of transferred options shall be prohibited except those in
accordance with the first sentence of this Paragraph 6(i). The Committee may, in
its discretion amend the definition of Eligible Transferees to conform to the
coverage rules of Form S-8 under the Securities Act of 1933 or any comparable
Form from time to time in effect. Following transfer, any such options shall
continue to be subject to the same terms and conditions as were applicable
immediately prior to transfer. The events of termination of employment of
Paragraphs 6(e), 6(f) and 6(g) hereof shall continue to be applied with respect
to the original Eligible Holder, following which the options shall be
exercisable by the transferee only to the extent, and for the periods specified,
in Paragraphs 6(e), 6(f) and 6(g). The Committee may delegate to a committee
consisting of employees of the Company the authority to authorize transfers,
establish terms and conditions upon which transfers may be made and establish
classes of Eligible Holders eligible to transfer
<PAGE> 6
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options, as well as to make other determinations with respect to option
transfers.
7. Terms and Conditions of Stock Appreciation Rights
Stock appreciation rights (including limited stock appreciation
rights) granted under the Plan shall be subject to the foregoing and the
following terms and conditions and to such other terms and conditions, not
inconsistent therewith, as the Committee shall determine:
(a) Replacement Stock Appreciation Rights. As of the Spinoff, each
unexercised stock appreciation right (including a limited stock appreciation
right) held by an Eligible Holder that was granted under the D&B Plans (a "D&B
SAR") shall be cancelled, and such Eligible Holder shall receive a replacement
stock appreciation right pursuant to this Plan. The number of Shares covered by
each replacement stock appreciation right shall be determined by (i) multiplying
the number of D&B shares covered by the cancelled D&B SAR by the D&B Ratio and
(ii) rounding down the result to a whole number of Shares. The exercise price of
each replacement stock appreciation right shall be determined by dividing the
exercise price of the cancelled D&B SAR by the D&B Ratio. Unless otherwise
specified in this Plan, all other terms of the replacement stock appreciation
rights shall remain substantially identical to those of the cancelled D&B SARs
as set forth in the applicable D&B Plans and related D&B SAR agreement(s).
(b) Terms. Each stock appreciation right shall entitle an Eligible
Holder to surrender to the Company an unexercised option, or any portion
thereof, and to receive from the Company in exchange therefor an amount equal to
the excess of the fair market value on the exercise date of one Share over the
option price per Share times the number of Shares covered by the option, or
portion thereof, which is surrendered. The date a notice of exercise is received
by the Company shall be the exercise date. Payment shall be made in Shares or in
cash, or partly in Shares and partly in cash, valued at such fair market value,
all as shall be determined by the Committee. Stock appreciation rights may be
exercised from time to time upon actual receipt by the Company of written notice
of exercise stating the number of Shares subject to an exercisable option with
respect to which the stock appreciation right is being exercised. No fractional
Shares will be issued in payment for stock appreciation rights, but instead cash
will be paid for a fraction or, if the Committee should so determine, the number
of Shares will be rounded downward to the next whole Share.
(c) Limitations on Exercisability. The Committee shall impose such
conditions upon the exercisability of stock appreciation rights as will result,
except upon the occurrence of an event contemplated by replacement limited stock
appreciation rights granted pursuant to Paragraph 7(d) or contemplated by the
provisions of Paragraph 10, in the amount to be charged against
<PAGE> 7
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the Company's consolidated income by reason of stock appreciation rights not to
exceed, in any one calendar year, two percent of the Company's prior calendar
year's consolidated income before income taxes. The Committee also may impose,
in its discretion, such other conditions upon the exercisability of stock
appreciation rights as it may deem fit.
(d) Replacement Limited Stock Appreciation Rights. The Committee
shall grant replacement limited stock appreciation rights in substantially the
same manner in which replacement stock appreciation rights are awarded pursuant
to this Section 7 of the Plan. Unless the context otherwise requires, whenever
the term "stock appreciation right" is used in the Plan, such term shall include
limited stock appreciation rights.
8. Terms and Conditions of Restricted Stock
As of the Spinoff Date, restricted stock held by an Eligible Holder
that was granted under the D&B Plans ("D&B Restricted Stock") and restricted
stock received by an Eligible Holder as a result of the Spinoff ("New D&B
Restricted Stock") shall be forfeited, and such Eligible Holder shall receive
replacement restricted stock pursuant to this Plan. The number of shares of
restricted stock shall equal (i) the number of Shares of forfeited New D&B
Restricted Stock plus (ii) the number of shares of forfeited D&B Restricted
Stock multiplied by a fraction, the numerator of which is the average of the
Daily Average Trading Prices of D&B common stock for the five consecutive
trading days starting on the ex-dividend trading date, and the denominator of
which is the average of the Daily Average Trading Prices of the Shares for the
five consecutive trading days starting on the first date on which the Shares are
traded regular way. Unless otherwise specified in this Plan, all other terms of
the replacement restricted stock shall remain substantially identical to those
of the forfeited D&B Restricted Stock as set forth in the applicable D&B Plans
and related D&B Restricted Stock agreement(s). For purposes of this paragraph,
the "Daily Average Trading Price" shall mean the average of the high and low
trading prices for stock on a given day.
9. Transfers and Leaves of Absence
For purposes of the Plan: (a) a transfer of an employee from the
Company to a 50% or more owned subsidiary, partnership, venture or other
affiliate (whether or not incorporated) or vice versa, or from one such
subsidiary, partnership, venture or other affiliate to another, (b) a leave of
absence, duly authorized in writing by the Company, for military service or
sickness or for any other purpose approved by the Company if the period of such
leave does not exceed 90 days, or (c) a leave of absence in excess of 90 days,
duly authorized in writing by the Company, provided the employee's right to
re-employment is guaranteed either by statute or by contract, shall not be
deemed a termination of employment under the Plan.
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10. Adjustments Upon Changes in Capitalization or Other Events
Upon changes in the Shares by reason of a stock dividend, stock
split, reverse split, recapitalization, merger, consolidation, combination or
exchange of Shares, separation, reorganization or liquidation, the number and
class of Shares available under the Plan as to which stock options, stock
appreciation rights or restricted stock may be granted (both in the aggregate
and to any one Eligible Holder), the number and class of Shares under each
option and the option price per Share, the terms of stock appreciation rights
and the number and class of shares under each restricted stock award shall be
correspondingly adjusted by the Committee, such adjustments to be made in the
case of outstanding options without change in the total price applicable to such
options. In the event of a merger, consolidation, combination, reorganization or
other transaction in which the Company will not be the surviving corporation, an
Eligible Holder shall be entitled to options on that number of shares of stock
in the new corporation which the Eligible Holder would have received had the
Eligible Holder exercised all of the unexercised options available to the
Eligible Holder under the Plan, whether or not then exercisable, at the instant
immediately prior to the effective date of such transaction, and if such
unexercised options had related stock appreciation rights the Eligible Holder
also will receive new stock appreciation rights related to the new options.
Thereafter, adjustments as provided above shall relate to the options or stock
appreciation rights of the new corporation. Except as otherwise specifically
provided in the stock option, stock appreciation right or restricted stock
award, in the event of a Change in Control, merger, consolidation, combination,
reorganization or other transaction in which the shareholders of the Company
will receive cash or securities (other than common stock) or in the event that
an offer is made to the holders of common stock of the Company to sell or
exchange such common stock for cash, securities or stock of another corporation
and such offer, if accepted, would result in the offeror becoming the owner of
(a) at least 50% of the outstanding common stock of the Company or (b) such
lesser percentage of the outstanding common stock which the Committee in its
sole discretion determines will materially adversely affect the market value of
the common stock after the tender or exchange offer, the Committee shall, prior
to the shareholders' vote on such transaction or prior to the expiration date
(without extensions) of the tender or exchange offer, (A) with respect to stock
options and stock appreciation rights, (i) accelerate the time of exercise so
that all stock options and stock appreciation rights which are outstanding shall
become immediately exercisable in full without regard to any limitations of time
or amount otherwise contained in the Plan or the options or stock appreciation
rights and/or (ii) determine that the options and stock appreciation rights
shall be adjusted and make such adjustments by substituting for common stock of
the Company subject to options and stock appreciation rights, common stock of
the surviving corporation or offeror if such stock of such corporation is
publicly traded or, if such stock is not
<PAGE> 9
9
publicly traded, by substituting common stock of a parent of the surviving
corporation or offeror if the stock of such parent is publicly traded, in which
event the aggregate option price shall remain the same and the number of Shares
subject to option shall be the number of Shares which could have been purchased
on the closing day of such transaction or the expiration date of the offer with
the proceeds which would have been received by the Eligible Holder if the option
had been exercised in full prior to such transaction or expiration date and the
Eligible Holder had exchanged all of such Shares in the transaction or sold or
exchanged all of such Shares pursuant to the tender or exchange offer, and if
any such option has related stock appreciation rights, the stock appreciation
rights shall likewise be adjusted and (B) with respect to restricted stock, (i)
accelerate the termination of the Restriction Period (as defined in the
applicable D&B Plan) so that all restrictions with respect to an Eligible
Holder's restricted stock shall immediately lapse without regard to any
limitations of time or amount otherwise contained in the D&B Plans or a
restricted stock agreement and/or (ii) determine that the awards shall be
adjusted and make such adjustments by substituting for the Shares subject to
awards, common stock of the surviving corporation or offeror if such stock of
such corporation is publicly traded or, if such stock is not publicly traded, by
substituting common stock of a parent of the surviving corporation or offeror if
the stock of such parent is publicly traded, in which event the number of shares
subject to an award shall be the number of shares which could have been
purchased on the closing day of such transaction or the expiration date of the
offer with the proceeds which would have been received by the Eligible Holder if
the Eligible Holder had exchanged all of such shares in the transaction or sold
or exchanged all of such shares pursuant to the tender or exchange offer. For
purposes of stock options and stock appreciation rights, "Change in Control"
means:
(a) any "Person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), (other
than the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned, directly or
indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or becomes the
"Beneficial Owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities;
(b) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board, and any new Director (other
than a Director designated by a person who has entered into an agreement with
the Company to effect a transaction described in clause (a), (c) or (d) of this
Paragraph) whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds (2/3) of
the Directors then still in office who either
<PAGE> 10
10
were Directors at the beginning of the period or whose election or nomination
for election was previously so approved cease for any reason to constitute at
least a majority thereof;
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (1) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which no
"Person" (as hereinabove defined) acquires more than 50% of the combined voting
power of the Company's then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets.
For purposes of restricted stock, "Change in Control" shall have the
same meaning as in the 1989 Key Employees Restricted Stock Plan for The Dun &
Bradstreet Corporation and Subsidiaries as in effect on the date on which this
Plan becomes effective.
11. Use of Proceeds
Proceeds from the sale of Shares pursuant to exercise of stock
options granted under the Plan shall constitute general funds of the Company.
12. Amendments
The Board of Directors may amend, alter or discontinue the Plan, but
no amendment, alteration or discontinuation shall be made which would impair the
rights of any Eligible Holder under any award theretofore granted, without the
Eligible Holder's consent, or which, without the approval of the shareholders of
the Company, would:
(a) Except as is provided in Paragraph 10 of the Plan,
increase the total number of Shares reserved for the purposes of the Plan or
change the maximum number of Shares for which awards may be granted to any
Eligible Holder.
(b) Decrease the option price to less than 100% of fair market
value on the date of grant of the original option under the D&B Plans.
(c) Change the employees (or class of employees) eligible to
receive awards under the Plan.
<PAGE> 11
11
(d) Materially increase the benefits accruing to employees
participating under the Plan.
13. Effectiveness of the Plan and Amendments
The Plan shall be effective as of the Spinoff.
<PAGE> 1
Exhibit 10.24
1998 DUN & BRADSTREET CORPORATION
KEY EMPLOYEES' STOCK INCENTIVE PLAN
1. Purpose of the Plan
The purpose of the Plan is to aid the Company and its Subsidiaries
in securing and retaining key employees of outstanding ability and to motivate
such employees to exert their best efforts on behalf of the Company and its
Subsidiaries by providing incentives through the granting of Awards. The Company
expects that it will benefit from the added interest which such key employees
will have in the welfare of the Company as a result of their proprietary
interest in the Company's success.
2. Definitions
The following capitalized terms used in the Plan have the respective
meanings set forth in this Section:
(a) Act: The Securities Exchange Act of 1934, as amended, or any
successor thereto.
(b) Award: An Option, Stock Appreciation Right or Other Stock-Based
Award granted pursuant to the Plan.
(c) Beneficial Owner: As such term is defined in Rule 13d-3 under
the Act (or any successor rule thereto).
(d) Board: The Board of Directors of the Company.
(e) Change in Control: The occurrence of any of the following
events:
(i) any "Person" as such term is used in Section 13(d) and
14(d) of the Act (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as
their ownership of stock of the Company), becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities;
(ii) during any period of twenty-four months (not including
any period prior to the Effective Date), individuals who at the
beginning of such period
<PAGE> 2
2
constitute the Board, and any new director (other than (A) a
director nominated by a Person who has entered into an agreement
with the Company to effect a transaction described in Sections
2(e)(i), (iii) or (iv) of the Plan, (B) a director nominated by any
Person (including the Company) who publicly announces an intention
to take or to consider taking actions (including, but not limited
to, an actual or threatened proxy contest) which if consummated
would constitute a Change in Control or (C) a director designated by
any Person who is the Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined
voting power of the Company's securities) whose election by the
Board or nomination for election by the Company's stockholders was
approved in advance by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at
least a majority thereof;
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than
a merger or consolidation (A) which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
50% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation and (B) after which no Person would hold 20%
or more of the combined voting power of the then outstanding
securities of the Company or such surviving entity; or
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets.
(f) Code: The Internal Revenue Code of 1986, as amended, or any
successor thereto.
(g) Committee: The Compensation and Benefits Committee of the Board,
or any successor thereto or other committee designated by the Board to assume
the obligations of the Committee hereunder.
(h) Company: The New Dun & Bradstreet Corporation, a Delaware
corporation to be renamed "The Dun & Bradstreet Corporation" on the Effective
Date.
(i) Disability: Inability to engage in any substantial
<PAGE> 3
3
gainful activity by reason of a medically determinable physical or mental
impairment which constitutes a permanent and total disability, as defined in
Section 22(e)(3) of the Code (or any successor section thereto). The
determination whether a Participant has suffered a Disability shall be made by
the Committee based upon such evidence as it deems necessary and appropriate. A
Participant shall not be considered disabled unless he or she furnishes such
medical or other evidence of the existence of the Disability as the Committee,
in its sole discretion, may require.
(j) Effective Date: The date on which the Plan takes effect, as
defined pursuant to Section 17 of the Plan.
(k) Fair Market Value: On a given date, the arithmetic mean of the
high and low prices of the Shares as reported on such date on the Composite Tape
of the principal national securities exchange on which such Shares are listed or
admitted to trading, or, if no Composite Tape exists for such national
securities exchange on such date, then on the principal national securities
exchange on which such Shares are listed or admitted to trading, or, if the
Shares are not listed or admitted on a national securities exchange, the
arithmetic mean of the per Share closing bid price and per Share closing asked
price on such date as quoted on the National Association of Securities Dealers
Automated Quotation System (or such market in which such prices are regularly
quoted), or, if there is no market on which the Shares are regularly quoted, the
Fair Market Value shall be the value established by the Committee in good faith.
If no sale of Shares shall have been reported on such Composite Tape or such
national securities exchange on such date or quoted on the National Association
of Securities Dealers Automated Quotation System on such date, then the
immediately preceding date on which sales of the Shares have been so reported or
quoted shall be used.
(l) ISO: An Option that is also an incentive stock option granted
pursuant to Section 7(d) of the Plan.
(m) LSAR: A limited stock appreciation right granted pursuant to
Section 8(d) of the Plan.
(n) Other Stock-Based Awards: Awards granted pursuant to Section 9
of the Plan.
(o) Option: A stock option granted pursuant to Section 7 of the
Plan.
(p) Option Price: The purchase price per Share of an Option, as
determined pursuant to Section 7(a) of the Plan.
(q) Participant: An individual who is selected by the Committee to
participate in the Plan pursuant to Section 5 of the Plan.
(r) Performance-Based Awards: Other Stock-Based Awards
<PAGE> 4
4
granted pursuant to Section 9(b) of the Plan.
(s) Person: As such term is used for purposes of Section 13(d) or
14(d) of the Act (or any successor section thereto).
(t) Plan: The 1998 Dun & Bradstreet Corporation Key Employees' Stock
Incentive Plan.
(u) Post-Retirement Exercise Period: As such term is defined in
Section 7(f) of the Plan.
(v) Retirement: Termination of employment with the Company or a
Subsidiary after such Participant has attained age 55 and five years of service
with the Company; or, with the prior written consent of the Committee that such
termination be treated as a Retirement hereunder, termination of employment
under other circumstances.
(w) Shares: Shares of common stock, par value $0.01 per Share, of
the Company.
(x) Special Exercise Period: As such term is defined in Section 7(f)
of the Plan.
(y) Spinoff Date: The date on which the Shares are distributed to
the shareholders.
(z) Stock Appreciation Right: A stock appreciation right granted
pursuant to Section 8 of the Plan.
(aa) Subsidiary: A subsidiary corporation, as defined in Section
424(f) of the Code (or any successor section thereto).
3. Shares Subject to the Plan
The total number of Shares which may be issued under the Plan is
16,500,000. The maximum number of Shares for which Awards may be granted during
a calendar year to any Participant shall be 400,000. The Shares may consist, in
whole or in part, of unissued Shares or treasury Shares. The issuance of Shares
or the payment of cash upon the exercise of an Award shall reduce the total
number of Shares available under the Plan, as applicable. Shares which are
subject to Awards which terminate or lapse may be granted again under the Plan.
4. Administration
The Plan shall be administered by the Committee, which may delegate
its duties and powers in whole or in part to any subcommittee thereof consisting
solely of at least two individuals who are each "non-employee directors" within
the meaning of Rule 16b-3 under the Act (or any successor rule
<PAGE> 5
5
thereto) and "outside directors" within the meaning of Section 162(m) of the
Code (or any successor section thereto); provided, however, that any action
permitted to be taken by the Committee may be taken by the Board, in its
discretion. The Committee is authorized to interpret the Plan, to establish,
amend and rescind any rules and regulations relating to the Plan, and to make
any other determinations that it deems necessary or desirable for the
administration of the Plan. The Committee may correct any defect or omission or
reconcile any inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the Committee in the
interpretation and administration of the Plan, as described herein, shall lie
within its sole and absolute discretion and shall be final, conclusive and
binding on all parties concerned (including, but not limited to, Participants
and their beneficiaries or successors). Determinations made by the Committee
under the Plan need not be uniform and may be made selectively among
Participants, whether or not such Participants are similarly situated. The
Committee shall require payment of any amount it may determine to be necessary
to withhold for federal, state, local or other taxes as a result of the exercise
of an Award. Unless the Committee specifies otherwise, the Participant may elect
to pay a portion or all of such withholding taxes by (a) delivery in Shares or
(b) having Shares withheld by the Company from any Shares that would have
otherwise been received by the Participant. The number of Shares so delivered or
withheld shall have an aggregate Fair Market Value sufficient to satisfy the
applicable withholding taxes. If the chief executive officer of the Company is a
member of the Board, the Board by specific resolution may constitute such chief
executive officer as a committee of one which shall have the authority to grant
Awards of up to an aggregate of 100,000 Shares in each calendar year to
Participants who are not subject to the rules promulgated under Section 16 of
the Act (or any successor section thereto); provided, however, that such chief
executive officer shall notify the Committee of any such grants made pursuant to
this Section 4.
5. Eligibility
Key employees (but not members of the Committee or any person who
serves only as a director) of the Company and its Subsidiaries, who are from
time to time responsible for the management, growth and protection of the
business of the Company and its Subsidiaries, are eligible to be granted Awards
under the Plan. Participants shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the Committee
shall determine, in its sole discretion, the number of Shares to be covered by
the Awards granted to each Participant.
6. Limitations
No Award may be granted under the Plan after the tenth
<PAGE> 6
6
anniversary of the Effective Date, but Awards theretofore granted may extend
beyond that date.
7. Terms and Conditions of Options
Options granted under the Plan shall be, as determined by the
Committee, non-qualified, incentive or other stock options for federal income
tax purposes, as evidenced by the related Award agreements, and shall be subject
to the foregoing and the following terms and conditions and to such other terms
and conditions, not inconsistent therewith, as the Committee shall determine:
(a) Option Price. The Option Price per Share shall be determined by
the Committee, but shall not be less than 100% of the Fair Market Value of the
Shares on the date an Option is granted.
(b) Exercisability. Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be determined
by the Committee, but in no event shall an Option be exercisable more than ten
years after the date it is granted.
(c) Exercise of Options. Except as otherwise provided in the Plan or
in an Award agreement, an Option may be exercised for all, or from time to time
any part, of the Shares for which it is then exercisable. For purposes of
Section 7 of the Plan, the exercise date of an Option shall be the later of the
date a notice of exercise is received by the Company and, if applicable, the
date payment is received by the Company pursuant to clauses (i), (ii) or (iii)
in the following sentence. The purchase price for the Shares as to which an
Option is exercised shall be paid to the Company in full at the time of exercise
at the election of the Participant (i) in cash, (ii) in Shares having a Fair
Market Value equal to the aggregate Option Price for the Shares being purchased
and satisfying such other requirements as may be imposed by the Committee;
provided, that such shares of Common Stock have been held by the Participant for
no less than six months, (iii) partly in cash and partly in such Shares, or (iv)
through the delivery of irrevocable instructions to a broker to deliver promptly
to the Company an amount equal to the aggregate Option Price for the Shares
being purchased. No Participant shall have any rights to dividends or other
rights of a stockholder with respect to Shares subject to an Option until the
occurrence of the exercise date (determined as set forth above) and, if
applicable, the satisfaction of any other conditions imposed by the Committee
pursuant to the Plan.
(d) ISOs. The Committee may grant Options under the Plan that are
intended to be ISOs. Such ISOs shall comply with the requirements of Section 422
of the Code (or any successor section thereto). Unless otherwise permitted under
Section 422 of the Code (or any successor section thereto), no ISO may be
<PAGE> 7
7
granted to any Participant who at the time of such grant, owns more than ten
percent of the total combined voting power of all classes of stock of the
Company or of any Subsidiary, unless (i) the Option Price for such ISO is at
least 110% of the Fair Market Value of a Share on the date the ISO is granted
and (ii) the date on which such ISO terminates is a date not later than the day
preceding the fifth anniversary of the date on which the ISO is granted. Any
Participant who disposes of Shares acquired upon the exercise of an ISO either
(i) within two years after the date of grant of such ISO or (ii) within one year
after the transfer of such Shares to the Participant, shall notify the Company
of such disposition and of the amount realized upon such disposition.
