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, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
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Commission file number 1-7155
THE DUN & BRADSTREET CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 13-2740040
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(State of Incorporation) (I.R.S. Employer Identification No.)
One Diamond Hill Road, Murray Hill, NJ 07974
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (908) 665-5000
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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 X No
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, 1997
Common Stock, 170,479,479
par value $1 per share
<PAGE>
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, 1997 and 1996 3
Six Months Ended June 30, 1997 and 1996 4
Consolidated Balance Sheets (Unaudited)
June 30, 1997 and December 31, 1996 5
Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended June 30, 1997 and 1996 6
Notes to Consolidated Financial Statements (Unaudited) 7-10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11-14
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 16
SIGNATURES 17
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<PAGE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited)
<CAPTION>
Three Months Ended
June 30
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Dollar amounts in millions, except per share data 1997 1996
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<S> <C> <C>
Operating Revenues $ 498.3 $ 505.1
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Operating Costs 132.9 220.1
Selling and Administrative Expenses 232.8 250.4
Depreciation and Amortization 39.5 41.2
Reorganization Costs - 7.6
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Operating Income (Loss) 93.1 (14.2)
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Interest Expense (11.1) (6.2)
Other Expense - Net (5.5) (11.2)
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Non-Operating Expense - Net (16.6) (17.4)
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Income (Loss) from Continuing Operations before
Provision for Income Taxes 76.5 (31.6)
Provision for Income Taxes 26.3 12.3
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Income (Loss) from Continuing Operations 50.2 (43.9)
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Income from Discontinued Operations, Net of Income
Tax Benefit of $12.9 million for 1996 - 0.3
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Net Income (Loss) $ 50.2 $ (43.6)
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Earnings (Loss) Per Share of Common Stock:
Continuing Operations $ 0.29 $ (0.26)
Discontinued Operations 0.00 -
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Net Earnings (Loss) Per Share of Common Stock $ 0.29 $ (0.26)
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Dividends Paid Per Share of Common Stock $ 0.22 $ 0.66
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Weighted Average Number of Shares Outstanding 171.0 170.0
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<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
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</TABLE>
<PAGE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
Consolidated Statements of Operations (unaudited)
<CAPTION>
Six Months Ended
June 30,
------------------------------------
Dollar amounts in millions, except per share data 1997 1996
<S> <C> <C>
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Operating Revenues $ 957.3 $ 955.5
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Operating Costs 270.7 367.0
Selling and Administrative Expenses 432.9 461.1
Depreciation and Amortization 80.3 80.3
Reorganization Costs - 9.0
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Operating Income 173.4 38.1
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Interest Expense (32.3) (12.5)
Other Expense - Net (6.8) (22.8)
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Non-Operating Expense - Net (39.1) (35.3)
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Income from Continuing Operations before
Provision for Income Taxes 134.3 2.8
Provision for Income Taxes 46.1 24.8
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Income (Loss) from Continuing Operations 88.2 (22.0)
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Income from Discontinued Operations, Net of Income
Tax Benefit of $2.7 million for 1996 - 42.6
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Net Income $ 88.2 $ 20.6
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Earnings (Loss) Per Share of Common Stock:
Continuing Operations $ 0.52 $ (0.13)
Discontinued Operations - 0.25
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Net Earnings Per Share of Common Stock $ 0.52 $ 0.12
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Dividends Paid Per Share of Common Stock $ 0.44 $ 1.32
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Weighted Average Number of Shares Outstanding 171.1 169.8
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<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
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</TABLE>
<PAGE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
Consolidated Balance Sheets (unaudited)
<CAPTION>
June 30, December 31,
Dollar amounts in millions, except per share data 1997 1996
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<S> <C> <C>
Assets
Current Assets
Cash and Cash Equivalents $134.6 $127.9
Accounts Receivable---Net of Allowance of $42.2 in 1997 and $38.1 in 1996 518.1 600.7
Other Current Assets 217.5 188.8
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Total Current Assets 870.2 917.4
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Non-Current Assets
Investments and Notes Receivable 234.5 292.2
Property, Plant and Equipment 354.9 373.1
Prepaid Pension Costs 175.9 172.1
Computer Software 154.2 150.7
Goodwill 200.9 218.4
Other Non-Current Assets 233.2 170.3
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Total Non-Current Assets 1,353.6 1,376.8
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Total Assets $2,223.8 $2,294.2
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Liabilities and Shareholders' Equity
Current Liabilities
Notes Payable $701.5 $1,120.7
Accrued and Other Current Liabilities 499.5 599.9
Unearned Subscription Income 391.8 297.0
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Total Current Liabilities 1,592.8 2,017.6
Postretirement and Postemployment Benefits 341.1 354.1
Other Non-Current Liabilities 431.7 354.2
Minority Interest 301.6 -
Shareholders' Equity
Preferred Stock, par value $1 per share, authorized---10,000,000 shares;
outstanding---none
Common Stock, par value $1 per share, authorized---400,000,000 shares;
issued---188,420,996 shares for 1997 and 1996 188.4 188.4
Capital Surplus 70.0 72.6
Retained Earnings 456.2 480.3
Treasury Stock, at cost, 17,835,017 and 17,612,776 shares
for 1997 and 1996, respectively (991.6) (1,019.7)
Cumulative Translation Adjustment (166.4) (153.3)
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Total Shareholders' Equity (443.4) (431.7)
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Total Liabilities and Shareholders' Equity $2,223.8 $2,294.2
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<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</FN>
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</TABLE>
<PAGE>
<TABLE>
The Dun & Bradstreet Corporation and Subsidiaries
Consolidated Statements of Cash Flows (unaudited)
<CAPTION>
Six Months Ended
June 30,
-----------------------------------
Dollar amounts in millions 1997 1996
<S> <C> <C>
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Cash Flows from Operating Activities:
Net Income $88.2 $20.6
Less: Income from Discontinued Operations - 42.6
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Income from Continuing Operations 88.2 (22.0)
Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 80.3 80.3
Losses from Sale of Businesses, Net of Taxes - 56.4
Distributions Received in Excess of Equity Earnings 57.8 (4.8)
Restructuring Payments - (26.3)
Postemployment Benefit Payments (18.5) (5.7)
Net Decrease in Accounts Receivable 70.4 13.1
Accrued Income Taxes (63.9) 40.5
Increase in Long Term Liabilities 30.7 -
Net Decrease in Other Working Capital Items 35.4 93.0
Other 2.9 (7.6)
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Net Cash Provided by Operating Activities 283.3 216.9
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Cash Flows from Investing Activities:
Proceeds from Marketable Securities 0.2 16.2
Payments for Marketable Securities (1.5) (1.7)
Capital Expenditures (30.1) (26.4)
Additions to Computer Software and Other Intangibles (36.6) (29.2)
Other 0.8 (0.6)
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Net Cash Used In Investing Activities (67.2) (41.7)
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Cash Flows from Financing Activities:
Payment of Dividends (75.3) (224.2)
Payments for Purchase of Treasury Shares (30.9) (3.3)
Net Proceeds from Exercise of Stock Options 19.1 38.3
Increase/(Decrease) in Commercial Paper Borrowings 649.7 (4.5)
Increase in Minority Interest 300.0 -
Decrease in Short-term Borrowings (1,067.6) (1.7)
Other (0.6) (2.6)
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Net Cash Used in Financing Activities (205.6) (198.0)
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Effect of Exchange Rate Changes on Cash and Cash Equivalents (3.8) (2.4)
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Increase (Decrease) in Cash and Cash Equivalents 6.7 (25.2)
Net Cash Provided By Discontinued Operations - 25.6
Cash and Cash Equivalents , Beginning of Year 127.9 147.1
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Cash and Cash Equivalents, End of Period $134.6 $147.5
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<FN>
The accompanying notes are an integral part of the consolidated financial statements.
