[CONFORMED COPY]
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MOODY'S CORPORATION
$300,000,000
7.61% Senior Notes due 2005
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NOTE PURCHASE AGREEMENT
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Dated as of October 3, 2000
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[CONFORMED COPY]
TABLE OF CONTENTS
PAGE
1. AUTHORIZATION OF NOTES....................................................1
2. SALE AND PURCHASE OF NOTES................................................1
3. CLOSING...................................................................2
4. CONDITIONS TO CLOSING.....................................................2
4.1 Representations and Warranties...................................2
4.2 Performance; No Default..........................................2
4.3 Compliance Certificates..........................................2
4.4 Opinions of Counsel..............................................3
4.5 Purchase Permitted By Applicable Law, etc........................3
4.6 Sale of Other Notes..............................................3
4.7 Payment of Special Counsel Fees..................................3
4.8 Private Placement Number.........................................3
4.9 Changes in Corporate Structure...................................4
4.10 Spin-Off.........................................................4
4.11 Proceedings and Documents........................................4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................4
5.1 Organization; Power and Authority................................4
5.2 Authorization, etc...............................................4
5.3 Disclosure.......................................................5
5.4 Organization and Ownership of Shares of Subsidiaries.............5
5.5 Financial Statements.............................................5
5.6 Compliance with Laws, Other Instruments, etc.....................6
5.7 Governmental Authorizations, etc.................................6
5.8 Litigation; Observance of Statutes and Orders....................6
5.9 Taxes............................................................6
5.10 Title to Property; Leases........................................7
5.11 Licenses, Permits, etc...........................................7
5.12 Compliance with ERISA............................................7
5.13 Private Offering by the Company..................................8
5.14 Use of Proceeds; Margin Regulations..............................8
5.15 Existing Indebtedness............................................8
5.16 Foreign Assets Control Regulations, etc..........................9
5.17 Status under Certain Statutes....................................9
6. REPRESENTATIONS OF THE PURCHASER..........................................9
6.1 Purchase for Investment..........................................9
6.2 Source of Funds..................................................9
7. INFORMATION AS TO COMPANY................................................11
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7.1 Financial and Business Information..............................11
7.2 Officer's Certificate...........................................13
7.3 Inspection......................................................13
8. PREPAYMENT OF THE NOTES..................................................14
8.1 Maturity........................................................14
8.2 Optional Prepayments with Make-Whole Amount.....................14
8.3 Allocation of Partial Prepayments...............................14
8.4 Maturity; Surrender, etc........................................15
8.5 Purchase of Notes...............................................15
8.6 Make-Whole Amount...............................................15
9. AFFIRMATIVE COVENANTS....................................................16
9.1 Compliance with Law.............................................17
9.2 Insurance.......................................................17
9.3 Maintenance of Properties.......................................17
9.4 Payment of Taxes................................................17
9.5 Corporate Existence, etc........................................18
9.6 Subsidiary Guarantors...........................................18
10.NEGATIVE COVENANTS.......................................................18
10.1 Transactions with Affiliates....................................18
10.2 Merger, Consolidation, etc......................................19
10.3 Disposition of Assets...........................................19
10.4 Limitation on Liens.............................................20
10.5 Limitation on Sale and Leaseback Transactions...................22
10.6 Total Indebtedness to EBITDA Ratio..............................22
10.7 Interest Coverage Ratio.........................................23
11.EVENTS OF DEFAULT........................................................23
12.REMEDIES ON DEFAULT, ETC.................................................25
12.1 Acceleration....................................................25
12.2 Other Remedies..................................................25
12.3 Rescission......................................................26
12.4 No Waivers or Election of Remedies, Expenses, etc...............26
13.REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES............................26
13.1 Registration of Notes...........................................26
13.2 Transfer and Exchange of Notes..................................27
13.3 Replacement of Notes............................................27
14.PAYMENTS ON NOTES........................................................27
14.1 Place of Payment................................................27
14.2 Home Office Payment.............................................28
15.EXPENSES, ETC............................................................28
15.1 Transaction Expenses............................................28
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15.2 Survival........................................................29
16.SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.............29