(e) Exercisability Upon Termination of Employment by Death or
Disability. If a Participant's employment with the Company and its Subsidiaries
terminates by reason of death or Disability after the first anniversary of the
date of grant of an Option, (i) the unexercised portion of such Option shall
immediately vest in full and (ii) such portion may thereafter be exercised
during the shorter of (A) the remaining stated term of the Option or (B) five
years after the date of death or Disability.
(f) Exercisability Upon Termination of Employment by Retirement. If
a Participant's employment with the Company and its Subsidiaries terminates by
reason of Retirement after the first anniversary of the date of grant of an
Option, an unexercised Option may thereafter be exercised during the shorter of
(i) the remaining stated term of the Option or (ii) five years after the date of
such termination of employment (the "Post-Retirement Exercise Period"), but only
to the extent to which such Option was exercisable at the time of such
termination of employment or becomes exercisable during the Post-Retirement
Exercise Period; provided, however, that if a Participant dies within a period
of five years after such termination of employment, an unexercised Option may
thereafter be exercised, during the shorter of (i) the remaining stated term of
the Option or (ii) the period that is the longer of (A) five years after the
date of such termination of employment or (B) one year after the date of death
(the "Special Exercise Period"), but only to the extent to which such Option was
exercisable at the time of such termination of employment or becomes exercisable
during the Special Exercise Period.
(g) Effect of Other Termination of Employment. If a Participant's
employment with the Company and its Subsidiaries terminates for any reason
(other than death, Disability or Retirement after the first anniversary of the
date of grant of an Option as described above), an unexercised Option may
thereafter be exercised during the period ending 30 days after the date of such
termination of employment, but only to the extent to which such Option was
exercisable at the time of such termination of employment. Notwithstanding the
foregoing, the Committee may, in its sole discretion, accelerate the vesting of
unvested Options held by a Participant if such Participant is terminated from
<PAGE> 8
8
employment without "cause" (as such term is defined by the Committee in its sole
discretion) by the Company.
(h) Nontransferability of Stock Options. Except as otherwise
provided in this Section 7(h), a stock option shall not be transferable by the
optionee otherwise than by will or by the laws of descent and distribution and
during the lifetime of an optionee an option shall be exercisable only by the
optionee. An option exercisable after the death of an optionee or a transferee
pursuant to the following sentence may be exercised by the legatees, personal
representatives or distributees of the optionee or such transferee. The
Committee may, in its discretion, authorize all or a portion of the options
previously granted or to be granted to an optionee to be on terms which permit
irrevocable transfer for no consideration by such optionee to any child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, of the optionee, trusts for the
exclusive benefit of these persons, and any other entity owned solely by these
persons ("Eligible Transferees"), provided that (x) the stock option agreement
pursuant to which such options are granted must be approved by the Committee,
and must expressly provide for transferability in a manner consistent with this
Section and (y) subsequent transfers of transferred options shall be prohibited
except those in accordance with the first sentence of this Section 7(h). The
Committee may, in its discretion; amend the definition of Eligible Transferees
to conform to the coverage rules of Form S-8 under the Securities Act of 1933 or
any comparable Form from time to time in effect. Following transfer, any such
options shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer. The events of termination of service
of Sections 7(e), 7(f) and 7(g) hereof shall continue to be applied with respect
to the original optionee, following which the options shall be exercisable by
the transferee only to the extent, and for the periods specified, in Sections
7(e), 7(f) and 7(g). The Committee may delegate to a committee consisting of
employees of the Company the authority to authorize transfers, establish terms
and conditions upon which transfers may be made and establish classes of options
eligible to transfer options, as well as to make other determinations with
respect to option transfers.
8. Terms and Conditions of Stock Appreciation Rights
(a) Grants. The Committee also may grant (i) a Stock Appreciation
Right independent of an Option or (ii) a Stock Appreciation Right in connection
with an Option, or a portion thereof. A Stock Appreciation Right granted
pursuant to clause (ii) of the preceding sentence (A) may be granted at the time
the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same Shares covered by
an Option (or such lesser number of Shares as the Committee may determine) and
(C) shall be subject to the same terms and conditions as such Option except for
such additional
<PAGE> 9
9
limitations as are contemplated by this Section 8 (or such additional
limitations as may be included in an Award agreement).
(b) Terms. The exercise price per Share of a Stock Appreciation
Right shall be an amount determined by the Committee but in no event shall such
amount be less than the greater of (i) the Fair Market Value of a Share on the
date the Stock Appreciation Right is granted or, in the case of a Stock
Appreciation Right granted in conjunction with an Option, or a portion thereof,
the Option Price of the related Option and (ii) an amount permitted by
applicable laws, rules, by-laws or policies of regulatory authorities or stock
exchanges. Each Stock Appreciation Right granted independent of an Option shall
entitle a Participant upon exercise to an amount equal to (i) the excess of (A)
the Fair Market Value on the exercise date of one Share over (B) the exercise
price per Share, times (ii) the number of Shares covered by the Stock
Appreciation Right. Each Stock Appreciation Right granted in conjunction with an
Option, or a portion thereof, shall entitle a Participant to surrender to the
Company the unexercised Option, or any portion thereof, and to receive from the
Company in exchange therefor an amount equal to (i) the excess of (A) the Fair
Market Value on the exercise date of one Share over (B) the Option Price per
Share, times (ii) the number of Shares covered by the Option, or portion
thereof, which is surrendered. The date a notice of exercise is received by the
Company shall be the exercise date. Payment shall be made in Shares or in cash,
or partly in Shares and partly in cash, valued at such Fair Market Value, all as
shall be determined by the Committee. Stock Appreciation Rights may be exercised
from time to time upon actual receipt by the Company of written notice of
exercise stating the number of Shares with respect to which the Stock
Appreciation Right is being exercised. No fractional Shares will be issued in
payment for Stock Appreciation Rights, but instead cash will be paid for a
fraction or, if the Committee should so determine, the number of Shares will be
rounded downward to the next whole Share.
(c) Limitations. The Committee may impose, in its discretion, such
conditions upon the exercisability or transferability of Stock Appreciation
Rights as it may deem fit.
(d) Limited Stock Appreciation Rights. The Committee may grant LSARs
that are exercisable upon the occurrence of specified contingent events. Such
LSARs may provide for a different method of determining appreciation, may
specify that payment will be made only in cash and may provide that any related
Awards are not exercisable while such LSARs are exercisable. Unless the context
otherwise requires, whenever the term "Stock Appreciation Right" is used in the
Plan, such term shall include LSARs.
9. Other Stock-Based Awards
(a) Generally. The Committee, in its sole discretion,
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10
may grant Awards of Shares, Awards of restricted Shares and Awards that are
valued in whole or in part by reference to, or are otherwise based on the Fair
Market Value of, Shares ("Other Stock-Based Awards"). Such Other Stock-Based
Awards shall be in such form, and dependent on such conditions, as the Committee
shall determine, including, without limitation, the right to receive one or more
Shares (or the equivalent cash value of such Shares) upon the completion of a
specified period of service, the occurrence of an event and/or the attainment of
performance objectives. Other Stock-Based Awards may be granted alone or in
addition to any other Awards granted under the Plan. Subject to the provisions
of the Plan, the Committee shall determine to whom and when Other Stock-Based
Awards will be made; the number of Shares to be awarded under (or otherwise
related to) such Other Stock-Based Awards; whether such Other Stock-Based Awards
shall be settled in cash, Shares or a combination of cash and Shares; and all
other terms and conditions of such Awards (including, without limitation, the
vesting provisions thereof).
(b) Performance-Based Awards. Notwithstanding anything to the
contrary herein, certain Other Stock-Based Awards granted under this Section 9
may be granted in a manner which is deductible by the Company under Section
162(m) of the Code (or any successor section thereto) ("Performance-Based
Awards"). A Participant's Performance-Based Award shall be determined based on
the attainment of written performance goals approved by the Committee for a
performance period established by the Committee (i) while the outcome for that
performance period is substantially uncertain and (ii) no more than 90 days
after the commencement of the performance period to which the performance goal
relates or, if less, the number of days which is equal to 25 percent of the
relevant performance period. The performance goals, which must be objective,
shall be based upon one or more of the following criteria: (i) earnings before
or after taxes (including earnings before interest, taxes, depreciation and
amortization); (ii) net income; (iii) operating income; (iv) earnings per Share;
(v) book value per Share; (vi) return on stockholders' equity; (vii) expense
management; (viii) return on investment before or after the cost of capital;
(ix) improvements in capital structure; (x) profitability of an identifiable
business unit or product; (xi) maintenance or improvement of profit margins;
(xii) stock price; (xiii) market share; (xiv) revenues or sales; (xv) costs;
(xvi) cash flow; (xvii) working capital; (xviii) changes in net assets (whether
or not multiplied by a constant percentage intended to represent the cost of
capital) and (xix) return on assets. The foregoing criteria may relate to the
Company, one or more of its Subsidiaries or one or more of its divisions, units,
minority investments, partnerships, joint ventures, product lines or products or
any combination of the foregoing, and may be applied on an absolute basis and/or
be relative to one or more peer group companies or indices, or any combination
thereof, all as the Committee shall determine. In addition, to the degree
consistent with Section 162(m) of the Code (or any successor section thereto),
the performance goals may be calculated without regard to extraordinary items or
accounting changes. The maximum amount of a Performance-Based
<PAGE> 11
11
Award to any Participant with respect to a fiscal year of the Company shall be
$5,000,000. The Committee shall determine whether, with respect to a performance
period, the applicable performance goals have been met with respect to a given
Participant and, if they have, to so certify and ascertain the amount of the
applicable Performance-Based Award. No Performance-Based Awards will be paid for
such performance period until such certification is made by the Committee. The
amount of the Performance-Based Award actually paid to a given Participant may
be less than the amount determined by the applicable performance goal formula,
at the discretion of the Committee. The amount of the Performance-Based Award
determined by the Committee for a performance period shall be paid to the
Participant at such time as determined by the Committee in its sole discretion
after the end of such performance period; provided, however, that a Participant
may, if and to the extent permitted by the Committee and consistent with the
provisions of Section 162(m) of the Code, elect to defer payment of a
Performance-Based Award.
10. Adjustments Upon Certain Events
Notwithstanding any other provisions in the Plan to the contrary,
the following provisions shall apply to all Awards granted under the Plan:
(a) Generally. In the event of any change in the outstanding Shares
after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off, combination
or exchange of Shares or other corporate exchange, or any distribution to
stockholders of Shares other than regular cash dividends, the Committee shall
make such substitution or adjustment, if any, as it, in its sole discretion and
without liability to any person, deems to be equitable, as to (i) the number or
kind of Shares or other securities issued or reserved for issuance pursuant to
the Plan or pursuant to outstanding Awards, (ii) the Option Price and/or (iii)
any other affected terms of such Awards.
(b) Change in Control. In the event of a Change in Control, Awards
granted under the Plan shall accelerate as follows: (i) each Option and Stock
Appreciation Right shall become immediately vested and exercisable; provided,
however, that if such Awards are not exercised prior to the date of the
consummation of the Change in Control, the Committee, in its sole discretion and
without liability to any person may provide for (A) the payment of a cash amount
in exchange for the cancellation of such Award and/or (B) the issuance of
substitute Awards that will substantially preserve the value, rights and
benefits of any affected Awards (previously granted hereunder) as of the date of
the consummation of the Change in Control; (ii) restrictions on Awards of
restricted shares shall lapse; and (iii) Other Stock-Based Awards shall become
payable as if targets for the current period were satisfied at 100%.
<PAGE> 12
12
11. No Right to Employment
The granting of an Award under the Plan shall impose no obligation
on the Company or any Subsidiary to continue the employment of a Participant and
shall not lessen or affect the Company's or Subsidiary's right to terminate the
employment of such Participant.
12. Successors and Assigns
The Plan shall be binding on all successors and assigns of the
Company and a Participant, including without limitation, the estate of such
Participant and the executor, administrator or trustee of such estate, or any
receiver or trustee in bankruptcy or representative of the Participant's
creditors.
13. Nontransferability of Awards
Except as provided in Section 7(h) of the Plan, an Award shall not
be transferable or assignable by the Participant otherwise than by will or by
the laws of descent and distribution. During the lifetime of a Participant, an
Award shall be exercisable only by such Participant. An Award exercisable after
the death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant. Notwithstanding anything to
the contrary herein, the Committee, in its sole discretion, shall have the
authority to waive this Section 13 (or any part thereof) to the extent that this
Section 13 (or any part thereof) is not required under the rules promulgated
under any law, rule or regulation applicable to the Company.
14. Amendments or Termination
The Board or the Committee may amend, alter or discontinue the Plan,
but no amendment, alteration or discontinuation shall be made which, (a) without
the approval of the stockholders of the Company, would (except as is provided in
Section 10 of the Plan), increase the total number of Shares reserved for the
purposes of the Plan or change the maximum number of Shares for which Awards may
be granted to any Participant or (b) without the consent of a Participant, would
impair any of the rights or obligations under any Award theretofore granted to
such Participant under the Plan; provided, however, that the Board or the
Committee may amend the Plan in such manner as it deems necessary to permit the
granting of Awards meeting the requirements of the Code or other applicable
laws. Notwithstanding anything to the contrary herein, neither the Committee nor
the Board may amend, alter or discontinue the provisions relating to Section
10(b) of the Plan after the occurrence of a Change in Control.
<PAGE> 13
13
15. International Participants
With respect to Participants who reside or work outside the United
States of America and who are not (and who are not expected to be) "covered
employees" within the meaning of Section 162(m) of the Code (or any successor
section thereto), the Committee may, in its sole discretion, amend the terms of
the Plan or Awards with respect to such Participants in order to conform such
terms with the requirements of local law.
16. Choice of Law
The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware applicable to contracts made and to be performed
in the State of Delaware.
17. Effectiveness of the Plan
The Plan shall be effective as of the Spinoff Date. If the Plan is
not approved by the stockholders of the Company prior to the first anniversary
of the Spinoff Date, no Awards may be granted thereafter.
<PAGE> 1
Exhibit 10.25
STOCK APPRECIATION RIGHTS AGREEMENT
RELATING TO STOCK OPTIONS UNDER
THE 1998 DUN & BRADSTREET KEY EMPLOYEES' STOCK INCENTIVE PLAN
This Agreement confirms the grant on [grant date] by THE DUN & BRADSTREET
CORPORATION (the "Company") to:
[Associate Name] (the "Associate")
of Limited Stock Appreciation Rights ("LSAR's") with respect to the following
options to purchase shares of the Company's Common Stock, par value $0.01 per
share ("Common Stock"), presently held by the Associate or granted to the
Associate contemporaneously herewith under the 1998 Dun & Bradstreet Key
Employees' Stock Incentive Plan, as amended from time to time (the "1998 Plan"):
Date of Option Grant Number of Shares Option Exercise Price
[ ] [ ] [$ ]
Each LSAR represents the right to receive, in cash, upon exercise, the excess of
the Tender Offer Price (as defined below) over the option exercise price of the
above option to which the LSAR relates, such excess constituting the
"Appreciation." These LSAR's are issued in accordance with and are subject to
the terms of the 1998 Plan, which plan is incorporated herein by reference, and
the following additional terms and conditions:
1. Each LSAR is related to an option (the "Related Option") to purchase
the number of shares of Common Stock at the option exercise price per
share indicated above.
2. These LSAR's may be exercised, in whole or in part, only on and after
six months after the date of grant and only during the 30-day period
beginning on the first day following the acquisition of at least 20% of
all outstanding shares of Common Stock pursuant to any tender or
exchange offer for shares of Common Stock (other than one made by the
Company), whether the Company does or does not support the offer. A
tender or exchange offer filed with the Securities and Exchange
Commission on Form 14D-1 (or successor form) shall be treated
conclusively as a tender or exchange offer for purposes of this
provision. Each LSAR is exercisable only if and to the extent the
Related Option is exercisable. During the 30-day period when these
LSAR's are exercisable, other stock appreciation rights relating to the
Related Option shall not be exercisable.
3. To the extent exercisable, these LSAR's may be exercised from time to
time by notice to the Company. The date a notice of exercise is
received by the Company shall be the exercise date. At the time of
payment of the Appreciation to the Associate, the Company shall require
payment of any amount the Company may determine to be necessary to
withhold for federal, state or local taxes as a result of the exercise
of an LSAR.
4. Exercise of an LSAR shall reduce the number of shares of Common Stock
covered by the Related Option and any other related stock appreciation
right on a share for share basis. The exercise of a Related Option or
of any other related stock appreciation right shall reduce the number
of related LSAR's on the same basis.
<PAGE> 2
5. The term "Tender Offer Price" when used herein shall mean the highest
price paid for shares of Common Stock in any tender or exchange offer
of the kind contemplated in Paragraph 2 above which is in effect at any
time during the 60-day period preceding the date of exercise of an
LSAR, provided that any securities or property which are part or all of
the consideration paid for shares of Common Stock in any such tender or
exchange offer shall be valued at the higher of (i) the valuation
placed on such securities or property by the person making such offer
or (ii) the valuation (for purposes hereof) placed on such securities
or property by the Compensation & Benefits Committee of the Board of
Directors of the Company (the "Committee").
6. These LSAR's shall terminate when the Associate is no longer subject to
the provisions of Section 16(b) of the Securities Exchange Act of 1934,
as amended.
7. These LSAR's are not transferable by the Associate, provided that the
Committee may, in its discretion, authorize these LSAR's to be
transferred in the limited circumstances applicable to the Related
Option.
IN WITNESS WHEREOF, The Dun & Bradstreet Corporation has caused this Agreement
to be executed in duplicate by its officer thereunto duly authorized.
THE DUN & BRADSTREET CORPORATION
By
--------------------------
Chief Executive Officer
The undersigned hereby accepts and agrees to all the terms and provisions of the
foregoing Limited Stock Appreciation Rights Agreement and acknowledges receipt
of (i) a copy of the Prospectus dated [date of latest Prospectus] relating to
the 1998 Dun & Bradstreet Key Employees' Stock Incentive Plan and (ii) a copy of
the [year Annual Report] of The Dun & Bradstreet Corporation.
- - ------------------------ --------------------------------
Date Associate
<PAGE> 1
Exhibit 10.26
[MASTER 2X]
PRIOR AGREEMENTS
June 29, 1998
PERSONAL AND CONFIDENTIAL
[NAME]
[ADDRESS]
[ADDRESS]
Dear [FIRST_NAME]:
The New Dun & Bradstreet Corporation, to be renamed "The Dun &
Bradstreet Corporation" after the shares of common stock of the New Dun &
Bradstreet Corporation are distributed to the shareholders of The Dun &
Bradstreet, (the "Company") considers it essential to the best interests of its
shareholders to foster the continued employment of key management personnel. In
this connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
"Change in Control" (as such term is defined in Section 2) may exist and that
such possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of key management
personnel to the detriment of the Company and its shareholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of key members of
the Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control.
In order to induce you to remain in the employ of the Company, the
Company agrees that you shall receive the severance benefits set forth in this
letter agreement (the "Agreement") in the event your employment with the Company
is terminated under the circumstances described below subsequent to a Change in
Control. No provision of this letter agreement shall be effective for any
purpose whatsoever except upon the occurrence of either a "Potential Change in
Control" (as such term is defined in Section 2) or a Change in Control. This
letter
<PAGE> 2
June 29, 1998
Page 2
agreement supersedes any previous letter agreement(s) between you and the
Company relating to this subject matter.
1. Term of Agreement. This Agreement shall commence on June 29,
1998, and shall continue in effect through December 31, 2000; provided, however,
that commencing on January 1, 2001, and each January 1 thereafter, the term of
this Agreement shall automatically be extended for one additional year unless,
not later than September 30th of the preceding year, the Company or you shall
have given notice to the other that it or you, respectively, does not wish to
extend this Agreement, provided, however, that no such notice shall be effective
if a Change in Control or Potential Change in Control shall have occurred prior
to the date of such notice; and provided, further, that if a Change in Control
shall have occurred during the original or extended term of this Agreement, this
Agreement shall continue in effect for a period of not less than twenty-four
(24) months beyond the month in which such Change in Control occurred.
2. Change in Control; Potential Change in Control. (i) No benefits
shall be payable hereunder unless there shall have been a Change in Control, as
set forth below. For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if
(a) any "Person", as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any company owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), is or becomes the "Beneficial Owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the
Company's then outstanding securities;
(b) during any period of twenty-four months (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other
than (1) a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(a), (c) or (d) of this Section, (2) a director designated by any Person
(including the Company) who publicly announces an intention to take or to
consider taking actions (including, but not limited to, an actual or
threatened proxy contest) which if consummated would constitute a Change
in Control or (3) a director designated by any Person who is the
Beneficial Owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's
<PAGE> 3
June 29, 1998
Page 3
securities) whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved cease for any reason to constitute at least a
majority thereof;
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other company, other than (1) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and (2) after
which no Person holds 20% or more of the combined voting power of the then
outstanding securities of the Company or such surviving entity; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets.
(ii) For purposes of this Agreement, a "Potential Change in Control"
shall be deemed to have occurred if:
(a) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(b) any Person (including the Company) publicly announces an
intention to take or to consider taking actions which if consummated would
constitute a Change in Control;
(c) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
(iii) You agree that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control, you will remain in the
employ of the Company until the earliest of (a) a date which is 180 days from
the occurrence of such Potential Change in Control, (b) the termination by you
of your employment by reason of Disability as defined in Subsection 3(ii), or
(c) the date on which you first become entitled under this Agreement to receive
the benefits provided in Section 4(iii) below.