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</FN>
</TABLE>
<PAGE>
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 (the "Company") 1996 Annual Report on Form 10-K, as amended by
Form 10-K/A-1. 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 with the
1997 presentation.
Note 2 - Reorganization and Discontinued Operations
On November 1, 1996, the Company reorganized into three publicly traded
independent companies by spinning off through a tax-free distribution two new
companies, (1) Cognizant Corporation ("Cognizant") and (2) ACNielsen Corporation
("ACNielsen") to shareholders. In conjunction with the reorganization, the
Company also disposed of Dun & Bradstreet Software ("DBS") and NCH Promotional
Services ("NCH"). The Company's continuing operations consist of Dun &
Bradstreet, the operating company ("D&B"), Moody's Investors Service ("Moody's")
and Reuben H.Donnelley ("RHD").
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
prior year's consolidated financial statements of the Company have been
reclassified to reflect the reorganization. Accordingly, the prior year's
revenues, costs and expenses, assets and liabilities, and cash flows of
Cognizant, ACNielsen, DBS and NCH 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 of
these entities have been reported, net of applicable income taxes, as "Income
from Discontinued Operations" and the net cash flows of these entities have been
reported as "Net Cash Provided by Discontinued Operations."
Summarized financial information for the Discontinued Operations was as follows
(in millions):
Three Months Six Months
Ended Ended
June 30, 1996 June 30, 1996
Operating Revenue $845.7 $1,616.9
(Loss)Income Before Provision for Income
Taxes $(12.6) $ 39.9
Income from Discontinued Operations,
net of Income Taxes $ 0.3 $ 42.6
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<PAGE>
Note 3 - Investment Partnership
During 1993, the Company participated in the formation of a limited partnership
to invest in various securities including those of the Company. Third-party
investors held limited partner and special investors interests totaling $500.0
million. Funds raised by the partnership provided a source of financing for the
Company's repurchase in 1993 of 8.3 million shares of its common stock. During
the fourth quarter of 1996, the Company redeemed these partnership interests.
This redemption was financed with short-term borrowings.
The partnership is presently engaged in the business of licensing database
assets and computer software. One of the Company's subsidiaries serves as
managing general partner and two subsidiaries hold limited partner interests. In
April 1997, the partnership raised $300.0 million of minority interest financing
from a third-party investor. The Company's subsidiaries contributed assets to
the partnership and the third-party investor contributed cash ($300.0 million)
in exchange for a limited partner interest. Funds raised by the partnership were
loaned to the Company and used to repay existing short-term debt in April 1997.
At June 30, 1997, the third-party investment in this partnership was included in
minority interest.
For financial reporting purposes, the results of operations, the assets,
liabilities and cash flows of the partnership described above are included in
the Company's consolidated financial statements.
Note 4 - Financial Instruments with Off-Balance-Sheet Risk
At times, the Company uses forward exchange contracts and interest rate swaps to
hedge existing assets, liabilities, firm commitments and anticipated
transactions. For forward exchange contracts, the risk reduction is assessed on
a transaction basis. All hedging instruments are designated as and effective as
a hedge and are highly correlated as required by generally accepted accounting
principles.
Gains and losses on hedges of existing assets or liabilities are included in the
carrying amounts of those assets or liabilities and are ultimately recognized in
income as part of those carrying amounts. Gains and losses related to qualifying
hedges of firm commitments or anticipated transactions are also deferred and are
recognized in income or as adjustments of carrying amounts when the hedged
transaction occurs. If a hedging instrument is sold or terminated prior to
maturity, gains and losses will continue to be deferred until the hedged item is
recognized in income. If a hedging instrument ceases to qualify as a hedge, any
subsequent gains and losses are recognized currently in income.
The Company uses interest rate swaps to synthetically change its variable-rate
debt into fixed-rate debt. Periodic swap payments and receipts under the
interest rate swaps are recorded as part of interest expense. Neither the swap
contracts nor the gains or losses on these contracts are recognized in the
financial statements.
The Company does not use any derivatives for trading or speculative purposes.
If a derivative ceases to qualify for hedge accounting, it is accounted for on
a mark-to-market basis.
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<PAGE>
Note 5- 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 the Company, A.C.
Nielsen Company (a subsidiary of ACNielsen) and IMS International, Inc.
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 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.