17.AMENDMENT AND WAIVER.....................................................29
17.1 Requirements....................................................29
17.2 Solicitation of Holders of Notes................................29
17.3 Binding Effect, etc.............................................30
17.4 Notes held by Company, etc......................................30
18.NOTICES..................................................................30
19.REPRODUCTION OF DOCUMENTS................................................31
20.CONFIDENTIAL INFORMATION.................................................31
21.SUBSTITUTION OF PURCHASER................................................32
22.MISCELLANEOUS............................................................32
22.1 Successors and Assigns..........................................32
22.2 Payments Due on Non-Business Days...............................33
22.3 Severability....................................................33
22.4 Construction....................................................33
22.5 Counterparts....................................................33
22.6 Governing Law...................................................33
SCHEDULE A -- INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED TERMS
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and
Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
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[CONFORMED COPY]
MOODY'S CORPORATION
99 Church Street
New York, New York 10007
7.61% Senior Notes due 2005
As of October 3, 2000
TO THE PURCHASERS WHOSE NAMES APPEAR IN THE ACCEPTANCE FORM AT THE END HEREOF:
Ladies and Gentlemen:
MOODY'S CORPORATION, a Delaware corporation (the "COMPANY"), agrees
with each of the purchasers whose names appear in the acceptance form at the end
hereof (each, a "Purchaser" and, collectively, the "Purchasers") as follows:
1.AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of $300,000,000 aggregate
principal amount of its 7.61% Senior Notes due 2005. As used herein, the term
"Notes" includes all notes originally issued pursuant to this Agreement and any
other notes issued in substitution therefor pursuant to Section 13. The Notes
shall be substantially in the form set out in Exhibit 1, with such changes
therefrom, if any, as may be approved by each Purchaser and the Company. Certain
capitalized terms used in this Agreement are defined in Schedule B; references
to a "Schedule" or an "Exhibit" are, unless otherwise specified, to a Schedule
or an Exhibit attached to this Agreement.
Payment of the principal of, Make-Whole Amount (if any) and interest on
the Notes shall be guaranteed by the Subsidiary Guarantors as contemplated by
Section 9.6 and as provided in the Subsidiary Guarantees.
2.SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to each Purchaser and each Purchaser will purchase from the
Company, at the Closing provided for in Section 3, Notes in the principal amount
specified opposite such Purchaser's name in Schedule A at the purchase price of
100% of the principal amount thereof. The Purchasers' obligations hereunder are
several and not joint obligations and no Purchaser shall have any liability to
any Person for the performance or non-performance of any obligation by any other
Purchaser hereunder.
3.CLOSING.
The sale and purchase of the Notes to be purchased by each Purchaser
shall occur at the offices of Milbank, Tweed, Hadley & McCloy LLP, One Chase
Manhattan Plaza, New York, New York 10005, at 10:00 a.m., New York City time, at
a closing (the "Closing") on October 3, 2000. At the Closing the Company will
deliver to each Purchaser the Notes to be purchased by such Purchaser in the
form of a single Note (or such greater number of Notes in denominations of at
least $100,000 as such Purchaser may request) dated the date of the Closing and
registered in such Purchaser's name (or in the name of such Purchaser's
nominee), against delivery by such Purchaser to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of Moody's Corporation
to account number 323233244 at The Chase Manhattan Bank in New York, New York,
ABA #021-000-021. If at the Closing the Company shall fail to tender such Notes
to any Purchaser as provided above in this Section 3, or any of the conditions
specified in Section 4 shall not have been fulfilled to such Purchaser's
satisfaction, such Purchaser shall, at such Purchaser's election, be relieved of
all further obligations under this Agreement, without thereby waiving any rights
such Purchaser may have by reason of such failure or such nonfulfillment.
4.CONDITIONS TO CLOSING.
Each Purchaser's obligation to purchase and pay for the Notes to be
sold to such Purchaser at the Closing is subject to the fulfillment to such
Purchaser's satisfaction, prior to or at the Closing, of the following
conditions:
4.1 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
4.2 PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing.
4.3 COMPLIANCE CERTIFICATES.
(a) Officer's Certificate. The Company shall have delivered to such
Purchaser an Officer's Certificate, dated the date of the Closing, certifying
that the conditions specified in Sections 4.1, 4.2, 4.9 and 4.10 have been
fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to such
Purchaser a certificate, dated the date of Closing, certifying as to the
resolutions attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and this Agreement.
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4.4 OPINIONS OF COUNSEL.
Such Purchaser shall have received opinions in form and substance
satisfactory to such Purchaser, dated the date of the Closing (a) from Simpson
Thacher & Bartlett, special counsel for the Company, covering the matters set
forth in Exhibit 4.4(a) and covering such other matters incident to the
transactions contemplated hereby as such Purchaser or the Purchasers' counsel
may reasonably request (and the Company hereby instructs its counsel to deliver
such opinion to the Purchasers) and (b) from Milbank, Tweed, Hadley & McCloy
LLP, the Purchasers' special New York counsel in connection with such
transactions, substantially in the form set forth in Exhibit 4.4(b) and covering
such other matters incident to such transactions as such Purchaser may
reasonably request.