<PAGE> 4
June 29, 1998
Page 4
3. Termination Following Change in Control. (i) General. If any of
the events described in Section 2 constituting a Change in Control shall have
occurred, you shall be entitled to the benefits provided in Section 4(iii) upon
the subsequent termination of your employment during the term of this Agreement
unless such termination is (a) because of your death or Disability, (b) by the
Company for Cause, or (c) by you other than for Good Reason. If your employment
with the Company is terminated prior to a Change in Control at the request of a
Person engaging in a transaction or series of transactions that would result in
a Change in Control, the twenty-four month period set forth in Section 1 of this
Agreement will commence upon the subsequent occurrence of a Change in Control,
your actual termination shall be deemed a termination occurring during such
twenty-four month period and covered by Section 3 of this Agreement, your Date
of Termination shall be deemed to have occurred immediately following the Change
in Control, and Notice of Termination shall have been deemed to have been given
by the Company immediately prior to your actual termination.
(ii) Disability. If, as a result of your incapacity due to physical
or mental illness or disability, you shall have been absent from the full-time
performance of your duties with the Company for six (6) consecutive months, and
within thirty (30) days after written notice of termination is thereafter given
you shall not have returned to the full-time performance of your duties, your
employment may be terminated for "Disability".
(iii) Cause. Termination by the Company of your employment for
"Cause" shall mean termination: (a) upon the willful and continued failure by
you to substantially perform your duties with the Company (other than any such
failure resulting from your incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of Termination
(as defined in Subsection 3(v)) by you for Good Reason (as defined in Subsection
3(iv)), after a written demand for substantial performance is delivered to you
by the Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties; (b) upon the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise; or (c) upon your conviction
of a felony. For purposes of this Subsection, no act, or failure to act, on your
part shall be deemed "willful" unless done, or omitted to be done, by you not in
good faith and without reasonable belief that your action or omission was in the
best interest of the Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board), finding that in
<PAGE> 5
June 29, 1998
Page 5
the good faith opinion of the Board you were guilty of conduct set forth above
in this Subsection and specifying the particulars thereof in detail.
(iv) Good Reason. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean
without your express written consent, the occurrence after a Change in Control
of any of the following circumstances unless, in the case of paragraphs (a),
(e), (f), (g) or (h), such circumstances are fully corrected prior to the Date
of Termination (as defined in Section 3(vi)) specified in the Notice of
Termination (as defined in Section 3(v)) given in respect thereof:
(a) the assignment to you of any duties inconsistent with the
position in the Company that you held immediately prior to the Change in
Control, or an adverse alteration in the nature or status of your
responsibilities or the conditions of your employment from those in effect
immediately prior to such Change in Control;
(b) a reduction by the Company in your annual base salary and/or
guideline bonus and/or perquisites as in effect on the date hereof or as
the same may be increased from time to time except for across-the-board
perquisites reductions similarly affecting all management personnel of the
Company and all management personnel of any Person in control of the
Company;
(c) the relocation of the Company's offices at which you are
principally employed immediately prior to the date of the Change in
Control to a location more than thirty-five (35) miles from such location,
except for required travel on the Company's business to an extent
substantially consistent with your business travel obligations prior to
the Change in Control; provided, however, that a relocation of the
Company's offices at which you are principally employed immediately prior
to the date of the Change in Control to New York City shall not constitute
"Good Reason" for purposes of this Agreement;
(d) the failure by the Company to pay to you any portion of your
compensation or to pay to you any portion of an installment of deferred
compensation under any deferred compensation program of the Company within
seven (7) days of the date such compensation is due;
(e) the failure by the Company to continue in effect any material
compensation or benefit plan in which you participated immediately prior
to the Change in Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such
plan, or the failure by the Company to continue your
<PAGE> 6
June 29, 1998
Page 6
participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amount of
benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control;
(f) the failure by the Company to continue to provide you with
benefits substantially similar to those enjoyed by you under any of the
Company's life insurance, medical, dental, accident, or disability plans
or perquisites in which you were participating at the time of the Change
in Control, the taking of any action by the Company which would directly
or indirectly materially reduce any of such benefits, or the failure by
the Company to provide you with the number of paid vacation days to which
you are entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at the time
of the Change in Control;
(g) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof; or
(h) any purported termination of your employment that is not
effected pursuant to a Notice of Termination satisfying the requirements
of Subsection (v) hereof (and, if applicable, the requirements of
Subsection (iii) hereof), which purported termination shall not be
effective for purposes of this Agreement.
Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.
(v) Notice of Termination. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6. "Notice of
Termination" shall mean a notice that shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
(vi) Date of Termination, Etc. "Date of Termination" shall mean (a)
if your employment is terminated for Disability, thirty (30) days after Notice
of Termination is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30) day period), or (b)
if your employment is terminated pursuant to Subsection (iii) or (iv) hereof or
for any other reason (other than Disability), the date
<PAGE> 7
June 29, 1998
Page 7
specified in the Notice of Termination (which, in the case of a termination for
Cause shall not be less than thirty (30) days from the date such Notice of
Termination is given, and in the case of a termination for Good Reason shall not
be less than fifteen (15) nor more than sixty (60) days from the date such
Notice of Termination is given; provided, however, that if within fifteen (15)
days after any Notice of Termination is given, or, if later, prior to the Date
of Termination (as determined without regard to this proviso), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal therefrom has expired
and no appeal has been perfected); and provided, further, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company will continue to pay you your full compensation in effect
when the notice giving rise to the dispute was given (including, but not limited
to, base salary) and continue you as a participant in all compensation, benefit
and insurance plans in which you were participating when the notice giving rise
to the dispute was given, until the dispute is finally resolved in accordance
with this Subsection. Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement, and shall not be offset against or
reduce any other amounts due under this Agreement and shall not be reduced by
any compensation earned by you as the result of employment by another employer.
4. Compensation Upon Termination or During Disability. Following a
Change in Control, you shall be entitled to the following benefits during a
period of disability, or upon termination of your employment, as the case may
be, provided that such period or termination occurs during the term of this
Agreement:
(i) During any period that you fail to perform your full-time
duties with the Company as a result of incapacity due to physical or
mental illness or disability, you shall continue to receive your base
salary at the rate in effect at the commencement of any such period,
together with all compensation payable to you under the Company's
disability plan or program or other similar plan during such period, until
this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter,
or in the event your employment shall be terminated by reason of your
death, your benefits shall be determined under the Company's retirement,
insurance and other compensation programs then in effect in accordance
with the terms of such programs.
<PAGE> 8
June 29, 1998
Page 8
(ii) If your employment shall be terminated by the Company for
Cause or by you other than for Good Reason, the Company shall pay you your
full base salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given, plus all other amounts to which
you are entitled under any compensation plan of the Company at the time
such payments are due, and the Company shall have no further obligations
to you under this Agreement.
(iii) If your employment by the Company should be terminated by
the Company other than for Cause or Disability or if you should terminate
your employment for Good Reason, you shall be entitled to the benefits
provided below:
(a) the Company shall pay to you your full base salary through
the Date of Termination at the rate in effect at the time Notice of
Termination is given, no later than the fifth day following the Date
of Termination, plus all other amounts to which you are entitled
under any compensation plan of the Company, at the time such
payments are due;
(b) in lieu of any further salary payments to you for periods
subsequent to the Date of Termination, the Company shall pay as
severance pay to you, at the time specified in Subsection (v), a
lump sum severance payment (in addition to the payments provided in
paragraphs (c), (d), (e), (f), (g), (h) and (i) below, the
"Severance Payments") equal to (1) 200% of the greater of (A) your
annual base salary in effect on the Date of Termination or (B) your
annual base salary in effect immediately prior to the Change in
Control, and (2) 200% of your guideline bonus with respect to the
year in which the Change in Control occurs; your annual base salary
and guideline bonus (as taken into account under the first half of
this Subsection (iii)(b)) shall count for two years additional
credited service and be included in final average earnings
calculations for participants in the Company's Retirement Account
Plan, Supplemental Executive Retirement Plan, Pension Benefit
Equalization Plan and any successor or substitute plans thereto, a
sample calculation of which appears in Exhibit A to this Agreement;
(c) in lieu of shares of common stock of the Company ("Common
Shares") issuable upon exercise of outstanding options (other than
options qualifying as incentive stock options ("ISOs") under Section
422A of the Internal Revenue Code of 1986 (the "Code") which ISOs
were granted on or before the date hereof) ("Options"), and stock
appreciation rights ("SARs"), if any, granted to you under the
Company's 1998 Replacement Plan, 1998 Key Employees' Stock Incentive
<PAGE> 9
June 29, 1998
Page 9
Plan or any successor or substitute plans thereto (except those SARs
applicable to ISOs granted on or before the date hereof) (which
Options shall be cancelled upon the making of the payment referred
to below), the Company shall pay to you, at the time specified in
Subsection (v), an amount in cash equal to the product of (1) the
excess of, in the case of an ISO granted after the date hereof, the
closing price of Common Shares as reported on the New York Stock
Exchange on or nearest the Date of Termination (or, if not listed on
such exchange, on a nationally recognized exchange or quotation
system on which trading volume in the Common Shares is highest) and,
in the case of all other Options, the higher of such closing price
or the highest per share price for Common Shares actually paid in
connection with any Change in Control, over the per share option
price of each Option held by you (whether or not then fully
exercisable), and (2) the number of Common Shares covered by each
such Option;
(d) in lieu of Common Shares issuable upon the lapse of
restrictions, if any, granted to you under the Company's 1998
Replacement Plan, 1998 Key Employees' Stock Incentive Plan or any
successor or substitute plan(s) thereto, the Company shall pay to
you, at the time specified in Subsection (v), an amount in cash
equal to the product of (1) the closing price of Common Shares as
reported on the New York Stock Exchange on or nearest the Date of
Termination (or, if not listed on such exchange, on a nationally
recognized exchange or quotation system on which trading volume in
the Common Shares is highest) or the highest per share price for
Common Shares actually paid in connection with any Change in
Control, whichever is greater (such price, the "Price"), and (2) the
number of Common Shares granted to you subject to such restrictions;
(e) (1) all outstanding performance units awarded to you under
the Company's 1998 Key Employees' Stock Incentive Plan, whether or
not vested, shall be cancelled, and you shall receive a cash payment
equal to the amount you would have earned at a 100% target award
valuation; and (2) all outstanding unrestricted stock awarded to you
under such plan, whether or not vested, shall be cancelled, and you
shall receive a cash payment equal to the product of (A) the number
of cancelled unrestricted shares and (B) the Price;
(f) the Company shall provide you with a cash allowance, at
the time specified in Subsection (v), for outplacement counseling
and job search activities in the amount of 15% of your annual salary
and guideline bonus as in effect on the Date of Termination but not
<PAGE> 10
June 29, 1998
Page 10
to exceed a maximum allowance of $50,000; and the Company shall pay
to you all legal fees and expenses incurred by you as a result of
such termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this
Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of section 4999 of the Code
to any payment or benefit provided hereunder);
(g) for a twenty-four (24) month period after such
termination, the Company shall arrange to provide you with life and
health insurance benefits and perquisites substantially similar to
those which you were receiving immediately prior to the Notice of
Termination. Notwithstanding the foregoing, the Company shall not
provide any benefit otherwise receivable by you pursuant to this
paragraph (g) if an equivalent benefit is actually received by you
during the twenty-four (24) month period following your termination,
and any such benefit actually received by you shall be reported to
the Company;
(h) at the time specified in Subsection (v), the Company shall
pay to you, in lieu of amounts which may otherwise be payable to you
under any bonus plan (a "Bonus Plan"), an amount in cash equal to
(1) your annual target bonus for the year in which the Change in
Control occurs, multiplied by a fraction, (A) the numerator of which
equals the number of full or partial days in such annual performance
period during which you were employed by the Company and (B) the
denominator of which is 365, and (2) the entire target bonus
opportunity with respect to each performance period in progress
under all other Bonus Plans in effect at the time of termination;
and
(i) starting at age 55, you shall receive retiree medical and
life benefits from the Company. Such benefits shall be no less
favorable than the benefits that you would have received had you, at
the time Notice of Termination is given, both (1) attained age 55
and (2) retired from the Company. Notwithstanding the foregoing, any
benefit described in the preceding sentence shall constitute
secondary coverage with respect to retiree medical and life benefits
actually received by you in connection with any subsequent
employment (or self-employment) following your termination.
(iv) In the event that you become entitled to the Severance
Payments, if any of the Severance Payments will be
<PAGE> 11
June 29, 1998
Page 11
subject to the tax (the "Excise Tax") imposed by section 4999 of the Code,
(or any similar federal, state or local tax that may hereafter be
imposed), the Company shall pay to you at the time specified in Subsection
(v) below, an additional amount (the "Gross-Up Payment") such that the net
amount retained by you, after deduction of any Excise Tax on the Total
Payments (as hereinafter defined) and any federal, state and local income
tax and Excise Tax upon the payment provided for by this subsection, shall
be equal to the Total Payments. For purposes of determining whether any of
the Severance Payments will be subject to the Excise Tax and the amount of
such Excise Tax, (a) any other payments or benefits received or to be
received by you in connection with a Change in Control or your termination
of employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated with the
Company or such Person) (which, together with the Severance Payments,
constitute the "Total Payments") shall be treated as "parachute payments"
within the meaning of section 280G(b)(2) of the Code, and all "excess
parachute payments" within the meaning of section 280G(b)(1) shall be
treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company's independent auditors and acceptable to you such
other payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in
part) represent reasonable compensation for services actually rendered
within the meaning of section 280G(b)(4) of the Code in excess of the base
amount within the meaning of section 280G(b)(3) of the Code, or are
otherwise not subject to the Excise Tax, (b) the amount of the Total
Payments which shall be treated as subject to the Excise Tax shall be
equal to the lesser of (1) the total amount of the Total Payments and (2)
the amount of excess parachute payments within the meaning of section
280G(b)(1) (after applying clause (a), above), and (c) the value of any
non-cash benefits or any deferred payments or benefit shall be determined
by the Company's independent auditors in accordance with the principles of
sections 280G(d) (3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, you shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state
and locality of your residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise Tax
is subsequently determined to be less than the amount taken into account
hereunder at the time of termination of your employment, you shall repay
to the Company within ten (10)
<PAGE> 12
June 29, 1998
Page 12
days after the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment attributable to
such reduction (plus the portion of the Gross-Up Payment attributable to
the Excise Tax and federal and state and local income tax imposed on the
Gross-Up Payment being repaid by you if such repayment results in a
reduction in Excise Tax and/or a federal and state and local income tax
deduction) plus interest on the amount of such repayment at the rate
provided in section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder
at the time of the termination of your employment (including by reason of
any payment the existence or amount of which cannot be determined at the
time of the Gross-Up Payment), the Company shall make an additional
gross-up payment in respect of such excess (plus any interest payable with
respect to such excess) within ten (10) days after the time that the
amount of such excess is finally determined.
(v) The payments provided for in Subsections (iii)(b), (c), (d),
(e), (f) and (h) shall be made not later than the fifth day following the
Date of Termination; provided, however, that if the amounts of such
payments cannot be finally determined on or before such day, the Company
shall pay to you on such day an estimate, as determined in good faith by
the Company, of the minimum amount of such payments and shall pay the
remainder of such payments (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the Date of
Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess
shall constitute a loan by the Company to you, payable on the fifth day
after demand by the Company (together with interest at the rate provided
in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsections (iii)(g) and (iii)(i)
hereof, you shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this
Section 4 be reduced by any compensation earned by you as the result of
employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by you to the Company, or otherwise.
5. Successors; Binding Agreement. (i) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required
<PAGE> 13
June 29, 1998
Page 13
to perform it if no such succession had taken place. Failure of the Company to
obtain such express assumption and agreement at or prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you to
compensation from the Company in the same amount and on the same terms to which
you would be entitled hereunder if you terminate your employment for Good Reason
following a Change in Control, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be enforceable
by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notice to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
7. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New York without regard to its conflicts of law
principles. All references to sections of the
<PAGE> 14
June 29, 1998
Page 14
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law.
The obligations of the Company under Section 4 shall survive the expiration of
the term of this Agreement.
8. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Prior Agreement. In consideration of the benefits provided
hereunder, you agree that all prior agreements with respect to the subject
matter contained herein, made between you and The Dun & Bradstreet Corporation
have become null and void and of no force or effect.
11. Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
during the term of this Agreement supersedes the provisions of all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto with respect to the subject matter contained
herein.
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
THE NEW DUN & BRADSTREET
CORPORATION
BY____________________________________
Nancy L. Henry
Senior Vice President
and Chief Legal Counsel
<PAGE> 15
June 29, 1998
Page 15
Agreed to this _____ day of _______________, 1998.
_____________________________
[NAME]
<PAGE> 16
[MASTER 3X]
PRIOR AGREEMENTS
June 29, 1998
PERSONAL AND CONFIDENTIAL
[NAME]
[ADDRESS]
[ADDRESS]
Dear [FIRST_NAME]:
The New Dun & Bradstreet Corporation, to be renamed "The Dun &
Bradstreet Corporation" after the shares of common stock of the New Dun &
Bradstreet Corporation are distributed to the shareholders of The Dun &
Bradstreet Corporation, (the "Company") considers it essential to the best
interests of its shareholders to foster the continued employment of key
management personnel. In this connection, the Board of Directors of the Company
(the "Board") recognizes that, as is the case with many publicly held
corporations, the possibility of a "Change in Control" (as such term is defined
in Section 2) may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of key management personnel to the detriment of the Company and its
shareholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of key members of
the Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control.
In order to induce you to remain in the employ of the Company, the
Company agrees that you shall receive the severance benefits set forth in this
letter agreement (the "Agreement") in the event your employment with the Company
is terminated under the circumstances described below subsequent to a Change in
Control. No provision of this letter agreement shall be effective for any
purpose whatsoever except upon the occurrence of either a "Potential Change in
Control" (as such term is defined in Section 2) or a Change in Control. This
letter
<PAGE> 17
June 29, 1998
Page 2
agreement supersedes any previous letter agreement(s) between you and the
Company relating to this subject matter.
1. Term of Agreement. This Agreement shall commence on June 29,
1998, and shall continue in effect through December 31, 2000; provided, however,
that commencing on January 1, 2001, and each January 1 thereafter, the term of
this Agreement shall automatically be extended for one additional year unless,
not later than September 30th of the preceding year, the Company or you shall
have given notice to the other that it or you, respectively, does not wish to
extend this Agreement, provided, however, that no such notice shall be effective
if a Change in Control or Potential Change in Control shall have occurred prior
to the date of such notice; and provided, further, that if a Change in Control
shall have occurred during the original or extended term of this Agreement, this
Agreement shall continue in effect for a period of not less than twenty-four
(24) months beyond the month in which such Change in Control occurred.
2. Change in Control; Potential Change in Control. (i) No benefits
shall be payable hereunder unless there shall have been a Change in Control, as
set forth below. For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if
(a) any "Person", as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any company owned,
directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), is or becomes the "Beneficial Owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the
Company's then outstanding securities;
(b) during any period of twenty-four months (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other
than (1) a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(a), (c) or (d) of this Section, (2) a director designated by any Person
(including the Company) who publicly announces an intention to take or to
consider taking actions (including, but not limited to, an actual or
threatened proxy contest) which if consummated would constitute a Change
in Control or (3) a director designated by any Person who is the
Beneficial Owner, directly or indirectly, of securities of the Company
representing 10% or more of the combined voting power of the Company's
<PAGE> 18
June 29, 1998
Page 3
securities) whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election was
previously so approved cease for any reason to constitute at least a
majority thereof;
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other company, other than (1) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and (2) after
which no Person holds 20% or more of the combined voting power of the then
outstanding securities of the Company or such surviving entity; or
(d) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets.
(ii) For purposes of this Agreement, a "Potential Change in Control"
shall be deemed to have occurred if:
(a) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(b) any Person (including the Company) publicly announces an
intention to take or to consider taking actions which if consummated would
constitute a Change in Control;
(c) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
(iii) You agree that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control, you will remain in the
employ of the Company until the earliest of (a) a date which is 180 days from
the occurrence of such Potential Change in Control, (b) the termination by you
of your employment by reason of Disability as defined in Subsection 3(ii), or
(c) the date on which you first become entitled under this Agreement to receive
the benefits provided in Section 4(iii) below.
<PAGE> 19
June 29, 1998
Page 4
3. Termination Following Change in Control. (i) General. If any of
the events described in Section 2 constituting a Change in Control shall have
occurred, you shall be entitled to the benefits provided in Section 4(iii) upon
the subsequent termination of your employment during the term of this Agreement
unless such termination is (a) because of your death or Disability, (b) by the
Company for Cause, or (c) by you other than for Good Reason. If your employment
with the Company is terminated prior to a Change in Control at the request of a
Person engaging in a transaction or series of transactions that would result in
a Change in Control, the twenty-four month period set forth in Section 1 of this
Agreement will commence upon the subsequent occurrence of a Change in Control,
your actual termination shall be deemed a termination occurring during such
twenty-four month period and covered by Section 3 of this Agreement, your Date
of Termination shall be deemed to have occurred immediately following the Change
in Control, and Notice of Termination shall have been deemed to have been given
by the Company immediately prior to your actual termination.
(ii) Disability. If, as a result of your incapacity due to physical
or mental illness or disability, you shall have been absent from the full-time
performance of your duties with the Company for six (6) consecutive months, and
within thirty (30) days after written notice of termination is thereafter given
you shall not have returned to the full-time performance of your duties, your
employment may be terminated for "Disability".
(iii) Cause. Termination by the Company of your employment for
"Cause" shall mean termination: (a) upon the willful and continued failure by
you to substantially perform your duties with the Company (other than any such
failure resulting from your incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of Termination
(as defined in Subsection 3(v)) by you for Good Reason (as defined in Subsection
3(iv)), after a written demand for substantial performance is delivered to you
by the Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties; (b) upon the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise; or (c) upon your conviction
of a felony. For purposes of this Subsection, no act, or failure to act, on your
part shall be deemed "willful" unless done, or omitted to be done, by you not in
good faith and without reasonable belief that your action or omission was in the
best interest of the Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative vote of
not less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board (after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Board), finding that in
<PAGE> 20
June 29, 1998
Page 5
the good faith opinion of the Board you were guilty of conduct set forth above
in this Subsection and specifying the particulars thereof in detail.