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, Cognizant, ACNielsen and the Company 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 the Company and Cognizant will share
liability equally for any amounts in excess of the ACN Maximum Amount. The ACN
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<PAGE>
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.
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.
Note 6 - DonTech
The consolidated results of the Company include the results of DonTech, a
partnership between RHD and Ameritech Advertising Services formed in 1990 to
serve as the exclusive yellow pages publisher for Ameritech directories in
Illinois and Northwest Indiana. For the quarter ended June 30, 1997 and 1996,
DonTech's operating revenues were $60.5 million and $31.0 million, respectively,
and net income was $13.3 million and $10.6 million, respectively. For the six
months ended June 30, 1997 and 1996, DonTech's operating revenues were $71.4
million and $42.9 million, respectively, and net income was $13.6 million and
$11.5 million, respectively.
During July 1997, RHD signed a series of new agreements with Ameritech
Advertising Services changing the structure of the existing partnership by
appointing DonTech as the exclusive sales agent in perpetuity for yellow page
directories published by Ameritech in Illinois and Northwest Indiana. Under the
new sales agency agreement, DonTech will perform the advertising sales function
for the directories and earn a commission, while Ameritech will become the
directories' publisher. As a result of the transfer of publishing services to
Ameritech, RHD will receive a revenue participation interest from Ameritech.
The Company formerly recognized its profits from its partnership interest in
DonTech as revenues and operating income when the directories were published.
Under the new exclusive sales agency agreement, the sales commissions earned by
DonTech and the revenues and operating income earned by RHD under the revenue
participation agreement will be recognized as earned at the time of the
advertising sale.
As a result of the change in the partnership structure, an approximately $30
million timing shift of revenue and operating income into the third quarter from
the fourth quarter of 1997 is expected. However, the impact of these changes on
the 1997 full year results is not expected to be significant.
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<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
On November 1, 1996, The Dun & Bradstreet Corporation (the "Company")
reorganized into three publicly traded independent companies by spinning off
through a tax-free distribution two new companies, (1) Cognizant Corporation
("Cognizant") and (2) ACNielsen Corporation ("ACNielsen") to shareholders. In
conjunction with the reorganization, the Company also disposed of Dun &
Bradstreet Software ("DBS") and NCH Promotional Services ("NCH"). The Company's
continuing operations consist of Dun & Bradstreet, the operating company
("D&B"), Moody's Investors Service ("Moody's") and Reuben H. Donnelley ("RHD").
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
prior year's consolidated financial statements of the Company have been
reclassified to reflect the reorganization. Accordingly, the prior year's
revenues, costs and expenses, assets and liabilities, and cash flows of
Cognizant, ACNielsen, DBS and NCH 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 of
these entities have been reported, net of applicable income taxes, as "Income
from Discontinued Operations" and the net cash flows of these entities have been
reported as "Net Cash Provided by Discontinued Operations."
Results of Operations
Consolidated Results
The Company's second quarter 1997 net income of $50.2 million was up $94.1
million from the prior year's second quarter loss from continuing operations of
$43.9 million which included impairment losses resulting from the decision to
dispose of two businesses and certain transaction-related expenses, as discussed
below. Earnings per share for the second quarter of $.29 was up from the prior
year's loss per share from continuing operations of $.26. Year-to-date net
income of $88.2 million in 1997 was up from prior year's loss from continuing
operations of $22.0 million and 1997 year-to-date earnings per share of $.52 was
up $.65 from prior year's loss per share from continuing operations of $.13.
Operating revenues for the second quarter were down 1.4% to $498.3 million in
1997 from $505.1 million from continuing operations in second quarter of 1996.
Excluding the results of American Credit Indemnity ("ACI") and the Proprietary
West Operations of R.H Donnelley ("P-West"), which were divested during 1996,
revenues from continuing operations increased by 3.7%, driven by growth at
Moody's and D&B U.S. Year-to-date 1997 operating revenues were $957.3 million
compared with $955.5 million in the first half of 1996. Excluding the results of
ACI and P-West, revenues from continuing operations increased by 5.1% from prior
year.
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<PAGE>
Operating income for the second quarter of 1997 of $93.1 million was $107.3
million higher than the prior year's second quarter operating loss of $14.2
million. Second quarter 1996 operating results included losses related to the
sales of P-West of $25.0 million and ACI of $63.8 million and certain
transaction related expenses. Excluding the impact of those one-time items,
operating income increased by 13.3% reflecting the revenue growth noted above,
strong cost controls, and reduced corporate expenses associated with the Company
after the reorganization. Operating income in the second quarter of 1997
included the write-off of a $5.0 million minority investment in Nets, Inc.,
which filed for bankruptcy during the quarter. On a year-to-date basis,
operating income of $173.4 million in 1997 was up from $38.1 million in 1996,
resulting from the factors cited above.
Non-operating expense-net was $16.6 million for the second quarter of 1997
compared with non-operating expense-net of $17.4 million for the second quarter
of 1996. Year-to-date 1997, non-operating expense-net was $39.1 million compared
with $35.3 million in 1996. The increase is largely attributable to a loss
recognized during the first quarter of $2.9 million as a result of canceling
$300.0 million of swap agreements.
The effective tax rate was 34.3% for the second quarter of and YTD 1997 compared
to an underlying effective tax rate of 34% for similar periods in 1996.
In the second quarter of 1996, the Company's consolidated results included
income from discontinued operations of $.3 million. On a year-to-date basis in
1996, the Company's consolidated results included income from discontinued
operations of $42.6 million or $.25 per share.
Segment Results
The Risk Management Services segment reported second-quarter revenue growth of
4.4% to $434.1 million from $415.8 million a year ago, excluding the results of
ACI which was divested during 1996. D&B, the operating company, reported
second-quarter revenue of $324.0 million compared with $325.0 million a year
ago. D&B U.S. posted a 2.8% increase in second-quarter revenue, a result of
strong performance in Receivable Management Services over the same quarter last
year. D&B Europe's revenue was down 3.9% in the second quarter over the previous
year reflecting unfavorable foreign exchange movement. Excluding the impact of
foreign exchange, European revenue grew by 3% in the second quarter of 1997. D&B
Asia Pacific, Latin America and Canada was down 8.0% in the second quarter from
the previous year primarily as a result of reorganizing the operations in Latin
America and lower than expected performance. Moody's Investors Service showed
the fastest growth during the second quarter, driven by double-digit growth in
its corporate bond ratings business. A favorable interest rate environment and
the continuing introduction of new fixed-income instruments throughout the world
also contributed to revenue growth. Moody's second-quarter revenue was $110.2
million in 1997, an increase of 21.3% over the prior year.