4.5 PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing such Purchaser's purchase of Notes shall (i)
be permitted by the laws and regulations of each jurisdiction to which such
Purchaser is subject, without recourse to provisions (such as Section 1405(a)(8)
of the New York Insurance Law) permitting limited investments by insurance
companies without restriction as to the character of the particular investment,
(ii) not violate any applicable law or regulation (including, without
limitation, Regulation U, T or X of the Board of Governors of the Federal
Reserve System) and (iii) not subject such Purchaser to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof. If requested by such Purchaser,
such Purchaser shall have received an Officer's Certificate from the Company
certifying as to such matters of fact as such Purchaser may reasonably specify
to enable such Purchaser to determine whether such purchase is so permitted.
4.6 SALE OF OTHER NOTES.
Contemporaneously with the Closing the Company shall sell to each other
Purchaser and each other Purchaser shall purchase the Notes to be purchased by
it at the Closing as specified in Schedule A.
4.7 PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall have
paid on or before the Closing the fees, charges and disbursements of the
Purchasers' special counsel referred to in Section 4.4(b) to the extent
reflected in a statement of such counsel rendered to the Company at least one
Business Day prior to the Closing.
4.8 PRIVATE PLACEMENT NUMBER.
A Private Placement number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained.
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4.9 CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, the Company shall not have changed
its jurisdiction of incorporation or been a party to any merger or consolidation
and shall not have succeeded to all or any substantial part of the liabilities
of any other entity, at any time following the date of the most recent financial
statements referred to in Schedule 5.5.
4.10 SPIN-OFF.
The Spin-Off shall have occurred.
4.11 PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to such Purchaser and the Purchasers'
special counsel, and such Purchaser and such special counsel shall have received
all such counterpart originals or certified or other copies of such documents as
such Purchaser or such special counsel may reasonably request.
5.REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each Purchaser that:
5.1 ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or hold
under lease the properties it purports to own or hold under lease, to transact
the business it transacts and proposes to transact, to execute and deliver this
Agreement and the Notes and to perform the provisions hereof and thereof.
5.2 AUTHORIZATION, ETC.
This Agreement and the Notes have been duly authorized by all necessary
corporate action on the part of the Company, and this Agreement constitutes, and
upon execution and delivery thereof each Note will constitute, a legal, valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
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5.3 DISCLOSURE.
The Company, through its co-agents, Salomon Smith Barney Inc. and The
Bank of New York, has delivered to each Purchaser a copy of an Offering
Placement Memorandum, dated August 2000 (the "MEMORANDUM"), relating to the
transactions contemplated hereby. Except as disclosed in Schedule 5.3, this
Agreement, the Memorandum, the documents, certificates or other writings
identified in Schedule 5.3 and the financial statements listed in Schedule 5.5,
taken as a whole, do not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Except for
the Spin-Off and as disclosed in the Memorandum or as expressly described in
Schedule 5.3, or in one of the documents, certificates or other writings
identified therein, or in the financial statements listed in Schedule 5.5, since
December 31, 1999, there has been no change in the financial condition,
operations, business or properties of the Company or any of its Subsidiaries
except changes that individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect.
5.4 ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES.
(a) Schedule 5.4 is (except as noted therein) a complete and correct
list of the Company's Subsidiaries, showing, as to each Subsidiary, the correct
name thereof, the jurisdiction of its organization, the percentage of shares of
each class of its capital stock or similar equity interests outstanding owned by
the Company and each other Subsidiary, and whether, as of the date of the
Closing, such Subsidiary shall be a Subsidiary Guarantor.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
5.5 FINANCIAL STATEMENTS.
The Company has delivered to each Purchaser copies of the combined
financial statements of the Company listed on Schedule 5.5. All of said
financial statements fairly present in all material respects the combined
financial position of the Company as of the respective dates thereof and the
combined results of its operations and cash flows for the respective periods so
specified in conformity with GAAP (subject, in the case of any interim financial
statements, to normal year-end adjustments).
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5.6 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not (i) contravene, result in any breach of, or
constitute a default under, or result in the creation of any Lien in respect of
any property of the Company or any Subsidiary under, any indenture, mortgage,
deed of trust, loan, purchase or credit agreement, lease, corporate charter or
by-laws, or any other Material agreement or instrument to which the Company or
any Subsidiary is bound or by which the Company or any Subsidiary or any of
their respective properties may be bound or affected, (ii) conflict with or
result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Company or any Subsidiary or (iii) violate any provision of
any statute or other rule or regulation of any Governmental Authority applicable
to the Company or any Subsidiary.