(iv) Good Reason. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean
without your express written consent, the occurrence after a Change in Control
of any of the following circumstances unless, in the case of paragraphs (a),
(e), (f), (g) or (h), such circumstances are fully corrected prior to the Date
of Termination (as defined in Section 3(vi)) specified in the Notice of
Termination (as defined in Section 3(v)) given in respect thereof:
(a) the assignment to you of any duties inconsistent with the
position in the Company that you held immediately prior to the Change in
Control, or an adverse alteration in the nature or status of your
responsibilities or the conditions of your employment from those in effect
immediately prior to such Change in Control;
(b) a reduction by the Company in your annual base salary and/or
guideline bonus and/or perquisites as in effect on the date hereof or as
the same may be increased from time to time except for across-the-board
perquisites reductions similarly affecting all management personnel of the
Company and all management personnel of any Person in control of the
Company;
(c) the relocation of the Company's offices at which you are
principally employed immediately prior to the date of the Change in
Control to a location more than thirty-five (35) miles from such location,
except for required travel on the Company's business to an extent
substantially consistent with your business travel obligations prior to
the Change in Control; provided, however, that a relocation of the
Company's offices at which you are principally employed immediately prior
to the date of the Change in Control to New York City shall not constitute
"Good Reason" for purposes of this Agreement;
(d) the failure by the Company to pay to you any portion of your
compensation or to pay to you any portion of an installment of deferred
compensation under any deferred compensation program of the Company within
seven (7) days of the date such compensation is due;
(e) the failure by the Company to continue in effect any material
compensation or benefit plan in which you participated immediately prior
to the Change in Control, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to such
plan, or the failure by the Company to continue your
<PAGE> 21
June 29, 1998
Page 6
participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amount of
benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control;
(f) the failure by the Company to continue to provide you with
benefits substantially similar to those enjoyed by you under any of the
Company's life insurance, medical, dental, accident, or disability plans
or perquisites in which you were participating at the time of the Change
in Control, the taking of any action by the Company which would directly
or indirectly materially reduce any of such benefits, or the failure by
the Company to provide you with the number of paid vacation days to which
you are entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at the time
of the Change in Control;
(g) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof; or
(h) any purported termination of your employment that is not
effected pursuant to a Notice of Termination satisfying the requirements
of Subsection (v) hereof (and, if applicable, the requirements of
Subsection (iii) hereof), which purported termination shall not be
effective for purposes of this Agreement.
Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.
(v) Notice of Termination. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6. "Notice of
Termination" shall mean a notice that shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
(vi) Date of Termination, Etc. "Date of Termination" shall mean (a)
if your employment is terminated for Disability, thirty (30) days after Notice
of Termination is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30) day period), or (b)
if your employment is terminated pursuant to Subsection (iii) or (iv) hereof or
for any other reason (other than Disability), the date
<PAGE> 22
June 29, 1998
Page 7
specified in the Notice of Termination (which, in the case of a termination for
Cause shall not be less than thirty (30) days from the date such Notice of
Termination is given, and in the case of a termination for Good Reason shall not
be less than fifteen (15) nor more than sixty (60) days from the date such
Notice of Termination is given; provided, however, that if within fifteen (15)
days after any Notice of Termination is given, or, if later, prior to the Date
of Termination (as determined without regard to this proviso), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal therefrom has expired
and no appeal has been perfected); and provided, further, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company will continue to pay you your full compensation in effect
when the notice giving rise to the dispute was given (including, but not limited
to, base salary) and continue you as a participant in all compensation, benefit
and insurance plans in which you were participating when the notice giving rise
to the dispute was given, until the dispute is finally resolved in accordance
with this Subsection. Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement, and shall not be offset against or
reduce any other amounts due under this Agreement and shall not be reduced by
any compensation earned by you as the result of employment by another employer.
4. Compensation Upon Termination or During Disability. Following a
Change in Control, you shall be entitled to the following benefits during a
period of disability, or upon termination of your employment, as the case may
be, provided that such period or termination occurs during the term of this
Agreement:
(i) During any period that you fail to perform your full-time
duties with the Company as a result of incapacity due to physical or
mental illness or disability, you shall continue to receive your base
salary at the rate in effect at the commencement of any such period,
together with all compensation payable to you under the Company's
disability plan or program or other similar plan during such period, until
this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter,
or in the event your employment shall be terminated by reason of your
death, your benefits shall be determined under the Company's retirement,
insurance and other compensation programs then in effect in accordance
with the terms of such programs.
<PAGE> 23
June 29, 1998
Page 8
(ii) If your employment shall be terminated by the Company for
Cause or by you other than for Good Reason, the Company shall pay you your
full base salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given, plus all other amounts to which
you are entitled under any compensation plan of the Company at the time
such payments are due, and the Company shall have no further obligations
to you under this Agreement.
(iii) If your employment by the Company should be terminated by
the Company other than for Cause or Disability or if you should terminate
your employment for Good Reason, you shall be entitled to the benefits
provided below:
(a) the Company shall pay to you your full base salary through
the Date of Termination at the rate in effect at the time Notice of
Termination is given, no later than the fifth day following the Date
of Termination, plus all other amounts to which you are entitled
under any compensation plan of the Company, at the time such
payments are due;
(b) in lieu of any further salary payments to you for periods
subsequent to the Date of Termination, the Company shall pay as
severance pay to you, at the time specified in Subsection (v), a
lump sum severance payment (in addition to the payments provided in
paragraphs (c), (d), (e), (f), (g), (h) and (i) below, the
"Severance Payments") equal to (1) 300% of the greater of (A) your
annual base salary in effect on the Date of Termination or (B) your
annual base salary in effect immediately prior to the Change in
Control, and (2) 300% of your guideline bonus with respect to the
year in which the Change in Control occurs; your annual base salary
and guideline bonus (as taken into account under the first half of
this Subsection (iii)(b)) shall count for three years additional
credited service and be included in final average earnings
calculations for participants in the Company's Retirement Account
Plan, Supplemental Executive Retirement Plan, Pension Benefit
Equalization Plan and any successor or substitute plans thereto, a
sample calculation of which appears in Exhibit A to this Agreement;
(c) in lieu of shares of common stock of the Company ("Common
Shares") issuable upon exercise of outstanding options (other than
options qualifying as incentive stock options ("ISOs") under Section
422A of the Internal Revenue Code of 1986 (the "Code") which ISOs
were granted on or before the date hereof) ("Options"), and stock
appreciation rights ("SARs"), if any, granted to you under the
Company's 1998 Replacement Plan, 1998 Key Employees' Stock Incentive
<PAGE> 24
June 29, 1998
Page 9
Plan or any successor or substitute plans thereto (except those SARs
applicable to ISOs granted on or before the date hereof) (which
Options shall be cancelled upon the making of the payment referred
to below), the Company shall pay to you, at the time specified in
Subsection (v), an amount in cash equal to the product of (1) the
excess of, in the case of an ISO granted after the date hereof, the
closing price of Common Shares as reported on the New York Stock
Exchange on or nearest the Date of Termination (or, if not listed on
such exchange, on a nationally recognized exchange or quotation
system on which trading volume in the Common Shares is highest) and,
in the case of all other Options, the higher of such closing price
or the highest per share price for Common Shares actually paid in
connection with any Change in Control, over the per share option
price of each Option held by you (whether or not then fully
exercisable), and (2) the number of Common Shares covered by each
such Option;
(d) in lieu of Common Shares issuable upon the lapse of
restrictions, if any, granted to you under the Company's 1998
Replacement Plan, 1998 Key Employees' Stock Incentive Plan or any
successor or substitute plan(s) thereto, the Company shall pay to
you, at the time specified in Subsection (v), an amount in cash
equal to the product of (1) the closing price of Common Shares as
reported on the New York Stock Exchange on or nearest the Date of
Termination (or, if not listed on such exchange, on a nationally
recognized exchange or quotation system on which trading volume in
the Common Shares is highest) or the highest per share price for
Common Shares actually paid in connection with any Change in
Control, whichever is greater (such price, the "Price"), and (2) the
number of Common Shares granted to you subject to such restrictions;
(e) (1) all outstanding performance units awarded to you under
the Company's 1998 Key Employees' Stock Incentive Plan, whether or
not vested, shall be cancelled, and you shall receive a cash payment
equal to the amount you would have earned at a 100% target award
valuation; and (2) all outstanding unrestricted stock awarded to you
under such plan, whether or not vested, shall be cancelled, and you
shall receive a cash payment equal to the product of (A) the number
of cancelled unrestricted shares and (B) the Price;
(f) the Company shall provide you with a cash allowance, at
the time specified in Subsection (v), for outplacement counseling
and job search activities in the amount of 20% of your annual salary
and guideline bonus as in effect on the Date of Termination but not
<PAGE> 25
June 29, 1998
Page 10
to exceed a maximum allowance of $100,000; and the Company shall pay
to you all legal fees and expenses incurred by you as a result of
such termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this
Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of section 4999 of the Code
to any payment or benefit provided hereunder);
(g) for a thirty-six (36) month period after such termination,
the Company shall arrange to provide you with life and health
insurance benefits and perquisites substantially similar to those
which you were receiving immediately prior to the Notice of
Termination. Notwithstanding the foregoing, the Company shall not
provide any benefit otherwise receivable by you pursuant to this
paragraph (g) if an equivalent benefit is actually received by you
during the thirty-six (36) month period following your termination,
and any such benefit actually received by you shall be reported to
the Company;
(h) at the time specified in Subsection (v), the Company shall
pay to you, in lieu of amounts which may otherwise be payable to you
under any bonus plan (a "Bonus Plan"), an amount in cash equal to
(1) your annual target bonus for the year in which the Change in
Control occurs, multiplied by a fraction, (A) the numerator of which
equals the number of full or partial days in such annual performance
period during which you were employed by the Company and (B) the
denominator of which is 365, and (2) the entire target bonus
opportunity with respect to each performance period in progress
under all other Bonus Plans in effect at the time of termination;
and
(i) starting at age 55, you shall receive retiree medical and
life benefits from the Company. Such benefits shall be no less
favorable than the benefits that you would have received had you, at
the time Notice of Termination is given, both (1) attained age 55
and (2) retired from the Company. Notwithstanding the foregoing, any
benefit described in the preceding sentence shall constitute
secondary coverage with respect to retiree medical and life benefits
actually received by you in connection with any subsequent
employment (or self-employment) following your termination.
(iv) In the event that you become entitled to the Severance
Payments, if any of the Severance Payments will be
<PAGE> 26
June 29, 1998
Page 11
subject to the tax (the "Excise Tax") imposed by section 4999 of the Code,
(or any similar federal, state or local tax that may hereafter be
imposed), the Company shall pay to you at the time specified in Subsection
(v) below, an additional amount (the "Gross-Up Payment") such that the net
amount retained by you, after deduction of any Excise Tax on the Total
Payments (as hereinafter defined) and any federal, state and local income
tax and Excise Tax upon the payment provided for by this subsection, shall
be equal to the Total Payments. For purposes of determining whether any of
the Severance Payments will be subject to the Excise Tax and the amount of
such Excise Tax, (a) any other payments or benefits received or to be
received by you in connection with a Change in Control or your termination
of employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated with the
Company or such Person) (which, together with the Severance Payments,
constitute the "Total Payments") shall be treated as "parachute payments"
within the meaning of section 280G(b)(2) of the Code, and all "excess
parachute payments" within the meaning of section 280G(b)(1) shall be
treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company's independent auditors and acceptable to you such
other payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in
part) represent reasonable compensation for services actually rendered
within the meaning of section 280G(b)(4) of the Code in excess of the base
amount within the meaning of section 280G(b)(3) of the Code, or are
otherwise not subject to the Excise Tax, (b) the amount of the Total
Payments which shall be treated as subject to the Excise Tax shall be
equal to the lesser of (1) the total amount of the Total Payments and (2)
the amount of excess parachute payments within the meaning of section
280G(b)(1) (after applying clause (a), above), and (c) the value of any
non-cash benefits or any deferred payments or benefit shall be determined
by the Company's independent auditors in accordance with the principles of
sections 280G(d) (3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, you shall be deemed to pay federal income
taxes at the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state
and locality of your residence on the Date of Termination, net of the
maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise Tax
is subsequently determined to be less than the amount taken into account
hereunder at the time of termination of your employment, you shall repay
to the Company within ten (10)
<PAGE> 27
June 29, 1998
Page 12
days after the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment attributable to
such reduction (plus the portion of the Gross-Up Payment attributable to
the Excise Tax and federal and state and local income tax imposed on the
Gross-Up Payment being repaid by you if such repayment results in a
reduction in Excise Tax and/or a federal and state and local income tax
deduction) plus interest on the amount of such repayment at the rate
provided in section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account hereunder
at the time of the termination of your employment (including by reason of
any payment the existence or amount of which cannot be determined at the
time of the Gross-Up Payment), the Company shall make an additional
gross-up payment in respect of such excess (plus any interest payable with
respect to such excess) within ten (10) days after the time that the
amount of such excess is finally determined.
(v) The payments provided for in Subsections (iii)(b), (c), (d),
(e), (f) and (h) shall be made not later than the fifth day following the
Date of Termination; provided, however, that if the amounts of such
payments cannot be finally determined on or before such day, the Company
shall pay to you on such day an estimate, as determined in good faith by
the Company, of the minimum amount of such payments and shall pay the
remainder of such payments (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the Date of
Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess
shall constitute a loan by the Company to you, payable on the fifth day
after demand by the Company (together with interest at the rate provided
in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsections (iii)(g) and (iii)(i)
hereof, you shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this
Section 4 be reduced by any compensation earned by you as the result of
employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by you to the Company, or otherwise.
5. Successors; Binding Agreement. (i) The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required
<PAGE> 28
June 29, 1998
Page 13
to perform it if no such succession had taken place. Failure of the Company to
obtain such express assumption and agreement at or prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you to
compensation from the Company in the same amount and on the same terms to which
you would be entitled hereunder if you terminate your employment for Good Reason
following a Change in Control, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(ii) This Agreement shall inure to the benefit of and be enforceable
by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notice to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
7. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New York without regard to its conflicts of law
principles. All references to sections of the
<PAGE> 29
June 29, 1998
Page 14
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law.
The obligations of the Company under Section 4 shall survive the expiration of
the term of this Agreement.
8. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Prior Agreement. In consideration of the benefits provided
hereunder, you agree that all prior agreements with respect to the subject
matter contained herein, made between you and The Dun & Bradstreet Corporation
have become null and void and of no force or effect
11. Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
during the term of this Agreement supersedes the provisions of all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto with respect to the subject matter contained
herein.
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
THE NEW DUN & BRADSTREET
CORPORATION
BY _____________________________________
Nancy L. Henry
Senior Vice President
and Chief Legal Counsel
<PAGE> 30
June 29, 1998
Page 15
Agreed to this _____ day of _______________, 1998.
_______________________________
[NAME]
<PAGE> 1
Exhibit 10.27
THE DUN & BRADSTREET EXECUTIVE TRANSITION PLAN
(as in effect as of June 17, 1998 with certain earlier effective dates)
The Dun & Bradstreet Corporation (the "Company") wishes to
define those circumstances under which it will provide assistance to an Eligible
Employee in the event of his or her Eligible Termination (as such terms are
defined herein). Accordingly, the Company hereby establishes The Dun &
Bradstreet Executive Transition Plan (the "Plan").
SECTION 1 - DEFINITIONS
1.1 "Cause" shall mean (a) willful malfeasance or willful
misconduct by the Eligible Employee in connection with his or her employment,
(b) continuing failure to perform such duties as are requested by any employee
to whom the Eligible Employee reports or the Company's board of directors, (c)
failure by the Eligible Employee to observe material policies of the Company
applicable to the Eligible Employee or (d) the commission by an Eligible
Employee of (i) any felony or (ii) any misdemeanor involving moral turpitude.
1.2 "Change in Control" shall mean:
(a) any "person," as such term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's
then outstanding securities;
(b) during any period of twenty-four months (not
including any period prior to the effective date of this provision), individuals
who at the beginning of such period constitute the Board of Directors of the
Company, and any new director (other than (1) a director designated by a person
who has entered into an agreement with the Company to effect a transaction
described in clause (a), (c) or (d) of this Section), (2) a director designated
by any Person (including the Company) who publicly announces an intention to
take or to consider taking actions (including, but not limited to, an actual or
threatened proxy contest) which if consummated would constitute a Change in
Control or (3) a director designated by any Person who is the Beneficial Owner,
directly or indirectly, of securities of the Company representing 10% or more of
the combined voting power of the Company's securities) whose election by the
Board or nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved cease for any reason to
constitute at least a majority thereof;
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other company, other than (1) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation and (2) after which no Person holds 20% or more of
the combined voting power of the then outstanding securities of the Company or
such surviving entity; or
(d) The shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
1.3 "Committee" shall mean the Compensation and Benefits
Committee of the Board of Directors of the Company.
1.4 "Eligible Employee" shall mean the Chief Executive Officer
of the Company and such other executive officers of the Company or its
affiliates as are designated in writing by the Chief Executive Officer.
1.5 "Eligible Termination" shall mean (a) an involuntary
termination of employment with the Company by reason of a reduction in force
program, job elimination or unsatisfactory performance in the execution of an
Eligible Employee's duties or (b) a resignation mutually agreed to in writing by
the Company and the Eligible Employee. Notwithstanding the foregoing, an
Eligible Termination shall not include (w) a unilateral resignation, (x) a
termination by the Company for Cause, (y) a termination as a result of a sale
(whether in whole or in part, of stock or assets), merger or other combination,
spinoff, reorganization or liquidation, dissolution or other winding up or other
similar transactions involving the Company; provided however, that a termination
of employment as a result of a Change in Control shall not be covered by this
clause (y), or (z) any termination where an offer of employment is made to the
Eligible Employee of a comparable position at the Company.
<PAGE> 2
2
1.6 "Salary" shall mean an Eligible Employee's annual base
salary at the time his or her employment terminates, except as otherwise
provided in Schedule A hereto.
1.7 "Severance and Release Agreement" shall mean an agreement
signed by the Eligible Employee substantially in the form attached hereto as
Exhibit 1. Notwithstanding the foregoing, the Company may, by action of its
chief human resources officer or chief legal counsel, modify the form of
Severance and Release Agreement to be signed by any Eligible Employee in a
manner approved by the Committee (or its delegee).
SECTION 2 - SEVERANCE BENEFITS
2.1 Subject to the provisions of this Section 2, in the event
of an Eligible Termination, an Eligible Employee shall be entitled to receive
from the Company the benefits set forth on Schedule A hereto.
2.2 The grant of severance benefits pursuant to Section 2.1
hereof is conditioned upon an Eligible Employee's (a) signing a Severance and
Release Agreement and the expiration of any revocation period set forth therein
and (b) relinquishment of any right to benefits under the Dun & Bradstreet
Career Transition Plan.
2.3 Notwithstanding any other provision contained herein
(except as set forth in this Section 2.3), the Chief Executive Officer of the
Company may, at any time, take such action as such officer, in such officer's
sole discretion, deems appropriate to reduce or increase by any amount the
benefits otherwise payable to an Eligible Employee pursuant to Schedule A or
otherwise modify the terms and conditions applicable to an Eligible Employee
under this Plan provided that the Chief Executive Officer reports any reduction
or increase in benefits or other modification of the terms and conditions hereof
to the Committee and provided further that with respect to benefits payable, or
other modifications applicable, to the Chief Executive Officer, only the
Committee may take such action. Benefits granted hereunder may not exceed an
amount nor be paid over a period which would cause the Plan to be other than a
"welfare benefit plan" under section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
2.4 In the event the Company, in its sole discretion, grants
an Eligible Employee a period of inactive employee status, then, in such event,
any amounts paid to such Eligible Employee during any such period shall offset
the benefits payable under this Plan. For this purpose, a period of inactive
employee status shall mean the period beginning on the date such status
commences (of which the Eligible Employee shall be notified) and ending on the
date of such Eligible Employee's termination of employment.
<PAGE> 3
3
SECTION 3 - AMENDMENT AND TERMINATION
3.1 The Company reserves the right to terminate the Plan at
any time and without any further obligation by action of its board of directors
or such other person or persons to whom the board properly delegates such
authority.
3.2 The Company shall have the right to modify or amend the
terms of the Plan at any time, or from time to time, to any extent that it may
deem advisable by action of its board of directors, the Committee or such other
person or persons to whom the board or the Committee properly delegates such
authority.
3.3 All modifications of or amendments to the Plan shall be in
writing.
SECTION 4 - ADMINISTRATION OF THE PLAN
4.1 The Board of Directors and the Compensation and Benefits
Committee shall be the named fiduciaries (the "Named Fiduciaries") who severally
and not jointly shall have authority to control and manage the operation and
administration of the Plan and to manage and control its assets. The
Compensation and Benefits Committee shall consist of not less than three (3) nor
more than seven (7) members, as may be appointed by the Board of Directors from
time to time. Any member of the Compensation and Benefits Committee may resign
at will by notice to the Board of Directors or be removed at any time (with or
without cause) by the Board of Directors.
4.2 The Named Fiduciaries may from time to time allocate
fiduciary responsibilities among themselves and may designate persons other than
Named Fiduciaries to carry out fiduciary responsibilities under the Plan, and
such persons shall be deemed to be fiduciaries under the Plan with respect to
such delegated responsibilities. Fiduciaries may employ one or more persons to
render advice with regard to any responsibility such fiduciary has under the
Plan.
4.3 The Named Fiduciaries (and their delegees) shall have the
exclusive right to interpret any and all of the provisions of the Plan and to
determine any questions arising thereunder or in connection with the
administration of the Plan. Any decision or action by the Named Fiduciaries (and
their delegees) shall be conclusive and binding upon all Employees, Members and
Beneficiaries. In all instances the Named Fiduciaries (and their delegees) shall
have complete discretionary authority to determine eligibility for participation
and benefits under the Plan, and to construe and interpret all provisions of the
Plan and all documents relating thereto including, without limitation, all
disputed and uncertain terms. All deference permitted by law shall be given to
such constructions, interpretations and determinations.
<PAGE> 4
4
4.4 Any action to be taken by the Named Fiduciaries shall be
taken by a majority of its members either at a meeting or by written instrument
approved by such majority in the absence of a meeting. A written resolution or
memorandum signed by one Committee member and the secretary of the Compensation
and Benefits Committee shall be sufficient evidence to any person of any action
taken pursuant to the Plan.
4.5 Any person, corporation or other entity may serve in more
than one fiduciary capacity under the Plan.
4.6 The Company shall indemnify any individual who is a
director, officer or employee of the Company or any affiliate, or his or her
heirs and legal representatives, against all liability and reasonable expense,
including counsel fees, amounts paid in settlement and amounts of judgments,
fines or penalties, incurred or imposed upon him or her in connection with any
claim, action, suit or proceeding, whether civil, criminal, administrative or
investigative, in connection with his or her duties with respect to the Plan,
provided that any act or omission giving rise to such claim, action, suit or
proceeding does not constitute willful misconduct or is not performed or omitted
in bad faith.