On a year-to-date basis, the Risk Management Services segment reported revenue
growth of 6.0% to $874.2 million in 1997 from $824.5 million a year ago,
excluding the results of ACI which was divested during 1996. D&B, the operating
company, reported revenue of $650.6 million in 1997, up 2.4% from the prior
year. D&B U.S.'s revenue grew 5.1%, a result of strong performance in both the
Receivable Management Services and Marketing Information Services divisions.
Europe's results were flat versus the prior year. However, after adjusting for
the negative foreign exchange impact, underlying growth for Europe was 6%. D&B
Asia Pacific, Latin America and Canada was down 7.3% from the prior year due to
the factors noted above. Moody's Investors Service reported revenue growth of
18.3% above the prior year due to gains in corporate bonds, structured ratings
and commercial paper.
-12-
The Directory Information Services segment reported second-quarter revenue of
$64.1 million compared with $64.8 million in the prior year, excluding the
second-quarter 1996 results of P-West. On a year-to-date basis, the Directory
Information Services' revenue of $83.1 million decreased 3.6% from the prior
year. Lower revenues were experienced at RHD due to the increasingly competitive
environment in the proprietary yellow pages business and a delay in the timing
of the publication of certain proprietary revenues. Higher revenues reported by
DonTech, the partnership with Ameritech Advertising Services resulted from the
production shift of several directories, which partially offset the lower
results of RHD.
During July 1997, RHD signed a series of new agreements with Ameritech
Advertising Services changing the structure of the existing partnership by
appointing DonTech as the exclusive sales agent in perpetuity for yellow page
directories published by Ameritech in Illinois and Northwest Indiana. Under the
new sales agency agreement, DonTech will perform the advertising sales function
for the directories and earn a commission, while Ameritech will become the
directories' publisher. As a result of the transfer of publishing services to
Ameritech, RHD will receive a revenue participation interest from Ameritech..
The Company formerly recognized its profits from its partnership interest in
DonTech as revenues and operating income when the directories were published.
Under the new exclusive sales agency agreement, the sales commissions earned by
DonTech and the revenues and operating income earned by RHD under the revenue
participation agreement will be recognized as earned at the time of
the advertising sale.
As a result of the change in the partnership structure, an approximately $30
million timing shift of revenue and operating income into the third quarter from
the fourth quarter of 1997 is expected. However, the impact of these changes on
the 1997 full year results is not expected to be significant.
Adoption of Statements of Financial Accounting Standards ("SFAS")
In February 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 128, "Earnings per Share" ("SFAS No. 128"), which simplifies existing
computational guidelines, revises disclosure requirements and increases the
comparability of earnings per share data on an international basis. This
statement is effective for financial statements for periods ending after
December 15, 1997 and requires restatement of all prior-period per share data
presented. There would have been no change in the earnings per share as
reflected in the accompanying Consolidated Statements of Operations had SFAS No.
128 been effective in the periods ended June 30, 1997 and 1996.
In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income"
("SFAS No. 130"), which establishes standards for reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. This statement is effective for fiscal years beginning
after December 15, 1997 and requires reclassification of prior period financial
statements. The Company is currently considering the various presentation
options of SFAS No. 130.
-13-
Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information" ("SFAS 131"), which revises disclosure
requirements about operating segments and establishes standards for related
disclosures about products and services, geographic areas and major customers.
SFAS 131 requires that public business enterprises report financial and
descriptive information about its reportable operating segments. The statement
is effective for periods beginning after December 15, 1997 and requires
restatement of prior years in the initial year of application. SFAS No. 131 will
impact the Company's segment disclosures, but will not impact the Company's
results of operations, financial position or cash flows.
Liquidity and Financial Position
At June 30, 1997, cash and cash equivalents totaled $134.6 million, an increase
of $6.7 million from $127.9 million held at December 31, 1996. In comparison,
during the first two quarters of 1996, cash and cash equivalents from continuing
operations decreased by $25.2 million.
Operating activities generated net cash of $283.3 million during the six months
ended June 30, 1997 compared to $216.9 million in 1996. Improved operating
results as well as timing of tax payments and distributions received from
unconsolidated subsidiaries in 1997 contributed to the increase in cash provided
by operating activities during the first half of 1997 compared to 1996.
Net cash used in investing activities was $67.2 million for the six months ended
June 30, 1997 compared to $41.7 million in 1996. In 1997 the Company invested
$66.7 million for capital expenditures and additions to computer software and
other intangibles compared to $55.6 million in 1996. Additionally, in 1996, the
Company generated $16.2 million of proceeds from marketable securities.
Net cash used in financing activities was $205.6 million during the six months
ended June 30, 1997 compared to $198.0 million in the 1996. Payments of
dividends accounted for $75.3 million during the first half of 1997 compared to
$224.2 million in 1996, which represented the dividend policy prior to the
reorganization. The Company used $30.9 million during the first half of 1997 for
the repurchase of stock compared to $3.3 million during the first half of 1996.
Proceeds from the exercise of stock options was $19.1 million for the first half
of 1997 compared to $38.3 million in 1996.
On April 1, 1997, the Company completed a $300.0 million minority interest
financing. Funds raised by the minority interest financing were loaned to the
Company and used to repay a portion of the outstanding short-term debt in April
1997. Also, during the second quarter of 1997, the Company re-entered the
commercial paper market and used the proceeds to repay the additional amounts
outstanding on the short-term debt facility. Overall, during the first half of
1997, the Company reduced its total debt outstanding by $117.9 million.