5.7 GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
Notes.
5.8 LITIGATION; OBSERVANCE OF STATUTES AND ORDERS.
(a) Except as disclosed in Schedule 5.8, there are no actions, suits or
proceedings pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
5.9 TAXES.
The Company and its Subsidiaries have filed all income tax returns that
are required to have been filed in any jurisdiction, and have paid all taxes
shown to be due and payable on such returns and all other taxes and assessments
payable by them, to the extent such taxes and assessments have become due and
payable and before they have become delinquent, except for any taxes and
assessments (i) the amount of which is not individually or in the aggregate
Material or (ii) the amount, applicability or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which the Company or a Subsidiary, as the case may be, has established adequate
reserves in accordance with GAAP.
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5.10 TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good and sufficient title to
their respective Material properties, including all such properties reflected in
the most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement, except for those defects
in title and Liens that, individually or in the aggregate, would not have a
Material Adverse Effect. All leases that the Company or any Subsidiary is party
to as lessee and that individually or in the aggregate are Material are valid
and subsisting and are in full force and effect in all material respects.
5.11 LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 5.11, the Company and its Subsidiaries
own or possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights thereto, that
are Material, without known conflict with the rights of others, except for those
conflicts that, individually or in the aggregate, would not have a Material
Adverse Effect.
5.12 COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated and administered
each Plan in compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and could not reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that would reasonably be expected to result in the incurrence of any such
liability by the Company or any ERISA Affiliate, or in the imposition of any
Lien on any of the rights, properties or assets of the Company or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty
or excise tax provisions or to Section 401(a)(29) or 412 of the Code, other than
such liabilities or Liens as would not be individually or in the aggregate
Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "benefit liabilities" has the
meaning specified in section 4001 of ERISA and the terms "current value" and
"present value" have the meaning specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
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(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of the Purchasers' representation in Section
6.2 as to the sources of the funds to be used to pay the purchase price of the
Notes to be purchased by the Purchasers.
5.13 PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than the Purchasers and not more than 80 other Institutional
Investors, each of which has been offered the Notes at a private sale for
investment. Neither the Company nor anyone acting on its behalf has taken, or
will take, any action that would subject the issuance or sale of the Notes to
the registration requirements of Section 5 of the Securities Act.
5.14 USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes as set
forth in Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (12 CFR 221), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 5% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does not
have any present intention that margin stock will constitute more than 5% of the
value of such assets. As used in this Section, the terms "margin stock" and
"purpose of buying or carrying" shall have the meanings assigned to them in said
Regulation U.
5.15 EXISTING INDEBTEDNESS.
Except as described therein, Schedule 5.15 sets forth a complete and
correct list of all outstanding Indebtedness of the Company and its Subsidiaries
as of October 2, 2000, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness of the Company or its Subsidiaries. Neither the Company nor any
Subsidiary is in default and no waiver of default is currently in effect, in the
payment of any principal or interest on any Indebtedness of the Company or such
8
Subsidiary and no event or condition exists with respect to any Indebtedness of
the Company or any Subsidiary the outstanding principal amount of which exceeds
$5,000,000 that would permit (or that with notice or the lapse of time, or both,
would permit) one or more Persons to cause such Indebtedness to become due and
payable before its stated maturity or before its regularly scheduled dates of
payment.
5.16 FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17 STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.
6.REPRESENTATIONS OF THE PURCHASER.
6.1 PURCHASE FOR INVESTMENT.
Each Purchaser represents that such Purchaser is purchasing the Notes
for its own account or for one or more separate accounts maintained by it or for
the account of one or more pension or trust funds and not with a view to the
distribution thereof, provided that the disposition of such Purchaser's or their
property shall at all times be within such Purchaser's or their control. Each
Purchaser understands that the Notes have not been registered under the
Securities Act and may be resold only if registered pursuant to the provisions
of the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is
required by law, and that the Company is not required to register the Notes.