SECTION 5 - MISCELLANEOUS
5.1 Neither the establishment of the Plan nor any action of
the Company, the Committee, or any fiduciary shall be held or construed to
confer upon any person any legal right to continue employment with the Company.
The Company expressly reserves the right to discharge any employee whenever the
interest of the Company, in its sole judgment, may so require, without any
liability on the part of the Company, the Committee, or any fiduciary.
5.2 Benefits payable under the Plan shall be paid out of the
general assets of the Company or an affiliate. The Company need not fund the
benefits payable under this Plan; however, nothing in this Section 5.2 shall be
interpreted as precluding the Company from funding or setting aside amounts in
anticipation of paying such benefits. Any benefits payable to an Eligible
Employee under this Plan shall represent an unsecured claim by such Eligible
Employee against the general assets of the Company that employed such Eligible
Employee.
5.3 The Company shall deduct from the amount of any severance
benefits payable hereunder the amount required by law to be withheld for the
payment of any taxes and any other amount, properly to be withheld.
5.4 Benefits payable under the Plan shall not be subject to
assignment, alienation, transfer, pledge, encumbrance, commutation or
anticipation by the Eligible Employee. Any
<PAGE> 5
5
attempt to assign, alienate, transfer, pledge, encumber, commute or anticipate
Plan benefits shall be void.
5.5 This Plan shall be interpreted and applied in accordance
with the laws of the State of New York, except to the extent superseded by
applicable federal law.
5.6 This Plan will be of no force or effect to the extent
superseded by foreign law.
5.7 This Plan supersedes any and all prior severance
arrangements, policies, plans or practices of the Company (whether written or
unwritten). Notwithstanding the preceding sentence, the Plan does not affect the
severance provisions of any written individual employment contracts or written
agreements between an Eligible Employee and the Company. Benefits payable under
the Plan shall be offset by any other severance or termination payment made by
the Company including, but not limited to, amounts paid pursuant to any
agreement or law.
<PAGE> 6
SCHEDULE A
An Eligible Employee entitled to benefits hereunder shall,
subject to Section 2 of the Plan, receive the following:
1. Salary Continuation
The Eligible Employee shall receive 104 weeks of Salary
continuation, provided, however, that for purposes of determining the Salary
continuation amount, in the event the Eligible Employee has incurred an Eligible
Termination other than by reason of unsatisfactory performance, "Salary" shall
include the Eligible Employee's guideline annual bonus opportunity under the
applicable Annual Incentive Plan (as defined in paragraph 3 hereof) for the year
of termination, payment of which will be prorated annually over a period equal
to the number of weeks of Salary continuation (the "Salary Continuation Period")
and made at the same time as other Salary continuation amounts. Salary
continuation hereunder shall be paid at the times the Eligible Employee's Salary
would have been paid if employment had not terminated, over the Salary
Continuation Period. In the event the Eligible Employee performs services for an
entity other than the Company or a Participating Company during the Salary
Continuation Period, such employee shall notify the Company on or prior to the
commencement thereof. For purposes of this Schedule A, to "perform services"
shall mean employment or services as a full-time employee, consultant, owner,
partner, associate, agent or otherwise on behalf of any person, principal,
partnership, firm or corporation (other than the Company or a Participating
Company). All Salary continuation payments shall cease upon re-employment by the
Company or a Participating Company. For purposes of this paragraph 1, a
"Participating Company" shall mean the Company or any other affiliated entity
more than 50% of the voting interests of which are owned, directly or
indirectly, by the Company and which has elected to participate in The Dun &
Bradstreet Corporation Career Transition Plan.
2. Welfare Benefit Continuation
Medical, dental and life insurance benefits shall be provided
throughout the Salary Continuation Period at the levels in effect for the
Eligible Employee immediately prior to termination of employment but in no event
greater than the levels in effect for active employees generally during the
Salary Continuation Period, provided that the Eligible Employee shall pay the
employee portion of any required premium payments at the level in effect for
employees generally of the Company for such benefits. For purposes of
determining an Eligible Employee's entitlement to continuation coverage as
required by Title I, Subtitle B, Part 6 of ERISA, such employee's 18-month or
other period of coverage shall commence on his or her termination of employment.
<PAGE> 7
3. Annual Bonus Payment
Subject to the provisions of this paragraph 3, a cash bonus
for the calendar year of termination may be paid in an amount equal to the
actual bonus which would have been payable to the Eligible Employee under the
annual bonus plan in which he or she participates (the "Annual Incentive Plan")
had such employee remained employed through the end of the year of such
termination multiplied by a fraction the numerator of which is the number of
full months of employment during the calendar year of termination and the
denominator of which is 12. Such bonus shall be payable at the time otherwise
payable under the Annual Incentive Plan had employment not terminated.
Notwithstanding the foregoing, no amount shall be paid under this paragraph in
the event the Eligible Employee incurred an Eligible Termination by reason of
unsatisfactory performance. The foregoing provisions of this paragraph 3 shall
be appropriately modified in the case of any plan not on a calendar year basis.
4. Long-Term Awards
Cash payments shall be made to an Eligible Employee as set
forth in this paragraph in respect of "Performance-Based Awards" (as such term
is defined in the 1998 Dun & Bradstreet Key Employees' Stock Incentive Plan (the
"Stock Incentive Plan")) otherwise payable under the Stock Incentive Plan had
the Eligible Employee remained employed through the end of the applicable
performance period in the event the Eligible Employee was employed by a
Participating Company for at least half the applicable performance period. In
such event, cash payments shall be made to an Eligible Employee in amounts equal
to the value of the Performance-Based Awards, as earned, otherwise payable under
the Stock Incentive Plan had the employee remained employed through the end of
the applicable performance period multiplied by a fraction the numerator of
which is the number of full months of employment with a Participating Company
from the beginning of the performance period to termination of employment, and
the denominator of which is the number of full months in the performance period.
Such payments shall be made at the times the Performance-Based Awards in respect
of which such payments are made would otherwise be payable under the Stock
Incentive Plan had employment not terminated. Notwithstanding the foregoing, no
amount shall be paid under this paragraph in the event the Eligible Employee
incurred an Eligible Termination by reason of unsatisfactory performance.
Nothing contained herein shall reduce any amounts otherwise required to be paid
under the Stock Incentive Plan except to the extent such amounts are paid
hereunder.
5. Death
Upon the death of an Eligible Employee during the Salary
Continuation Period, the benefits described in paragraphs 1, 3 and 4 of this
Schedule shall continue to be paid to his or
-2-
<PAGE> 8
her estate, as applicable, at the time or times otherwise provided for herein.
6. Other Benefits
The Eligible Employee shall be entitled to such executive
outplacement services during the Salary Continuation Period as shall be provided
by the Company. During the Salary continuation period, financial
planning/counseling shall be afforded to the Eligible Employee to the same
extent afforded immediately prior to termination of employment in the event the
Eligible Employee incurred an Eligible Termination other than by reason of
unsatisfactory performance.
7. No Further Grants, Etc.
Following an Eligible Employee's termination of employment, no
further grants, awards, contributions, accruals or continued participation
(except as otherwise provided for herein) shall be made to or on behalf of such
employee under any plan or program maintained by the Company including, but not
limited to, any Annual Incentive Plan, the Stock Incentive Plan, or any
qualified or nonqualified retirement, profit sharing, stock option or restricted
stock plan of the Company. Any unvested or unexercised options, unvested
restricted stock and all other benefits under any plan or program maintained by
the Company (including, but not limited to, any Annual Incentive Plan, any
long-term incentive plan or any qualified or nonqualified retirement, profit
sharing, stock option or restricted stock plan) which are held or accrued by an
Eligible Employee at the time of his or her termination of employment, shall be
treated in accordance with the terms of such plans and programs under which such
options, restricted stock or other benefits were granted or accrued.
-3-
<PAGE> 1
Exhibit 10.28
PENSION BENEFIT EQUALIZATION PLAN
OF
THE DUN & BRADSTREET CORPORATION
As in effect on June 17, 1998 with certain earlier effective dates
I. Purpose of the Plan
The purpose of the Pension Benefit Equalization Plan of The
Dun & Bradstreet Corporation (the "Plan") is to provide a means of equalizing
the benefits of those employees participating in the Retirement Account of The
Dun & Bradstreet Corporation (the "Retirement Plan") whose funded benefits under
the Retirement Plan are or will be limited by the application of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), the Internal
Revenue Code of 1986, as amended (the "Code") or any applicable law or
regulation. The Plan is intended to be an "excess benefit plan" as that term is
defined in Section 3(36) of ERISA with respect to those participants whose
benefits under the Retirement Plan have been limited by Section 415 of the Code,
and a "top hat" plan meeting the requirements of Sections 201(2), 301(a)(3),
401(a)(1) and 4021(b)(6) of ERISA with respect to those participants whose
benefits under the Retirement Plan have been limited by Section 401(a)(17) of
the Code.
II. Administration of the Plan
The Board and the Compensation and Benefits Committee
appointed by the Board (the "Committee") severally (and not jointly) shall be
responsible for the administration of the Plan. The Committee shall consist of
not less than three (3) nor more than seven (7) members, as may be appointed by
the Board from time to time. Any member of the Committee may resign at will by
notice to the Board or be removed at any time (with or without cause) by the
Board.
The members of the Committee may from time to time allocate
responsibilities among themselves and may delegate to any management committee,
employee, director or agent its responsibility to perform any act hereunder,
including without limitation those matters involving the exercise of discretion,
provided that such delegation shall be subject to revocation at any time at its
discretion.
The Committee (and their delegees) shall have the exclusive
authority to interpret the provisions of the Plan and construe all of its terms
(including, without limitation, all disputed and uncertain terms), to adopt,
amend, and rescind rules and regulations for the administration of the Plan, and
generally to conduct and administer the Plan and to make all determinations in
connection with the Plan as may be necessary or advisable. All such actions of
the Committee shall be conclusive and binding upon all Participants, Former
<PAGE> 2
2
Participants, Vested Former Participants and Surviving Spouses. All deference
permitted by law shall be given to such interpretations, determinations and
actions.
Any action to be taken by the Committee shall be taken by a
majority of its members, either at a meeting or by written instrument approved
by such majority in the absence of a meeting. A written resolution or memorandum
signed by one Committee member and the secretary of the Committee shall be
sufficient evidence to any person of any action taken pursuant to the Plan.
Any person, corporation or other entity may serve in more than
one fiduciary capacity under the Plan.
III. Participation in the Plan
All members of the Retirement Plan shall be eligible to
participate in this Plan whenever their benefits under the Retirement Plan as
from time to time in effect would exceed the limitations on benefits and
contributions imposed by Sections 401, 415 or any other applicable Section of
the Code, calculated from and after September 2, 1974. For purposes of this
Plan, benefits of a participant in this Plan shall be determined as though no
provision were contained in the Retirement Plan incorporating limitations
imposed by Sections 401, 415 or any other Section of the Code.
IV. Benefit Limitations
For purposes of this Plan and the Retirement Plan, the
limitations imposed by Section 415 of the Code shall be deemed to be met when
the sum of the participant's defined benefit plan fraction and his defined
contribution plan fraction equals 1.0, as such fractions are computed for
purposes of Section 415 of the Code and Section 19.4 of the Retirement Plan.
V. Equalized Benefits
The Corporation shall pay to each eligible member of the
Retirement Plan and his beneficiaries a supplemental pension benefit equal to
the benefit which would have been payable to them under the Retirement Plan, as
if no provision were set forth therein incorporating limitations imposed by
Sections 401, 415 or any other applicable Section of the Code, to the extent
that such benefit otherwise payable under the Retirement Plan exceeds the
benefit limitations related to the Retirement Plan as described in Section III
of this Plan.
Subject to Section XII of this Plan, such supplemental pension
benefits shall be payable in accordance with all of the terms and conditions
applicable to the participant's benefits under the Retirement Plan including
whatever optional benefits he may have elected; provided, however, if an
Election (as defined in Section IX of this Plan) or a Special Election (as
defined in Section X of this Plan) has been made and becomes effective prior to
the date when benefits under this Plan would otherwise be payable, the form of
payment of benefits under this Plan shall be in the form so elected pursuant to
such Election or Special Election;
<PAGE> 3
3
provided further that notwithstanding any Election or Special Election, if the
lump sum value, determined in the same manner as provided under Section IX
below, of the benefits payable under this Plan is $10,000 or less at the time
such benefits are payable under this Plan, such benefits shall be payable as a
lump sum.
Any portion of the benefits payable under this Plan as a lump
sum, including any amounts payable as a lump sum under Section VI, shall be paid
60 days after the date when payments of the same benefits under this Plan, if
payable in the form of an annuity, would otherwise commence, or as soon as
practicable thereafter, provided the Committee has approved such payment. Any
such lump sum distribution of a participant's or beneficiary's benefits under
this Plan shall fully satisfy all present and future Plan liability with respect
to such participant or beneficiary for such portion or all of such benefits so
distributed. Any portion of the benefits payable under this Plan as an annuity
shall commence on the date when annuity benefits under this Plan would otherwise
commence, without regard to any Election or Special Election.
VI. Payments of Benefits in the Event of Death
In case of the death of the participant, the amount in his
account shall, where applicable and subject to Section XII of this Plan, be
distributed to the surviving beneficiary who has been designated to receive
benefits under the Retirement Plan and in the manner which has been elected
under the Retirement Plan; provided, however, if an Election (as defined in
Section IX of this Plan) or a Special Election (as defined in Section X of this
Plan) has been made and becomes effective prior to the date when benefits under
this Plan would otherwise be payable, the form of payment of benefits payable to
such surviving beneficiary under this Plan shall be in the form so elected
pursuant to such Election or Special Election; provided further that
notwithstanding any Election or Special Election, if the lump sum value,
determined in the same manner as provided under Section IX below, of the
benefits payable under this Plan is $10,000 or less at the time such benefits
are payable to such surviving beneficiary under this Plan, such benefits shall
be payable as a lump sum.
If the participant has not designated a beneficiary under the
Retirement Plan, or if no such beneficiary is living at the time of the
participant's death, the amount, if any, in the participant's account that is
distributable upon his death shall be distributed to the person or persons who
would otherwise be entitled to receive a distribution of the participant's
Retirement Plan benefits. Payment to such person or persons shall completely
discharge the Plan with respect to the amount so paid.
VII. Change in Control
Upon the occurrence of a "Change in Control" of the
Corporation, as such term is defined below, (i) each participant and beneficiary
already receiving benefits and/or survivor's benefits under the Plan shall
receive a lump sum distribution of their unpaid benefits and/or survivor's
benefits under the Plan in an amount equal to the present value of such benefits
and/or survivor's benefits in full satisfaction of all present and future Plan
liability with respect to such participant or beneficiary, and (ii) each vested
participant who is
<PAGE> 4
4
not already receiving benefits under the Plan shall receive (A) a lump sum
distribution of the present value of his accrued benefit under the Plan as of
the date of such Change in Control, within 30 days of the date of such Change in
Control and (B) a lump sum distribution of the present value of his additional
benefit, if any, accrued under the Plan from the date of the Change in Control
until the date he retires or terminates employment with the Corporation, within
30 days from the date of the participant's retirement or termination of
employment with the Corporation. In determining the amount of the lump sum
distributions to be paid under this Section VII, the following actuarial
assumptions shall be used: (i) the interest rate used shall be the interest rate
used by the Pension Benefit Guaranty Corporation for determining the value of
immediate annuities as of January 1st of either the year of the occurrence of
the Change in Control or the participant's retirement or termination of
employment, whichever is applicable, (ii) the 1983 Group Annuity Mortality Table
shall be used; and (iii) it shall be assumed that all participants retired or
terminated employment with the Corporation on the date of the occurrence of the
Change in Control for purposes of determining the amount of the lump sum
distribution to be paid upon the occurrence of the Change in Control.
For purposes of this Plan, a "Change in Control" shall be
deemed to have occurred if
(a) any "Person," as such term is used in Section 13 (d) and
14 (d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Corporation, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation, or any corporation owned, directly or indirectly, by the
shareholders of the Corporation in substantially the same proportions
as their ownership of stock of the Corporation), is or becomes the
"Beneficial Owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
20% or more of the combined voting power of the Corporation's then
outstanding securities;
(b) during any period of twenty-four months (not including any
period prior to the effective date of this provision), individuals who
at the beginning of such period constitute the Board, and any new
director (other than (1) a director designated by a person who has
entered into an agreement with the Corporation to effect a transaction
described in clause (a), (c) or (d) of this Section), (2) a director
designated by any Person (including the Corporation) who publicly
announces an intention to take or to consider taking actions
(including, but not limited to, an actual or threatened proxy contest)
which if consummated would constitute a Change in Control or (3) a
director designated by any Person who is the Beneficial Owner, directly
or indirectly, of securities of the Corporation representing 10% or
more of the combined voting power of the Corporation's securities)
whose election by the Board or nomination for election by the
Corporation's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved cease for any reason
to constitute at least a majority thereof;
<PAGE> 5
5
(c) the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other company, other than (1)
a merger or consolidation which would result in the voting securities
of the Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the Corporation or
such surviving entity outstanding immediately after such merger or
consolidation and (2) after which no Person holds 20% or more of the
combined voting power of the then outstanding securities of the
Corporation or such surviving entity; or
(d) the shareholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets.
<PAGE> 6
6
VIII. Funding
Benefits payable under this Plan shall not be funded and shall
be made out of the general funds of the Corporation; provided, however, that the
Corporation reserves the right to establish one or more trusts to provide
alternate sources of benefit payments under this Plan, provided, further,
however, that upon the occurrence of a "Potential Change in Control" of the
Corporation, as defined below, the appropriate officers of the Corporation are
authorized to make contributions to such a trust fund, established as an
alternate source of benefits payable under the Plan, as are necessary to fund
the lump sum payments to Plan participants required pursuant to Section VII of
this Plan in the event of a Change in Control of the Corporation; provided,
further, however, that if payments are made from such trust fund, such payments
will satisfy the Corporation's obligations under this Plan to the extent made
from such trust fund.
In determining the amount of the necessary contribution to the
trust fund in the event of a Potential Change in Control, the following
actuarial assumptions shall be used: (i) the interest rate used shall be the
interest rate used by the Pension Benefit Guaranty Corporation for determining
the value of immediate annuities as of January 1st of the year of the occurrence
of the Potential Change in Control, (ii) the 1983 Group Annuity Mortality Table
shall be used; and (iii) it shall be assumed that all participants will retire
or terminate employment with the Corporation as soon as practicable after the
occurrence of the Potential Change in Control.
For the purposes of this Plan, "Potential Change in Control"
means:
(a) the Corporation enters into an agreement, the consummation
of which would result in the occurrence of a Change in Control of the
Corporation;
(b) any person (including the Corporation) publicly announces
an intention to take or to consider taking actions which if consummated
would constitute a Change in Control of the Corporation;
(c) any person, other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation
(or a Corporation owned, directly or indirectly, by the stockholders of
the Corporation in substantially the same proportions as their
ownership of stock of the Corporation), who is or becomes the
beneficial owner, directly or indirectly, of securities of the
Corporation representing 9.5% or more of the combined voting power of
the Corporation's then outstanding securities, increases his beneficial
ownership of such securities by 5% or more over the percentage so owned
by such person; or
(d) The Board of Directors of the Corporation adopts a
resolution to the effect that, for purposes of this Plan, a Potential
Change in Control of the Corporation has occurred.
<PAGE> 7
7
IX. Election of Form of Payment
A participant under this Plan may make an election, on a form
supplied by the Committee, to receive all, none, or a specified portion of his
benefits under this Plan in a lump sum and to receive any balance of such
benefits in the form of an annuity (an "Election"); provided that any such
Election shall be effective for purposes of this Plan only if (i) such
participant remains in the employment of the Corporation or an Affiliate (as
defined under Section XII below), as the case may be, for the full twelve
calendar months immediately following the Election Date of such Election, except
in the case of such participant's death or disability as provided below and (ii)
such participant complies with the administrative procedures set forth by the
Committee with respect to the making of the Election. A participant making such
Election shall be subject to the provisions of Section XII of this Plan.
A participant may elect a payment form different than the
payment form previously elected by him under this Section IX by filing a revised
election form; provided that any such new Election shall be effective only if
the conditions in clauses (i) and (ii) of the immediately preceding paragraph
are satisfied with respect to such new Election. Any prior Election made by a
participant that has satisfied such conditions remains effective for purposes of
this Plan until such participant has made a new Election that satisfies such
conditions.
A participant making an election under this Section IX may
specify the portion of his benefits under this Plan to be received in a lump sum
as follows: 0 percent, 25 percent, 50 percent, 75 percent or 100 percent.
In the event a participant who has made an Election dies or
becomes "totally disabled" as defined in The Dun & Bradstreet Corporation Long
Term Disability Plan while employed by the Corporation or an Affiliate and such
death or total disability occurs during the twelve-calendar-month period
immediately following the Election Date of such Election, the condition that
such participant remain employed with the Corporation or an Affiliate (as
defined in Section XII) for such twelve-month-period shall be deemed to be
satisfied and such Election shall be effective with respect to benefits payable
to such participant or participant's beneficiaries under this Plan.
The amount of any portion of the benefits payable as a lump
sum under this Section IX will equal the present value of such portion of such
benefits, and the present value shall be determined (i) based on a discount rate
equal to the average of 85% of the 15-year non-callable U.S. Treasury bond
yields as of the close of business on the last business day of each of the three
months immediately preceding the date the annuity value is determined and (ii)
using the 1983 Group Annuity Mortality Table.
"Election Date" for purposes of this Plan means the date that
a properly completed election form with respect to an Election or Special
Election (as defined in Section X below) is received by the Corporate Assistant
Treasurer of the Corporation.
<PAGE> 8
8
X. Special Election of Form of Payment
Any participant under this Plan (except for the Chairman of
the Board of Directors of the Corporation on December 21, 1994) who as of
December 31, 1994 (i) is age 54 or older and (ii) has at least 4 years of
Credited Service (as defined in the Corporation's Supplemental Executive Benefit
Plan) may make an election, on a form supplied by the Committee, to receive all,
none, or a specified portion, in the same percentages as described in Section IX
above, of his benefits under this Plan in a lump sum and to receive any balance
of such benefits in the form of an annuity (a "Special Election"); provided that
any such Special Election shall be effective for purposes of this Plan only if
such participant remains in employment with the Corporation or an Affiliate (as
defined in Section XII below), as the case may be, for the one calendar month
immediately following the Election Date, except in the case of death or
disability as provided below and complies with the administrative procedures set
forth by the Committee with respect to the making of the Special Election; and
provided further that the Election Date with respect to any such Special
Election may not be later than January 31, 1995. A participant making such
Special Election shall be subject to the provisions of Section XII of this Plan.