Dividends
On July 16, 1997, the Board of Directors approved a third quarter 1997 dividend
of $.22 per share, payable September 10, 1997 to shareholders of record at the
close of business August 20, 1997.
-14-
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Information required under this item is contained in Note 5 to the
Financial Statements, which is incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of The Dun & Bradstreet Corporation
was held on May 1, 1997.
The following nominees for director named in the Proxy Statement dated
March 27, 1997, were elected at the Meeting by the votes indicated.
For Withheld
Hall Adams Jr. 146,512,312 2,015,600
Ronald L. Kuehn 147,243,306 1,284,606
Michael R. Quinlan 147,147,070 1,380,842
The votes in favor of the election of the nominees represent at least
98.6% of the shares voted for each of the nominees.
The amendment of The Dun & Bradstreet Corporation Corporate Management
Incentive Plan was approved by the following vote:
For Against Abstain
Number of shares 139,238,771 8,386,836 902,305
The amendment of The Key Employees Performance Unit Plan for The Dun &
Bradstreet Corporation and Subsidiaries was approved by the following
vote:
For Against Abstain
Number of shares 140,401,645 7,234,358 891,909
The appointment of Coopers & Lybrand L.L.P. as independent public
accountants was approved by the following vote:
For Against Abstain
Number of shares 148,114,317 217,272 196,323
The proposal on implementation of the MacBride Principles in Northern
Ireland was defeated by the following vote:
For Against Abstain Non-Votes
Number of shares 14,555,526 104,845,042 17,128,527 11,998,817
-15-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
(10q) Supplemental Executive Benefit Plan, as amended January 15, 1997.
(10u) Amended and Restated Agreement of Limited Partnership of D&B
Investors L.P., dated as April 1, 1997.
(11) Statement Re: Computation of Per Share Earnings
(27) Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the quarter ended June 30, 1997.
-16-
<PAGE>
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 13, 1997 By: FRANK S. SOWINSKI
================================================
Frank S. Sowinski
Senior Vice President - Chief Financial Officer
Date: August 13, 1997 By: CHESTER J. GEVEDA, JR.
================================================
Chester J. Geveda, Jr.
Vice President and Controller
-17-
<PAGE>
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 , 1997 By:
===============================================
Frank S. Sowinski
Senior Vice President - Chief Financial Officer
Date: August , 1997 By:
===============================================
Chester J. Geveda, Jr.
Vice President and Controller
-17-
<PAGE>
Exhibit 10q
SUPPLEMENTAL EXECUTIVE BENEFIT PLAN
OF
THE DUN & BRADSTREET CORPORATION
(as amended effective January 15, 1997)
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.
SECTION 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.
S:\01743\97RET\SEBP97.WPD
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.
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.
<PAGE>
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
"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 stockholders 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 30% or more of the combined voting power of the
Corporation'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
Corporation to effect a transaction described in clause (a), (c) or (d) of this
Section) whose election by the Board or nomination for election by the
Corporation's stockholders 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 stockholders 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 or (2) a merger or consolidation effected to
implement a recapitalization of the Corporation (or similar transaction) in
which no "person" (as hereinabove defined) acquires more than 50% of the
combined voting power of the Corporation's then outstanding securities; or
(d) the stockholders 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 Executive Compensation and Stock Option
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 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 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 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.
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 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
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.
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 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.
<PAGE>
SECTION 3
Eligibility For Benefits
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.
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.
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:
(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 any business
of the Corporation or an Affiliate;
(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 or Vested Former 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
<PAGE>
(iii) 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":
(a) 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;
(b) 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
(c) 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.
(d) 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
(e) 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 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.
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
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.
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 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.
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 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.
(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.
<PAGE>
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.
(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:
<PAGE>
(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).
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 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.
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 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.
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.
4.8 (a) Subject to Section 4.8(c), the Corporation shall 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.
<PAGE>
(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 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.
<PAGE>
(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 assessment.
<PAGE>
SECTION 5
Disability Benefits
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.
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
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.
<PAGE>
6.2 Upon the death of a Participant or Vested Former 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.
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.
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.
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.
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 which the Participant or Vested Former Participant dies, and will
continue until the first day of the month in which the Surviving Spouse dies.
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.
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 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.
<PAGE>
(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.
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.
SECTION 7
Committee
7.1 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 the 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. All such actions of the Committee shall be
conclusive and binding upon all Participants, Former Participants, Vested Former
Participants and Surviving Spouses.
<PAGE>
SECTION 8
Miscellaneous
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.
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.
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 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.
<PAGE>
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 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 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.
<PAGE>
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 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.
8.5 (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
and any assets held by such trust to assist the Corporation and any assets held
by such trust to assist the Corporation in meeting it obligations under the Plan
shall meet the requirements necessary to retain such unfunded status.
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 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.
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.
8.8 The Corporation may withhold from any benefit under the Plan
an amount sufficient to satisfy its tax withholding obligations.
8.9 The Plan is established under and will be construed according
to the laws of the State of New York.
<PAGE>
Exhibit 10u
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 I.1. Formation.SECTION I.1. Formation.SECTION I.1.
Formation.SECTION I.1. 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 I.2. Name.SECTION I.2. Name.SECTION I.2. Name.SECTION I.2.
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 I.3. Purpose.SECTION I.3. Purpose.SECTION I.3. Purpose.SECTION
I.3. 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 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 I.4. Principal Place of Business.SECTION I.4. Principal Place
of Business.SECTION I.4. Principal Place of Business.SECTION I.4. 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 I.5. Term.SECTION I.5. Term.SECTION I.5. Term.SECTION I.5.
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 I.6. Filings; Agent for Service of Process.SECTION I.6.
Filings; Agent for Service of Process.SECTION I.6. Filings; Agent for Service of
Process.SECTION I.6. 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 I.7. Title to Partnership Property.SECTION I.7. Title to
Partnership Property.SECTION I.7. Title to Partnership Property.SECTION I.7.