6.2 SOURCE OF FUNDS.
Each Purchaser represents that at least one of the following statements
is an accurate representation as to each source of funds (a "Source") to be used
by such Purchaser to pay the purchase price of the Notes to be purchased by such
Purchaser hereunder:
(a) the Source is an "insurance company general account" (as the term
is defined in PTE 95-60 (issued July 12, 1995)) in respect of which the reserves
and liabilities (as defined by the annual statement for life insurance companies
approved by the National Association of Insurance Commissioners (the "NAIC
Annual Statement")) for the general account contract(s) held by or on behalf of
any employee benefit plan together with the amount of the reserves and
liabilities for the general account contract(s) held by or on behalf of any
other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60) or by the same employee
9
organization in the general account do not exceed 10% of the total reserves and
liabilities of the general account (exclusive of separate account liabilities)
plus surplus as set forth in the NAIC Annual Statement filed with such
Purchaser's state of domicile; or
(b) the Source is a separate account that is maintained solely in
connection with such Purchaser's fixed contractual obligations under which the
amounts payable, or credited, to any employee benefit plan (or its related
trust) that has any interest in such separate account (or to any participant or
beneficiary of such plan (including any annuitant)) are not affected in any
manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii) a
bank collective investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as disclosed by such Purchaser to the Company in
writing pursuant to this paragraph (c), no employee benefit plan or group of
plans maintained by the same employer or employee organization beneficially owns
more than 10% of all assets allocated to such pooled separate account or
collective investment fund; or
(d) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified professional
asset manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan's assets that are included in such investment fund,
when combined with the assets of all other employee benefit plans established or
maintained by the same employer or by an affiliate (within the meaning of
Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client assets
managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption
are satisfied, neither the QPAM nor a person controlling or controlled by the
QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity of
such QPAM and (ii) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (d); or
(e) the Source constitutes assets of a "plan(s)" (within the meaning of
Section IV of PTE 96-23 (the "INHAM Exemption")) managed by an "in-house asset
manager" or "INHAM" (within the meaning of Part IV of the INHAM Exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied,
neither the INHAM nor a person controlling or controlled by the INHAM (applying
the definition of "control" in Section IV(h) of the INHAM Exemption) owns a 5%
or more interest in the Company and (i) the identity of such INHAM and (ii) the
name(s) of the employee benefit plan(s) whose assets constitute the Source have
been disclosed to the Company in writing pursuant to this paragraph (e); or
(f) the Source is a governmental plan; or
10
(g) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each of
which has been identified to the Company in writing pursuant to this paragraph
(g); or
(h) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan", and "separate account" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
7.INFORMATION AS TO COMPANY.
7.1 FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements - within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of operations, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such quarter and (in the case of the second and third
quarters) for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
copies of the Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 7.1(a);
(b) Annual Statements - within 120 days after the end of each
fiscal year of the Company, duplicate copies of;
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of operations, changes in
shareholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
11
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied by an opinion thereon of independent certified public accountants of
recognized national standing, which opinion shall state that such financial
statements present fairly, in all material respects, the financial position of
the companies being reported upon and their results of operations and cash flows
and have been prepared in conformity with GAAP, and that the examination of such
accountants in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such audit
provides a reasonable basis for such opinion in the circumstances, provided that
the delivery within the time period specified above of the Company's Annual
Report on Form 10-K for such fiscal year (together with the Company's annual
report to shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements therefor and filed
with the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 7.1(b);
(c) SEC and Other Reports -- upon the request of any such holder after
being notified by the Company of any of the following (and the Company hereby
agrees to promptly notify each holder of a Note of any of the following), one
copy of (i) each financial statement, report, notice or proxy statement sent by
the Company or any Subsidiary to public securities holders generally, and (ii)
each regular or periodic report, each registration statement that shall have
become effective (without exhibits except as expressly requested by such
holder), and each final prospectus and all amendments thereto filed by the
Company or any Subsidiary with the Securities and Exchange Commission;
(d) Notice of Default or Event of Default -- promptly, and in any event
within five days after a Responsible Officer becoming aware of the existence of
any Default or Event of Default, a written notice specifying the nature and
period of existence thereof and what action the Company is taking or proposes to
take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days after
a Responsible Officer becoming aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Company or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined
in section 4043(b) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer Plan that such action
has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating
12
to employee benefit plans, or in the imposition of any Lien on any of
the rights, properties or assets of the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with any other
such liabilities or Liens then existing, would reasonably be expected
to have a Material Adverse Effect; and
(f) Requested Information -- with reasonable promptness, such
other data and information relating to the business, operations,
affairs, financial condition, assets or properties of the Company or
any of its Subsidiaries or relating to the ability of the Company to
perform its obligations hereunder and under the Notes as from time to
time may be reasonably requested by any such holder of Notes.