In the event a participant who has made a Special Election
dies or becomes "totally disabled" as defined in The Dun & Bradstreet
Corporation Long Term Disability Plan while employed by the Corporation or an
Affiliate (as defined in Section XII below) and such death or total disability
occurs during the one-calendar-month-period immediately following the Election
Date of such Special Election, the participant shall for purposes of this
Section X be deemed to have been employed with the Corporation or an Affiliate
(as defined in Section XII below), as the case may be, for such one
calendar-month period, and such Special Election shall be effective with respect
to benefits payable to such participant or participant's beneficiaries under
this Plan.
The amount of any portion of the benefits payable as a lump
sum under this Section X will equal the present value of such portion of such
benefits, and the present value shall be determined (i) based on a discount rate
equal to the average of 85% of the 15-year non-callable U.S. Treasury bond
yields as of the close of business on the last business day of each of the three
months immediately preceding the date the annuity value is determined and (ii)
using the 1983 Group Annuity Mortality Table.
XI. Indemnification
Subject to certain conditions as provided below, the
Corporation shall indemnify each participant or beneficiary who receives any
benefits under this Plan in the form of an annuity for any interest and
penalties that may be assessed by the U.S. Internal Revenue Service (the
"Service") with respect to U.S. Federal income tax on such benefits (payable
under the Plan in the form of an annuity) upon final settlement or judgment with
respect to any such assessment in favor of the Service, provided the basis for
the assessment is that the amendment of this Plan to provide for the Election or
the Special Election causes the participant or the beneficiary, as the case may
be, to be treated as being in constructive
<PAGE> 9
9
receipt of such benefits prior to the time when such benefits are actually
payable under the Plan.
In case any such assessment shall be made against a
participant or beneficiary, such participant or beneficiary, as the case may be
(the "indemnified party"), shall promptly notify the Corporation's Treasurer in
writing and the Corporation, upon request of such indemnified party, shall
select and retain an accountant or legal counsel reasonably satisfactory to the
indemnified party to represent the indemnified party in connection with such
assessment and shall pay the fees and expenses of such accountant or legal
counsel related to such representation, and the Corporation shall have the right
to determine how and when such assessment by the Service should be settled,
litigated or appealed. In connection with any such assessment, any indemnified
party shall have the right to retain his own accountant or legal counsel, but
the fees and expenses of such accountant or legal counsel shall be at the
expense of such indemnified party unless the Corporation and the indemnified
party shall have mutually agreed to the retention of such accountant or legal
counsel.
The Corporation shall not be liable to a participant or
beneficiary for any payments under this Section XI with respect to any
assessment described in the second preceding paragraph if such participant or
beneficiary against whom such assessment is made has not notified or allowed the
Corporation to participate with respect to such assessment in the manner
described above or, following demand by the Corporation, has not made the
deposit to avoid additional interest or penalties as described below, or has
agreed to, or otherwise settled with the Service with respect to, such
assessment without the Corporation's written consent, provided, however, (i) if
such assessment is settled with such consent or if there is a final judgment for
the Service, (ii) the Corporation has been notified and allowed to participate
in the manner as provided above and (iii) such participant or beneficiary has
made any required deposit to avoid additional interest or penalties as described
below, the Corporation agrees to indemnify the indemnified party to the extent
set forth in this Section XI.
In the event a final settlement or judgment with respect to an
assessment as described under this Section XI has been made against a
participant or beneficiary, such participant or beneficiary may elect to receive
a portion or all of his benefits that is otherwise payable as an annuity under
the Plan in the form of a lump sum in accordance with procedures as the
Committee may set forth, and such lump sum distribution will be made as soon as
practicable after any such election. At the time such assessment is made against
such participant or beneficiary (the "assessed party") and prior to any final
settlement or judgement with respect to such assessment, if so directed by the
Corporation, such assessed party shall, as a condition to receiving an indemnity
under this Section XI, as soon as practicable after notification of such
assessment make a deposit with the Service to avoid any additional interest or
penalties with respect to such assessment and, upon the request of such assessed
party, the Corporation shall lend, or arrange for the lending to, such assessed
party a portion of his remaining benefit under the Plan, not to exceed the lump
sum value of such benefit under the Plan, determined using the actuarial
assumptions set forth in Section IX, solely for purposes of providing the
assessed party with funds to make a deposit with the Service to avoid any
additional interest or penalties with respect to such assessment.
<PAGE> 10
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XII. Limitations on Payment of Benefits
If a participant under this Plan has at any time made an
Election or a Special Election to have all or a portion of the benefits under
this Plan distributed in a lump sum, such participant shall be subject to this
Section XII.
Notwithstanding any other provision of this Plan to the
contrary, no benefits or no further benefits, as the case may be, shall be paid
to a participant who is subject to this Section XII if the Committee reasonably
determines that such participant has:
(i) To the detriment of the Corporation or any Affiliate,
directly or indirectly acquired, without the prior written consent of
the Committee, an interest in any other company, firm, association, or
organization (other than an investment interest of less than 1% in a
publicly-owned company or organization), the business of which is in
direct competition with the business (present or future) of the
Corporation or any of its Affiliates;
(ii) To the detriment of the Corporation or any Affiliate,
directly or indirectly competed with the Corporation or any Affiliate
as an owner, employee, partner, director or contractor of a business,
in a field of business activity in which the participant has been
primarily engaged on behalf of the Corporation or any Affiliate or in
which he has considerable knowledge as a result of his employment by
the Corporation or any Affiliate, either for his own benefit or with
any person other than the Corporation or any Affiliate, without the
prior written consent of the Committee; or
(iii) Been discharged from employment with the Corporation
or any Affiliate for "Cause."
An "Affiliate" for purposes of this Plan means any
corporation, partnership, division or other organization controlling, controlled
by or under common control with the Corporation or any joint venture entered
into by the Corporation.
"Cause" for purposes of this Section XII shall include the
occurrence of any of the following events or such other dishonest or disloyal
act or omission as the Committee determines to be "cause":
(a) The participant has misappropriated any funds or property
of the Corporation or any Affiliate;
(b) The participant has, without the prior knowledge or
written consent of the Committee, obtained personal profit as a result
of any transaction by a third party with the Corporation or any
Affiliate; or
<PAGE> 11
11
(c) The participant has sold or otherwise imparted to any
person, firm, or corporation the names of the customers of the
Corporation or any Affiliate or any confidential records, data,
formulae, specifications and other trade secrets or other information
of value to the Corporation or any Affiliate derived by his or her
association with the Corporation or any Affiliate.
In any case described in this Section XII, the participant shall be given prior
written notice that no benefits or no further benefits, as the case may be, will
be paid to such participant. Such written notice shall specify the particular
act(s), or failures to act, on the basis of which the decision to terminate his
benefits has been made.
Notwithstanding any other provision of this Plan to the
contrary, a participant who receives in a lump sum any portion of his benefits
under this Plan pursuant to an Election or Special Election shall receive such
lump sum portion of his benefits subject to the condition that if such
participant engages in any of the acts described in clause (i) or (ii) of this
Section XII, then such participant shall within 60 days after written notice by
the Corporation repay to the Corporation the amount described in the immediately
following sentence. The amount to be repaid shall equal the amount, as
determined by the Committee, of the participant's lump sum benefit paid under
this Plan to which such participant would not have been entitled, if such lump
sum benefit had instead been payable in the form of an annuity under this Plan
and such annuity payments were subject to the provisions of this Section XII.
XIII. Miscellaneous
This Plan may be terminated at any time by the Board of
Directors of the Corporation, in which event the rights of participants to their
accrued benefits shall become nonforfeitable. This Plan may also be amended at
any time by the Board of Directors of the Corporation, except that no such
amendment shall deprive any participant of his benefits accrued at the time of
such amendment.
No right to payment or any other interest under this Plan may
be alienated, sold, transferred, pledged, assigned, or made subject to
attachment, execution, or levy of any kind.
Nothing in this Plan shall be construed as giving any employee
the right to be retained in the employ of the Corporation. The Corporation
expressly reserves the right to dismiss any employee at any time without regard
to the effect which such dismissal might have upon him under the Plan.
This Plan shall be construed, administered and enforced
according to the laws of the State of New York.
<PAGE> 12
12
XIV. Effective Date
This Plan shall be effective as of October 17, 1990, upon its
adoption by the Board of Directors of The Dun & Bradstreet Corporation.
<PAGE> 1
Exhibit 10.29
SUPPLEMENTAL EXECUTIVE BENEFIT PLAN
OF
THE DUN & BRADSTREET CORPORATION
(as in effect as of June 17, 1998 with certain earlier effective dates)
---------------------------
PREAMBLE
The principal purpose of this Supplemental Executive Benefit
Plan is to ensure the payment of a competitive level of retirement income and
disability benefits in order to attract, retain and motivate selected executives
of the Corporation and its affiliated companies.
1
Definitions
1.1 "Affiliate" means any corporation, partnership, division
or other organization controlling, controlled by or under common control with
the Corporation or any joint venture entered into by the Corporation.
1.2 "Average Final Compensation" means the greater of (i) a
Participant's or Vested Former Participant's average final compensation as
defined in The Dun & Bradstreet Corporation Retirement Account as if no
provision were set forth therein incorporating limitations imposed by Sections
401, 415 or any other applicable Section of the Internal Revenue Code, or, (ii)
if the Participant is disabled at the time of his Retirement, the Participant's
Basic Earnings. For purposes of (i), Average Final Compensation will not include
an employee's compensation while the employee is a Vested Former Participant or
a Former Participant and will include compensation from the date of the
Participant's employment with the Corporation or an Affiliate.
1.3 "Basic Disability Plan" means as to any Participant either
(i) the long-term disability plan of the Corporation or an Affiliate pursuant to
which long-term disability benefits are payable to such Participant or, (ii) if
the Affiliate which employs such Participant has not adopted a long-term
disability plan, the long-term disability plan of the Corporation.
<PAGE> 2
1.4 "Basic Disability Plan Benefit" means the amount of
benefits actually payable to a Participant from the Basic Disability Plan or
which would be payable if the Participant were a member of such Plan. For
purposes of determining a Participant's Basic Disability Plan Benefit, a
disability benefit shall not be treated as actually payable to a Participant
unless the Participant is actually covered by a long-term disability plan of the
Corporation or an Affiliate.
1.5 "Basic Earnings" means a Participant's total earnings
received as an employee as salary or wages in the twelve months immediately
preceding the onset of the Participant's disability, including any amounts
deferred under a plan qualified under Section 401(k) of the Internal Revenue
Code, amounts contributed on a Participant's behalf on a salary reduction basis
to a cafeteria plan described in Section 125 of the Internal Revenue Code, cash
bonuses and commissions, but excluding any pension, retainers, severance pay,
income derived from stock options, stock appreciation rights and restricted
stock awards and dispositions of stock acquired thereunder, payments dependent
upon any contingency after the period of Credited Service and other special
remuneration (including performance units).
1.6 "Basic Plan" means as to any Participant or Vested Former
Participant, the defined benefit pension plan of the Corporation or an
Affiliate, which is intended to meet the requirements of Code Section 401(a) and
pursuant to which retirement benefits are payable to such Participant or Vested
Former Participant or to the Surviving Spouse or designated beneficiary of a
deceased Participant or Vested Former Participant.
1.7 "Basic Plan Benefit" means the amount of benefits payable
from the Basic Plan to a Participant or Vested Former Participant.
1.8 "Board" means the Board of Directors of The Dun &
Bradstreet Corporation.
1.9 "Change in Control" means:
(a) Any "person," as such term is used in
Section 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the
<PAGE> 3
"Exchange Act") (other than the Corporation, any
trustee or other fiduciary holding securities under
an employee benefit plan of the Corporation, or any
Corporation owned, directly or indirectly, by the
shareholders of the Corporation in substantially the
same proportions as their ownership of stock of the
Corporation), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the
Corporation representing 20% or more of the combined
voting power of the Corporation's then outstanding
securities;
(b) during any period of twenty-four months
(not including any period prior to the effective date
of this provision), individuals who at the beginning
of such period constitute the Board, and any new
director (other than (1) a director designated by a
person who has entered into an agreement with the
Corporation to effect a transaction described in
clause (a), (c) or (d) of this Section) (2) a
director designated by any Person (including the
Corporation) who publicly announces an intention to
take or to consider taking actions (including, but
not limited to, an actual or threatened proxy
contest) which if consummated would constitute a
Change in Control or (3) a director designated by any
Person who is the Beneficial Owner, directly or
indirectly, of securities of the Corporation
representing 10% or more of the combined voting power
of the Corporation's securities) whose election by
the Board or nomination for election by the
Corporation's shareholders was approved by a vote of
at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning
of the period or whose election or nomination for
election was previously so approved cease for any
reason to constitute at least a majority thereof;
<PAGE> 4
(c) the shareholders of the Corporation
approve a merger or consolidation of the Corporation
with any other company, other than (1) a merger or
consolidation which would result in the voting
securities of the Corporation outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving entity) more than
50% of the combined voting power of the voting
securities of the Corporation or such surviving
entity outstanding immediately after such merger or
consolidation and (2) after which no Person holds 20%
or more of the combined voting power of the then
outstanding securities of the Corporation or such
surviving entity; or
(d) the shareholders of the Corporation
approve a plan of complete liquidation of the
Corporation or an agreement for the sale or
disposition by the Corporation of all or
substantially all of the Corporation's assets.
1.10 "Committee" means the Compensation and Benefits Committee
of the Board.
1.11 "Corporation" means The Dun & Bradstreet Corporation, a
Delaware corporation, and any successor or assigns thereto.
1.12 "Credited Service" means a Participant's, Former
Participant's or Vested Former Participant's Credited Service as defined in The
Dun & Bradstreet Corporation Retirement Account, except that Credited Service
will include service while the Participant is receiving Disability Benefits and
service from the date the Participant, Former Participant or Vested Former
Participant was employed by the Corporation or an Affiliate, but will not
include service while an employee is a Former Participant or Vested Former
Participant. However, in the case of an acquired company, the Participant's,
Former Participant's or Vested Former Participant's service with that company
prior to the date of acquisition will not be counted unless such service is
recognized for benefit accrual purposes under the relevant
<PAGE> 5
Basic Plan.
1.13 "Disability Benefit" means the benefits provided to
Participants and Vested Former Participants pursuant to Section 5 of the Plan.
1.14 "Effective Date" means July 1, 1989.
1.15 "Election" means an election as to the form of benefit
payment made pursuant to Section 4.5 of the Plan.
1.16 "Election Date" means the date that a properly completed
election form with respect to an Election or a Special Election is received by
the Corporation's Treasurer.
1.17 "Former Participant" means an employee who has not
completed five or more years of Credited Service at the time his employment with
the Corporation or an Affiliate terminates or at the time he was removed, upon
written notice by the Chief Executive Officer of the Corporation and with the
approval of the Committee, from further participation in the Plan.
1.18 "Other Disability Income" means (A) the disability
insurance benefit that the Participant is entitled to receive under the Federal
Social Security Act while he is receiving the Basic Disability Plan Benefit and
(B) the disability income payable to a Participant from the following sources:
(a) any supplemental executive disability
plan of any Affiliate; and
(b) any other contract, agreement or other
arrangement with the Corporation or an Affiliate
(excluding any Basic Disability Plan) to the extent
it provides disability benefits.
1.19 "Other Retirement Income" means (A)(i) the Social
Security retirement benefit that the Participant or Vested Former Participant is
entitled to receive under the Federal Social Security Act as of the date of his
Retirement or, (ii) if the Participant or Vested Former Participant is not
eligible to receive a Social Security retirement benefit commencing on such
date, the Social Security retirement benefit he is entitled to receive at
<PAGE> 6
the earliest age he is eligible to receive such a benefit, discounted to the
date his Benefit under the Plan actually commences, using the actuarial
assumptions then in use under the relevant Basic Plan, assuming for purposes of
(i) and (ii) above that for years prior to the Participant's employment with the
Corporation and for years following the Participant's termination of employment
with the Corporation up until the Participant attains age 62, the Participant
earned compensation so as to accrue the maximum Social Security benefits, and
(B) the retirement income payable to a Participant or Vested Former Participant
from the following sources:
(a) any retirement benefits equalization
plan of the Corporation or an Affiliate or any former
Affiliate, the purpose of which is to provide the
Participant or Vested Former Participant with the
benefits he is precluded from receiving under any
relevant Basic Plan as a result of limitations under
the Internal Revenue Code; and
(b) any supplemental executive retirement
plan of any Affiliate; and
(c) any other contract, agreement or other
arrangement with the Corporation or an Affiliate
(excluding any Basic Plan and any defined
contribution plan intended to meet the requirements
of Section 401(a) of the Code) to the extent it
provides retirement or pension benefits.
1.20 "Participant" means an employee of the Corporation or an
Affiliate who becomes a participant in the Plan pursuant to Section 2 and has
not been removed pursuant to Section 2.2.
1.21 "Plan" means this Supplemental Executive Benefit Plan of
The Dun & Bradstreet Corporation, as amended from time to time.
<PAGE> 7
1.22 "Potential Change in Control" means:
(a) the Corporation enters into an
agreement, the consummation of which would result in
the occurrence of a Change in Control of the
Corporation;
(b) any person (including the Corporation)
publicly announces an intention to take or to
consider taking actions which if consummated would
constitute a Change in Control of the Corporation;
(c) any person, other than a trustee or
their fiduciary holding securities under an employee
benefit plan of the Corporation (or a Corporation
owned, directly or indirectly, by the stockholders of
the Corporation in substantially the same proportions
as their ownership of stock of the Corporation), who
is or becomes the beneficial owner, directly or
indirectly, of securities of the Corporation
representing 9.5% or more of the combined voting
power of the Corporation's then outstanding
securities, increases his beneficial ownership of
such securities by 5% or more over the percentage so
owned by such person; or
(d) the Board adopts a resolution to the
effect that, for purposes of this Plan, a Potential
Change in Control of the Corporation has occurred.
1.23 "Retirement" means the termination, other than at death,
of a Participant's or Vested Former Participant's employment with the
Corporation or an Affiliate (i) after reaching age 55 and completing ten years
of Vesting Service, or (ii) immediately following the cessation of the payment
of Disability Benefits under the Plan to such Participant or Vested Former
Participant while he is still disabled, as such term is defined under the Basic
Disability Plan.
1.24 "Retirement Benefit" means the benefits provided to
Participants and
<PAGE> 8
Vested Former Participants pursuant to Section 4 of the Plan.
1.25 "Special Election" means an election as to the form of
benefit payment made pursuant to Section 4.6 of the Plan.
1.26 "Surviving Spouse" means the spouse of a deceased
Participant or Vested Former Participant to whom such Participant or Vested
Former Participant is legally married immediately preceding such Participant or
Vested Former Participant's death.
1.27 "Surviving Spouse's Benefits" mean the benefits provided
to a Participant's or Vested Former Participant's Surviving Spouse pursuant to
Section 6 of the Plan.
1.28 "Vested Former Participant" means an employee who
completed five or more years of Credited Service at the time his employment with
the Corporation or an Affiliate terminated or at the time he was removed, upon
written notice by the Chief Executive Officer of the Corporation and with the
approval of the Committee, from further participation in the Plan.
1.29 The masculine gender, where appearing in the Plan, will
be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.
SECTION 2
Eligibility and Participation
SECTION 2.1 All key management employees of the Corporation
and its Affiliates who are responsible for the management, growth or protection
of the business of the Corporation and its Affiliates, who are designated by the
Chief Executive Officer of the Corporation in writing, are eligible, upon
approval by the Committee, for participation in the Plan as of the effective
date of such designation.
SECTION 2.2 A Participant's participation in the Plan shall
terminate upon termination of his or her employment. Prior to termination of
employment, a participant
<PAGE> 9
may be removed, upon written notice by the Chief Executive Officer of the
Corporation and with the approval of the Committee, from further participation
in the Plan. As of the date of termination or removal, no further benefits shall
accrue to such individual.
SECTION 3
Eligibility For Benefits
SECTION 3.1 Each Participant or Vested Former Participant is
eligible for an annual Retirement Benefit under this Plan upon Retirement, or
upon termination of employment with the Corporation before Retirement after
completing five or more years of Credited Service.
SECTION 3.2 Each Participant is eligible to commence receiving
a Disability Benefit under this Plan upon the actual or deemed commencement of
benefits under the relevant Basic Disability Plan. Notwithstanding the above, a
Participant may not receive a Disability Benefit if he has not previously
enrolled for the maximum disability insurance coverage available under the
relevant Basic Disability Plan.
SECTION 3.3 Notwithstanding any other provision of the Plan to
the contrary, no benefits or no further benefits, as the case may be, shall be
paid to a Participant, Vested Former Participant or Surviving Spouse if the
Committee reasonably determines that such Participant or Vested Former
Participant has:
(a) To the detriment of the Corporation or any Affiliate,
directly or indirectly acquired, without the prior written consent of the
Committee, an interest in any other company, firm, association, or organization
(other than an investment interest of less than 1% in a publicly-owned company
or organization), the business of which is in direct competition with any
business of the Corporation or an Affiliate;
(b) To the detriment of the Corporation or any Affiliate,
directly or indirectly competed with the Corporation or any Affiliate as an
owner, employee, partner, director or contractor of a business, in a field of
business activity in which the Participant or Vested Former Participant has been
primarily engaged on behalf of the Corporation or any
<PAGE> 10
Affiliate or in which he has considerable knowledge as a result of his
employment by the Corporation or any Affiliate, either for his own benefit or
with any person other than the Corporation or any Affiliate, without the prior
written consent of the Committee; or
(c) Been discharged from employment with the Corporation or
any Affiliate for "Cause". "Cause" shall include the occurrence of any of the
following events or such other dishonest or disloyal act or omission as the
Committee reasonably determines to be "cause":
(i) The Participant or Vested Former Participant has
misappropriated any funds or property of the Corporation or any
Affiliate or committed any other act of willful malfeasance or willful
misconduct in connection with his or her employment;
(ii) The Participant or Vested Former Participant has,
without the prior knowledge or written consent of the Committee,
obtained personal profit as a result of any transaction by a third
party with the Corporation or any Affiliate; or
(iii) The Participant or Vested Former Participant has
sold or otherwise imparted to any person, firm, or corporation the
names of the customers of the Corporation or any Affiliate or any
confidential records, data, formulae, specifications and other trade
secrets or other information of value to the Corporation or any
Affiliate derived by his or her association with the Corporation or any
Affiliate.