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 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 I.8. Payments of Individual Obligations.SECTION I.8. Payments
of Individual Obligations.SECTION I.8. Payments of Individual
Obligations.SECTION I.8. 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 I.9. Independent Activities; Transactions with
Affiliates.SECTION I.9. Independent Activities; Transactions with
Affiliates.SECTION I.9. Independent Activities; Transactions with
Affiliates.SECTION I.9. 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 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 I.10. Definitions.SECTION I.10. Definitions.SECTION I.10.
Definitions.SECTION I.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.
"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 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.
"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.
"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."
"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.
"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
(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 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."
"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.
"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;
(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;
(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 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.
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).
"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 I.11. Other Terms.SECTION I.11. Other Terms.SECTION I.11.
Other Terms.SECTION I.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;"
(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 II.1. General Partner. SECTION II.1. General Partner. SECTION II.1.
General Partner. SECTION II.1. 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:
- - ------------------------------ ---------------------------- ------------------
Name and Address Capital Contribution/ Initial
Capital Account Percentage
Interest
- - ------------------------------ -------------------------------------- ----------
- - ------------------------------ -------------------------------------- ----------
Duns Investing VII Corporation Cash in an amount equal to $8,519,792, 1%
911 Washington Street resulting in a Closing Date Capital
Suite 100 Account equal to $8,551,713.
Wilmington, Delaware 19801
Attention: Kenneth J. Kubacki
- - ----------------------------------------------------- --------------------------
SECTION II.2. Limited Partners.SECTION II.2. Limited Partners.SECTION
II.2. Limited Partners.SECTION II.2. 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:
- - ----------------------------------------------------- --------------------------
<TABLE>
Name and Address Capital Contribution/ Initial
<CAPTION>
<S> <C> <C>
Capital Account Percentage
Interest
- - ----------------------------------------------------- ------------------------------------------- ------------------
- - ----------------------------------------------------- ------------------------------------------- ------------------
Duns Holding, Inc. Software and Databases with an aggregate 62.92%
911 Washington Street initial Gross Asset Value equal to
Suite 250 $523,458,000; Partnership Subsidiary I
Wilmington, Delaware 19801 Stock with an initial Gross Asset Value
Attention: Kenneth J. Kubacki equal to $1,000, and cash in an amount
Facsimile: (302) 428-1410 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 $5,423,469, 1%
One Diamond Hill Road resulting in a Closing Date Capital
Murray Hill, New Jersey 07974 Account equal to $8,551,713
Attention: Robert J. Levin
Facsimile: (908) 665-1409
- - ----------------------------------------------------- ------------------------------------------- ------------------
- - ----------------------------------------------------- ------------------------------------------- ------------------
Utrecht-America Finance Co. Cash in an amount equal to $8,519,792, 1%
c/o Utrecht-America Financial resulting in a Closing Date Capital
Services Corp. Account equal to $8,551,713
245 Park Avenue
New York, NY 10167
Attention: Treasurer
- - ----------------------------------------------------- ------------------------------------------- ------------------
- - ----------------------------------------------------- ------------------------------------------- ------------------
Leiden, Inc. Cash in an amount equal to $291,480,208, 34.08%
c/o Utrecht-America Financial resulting in a Closing Date Capital
Services Corp. Account equal to $291,480,208
245 Park Avenue
New York, NY 10167
Attention: Treasurer
- - ----------------------------------------------------- ------------------------------------------- ------------------
</TABLE>
<PAGE>
SECTION II.3. Additional Capital Contributions.SECTION II.3. Additional
Capital Contributions.SECTION II.3. Additional Capital Contributions.SECTION
II.3. 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 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 II.4. Other Matters.SECTION II.4. Other Matters.SECTION II.4.
Other Matters.SECTION II.4. 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.
ARTICLE III
ALLOCATIONS
SECTION III.1. Profits.SECTION III.1. Profits.SECTION III.1.
Profits.SECTION III.1. 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
(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 III.2. Losses.SECTION III.2. Losses.SECTION III.2.
Losses.SECTION III.2. 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 III.3. Special Loss Allocation.SECTION III.3. Special Loss
Allocation.SECTION III.3. Special Loss Allocation.SECTION III.3. 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 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 III.4. Other Special Allocations.SECTION III.4. Other Special
Allocations.SECTION III.4. Other Special Allocations.SECTION III.4. 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.
(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 III.5. Curative Allocations.SECTION III.5. Curative
Allocations.SECTION III.5. Curative Allocations.SECTION III.5. 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 III.6. Loss Limitation.SECTION III.6. Loss Limitation.SECTION
III.6. Loss Limitation.SECTION III.6. 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 III.7. Other Allocation Rules.SECTION III.7. Other Allocation
Rules.SECTION III.7. Other Allocation Rules.SECTION III.7. 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 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 III.8. Tax Allocations: Code Section 704(c).SECTION III.8. Tax
Allocations Code Section 704(c).SECTION III.8. Tax Allocations Code Section
704(c).SECTION III.8. 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.
ARTICLE IV
DISTRIBUTIONS
SECTION IV.1. Cash Flow.SECTION IV.1. Cash Flow.SECTION IV.1. Cash
Flow.SECTION IV.1. 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 IV.2. Amounts Withheld.SECTION IV.2. Amounts Withheld.SECTION
IV.2. Amounts Withheld.SECTION IV.2. 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 V.1. Authority of the General Partner.SECTION V.1. Authority of
the General Partner.SECTION V.1. Authority of the General Partner.SECTION V.1.
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 V.2. Right to Rely on the General Partner.SECTION V.2. Right to
Rely on the General Partner.SECTION V.2. Right to Rely on the General
Partner.SECTION V.2. 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
(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 V.3. Restrictions on Authority of the General Partner.SECTION
V.3. Restrictions on Authority of the General Partner.SECTION V.3. Restrictions
on Authority of the General Partner.SECTION V.3. 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);
(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.
SECTION V.4. Duties and Obligations of the General Partner.SECTION V.4.
Duties and Obligations of the General Partner.SECTION V.4. Duties and
Obligations of the General Partner.SECTION V.4. 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
<PAGE>
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
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 V.5. Indemnification of the Partners.SECTION V.5.
Indemnification of the Partners.SECTION V.5. Indemnification of the
Partners.SECTION V.5. 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.