7.2 OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1 (a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.3 through Section 10.7 hereof,
inclusive, as of the end of the quarterly or annual period covered by the
statements then being furnished and as of any other applicable dates of
determination (including with respect to each such Section, where applicable,
the calculations of the maximum or minimum amount, ratio or percentage, as the
case may be, permissible under the terms of such Sections, and the calculation
of the amount, ratio or percentage then in existence); and
(b) Event of Default -- a statement that such officer has reviewed the
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and its
Subsidiaries from the beginning of the quarterly or annual period covered by the
statements then being furnished to the date of the certificate and that such
review shall not have disclosed the existence during such period of any
condition or event that constitutes a Default or an Event of Default or, if any
such condition or event existed or exists (including, without limitation, any
such event or condition resulting from the failure of the Company or any
Subsidiary to comply with any Environmental Law), specifying the nature and
period of existence thereof and what action the Company shall have taken or
proposes to take with respect thereto.
7.3 INSPECTION.
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor.
(a) No Default -- if no Default or Event of Default then
exists, at the expense of such holder and upon reasonable prior notice
to the Company, to visit the principal executive office of the Company,
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries with the Company's officers, and, with the consent of the
13
Company (which consent will not be unreasonably withheld) to visit the
other offices and properties of the Company and each Subsidiary, all at
such reasonable times and as often as may be reasonably requested in
writing; and
(b) Default -- if a Default or Event of Default then exists,
at the expense of the Company to visit and inspect any of the offices
or properties of the Company or any Subsidiary, to examine all their
respective books of account, records, reports and other papers, to make
copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers and independent
public accountants (and by this provision the Company authorizes said
accountants to discuss the affairs, finances and accounts of the
Company and its Subsidiaries), all at such times and as often as may be
requested.
8.PREPAYMENT OF THE NOTES.
8.1 MATURITY.
As provided therein, the entire unpaid principal amount of the Notes
shall be due and payable on September 30, 2005.
8.2 OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
The Company may, at its option, upon notice as provided below, prepay
at any time all, or from time to time any part of, the Notes, in an amount not
less than 10% of the aggregate principal amount of the Notes then outstanding in
the case of a partial prepayment, at 100% of the principal amount so prepaid,
plus the Make-Whole Amount determined for the prepayment date with respect to
such principal amount. The Company will give each holder of Notes written notice
of each optional prepayment under this Section 8.2 not less than 30 days and not
more than 60 days prior to the date fixed for such prepayment. Each such notice
shall specify such date, the aggregate principal amount of the Notes to be
prepaid on such date, the principal amount of each Note held by such holder to
be prepaid (determined in accordance with Section 8.3), and the interest to be
paid on the prepayment date with respect to such principal amount being prepaid,
and shall be accompanied by a certificate of a Senior Financial Officer as to
the estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the prepayment),
setting forth the details of such computation. Two Business Days prior to such
prepayment, the Company shall deliver to each holder of Notes a certificate of a
Senior Financial Officer specifying the calculation of such Make-Whole Amount as
of the specified prepayment date.
8.3 ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for prepayment.
14
8.4 MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 8, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and
Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.5 PURCHASE OF NOTES.
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except (a) upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes or (b) pursuant to an
offer to purchase made by the Company or an Affiliate pro rata to the holders of
all Notes at the time outstanding upon the same terms and conditions. Any such
offer shall provide each holder with sufficient information to enable it to make
an informed decision with respect to such offer, and shall remain open for at
least twenty Business Days. If the holders of more than 50% of the principal
amount of the Notes then outstanding accept such offer, the Company shall
promptly notify the remaining holders of such fact and the expiration date for
the acceptance by holders of Notes of such offer shall be extended by the number
of days necessary to give each such remaining holder at least five Business Days
from its receipt of such notice to accept such offer. The Company will promptly
cancel all Notes acquired by it or any Affiliate pursuant to any payment,
prepayment or purchase of Notes pursuant to any provision of this Agreement and
no Notes may be issued in substitution or exchange for any such Notes.
8.6 MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an amount
equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments with respect to the Called Principal of such Note over the amount of
such Called Principal, provided that the Make-Whole Amount may in no event be
less than zero. For the purposes of determining the Make-Whole Amount, the
following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to Section 8.2 or
has become or is declared to be immediately due and payable pursuant to
Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal
of any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on which
interest on the Notes is payable) equal to the Reinvestment Yield with
respect to such Called Principal.