(iv) The Participant or Vested Former Participant fails,
on a continuing basis, to perform such duties as are requested by any
employee to whom the Participant or Vested Former Participant reports
or the Board; or
(v) The Participant or Vested Former Participant
commits any felony or any misdemeanor involving moral turpitude.
In any case described in this Section 3.3, the Participant, Vested
Former Participant or Surviving Spouse shall be given prior written notice that
no benefits or no further benefits, as the case may be, will be paid to such
Participant, Vested Former Participant or Surviving
<PAGE> 11
Spouse. Such written notice shall specify the particular act(s), or failures to
act, on the basis of which the decision to terminate benefits has been made.
SECTION 3.4 (a) Notwithstanding any other provision of the
Plan to the contrary, a Participant or Vested Former Participant who receives in
a lump sum any portion of his Retirement Benefit pursuant to an Election or
Special Election shall receive such lump sum portion of his Retirement Benefit
subject to the condition that if such Participant or Vested Former Participant
engages in any of the acts described in clause (i) or (ii) of Section 3.3, then
such Participant or Vested Former Participant shall within 60 days after written
notice by the Corporation repay to the Corporation the amount described in
Section 3.4(b).
(b) The amount described under this Section 3.4(b) shall equal
the amount, as determined by the Committee, of the Participant's or Vested
Former Participant's lump sum benefit paid under this Plan to which such
Participant or Vested Former Participant would not have been entitled, if such
lump sum benefit had instead been payable in the form of an annuity under this
Plan and such annuity payments were subject to the provisions of Section 3.3.
SECTION 4
Amount and Form of Retirement Benefits
SECTION 4.1 The Retirement Benefit provided by the Plan is
designed to provide each Participant and Vested Former Participant with an
annual pension from the Plan and certain other sources equal to his Retirement
Benefit as hereinafter specified. Thus, the Retirement Benefits described
hereunder as payable to Participants and Vested Former Participants will be
offset by retirement benefits payable from sources outside the Plan as specified
herein.
SECTION 4.2 (a) The Retirement Benefit of a Participant or
Vested Former Participant upon Retirement shall be an annual benefit equal to
(i) for a Participant or Vested Former Participant who had attained age fifty
and had been credited with at least ten
<PAGE> 12
years of Vesting Service as of January 15, 1997 or a Participant or Vested
Former Participant whose age plus years of Vesting Service is equal to or
greater than 70 as of January 15, 1997, or other individuals designated by the
Chief Executive Officer; 50% of his Average Final Compensation with respect to
his first ten years of Credited Service, plus 2% of such Average Final
Compensation for each year of Credited Service in excess of ten years of
Credited Service, but not to exceed fifteen years of Credited Service, offset by
his Other Retirement Income and his Basic Plan Benefit. A full month is credited
for each completed and partial month of age and Credited Service; (ii) for all
other Participants or Vested Former Participants; 40% of his Average Final
Compensation with respect to his first ten years of credited service, plus 2% of
Average Final Compensation for each year of Credited Service in excess of ten
years of Credited Service, but not to exceed twenty years of Credited Service,
offset by his Other Retirement Income and his Basic Plan Benefit. A full month
is credited for each completed and partial month of Credited Service. If such a
Participant or Vested Former Participant retires before age 60 without the
Corporation's consent, his Retirement Benefit shall be reduced by 3% for each
year or fraction thereof that Retirement commenced prior to reaching age 60.
(b) Any portion of the Retirement Benefit provided under this
Section 4.2 payable in the form of an annuity pursuant to Section 4.4 shall be
payable in monthly installments and will commence on the first day of the
calendar month coinciding with or next following the day the Participant or
Vested Former Participant retires, and any portion of such Retirement Benefit
payable in a lump sum pursuant to Section 4.4 shall be paid on the date that is
sixty days after the date when annuity payments under this Section 4.2 commence,
or would commence if any portion of the Retirement Benefit were payable in the
form of an annuity, or as soon as practicable thereafter, provided the Committee
has approved any such lump sum payments.
SECTION 4.3 (a) Subject to Section 4.3(c), the Retirement
Benefit of a Participant or Vested Former Participant who terminates employment
with the Corporation
<PAGE> 13
with five or more years of Credited Service before he is eligible to retire
under the relevant Basic Plan shall be an annual benefit equal to (i) for a
Participant or Vested Former Participant who had attained age fifty and had been
credited with at least ten years of Vesting Service as of January 15, 1997 or a
Participant or Vested Former Participant whose age plus years of Vesting Service
is equal to or greater than 70 as of January 15, 1997, or other individuals
designated by the Chief Executive Officer; 25% of his Average Final Compensation
for his first five years of Credited Service, plus 5% of Average Final
Compensation for each additional year of Credited Service between six and ten
years of Credited Service, plus 2% of Average Final Compensation for each
additional year of Credited Service from 11 to 15 years, offset by his Other
Retirement Income and his Basic Plan Benefit. A full month is credited for each
completed and partial month of Credited Service, and (ii) for all other
Participants or Vested Former Participants; 20% of his Average Final
Compensation with respect to his first five years of Credited Service, plus 4%
of Average Final Compensation for each additional year of Credited Service
between six and ten years of Credited Service, plus 2% of Average Final
Compensation for each additional year of Credited Service from 11 to 20 years,
offset by his Other Retirement Income and his Basic Plan Benefit. A full month
is credited for each completed and partial month of Credited Service.
(b) Any portion of the Retirement Benefit provided under this
Section 4.3 payable in the form of an annuity pursuant to Section 4.4 shall be
payable in monthly installments and will commence on the first day of the
calendar month coinciding with or next following the day the Participant or
Vested Former Participant reaches age 55 or the date of his termination, if
later, and any portion of such Retirement Benefit payable in a lump sum pursuant
to Section 4.4 shall be paid on the date that is 60 days after the date when
annuity payments under this Section 4.3 commence, or would commence if any
portion of the Retirement Benefit were payable in the form of an annuity, or as
soon as practicable thereafter, provided the Committee has approved any such
lump sum payments.
<PAGE> 14
(c) If a Participant or Vested Former Participant terminates
employment with the Corporation without the Corporation's consent, and the
payment of his Retirement Benefit commences, or would commence if it were
payable in the form of an annuity, before he reaches age 60, his Retirement
Benefit shall be reduced by 10% for each year or fraction thereof that the
payment of his Retirement Benefit commences, or would commence if it were
payable in the form of an annuity, prior to his reaching age 60.
SECTION 4.4 (a) Except as provided under Section 4.4(b) or
Section 4.4(c), a Retirement Benefit under this Plan shall be payable to a
Participant or Vested Former Participant in the form of a straight life annuity
and without regard to any optional form of benefits elected under the Basic
Plan.
(b) If a Participant or a Vested Former Participant makes an
Election while he is a Participant pursuant to Section 4.5 or a Special Election
pursuant to Section 4.6 and such Election or Special Election becomes effective
(i) prior to the date such Participant or such Vested Former Participant retires
or terminates employment with the Corporation or an Affiliate and (ii) while he
was still a Participant, a Retirement Benefit under this Plan shall be payable
to such Participant or such Vested Former Participant in the form or combination
of forms of payment elected pursuant to such Election or Special Election under
Section 4.5 or Section 4.6, as the case may be, and without regard to any
optional form of benefit elected under the Basic Plan. Any lump sum distribution
of a Participant's or Vested Former Participant's Retirement Benefit under the
Plan shall fully satisfy all present and future Plan liability with respect to
such Participant or Vested Former Participant for such portion or all of such
Retirement Benefit so distributed.
(c) Notwithstanding any Election or Special Election made
under Section 4.5 or 4.6, if the lump sum value, determined in the same manner
as provided under Section 4.5(a), of a Participant's or Vested Former
Participant's Retirement Benefit is $10,000 or less at the time such Retirement
Benefit is payable under this Plan, such benefit shall be payable as a lump sum.
<PAGE> 15
(d) If the Retirement Benefit under this Plan is payable to a
Participant or Vested Former Participant in a different form and/or at a
different time than his Other Retirement Income or his Basic Plan Benefits, the
offset provided in this Plan for such Participant's or Vested Former
Participant's Other Retirement Income and Basic Plan Benefit shall be converted,
using actuarial assumptions that are reasonable and appropriate and in
accordance with applicable law at the time the benefit under this Plan is
determined, to the extent required as follows, but solely for purposes of
calculating the amount of such offset:
(i) a percentage of the benefits to be offset equal to
the percentage of such Participant's or Vested Former Participant's
benefits payable in the form of an annuity under this Plan shall be
actuarially converted to the extent required into the form of a
straight life annuity, commencing at the time such benefits payable
under this Plan commence or on the date such Participant or Vested
Former Participant would first become eligible for the payment of such
benefits under this Plan, if earlier; and
(ii) the balance, if any, of the benefits to be offset
shall be actuarially converted to a lump sum payment payable on the
date which is 60 days after the date described in Section 4.4(d)(i).
SECTION 4.5 (a) A Participant may elect, on a form supplied by
the Committee, to receive all, none, or a specified portion, as provided in
Section 4.5(c), of his Retirement Benefit under the Plan in a lump sum and to
receive any balance of such Retirement Benefit in the form of an annuity;
provided that any such Election shall be effective for purposes of this Plan
only if the conditions of Section 4.5(b) are satisfied. A Participant may elect
a payment form different than the payment form previously elected by him under
this Section 4.5(a) by filing a revised election form; provided that any such
new Election shall be effective only if the conditions of Section 4.5(b) are
satisfied with respect to such new Election. Any prior Election made by a
Participant that has satisfied the conditions of Section 4.5(b) remains
effective for purposes of the Plan until such Participant has made a
<PAGE> 16
new Election satisfying the conditions of Section 4.5(b). The amount of any
portion of a Participant's or a Vested Former Participant's Retirement Benefit
payable as a lump sum under this Section 4.5 will equal the present value of
such portion of the Retirement Benefit, and such present value shall be
determined (i) based on a discount rate equal to 85% of the average of the
15-year non-callable U.S. Treasury bond yields as of the close of business on
the last business day of each of the three months immediately preceding the date
the annuity value is determined and (ii) using the 1983 Group Annuity Mortality
Table.
(b) A Participant's Election under Section 4.5(a) becomes
effective only if the following conditions are satisfied: (i) such Participant
remains in the employment of the Corporation or an Affiliate, as the case may
be, for the full twelve calendar months immediately following the Election Date
of such Election, except in case of death or disability of such Participant as
provided in Section 4.5(d) and (ii) such Participant complies with the
administrative procedures set forth by the Committee with respect to the making
of the Election.
(c) A Participant making an election under Section 4.5(a) may
specify the portion of his Retirement Benefit under the Plan to be received in a
lump sum as follows: 0 percent, 25 percent, 50 percent, 75 percent or 100
percent.
(d) In the event a Participant who has made an Election
pursuant to Section 4.5(a) dies or becomes totally and permanently disabled for
purposes of the relevant Basic Disability Plan while employed by the Corporation
or an Affiliate and such death or total and permanent disability occurs during
the twelve-calendar-month period, as described under Section 4.5(b)(i),
immediately following the Election Date of such Election, the condition under
Section 4.5(b)(i) shall be deemed satisfied with respect to such Participant.
SECTION 4.6 (a) Any Participant (except the Chairman of the
Board of Directors of the Corporation on December 21, 1994) who as of December
31, 1994 (i) is age 54 or older and (ii) has at least 4 years of Credited
Service may elect, on a form supplied by the Committee, to receive all, none, or
a specified portion, in the same percentages as
<PAGE> 17
described in Section 4.5(c), of his Retirement Benefit under the Plan in a lump
sum and to receive any balance of such Retirement Benefit in the form of an
annuity; provided that any such Special Election shall be effective for purposes
of this Plan only if such Participant remains in employment with the Corporation
or an Affiliate, as the case may be, for the one calendar month immediately
following the Election Date, except in the case of death or total and permanent
disability as provided in Section 4.6(b), and complies with the administrative
procedures set forth by the Committee for making such Special Election; and
provided further that the Election Date with respect to any such Special
Election is not later than January 31, 1995. The amount of any portion of a
Participant's or a Vested Former Participant's Retirement Benefit payable as a
lump sum under this Section 4.6 will equal the present value of such portion of
the Retirement Benefit, and such present value shall be determined (i) based on
a discount rate equal to the average of 85% of the 15-year non-callable U.S.
Treasury bond yields as of the close of business on the last business day of
each of the three months immediately preceding the date the annuity value is
determined and (ii) using the 1993 Group Annuity Mortality Table.
(b) In the event a Participant who has made a Special Election
pursuant to Section 4.6(a) dies or becomes totally and permanently disabled for
purposes of the relevant Basic Disability Plan while employed by the Corporation
or an Affiliate and such death or total and permanent disability occurs during
the one-calendar-month period, as described under Section 4.6(a) immediately
following the Election Date of such Special Election, the condition under
Section 4.6(a) requiring that such Participant remain employed with the
Corporation or an Affiliate, as the case may be, for the one-calendar-month
period immediately following the Election Date of such Election shall be deemed
satisfied.
SECTION 4.7 Subject to Section 3.1, Section 3.3, Section 3.4
and the foregoing limitations of this Section 4, the Retirement Benefit of each
Participant and Vested Former Participant under the Plan shall at all times be
100% vested and nonforfeitable.
SECTION 4.8 (a) Subject to Section 4.8(c), the Corporation
shall
<PAGE> 18
indemnify each Participant, Vested Former Participant and Surviving Spouse who
receives any portion of a Retirement Benefit or Surviving Spouse's Benefit under
this Plan in the form of an annuity for any interest and penalties that may be
assessed by the U.S. Internal Revenue Service (the "Service") with respect to
U.S. Federal income tax on such benefits (payable under the Plan in the form of
an annuity) upon final settlement or judgment with respect to any such
assessment in favor of the Service, provided the basis for the assessment is
that the amendment of the Plan to provide for the Election or the Special
Election causes the Participant, Vested Former Participant or Surviving Spouse,
as the case may be, to be treated as being in constructive receipt of such
benefits prior to the time when such benefits are actually payable under the
Plan.
(b) In case any assessment shall be made against a
Participant, Vested Former Participant or Surviving Spouse as described in
Section 4.8(a), such Participant, Vested Former Participant or Surviving Spouse,
as the case may be (the "indemnified party"), shall promptly notify the
Corporation's Treasurer in writing and the Corporation, upon request of such
indemnified party, shall select and retain an accountant or legal counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party in connection with such assessment and shall pay the fees and expenses of
such an accountant or legal counsel related to such representation, and the
Corporation shall have the right to determine how and when such assessment by
the Service should be settled, litigated or appealed. In connection with any
such assessment, any indemnified party shall have the right to retain his own
accountant or legal counsel, but the fees and expenses of such accountant or
legal counsel shall be at the expense of such indemnified party unless the
Corporation and the indemnified party shall have mutually agreed to the
retention of such accountant or legal counsel.
(c) The Corporation shall not be liable for any payments under
this Section 4.8 with respect to any assessment described in Section 4.8(a) if a
Participant, Vested Former Participant or Surviving Spouse against whom such
assessment is made has not promptly notified or allowed the Corporation to
participate with respect to such assessment in
<PAGE> 19
the manner described in Section 4.8(b) or, following demand by the Corporation,
has not made the deposit to avoid additional interest or penalties as described
in Section 4.8(d) or has agreed to, or otherwise settled with the Service with
respect to, such assessment without the Corporation's written consent, provided,
however, (i) if such assessment is settled with such consent or if there is a
final judgment for the Service, (ii) the Corporation has been notified and
allowed to participate in the manner as provided in Section 4.8(b) and (iii)
such Participant, Vested Former Participant or Surviving Spouse has made any
required deposit to avoid additional interest or penalty as described in Section
4.8(d), the Corporation agrees to indemnify the indemnified party to the extent
set forth in this Section 4.8.
(d) In the event a final settlement or judgment with respect
to an assessment as described under Section 4.8 has been made against a
Participant, Vested Former Participant or Surviving Spouse, such Participant,
Vested Former Participant or Surviving Spouse may elect to receive a portion or
all of his Retirement Benefit or Surviving Spouse's Benefit that is otherwise
payable as an annuity under the Plan in the form of a lump sum in accordance
with procedures as the Committee may set forth, and such lump sum distribution
will be made as soon as practicable after any such election. At the time such
assessment is made against such Participant, Vested Former Participant or
Surviving Spouse (the "assessed party") and prior to any final settlement or
judgment with respect to such assessment, if so directed by the Corporation,
such assessed party shall, as a condition to receiving any indemnity under this
Section 4.8, as soon as practicable after notification of such assessment make a
deposit with the Service to avoid any additional interest or penalties with
respect to such assessment and, upon the request of such assessed party, the
Corporation shall lend, or arrange for the lending to, such assessed party a
portion of his remaining Retirement Benefit or Surviving Spouse's Benefit under
the Plan, not to exceed the lump sum value of such benefit under the Plan,
determined using the actuarial assumptions set forth in Section 4.5(a), solely
for purposes of providing the assessed party with funds to make a deposit with
the Service to avoid any additional interest or penalties with respect to such
<PAGE> 20
assessment.
SECTION 5
Disability Benefits
SECTION 5.1 The Disability Benefit provided by the Plan is
designed to provide each Participant with a disability benefit from the Plan and
certain other sources equal to his Disability Benefit as hereinafter specified.
Thus, Disability Benefits described hereunder as payable to Participants will be
offset by disability benefits payable from sources outside the Plan (other than
benefits payable under the relevant Basic Disability Plan) as specified herein.
SECTION 5.2 In the event that a Participant has become totally
and permanently disabled for the purposes of the relevant Basic Disability Plan,
an annual Disability Benefit shall be payable in monthly installments under this
Plan during the same period as disability benefits are actually or deemed paid
by the relevant Basic Disability Plan, in an amount equal to 60% of the
Participant's Basic Earnings. Such Disability Benefit shall be offset by the
Participant's Other Disability Income, if any. A Participant's Disability
Benefits shall also be offset by the Participant's Basic Plan Benefit, if the
Participant's Basic Disability Plan Benefit does not already include such an
offset.
SECTION 6
Surviving Spouse's Benefits
SECTION 6.1 Upon the death of a Participant or Vested Former
Participant, while employed by the Corporation or an Affiliate, who has
completed at least ten years of Credited Service with the Corporation or an
Affiliate and has attained age 55, his Surviving Spouse will be entitled to a
Surviving Spouse's Benefit under this Plan equal to 50% of the Retirement
Benefit that would have been provided from the Plan had the Participant or
Vested Former Participant retired from the Corporation or an Affiliate with the
Corporation's consent, on the date of his death.
SECTION 6.2 Upon the death of a Participant or Vested Former
<PAGE> 21
Participant, while employed by the Corporation or an Affiliate, who has
completed at least five years of Credited Service with the Corporation or an
Affiliate and has not attained age 55, his Surviving Spouse will be entitled to
a Surviving Spouse's Benefit under this Plan equal to 50% of the Retirement
Benefit that would have been provided from the Plan had the Participant or
Vested Former Participant terminated employment with the Corporation or an
Affiliate on the date of his death with the Corporation's consent, and elected
to have the payment of his Basic Plan Benefit commence at age 55 in the form of
a straight life annuity.
SECTION 6.3 Upon the death of a Vested Former Participant
while no longer employed by the Corporation or an Affiliate, who has not
attained age 55, his Surviving Spouse will be entitled to a Surviving Spouse's
Benefit under this Plan equal to 50% of the Retirement Benefit that would have
been provided from the Plan to the Vested Former Participant at age 55, taking
into account whether the Corporation consented to the termination.
SECTION 6.4 Upon the death of a Participant or Vested Former
Participant, while employed by the Corporation or an Affiliate, who has
completed at least five, but less than ten years of Credited Service with the
Corporation or an Affiliate and has attained age 55, his Surviving Spouse will
be entitled to a Surviving Spouse's Benefit under this Plan equal to 50% of the
Retirement Benefit that would have been provided from the Plan had the
Participant or Vested Former Participant terminated employment with the
Corporation or an Affiliate on the date of his death with the Corporation's
consent and his Basic Plan Benefit commenced immediately in the form of a
straight life annuity.
SECTION 6.5 Upon the death of a Vested Former Participant
while he is receiving Retirement Benefits, his Surviving Spouse shall receive a
Surviving Spouse's Benefit equal to 50% of the Retirement Benefit he was
receiving at the time of his death.
SECTION 6.6 Except as provided in Section 6.8, the Surviving
Spouse's Benefit provided under Section 6.1, 6.4 and 6.5 will be payable
monthly, will commence as of the first day of the month coincident with or next
following the month in
<PAGE> 22
which the Participant or Vested Former Participant dies, and will continue until
the first day of the month in which the Surviving Spouse dies.
SECTION 6.7 Except as provided in Section 6.8, the Surviving
Spouse's Benefit provided under Section 6.2 and 6.3 will be payable monthly,
will commence as of the first day of the month coincident with or next following
the month in which the Participant or Vested Former Participant would have
attained age 55, and will continue until the first day of the month in which the
Surviving Spouse dies.
SECTION 6.8 (a) If a Participant or a Vested Former
Participant while he was a Participant has made an Election under Section 4.5 or
a Special Election under Section 4.6 and such Election or Special Election is
effective on the date of such Participant's or Vested Former Participant's
death, the Surviving Spouse's Benefit payable to a Surviving Spouse of such
Participant or Vested Former Participant will be payable in the form or
combination of forms of payment so elected by such Participant or Vested Former
Participant pursuant to such Election or Special Election. The amount of any
lump sum payment under this Section 6.8 shall be the present value of the
applicable portion of the Surviving Spouse's Benefit payable under the Plan, and
such present value shall be determined using the actuarial assumptions set forth
in Section 4.5(a). Any lump sum distribution of a Surviving Spouse's Surviving
Spouse's Benefit under the Plan shall fully satisfy all present and future Plan
liability with respect to such Surviving Spouse for such portion or all of such
Surviving Spouse's Benefit so distributed.