(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 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 V.6. Compensation and Expenses.SECTION V.6. Compensation and
Expenses.SECTION V.6. Compensation and Expenses.SECTION V.6. 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.
(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 VI.1. Rights or Powers.SECTION VI.1. Rights or Powers.SECTION
VI.1. Rights or Powers.SECTION VI.1. 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 VI.2. Voting Rights.SECTION VI.2. Voting Rights.SECTION VI.2.
Voting Rights.SECTION VI.2. 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 VI.3. Procedure for Consent.SECTION VI.3. Procedure for
Consent.SECTION VI.3. Procedure for Consent.SECTION VI.3. 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 VII.1. In General.SECTION VII.1. In General.SECTION VII.1. In
General.SECTION VII.1. 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 VII.2. Representations and Warranties.SECTION VII.2.
Representations and Warranties.SECTION VII.2. Representations and
Warranties.SECTION VII.2. 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 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.
(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:
(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 VIII.1. Accounting; Books and Records.SECTION VIII.1.
Accounting; Books and Records.SECTION VIII.1. Accounting; Books and
Records.SECTION VIII.1. 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.
(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 VIII.2. Reports.SECTION VIII.2. Reports.SECTION VIII.2.
Reports.SECTION VIII.2. 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:
(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 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 VIII.3. 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.
(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 VIII.4. Proprietary Information.SECTION VIII.4. Proprietary
Information.SECTION VIII.4. Proprietary Information.SECTION VIII.4. 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 IX.1. Amendments.SECTION IX.1. Amendments.SECTION IX.1.
Amendments.SECTION IX.1. 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 IX.2. Meetings of the Partners.SECTION IX.2. Meetings of the
Partners.SECTION IX.2. Meetings of the Partners.SECTION IX.2. 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 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 IX.3. Unanimous Consent.SECTION IX.3. Unanimous Consent.SECTION
IX.3. Unanimous Consent.SECTION IX.3. 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 X.1. Restriction on Transfers.SECTION X.1. Restriction on
Transfers.SECTION X.1. Restriction on Transfers.SECTION X.1. 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 X.2. Permitted Transfers.SECTION X.2. Permitted
Transfers.SECTION X.2. Permitted Transfers.SECTION X.2. 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.
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 X.3. Conditions to Permitted Transfers.SECTION X.3. Conditions to
Permitted Transfers.SECTION X.3. Conditions to Permitted Transfers.SECTION X.3.
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 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 X.4. Prohibited Transfers.SECTION X.4. Prohibited
Transfers.SECTION X.4. Prohibited Transfers.SECTION X.4. 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 X.5. Rights of Unadmitted Assignees.SECTION X.5. Rights of
Unadmitted Assignees.SECTION X.5. Rights of Unadmitted Assignees.SECTION X.5.
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.
SECTION X.6. Admission as Substituted Partners.SECTION X.6. Admission
as Substituted Partners.SECTION X.6. Admission as Substituted Partners.SECTION
X.6. 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 X.7. Distributions with Respect to Transferred
Interests.SECTION X.7. Distributions with Respect to Transferred
Interests.SECTION X.7. Distributions with Respect to Transferred
Interests.SECTION X.7. 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 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 X.8. Retirement of Class A Limited Partners' Interests in the
Partnership; Determination of Mark-to-Market Values and Gross Asset
Values.SECTION X.8. Retirement of Class A Limited Partners' Interests in the
Partnership; Determination of Mark-to-Market Values and Gross Asset
Values.SECTION X.8. Retirement of Class A Limited Partners' Interests in the
Partnership; Determination of Mark-to-Market Values and Gross Asset
Values.SECTION X.8. 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.
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(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 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 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 ARTICLE XI GENERAL PARTNER ARTICLE
ARTICLE XI GENERAL PARTNERGENERAL PARTNER
SECTION XI.1. Covenant Not to Withdraw, Transfer, or Dissolve.SECTION
XI.1. Covenant Not to Withdraw, Transfer, or Dissolve.SECTION XI.1. Covenant Not
to Withdraw, Transfer, or Dissolve.SECTION XI.1. 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 XI.2. Termination of Status as General Partner.SECTION XI.2.
Termination of Status as General Partner.SECTION XI.2. Termination of Status as
General Partner.SECTION XI.2. 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 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 XI.3. Election of New General Partners.SECTION XI.3. Election
of New General Partners.SECTION XI.3. Election of New General Partners.SECTION
XI.3. 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 ARTICLE XII DISSOLUTION AND
ARTICLE XII ARTICLE XII DISSOLUTION AND WINDING UPDISSOLUTION AND WINDING UP
SECTION XII.1. Liquidating Events.SECTION XII.1. Liquidating Events.SECTION
XII.1. Liquidating Events.SECTION XII.1. 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;
(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 XII.2. Winding Up.SECTION XII.2. Winding Up.SECTION XII.2.
Winding Up.SECTION XII.2. 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 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 XII.3. Restoration of Deficit Capital Accounts; Compliance With
Timing Requirements of Regulations.SECTION XII.3. Restoration of Deficit Capital
Accounts; Compliance With Timing Requirements of Regulations.SECTION XII.3.
Restoration of Deficit Capital Accounts; Compliance With Timing Requirements of
Regulations.SECTION XII.3. 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 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 XII.4. Deemed Distribution and Recontribution.SECTION XII.4.
Deemed Distribution and Recontribution.SECTION XII.4. Deemed Distribution and
Recontribution.SECTION XII.4. 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 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 XII.5. Rights of Partners.SECTION XII.5. Rights of
Partners.SECTION XII.5. Rights of Partners.SECTION XII.5. 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 XII.6. Notice of Dissolution.SECTION XII.6. Notice of
Dissolution.SECTION XII.6. Notice of Dissolution.SECTION XII.6. 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 XII.7. Liquidation Guaranteed Payment.SECTION XII.7.
Liquidation Guaranteed Payment.SECTION XII.7. Liquidation Guaranteed
Payment.SECTION XII.7. 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 XII.8. Character of Liquidating Distributions.SECTION XII.8.