15
"REINVESTMENT YIELD" means, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (i)
the yields reported, as of 10:00 A.M. (New York City time) on the
second Business Day preceding the Settlement Date with respect to such
Called Principal, on the display designated as Bloomberg Financial
Markets "Page PX1" (or such other display as may replace Bloomberg
Financial Markets "Page PX1") for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of
such Called Principal as of such Settlement Date, or (ii) if such
yields are not reported as of such time or the yields reported as of
such time are not ascertainable, the Treasury Constant Maturity Series
Yields reported, for the latest day for which such yields have been so
reported as of the second Business Day preceding the Settlement Date
with respect to such Called Principal, in U.S. Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for actively traded U.S. Treasury securities having a
constant maturity equal to the Remaining Average Life of such Called
Principal as of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between (1) the
actively traded "on the run" U.S. Treasury security with the maturity
closest to and greater than the Remaining Average Life and (2) the
actively traded "on the run" U.S. Treasury security with the maturity
closest to and less than the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth
year) obtained by dividing (i) such Called Principal into (ii) the sum
of the products obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such Called Principal
by (b) the number of years (calculated to the nearest one-twelfth year)
that will elapse between the Settlement Date with respect to such
Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the
Called Principal of any Note, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with
respect to such Called Principal if no payment of such Called Principal
were made prior to its scheduled due date, provided that if such
Settlement Date is not a date on which interest payments are due to be
made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of
interest accrued to such Settlement Date and required to be paid on
such Settlement Date pursuant to Section 8.2 or 12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal
of any Note, the date on which such Called Principal is to be prepaid
pursuant to Section 8.2 or has become or is declared to be immediately
due and payable pursuant to Section 12.1, as the context requires.
9.AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
16
9.1 COMPLIANCE WITH LAW.
The Company will and will cause each of its Subsidiaries to comply with
all laws, ordinances or governmental rules or regulations to which each of them
is subject, including, without limitation, Environmental Laws, and will obtain
and maintain in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their respective
properties or to the conduct of their respective businesses, in each case to the
extent necessary to ensure that non-compliance with such laws, ordinances or
governmental rules or regulations or failures to obtain or maintain in effect
such licenses, certificates, permits, franchises and other governmental
authorizations would not reasonably be expected, individually or in the
aggregate, to have a materially adverse effect on the business, operations,
affairs, financial condition, properties or assets of the Company and its
Subsidiaries taken as a whole.
9.2 INSURANCE.
The Company will and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles,
co-insurance and self-insurance, if adequate reserves are maintained with
respect thereto) as is customary in the case of entities of established
reputations engaged in the same or a similar business and similarly situated.
9.3 MAINTENANCE OF PROPERTIES.
The Company will and will cause each of its Subsidiaries to maintain
and keep, or cause to be maintained and kept, their respective properties in
good repair, working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be properly conducted
at all times, provided that this Section shall not prevent the Company or any
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance would not, individually
or in the aggregate, have a materially adverse effect on the business,
operations, affairs, financial condition, properties or assets of the Company
and its Subsidiaries taken as a whole.
9.4 PAYMENT OF TAXES.
The Company will and will cause each of its Subsidiaries to file all
income tax or similar tax returns required to be filed in any jurisdiction and
to pay and discharge all taxes shown to be due and payable on such returns and
all other taxes, assessments, governmental charges, or levies payable by any of
them, to the extent such taxes and assessments have become due and payable and
before they have become delinquent, provided that neither the Company nor any
Subsidiary need pay any such tax or assessment if (i) the amount, applicability
or validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate would not reasonably be expected
17
to have a materially adverse effect on the business, operations, affairs,
financial condition, properties or assets of the Company and its Subsidiaries
taken as a whole.
9.5 CORPORATE EXISTENCE, ETC.
Subject to Section 10.2, the Company will at all times preserve and
keep in full force and effect its corporate existence, and the Company will at
all times preserve and keep in full force and effect the corporate existence of
each of its Subsidiaries and all rights and franchises of the Company and its
Subsidiaries unless, in the good faith judgment of the Company, the termination
of or failure to preserve and keep in full force and effect the corporate
existence of any Subsidiary or any such right or franchise would not,
individually or in the aggregate, have a materially adverse effect on the
business, operations, affairs, financial condition, properties or assets of the
Company and its Subsidiaries taken as a whole.
9.6 SUBSIDIARY GUARANTORS.
(a) The Company will ensure that each Subsidiary that as of the date of
Closing or at any time thereafter has outstanding any Indebtedness under, or any
a Guaranty with respect to any Indebtedness of the Company or any of its
Subsidiaries outstanding under, the Credit Facility (or is otherwise a
co-obligor or jointly liable with respect to any such Indebtedness) is or will
become a Subsidiary Guarantor.