(b) Notwithstanding any Election or Special Election made
under Section 4.5 or 4.6, if the lump sum value, determined in the same manner
as provided under Section 4.5(a), of a Surviving Spouse's Benefit is $10,000 or
less at the time such Surviving Spouse's Benefit is payable under this Plan,
such benefit shall be payable as a lump sum.
(c) Any portion of a Surviving Spouse's Benefit provided under
Section 6.1, 6.4 and 6.5 which is payable as an annuity shall be paid in the
manner and at such time as set forth in Section 6.6, and any such benefit which
is payable as a lump sum shall be paid
<PAGE> 23
60 days after the date when annuity payments commence, or would commence if any
portion of such Surviving Spouse's Benefit were payable as an annuity as set
forth in Section 6.6.
(d) Any portion of a Surviving Spouse's Benefit provided under
Section 6.2 and 6.3 which is payable as an annuity shall be paid in the manner
and at such time as set forth in Section 6.7, and any such benefit which is
payable as a lump sum shall be paid 60 days after the date when annuity payments
commence, or would commence if any portion of such Surviving Spouse's Benefit
were payable as an annuity, as set forth in Section 6.7.
SECTION 6.9 Notwithstanding the foregoing provisions of
Section 6, the amount of a Surviving Spouse's Benefit shall be reduced by one
percentage point for each year (including a half year or more as a full year) in
excess of ten that the age of the Participant or Vested Former Participant
exceeds the age of the Surviving Spouse.
<PAGE> 24
SECTION 7
Committee
SECTION 7.1 The Board and the Committee severally (and not
jointly) shall be responsible for the administration of the Plan. The Committee
shall consist of not less than three (3) nor more than seven (7) members, as may
be appointed by the Board from time to time. Any member of the Committee may
resign at will by notice to the Board or be removed at any time (with or without
cause) by the Board.
SECTION 7.2 The members of the Committee may from time to time
allocate responsibilities among themselves and may delegate to any management
committee, employee, director or agent its responsibility to perform any act
hereunder, including without limitation those matters involving the exercise of
discretion, provided that such delegation shall be subject to revocation at any
time at its discretion.
SECTION 7.3 The Committee (and their delegees) shall have the
exclusive authority to interpret the provisions of the Plan and construe all of
its terms (including, without limitation, all disputed and uncertain terms), to
adopt, amend, and rescind rules and regulations for the administration of the
Plan, and generally to conduct and administer the Plan and to make all
determinations in connection with the Plan as may be necessary or advisable. All
such actions of the Committee shall be conclusive and binding upon all
Participants, Former Participants, Vested Former Participants and Surviving
Spouses. All deference permitted by law shall be given to such interpretations,
determinations and actions.
SECTION 7.4 Any action to be taken by the Committee shall be
taken by a majority of its members, either at a meeting or by written instrument
approved by such majority in the absence of a meeting. A written resolution or
memorandum signed by one
<PAGE> 25
Committee member and the secretary of the Committee shall be sufficient evidence
to any person of any action taken pursuant to the Plan.
SECTION 7.4 Any person, corporation or other entity may serve
in more than one fiduciary capacity under the Plan.
SECTION 8
Miscellaneous
SECTION 8.1 The Board may, in its sole discretion, terminate,
suspend or amend this Plan at any time or from time to time, in whole or in
part. However, no termination, suspension or amendment of the Plan may adversely
affect a Participant's or Vested Former Participant's vested benefit under the
Plan, or a retired Participant's or Vested Former Participant's right or the
right of a Surviving Spouse to receive or to continue to receive a benefit in
accordance with the Plan as in effect on the date immediately preceding the date
of such termination, suspension or amendment.
SECTION 8.2 Nothing contained herein will confer upon any
Participant, Former Participant or Vested Former Participant the right to be
retained in the service of the Corporation or any Affiliate, nor will it
interfere with the right of the Corporation or any Affiliate to discharge or
otherwise deal with Participants, Former Participants or Vested Former
Participants with respect to matters of employment without regard to the
existence of the Plan.
SECTION 8.3 Notwithstanding anything herein to the contrary,
at any time following the termination of service of a Participant or Vested
Former Participant, the Committee may authorize, under uniform rules applicable
to all Participants, Vested Former Participants and Surviving Spouses under the
Plan, a lump sum distribution of a Participant's, Vested Former Participant's
and/or Surviving Spouse's Retirement Benefit or Surviving Spouse's Benefit under
the Plan in an amount equal to the present value of such Retirement Benefit or
Surviving Spouse's Benefit, using the actuarial assumptions then in use for
funding
<PAGE> 26
purposes under The Dun & Bradstreet Corporation Retirement Account, in full
satisfaction of all present and future Plan liability with respect to such
Participant, Vested Former Participant and/or Surviving Spouse, if the amount of
such present value is less than $250,000. Such lump sum distribution may be made
without the consent of the Participant, Vested Former Participant or Surviving
Spouse.
SECTION 8.4 (a) Notwithstanding anything in this Plan to the
contrary, if a Participant has less than five years of Credited Service at the
time of a Change in Control, and as a result of the Change in Control, and
before he completes five years of Credited Service, (i) the Plan is terminated,
(ii) the Participant is removed from further participation in the Plan, or (iii)
the Participant is terminated as a result of action initiated directly or
indirectly by the Corporation or any Affiliate, such Participant shall be
entitled to a Benefit of 20% of his Average Final Compensation and the
Corporation will remain obligated to pay all benefits under the Plan.
(b) Notwithstanding anything in this Plan to the contrary,
upon the occurrence of a Change in Control, (i) no reduction shall be made in a
Participant's or Vested Former Participant's Retirement Benefit, notwithstanding
his termination of employment or Retirement prior to age 60 without the
Corporation's consent, (ii) the provisions of Section 3.3(i) and (ii) shall not
apply to any Participant, Vested Former Participant or Surviving Spouse, (iii)
each Participant and Vested Former Participant already receiving a Retirement
Benefit under the Plan shall receive a lump sum distribution of his unpaid
Retirement Benefit and, if he is married, his Surviving Spouse's Benefit under
the Plan within 30 days of the Change of Control in an amount equal to the
present value of such Retirement Benefit and Surviving Spouse's Benefit in full
satisfaction of all present and future Plan liability with respect to such
Participant, Vested Former Participant and Surviving Spouse, if any, and each
Surviving Spouse already receiving a Surviving Spouse's Benefit under the Plan
shall receive a lump sum distribution of his unpaid Surviving Spouse's Benefit
at the same time in an amount equal to the present value of such Surviving
Spouse's Benefit in full satisfaction of
<PAGE> 27
Plan liability to such Surviving Spouse, (iv) each Vested Former Participant who
is not already receiving a Retirement Benefit under the Plan shall receive a
lump sum distribution of his unpaid Retirement Benefit and, if he is married,
his Surviving Spouse's Benefit within 30 days of the Change in Control in an
amount equal to the present value of such Retirement Benefit and Surviving
Spouse's Benefit, and each Surviving Spouse of either a Vested Former
Participant or a Participant with five or more years of Credited Service who is
not already receiving a Surviving Spouse's Benefit under the Plan shall receive
a lump sum distribution of his unpaid Surviving Spouse's Benefit at the same
time in amount equal to the present value of such Surviving Spouse's Benefit,
(v) each Participant with less than five years of Credited Service who is
entitled to a benefit under Section 8.4(a) shall receive a lump sum distribution
of the present value of such Retirement Benefit within 30 days from the earlier
of the date the Plan is terminated, the date he is removed from further
participation in the Plan, or the date his employment with the Corporation is
terminated, and of his Surviving Spouse's Benefit based upon the amount of such
Retirement Benefit if he is married on the applicable date, and (vi) each
Participant who is not included in (v) above and who is not already receiving a
Retirement Benefit under the Plan shall receive (a) within 30 days of the later
to occur of the date of such Change in Control or the date he completes five
years of Credited Service a lump sum distribution of the present value of his
accrued Retirement Benefit under the Plan as of the applicable date and, if he
is married on such date, the present value of his Surviving Spouse's Benefit,
and (b) within 30 days from the earliest of the date of his Retirement or
termination of employment with the Corporation, the date the Plan is terminated
or the date he is removed from further participation in the Plan, a lump sum
distribution of the present value of his additional Retirement Benefit accrued
after the applicable event in (a) computed as of the applicable date herein set
forth in (b) and, if he is married on such applicable date, the present value of
his surviving Spouse's Benefit. In determining the amount of the lump sum
distributions to be paid under this Section 8.4, the following actuarial
assumptions shall be used: (i) the interest rate used shall be the interest
<PAGE> 28
rate used by the Pension Benefit Guaranty Corporation for determining the value
of immediate annuities as of January 1st of either the year of the occurrence of
the Change in Control or the Participant's retirement or termination of
employment, whichever is applicable, (ii) the 1983 Group Annuity Mortality Table
shall be used; and (iii) it shall be assumed that all Participants retired or
terminated employment with the Corporation on the date of the occurrence of the
Change in Control and with the Corporation's consent for purposes of determining
the amount of the lump sum distribution to be paid upon the occurrence of the
Change in Control.
SECTION 8.5 (a) The Plan is unfunded, and the Corporation will
make Plan benefit payments solely on a current disbursement basis, provided,
however, that the Corporation reserves the right to purchase insurance
contracts, which may or may not be in the name of a Participant or Vested Former
Participant, or establish one or more trusts to provide alternative sources of
benefit payments under this Plan, provided, further, however, that upon the
occurrence of a "Potential Change in Control" the appropriate officers of the
Corporation are authorized to make such contributions to such trust or trusts as
are necessary to fund the lump sum distributions to Plan Participants required
pursuant to Section 8.4 of this Plan in the event of a Change in Control. In
determining the amount of the necessary contribution to the trust or trusts in
the event of a Potential Change in Control, the following actuarial assumptions
shall be used: (i) the interest rate used shall be the interest rate used by the
Pension Benefit Guaranty Corporation for determining the value of immediate
annuities as of January 1st of the year of the occurrence of the Potential
Change in Control, (ii) the 1983 Group Annuity Mortality Table shall be used;
and (iii) it shall be assumed that all Participants will retire or terminate
employment with the Corporation as soon as practicable after the occurrence of
the Potential Change in Control and with the Corporation's consent. The
existence of any such insurance contracts, trust or trusts shall not relieve the
Corporation of any liability to make benefit payments under this Plan, but to
the extent any benefit payments are made from any such insurance contract in the
name of the Corporation or any Affiliate or
<PAGE> 29
from any such trust, such payment shall be in satisfaction of and shall reduce
the Corporation's liabilities under this Plan. Further, in the event of the
Corporation's bankruptcy or insolvency, all benefits accrued under this Plan
shall immediately become due and payable in a lump sum and all Participants,
Vested Former Participants and Surviving Spouses shall be entitled to share in
the Corporation's assets in the same manner and to the same extent as general
unsecured creditors of the Corporation.
(b) Members and Vested Former Members shall have the status of
general unsecured creditors of the Corporation and this Plan constitutes a mere
promise by the Corporation to make benefit payments at the time or times
required hereunder. It is the intention of the Corporation that this Plan be
unfunded for tax purposes and for purposes of Title I of the Employee Retirement
Income Security Act of 1974, as amended and any trust created by the Corporation
in meeting its obligations under the Plan shall meet the requirements necessary
to retain such unfunded status.
SECTION 8.6 If any dispute arises under the Plan between the
Corporation and a Participant, Former Participant, Vested Former Participant or
Surviving Spouse (collectively or individually referred to as "Participant" in
this Section 8.6) as to the amount or timing of any benefit payable under the
Plan or as to the persons entitled thereto, such dispute shall be resolved by
binding arbitration proceedings initiated by either party to the dispute in
accordance with the rules of the American Arbitration Association and the
results of such proceedings shall be conclusive on both parties and shall not be
subject to judicial review. If the disputed benefits involve the benefits of a
Participant who is no longer employed by the Corporation or any Affiliate, the
Corporation shall pay or continue to pay the benefits claimed by the Participant
until the results of the arbitration proceedings are determined unless such
claim is patently without merit; provided, however, that if the results of the
arbitration proceedings are adverse to the Participant, then in such event the
recipient of the benefits shall be obligated to repay the excess benefits to the
Corporation. The Corporation expressly acknowledges that the amounts payable
under the Plan are necessary to
<PAGE> 30
the livelihood of Participants and their family members and that any refusal or
neglect to pay benefits under the preceding sentence prior to the resolution of
any dispute shall be prima facie evidence of bad faith on its part and will be
conclusive grounds for an arbitration award resulting in an immediate lump sum
payment to the Participant, of the Participant's benefits under the Plan then
due and payable to him, unless the arbitrator determines that the claim for the
disputed benefits was without merit. The amount of such lump sum payment shall
be equal to the then actuarial value of such benefits calculated by utilizing
the actuarial assumptions then in use for funding purposes under The Dun &
Bradstreet Corporation Retirement Account. In addition, in the event of any
dispute covered by this Section 8.6 the Corporation agrees to pay the entire
costs of any arbitration proceeding or legal proceeding brought hereunder,
including the fees and expenses of counsel and pension experts engaged by a
Participant and that such expenses shall be reimbursed promptly upon evidence
that such expenses have been incurred without awaiting the outcome of the
arbitration proceedings; provided, however, that such costs and expenses shall
be repaid to the Corporation by the recipient of same if it is finally
determined by the arbitrators that the position taken by such person was without
merit.
SECTION 8.7 To the maximum extent permitted by law, no benefit
under the Plan shall be assignable or subject in any manner to alienation, sale,
transfer, claims of creditors, pledge, attachment or encumbrances of any kind.
SECTION 8.8 The Corporation may withhold from any benefit
under the Plan an amount sufficient to satisfy its tax withholding obligations.
SECTION 8.9 The Plan is established under and will be
construed according to the laws of the State of New York.
<PAGE> 1
Exhibit 10.30
PROFIT PARTICIPATION BENEFIT EQUALIZATION PLAN
OF
THE DUN & BRADSTREET CORPORATION
As in effect as of June 17, 1998 with certain earlier effective dates
I. Purpose of the Plan
The purpose of the Profit Participation Benefit Equalization
Plan of The Dun & Bradstreet Corporation (the "Plan") is to provide a means of
equalizing the benefits of those employees participating in the Profit
Participation Plan of the Dun & Bradstreet Corporation (the "Profit
Participation Plan") whose funded benefits under the Profit Participation Plan
are or will be limited by the application of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), the Internal Revenue Code of 1986,
as amended (the "Code") or any applicable law or regulation. The Plan is
intended to be an "excess benefit plan" as that term is defined in Section 3(36)
of ERISA with respect to those participants whose benefits under the Profit
Participation Plan have been limited by Section 415 of the Code, and a "top hat"
plan meeting the requirements of Sections 201(2), 301(a)(3), 401(a)(1) and
4021(b)(6) of ERISA with respect to those participants whose benefits under the
Profit Participation Plan have been limited by Section 401(a)(17) of the Code.
II. Administration of the Plan
The Board and the Compensation and Benefits Committee
appointed by the Board (the "Committee") severally (and not jointly) shall be
responsible for the administration of the Plan. The Committee shall consist of
not less than three (3) nor more than seven (7) members, as may be appointed by
the Board from time to time. Any member of the Committee may resign at will by
notice to the Board or be removed at any time (with or without cause) by the
Board.
The members of the Committee may from time to time allocate
responsibilities among themselves and may delegate to any management committee,
employee, director or agent its responsibility to perform any act hereunder,
including without limitation those matters involving the exercise of discretion,
provided that such delegation shall be subject to revocation at any time at its
discretion.
The Committee (and their delegees) shall have the exclusive
authority to interpret the provisions of the Plan and construe all of its terms
(including, without limitation, all disputed and uncertain terms), to adopt,
amend, and rescind rules and regulations for the administration of the Plan, and
generally to conduct and administer the Plan and to make all determinations in
connection with the Plan as may be necessary or advisable. All such actions of
the Committee shall be conclusive and binding upon all Participants, Former
<PAGE> 2
2
Participants, Vested Former Participants and Surviving Spouses. All deference
permitted by law shall be given to such interpretations, determinations and
actions.
Any action to be taken by the Committee shall be taken by a
majority of its members, either at a meeting or by written instrument approved
by such majority in the absence of a meeting. A written resolution or memorandum
signed by one Committee member and the secretary of the Committee shall be
sufficient evidence to any person of any action taken pursuant to the Plan.
Any person, corporation or other entity may serve in more than
one fiduciary capacity under the Plan.
III. Participation in the Plan
All members of the Profit Participation Plan shall be eligible
to participate in this Plan whenever their benefits under the Profit
Participation Plan as from time to time in effect would exceed the limitations
on benefits and contributions imposed by Sections 401, 415 or any other
applicable Section of the Code, calculated from and after September 2, 1974. For
purposes of this Plan, benefits of a participant in this Plan shall be
determined as though no provision were contained in the Profit Participation
Plan incorporating limitations imposed by Sections 401, 415 or any other Section
of the Code.
IV. Benefit Limitations
For purposes of this Plan and the Profit Participation Plan,
the limitations imposed by Section 415 of the Code shall be deemed to be met
when the sum of the participant's defined benefit plan fraction and his defined
contribution plan fraction equals 1.0, as such fractions are computed for
purposes of Section 415 of the Code and Section 14.4 of the Profit Participation
Plan.
V. Equalized Benefits
If member participating contributions or Company contributions
to the Profit Participation Plan are suspended during any calendar year because
any such contributions would cause the participant's account under such plan to
exceed the benefit limitations related to such plan as described in Section III
of this Plan, the Corporation shall pay the participant, on or about March 1st
of the following year, an amount equal to:
(1) the Company contributions that otherwise would have been credited
to such participant's account under the Profit Participation Plan for
the balance of the year in which such suspension occurs, as if no
provision were set forth therein incorporating limitations imposed by
Section 401, 415 or any other applicable Section of the Code, and the
participant had continued his participating contributions to the Profit
Participation Plan at the rate in effect at the time such contributions
were suspended for the balance of the year in which such suspension
occurs, plus
<PAGE> 3
3
(2) an interest factor equal to one-half of the annual return which
would have been received by the participant had such payment been
invested eighty percent (80%) in the Special Fixed Income Fund (Fund C)
of the Profit Participation Plan and twenty percent (20%) in the Wells
Fargo Equity Index Fund (Fund A) of the Profit Participation Plan
during the year in which such suspension occurs, less
(3) any applicable withholding taxes.
VI. Change in Control
Upon the occurrence of a "Change in Control", each participant
under the Plan shall receive a lump sum distribution equal to:
(1) the total amount which such participant had accrued under the Plan
which has not yet been distributed to such participant pursuant to
Section V(1) hereof as of the date of such Change in Control, plus
(2) an interest factor equal to one-half of the return which would have
been received by the participant had such amount been invested eighty
percent (80%) in the Special Fixed Income Fund (Fund C) of the Profit
Participation Plan and twenty (20%) in the Wells Fargo Equity Index
Fund (Fund A) of the Profit Participation Plan during the portion of
the calendar year subsequent to the date contributions to such
participant's account were suspended under the Profit Participation
Plan and prior to such Change in Control, less
(3) any applicable withholding taxes.
Any such lump sum distribution shall be paid to the
participant within sixty days of the Change in Control provided, however, that
any such payment will not prevent the further accrual of benefits under the Plan
after the date of such Change in Control
For purposes of this Plan, a "Change in Control" shall be
deemed to have occurred if
(a) any "Person," as such term is used in Section 13 (d) and
14 (d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Corporation, any trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation, or any corporation owned, directly or indirectly, by the
shareholders of the Corporation in substantially the same proportions
as their ownership of stock of the Corporation), is or becomes the
"Beneficial Owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Corporation representing
20% or more of the combined voting power of the Corporation's then
outstanding securities;
(b) during any period of twenty-four months (not including any
period prior to the effective date of this provision), individuals who
at the beginning of such period
<PAGE> 4
4
constitute the Board, and any new director (other than (1) a director
designated by a person who has entered into an agreement with the
Corporation to effect a transaction described in clause (a), (c) or (d)
of this Section) (2) a director designated by any Person (including the
Corporation) who publicly announces an intention to take or to consider
taking actions (including, but not limited to, an actual or threatened
proxy contest) which if consummated would constitute a Change in
Control or (3) a director designated by any Person who is the
Beneficial Owner, directly or indirectly, of securities of the
Corporation representing 10% or more of the combined voting power of
the Corporation's securities) whose election by the Board or nomination
for election by the Corporation's shareholders was approved by a vote
of at least two-thirds (2/3) of the directors then still in office who
either were directors at the beginning of the period or whose election
or nomination for election was previously so approved cease for any
reason to constitute at least a majority thereof;
(c) the shareholders of the Corporation approve a merger or
consolidation of the Corporation with any other company, other than (1)
a merger or consolidation which would result in the voting securities
of the Corporation outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than 50% of the
combined voting power of the voting securities of the Corporation or
such surviving entity outstanding immediately after such merger or
consolidation and (2) after which no Person holds 20% or more of the
combined voting power of the then outstanding securities of the
Corporation or such surviving entity; or
(d) the shareholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets.
VII. Miscellaneous
This Plan may be terminated at any time by the Board of
Directors of the Corporation, in which event the rights of participants to their
accrued benefits shall become nonforfeitable. This Plan may also be amended at
any time by the Board of Directors of the Corporation, except that no such
amendment shall deprive any participant of his benefits accrued at the time of
such amendment.
Benefits payable under this Plan shall not be funded and shall
be made out of the general funds of the Corporation; provided, however, that the
Corporation reserves the right to establish a trust fund as an alternate source
of benefits payable under the Plan and to the extent payments are made from such
trust, such payments will satisfy the Corporation's obligations under this Plan.
No right to payment or any other interest under this Plan may
be alienated, sold, transferred, pledged, assigned, or made subject to
attachment, execution, or levy of any kind.
<PAGE> 5
5
Nothing in this Plan shall be construed as giving any employee
the right to be retained in the employ of the Corporation. The Corporation
expressly reserves the right to dismiss any employee at any time without regard
to the effect which such dismissal might have upon him under the Plan.
This Plan shall be construed, administered and enforced
according to the laws of the State of New York.
VIII. Effective Date
This Plan shall be effective as of October 17, 1990, upon its
adoption by the Board of Directors of the Dun & Bradstreet Corporation.
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