Character of Liquidating Distributions.SECTION XII.8. Character of Liquidating
Distributions.SECTION XII.8. 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 XII.9. The Liquidator.SECTION XII.9. The Liquidator.SECTION
XII.9. The Liquidator.SECTION XII.9. 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.
SECTION XII.10. Form of Liquidating Distributions.SECTION XII.10. Form
of Liquidating Distributions.SECTION XII.10. Form of Liquidating
Distributions.SECTION XII.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 XIII.1. General Partner as Attorney-In-Fact.SECTION XIII.1.
General Partner as Attorney-In-Fact.SECTION XIII.1. General Partner as
Attorney-In-Fact.SECTION XIII.1. 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 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 XIII.2. Nature of Special Power.SECTION XIII.2. Nature of Special
Power.SECTION XIII.2. Nature of Special Power.SECTION XIII.2. 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 ARTICLE
SECTION XIV.1. Notice Events.SECTION XIV.1. Notice Events.SECTION XIV.1.
Notice Events.SECTION XIV.1. 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 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 XIV.2. Liquidation Notice.SECTION XIV.2. Liquidation
Notice.SECTION XIV.2. Liquidation Notice.SECTION XIV.2. 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 XIV.3. Electing Partners' Purchase Option.SECTION XIV.3.
Electing Partners' Purchase Option.SECTION XIV.3. Electing Partners' Purchase
Option.SECTION XIV.3. 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 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 XV.1. Notices.SECTION XV.1. Notices.SECTION XV.1.
Notices.SECTION XV.1. 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 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 XV.2. Binding Effect.SECTION XV.2. Binding Effect.SECTION XV.2.
Binding Effect.SECTION XV.2. 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 XV.3. Construction.SECTION XV.3. Construction.SECTION XV.3.
Construction.SECTION XV.3. 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 XV.4. Headings.SECTION XV.4. Headings.SECTION XV.4.
Headings.SECTION XV.4. 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 XV.5. Severability.SECTION XV.5. Severability.SECTION XV.5.
Severability.SECTION XV.5. 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 XV.6. Variation of Pronouns.SECTION XV.6. Variation of
Pronouns.SECTION XV.6. Variation of Pronouns.SECTION XV.6. 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.
SECTION XV.7. Governing Law.SECTION XV.7. Governing Law.SECTION XV.7.
Governing Law.SECTION XV.7. 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 XV.8. Waiver of Action for Partition.SECTION XV.8. Waiver of
Action for Partition.SECTION XV.8. Waiver of Action for Partition.SECTION XV.8.
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 XV.9. Waiver of Jury Trial.SECTION XV.9. Waiver of Jury
Trial.SECTION XV.9. Waiver of Jury Trial.SECTION XV.9. 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 XV.10. Consent to Jurisdiction.SECTION XV.10. Consent to
Jurisdiction.SECTION XV.10. Consent to Jurisdiction.SECTION XV.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 XV.11. Counterpart Execution.SECTION XV.11. Counterpart
Execution.SECTION XV.11. Counterpart Execution.SECTION XV.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 XV.12. Sole and Absolute Discretion.SECTION XV.12. Sole and
Absolute Discretion.SECTION XV.12. Sole and Absolute Discretion.SECTION XV.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 XV.13. Specific Performance.SECTION XV.13. Specific
Performance.SECTION XV.13. Specific Performance.SECTION XV.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.
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>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
GENERAL PARTNER:
DUNS INVESTING VII CORPORATION
By:
Name:
Title:
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>
LIMITED PARTNERS:
DUN & BRADSTREET, INC.
By:
Name:
Title:
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>
DUNS HOLDING, INC.
By:
Name:
Title:
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>
UTRECHT-AMERICA FINANCE CO.
By:
Name:
Title:
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.
LEIDEN, INC.
By:
Name:
Title:
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>
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
EXECUTION COPY
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>
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
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
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
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
- - --------------------------------------------------------------------------------
<TABLE>
Exhibit 11
THE DUN & BRADSTREET CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK
ON A FULLY DILUTED BASIS FOR THE QUARTER ENDED JUNE 30,
Amounts in Millions, Except Per Share Data 1997 1996
<CAPTION>
<S> <C> <C>
---- ----
(Average share data in thousands)
Weighted average number of shares. . . . . . . . . . . . . . . . . . . . . . . . . 170,994 169,955
Dilutive effect of shares issuable as of year-end under stock option
plans, stock appreciation rights and restricted stock plan. . . . . . . . . . . 2,474 842
Adjustment of shares applicable to stock options and stock
appreciation rights exercised during the year. . . . . . . . . . . . . . . . . (148) 91
--------- -----------
========= ===========
Weighted average number of shares on a fully diluted basis . . . . . . . . . . . 173,320 170,888
========= ===========
========= ===========
Income (Loss) from Continuing Operations. . . . . . . . . . . . . . . .. . . . . . $50.2 $(43.9)
Income from Discontinued Operations. .. . . . . . . . . . . . . . . . . . . . . . - .3
========= ====== =========== =====
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $50.2 $43.6
========= ====== =========== =====
Earnings (Loss) Per Share of Common Stock on a Fully Diluted Basis:
Continuing Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $0.29 $(.26)
Discontinued Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 0.0
========= ====== =========== =====
Earnings Per Share of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . $0.29 $(.26)
========= ====== =========== =====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 134607
<SECURITIES> 2614
<RECEIVABLES> 518075
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 214918
<PP&E> 820374
<DEPRECIATION> 465487
<TOTAL-ASSETS> 2223826
<CURRENT-LIABILITIES> 1984503
<BONDS> 0
0
0
<COMMON> 188421
<OTHER-SE> (631784)
<TOTAL-LIABILITY-AND-EQUITY> 2223826
<SALES> 0
<TOTAL-REVENUES> 957267
<CGS> 0
<TOTAL-COSTS> 783896
<OTHER-EXPENSES> (1575)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31134
<INCOME-PRETAX> 134268
<INCOME-TAX> 46074
<INCOME-CONTINUING> 88194
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 88194
<EPS-PRIMARY> .52
<EPS-DILUTED> .52
</TABLE>