(b) Upon notice by the Company to each holder of a Note (which notice
shall contain a certification by the Company as to the matters specified in
clauses (x) and (y) below), a Subsidiary Guarantor shall cease to be a
Subsidiary Guarantor and shall be released from its obligations under its
Subsidiary Guarantee if (x) such Subsidiary Guarantor shall not have outstanding
any Indebtedness under, or any Guaranty with respect to any Indebtedness of the
Company or any of its Subsidiaries outstanding under, the Credit Facility (and
shall not otherwise be a co-obligor or jointly liable with respect to any such
other Indebtedness) and (y) both immediately before and after giving effect to
such release no Default or Event of Default shall have occurred and be
continuing. If a Subsidiary again incurs any Indebtedness under, or guarantees
any Indebtedness of the Company or any of its Subsidiaries outstanding under,
the Credit Facility (or otherwise becomes a co-obligor or jointly liable with
respect to any such Indebtedness), then the Company will cause such Subsidiary
to become a Subsidiary Guarantor in accordance with the provisions of Subsection
(a) above.
10.NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
10.1 TRANSACTIONS WITH AFFILIATES.
The Company will not and will not permit any Subsidiary to enter into
directly or indirectly any Material transaction or Material group of related
transactions (including without limitation the purchase, lease, sale or exchange
of properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or another Subsidiary), except pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and
18
reasonable terms no less favorable to the Company or such Subsidiary than would
be obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
10.2 MERGER, CONSOLIDATION, ETC.
The Company shall not consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person unless:
(a) the successor formed by such consolidation or the survivor
of such merger or the Person that acquires by conveyance, transfer or
lease substantially all of the assets of the Company, as the case may
be, shall be a solvent corporation organized and existing under the
laws of the United States or any State thereof (including the District
of Columbia), and, if the Company is not such corporation, such
corporation shall have executed and delivered to each holder of any
Notes its assumption of the due and punctual performance and observance
of each covenant and condition of this Agreement and the Notes; and
(b) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing
(including, without limitation, any Default or Event of Default of
Section 10.6 or 10.7 as the provisions of such sections shall be
calculated on a pro forma basis as of the date of such transaction).
No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under this Agreement or the Notes.
10.3 DISPOSITION OF ASSETS.
The Company will not and will not permit any Subsidiary to, directly or
indirectly, make any sale, transfer, lease (as lessor), loan or other
disposition of any property or assets (an "Asset Sale") other than:
(a) Asset Sales in the ordinary course of business;
(b) Asset Sales by a Subsidiary to the Company or to a
Wholly-Owned Subsidiary;
(c) Non-Recourse Asset Sales of accounts receivable of the
Company or any Subsidiary on commercially reasonable terms for cash or
other highly liquid investments; and
(d) other Asset Sales, provided that
(i) immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be
continuing, and
19
(ii) the aggregate net book value of property or
assets disposed of in such proposed Asset Sale and all other
Asset Sales not permitted by clause (a), (b) or (c) above
during the preceding 36 consecutive calendar months does not
exceed 30% of the average of Consolidated Total Assets,
calculated using figures as of the last day of the twelve most
recently ended quarterly fiscal periods; and, provided
further, that for purposes of this clause (ii), there shall be
excluded from the calculation of the aggregate net book value
of property or assets disposed of during any 36 month period
any Asset Sale if and to the extent that an amount equal to
the net proceeds realized upon such Asset Sale is applied or
has been applied by the Company or such Subsidiary, as the
case may be, (A) within one years time before or after the
effective date of such Asset Sale (but in all events, without
duplication), (1) to reinvest in assets used in the business
of the Company or its Subsidiaries or (2) to purchase the
capital stock of any Person that, as a result of such capital
stock purchase, becomes a Subsidiary or (B) within 180 days
after the effective date of such Asset Sale, to repay
long-term Indebtedness (including any optional prepayment of
the Notes pursuant to Section 8.2) which is not subordinated
in right of payment to the Notes.
For purposes of this Section 10.3, any stock of a Subsidiary that is the subject
of an Asset Sale shall be valued at the aggregate net book value of the assets
of such Subsidiary multiplied by a fraction, the numerator of which is the
aggregate number of shares of stock of such Subsidiary disposed of in such Asset
Sale and the denominator of which is the aggregate number of shares of stock of
such Subsidiary outstanding immediately prior to such Asset Sale.
10.4 LIMITATION ON LIENS.
The Company will not and will not permit any Subsidiary to create,
assume, incur or suffer to exist any Lien upon or with respect to any property,
whether now owned or hereafter acquired, securing any Indebtedness or other
obligation, provided that nothing in this covenant shall prohibit:
(a) Liens in respect of property of the Company or any
Subsidiary existing on the date of this Agreement and described in
Schedule 5.15;
(b) Liens in respect of the acquisition of property as
follows:
(i) Liens covering property acquired by the Company
or any Subsidiary, which Liens are created at the time of such
acquisition or within 180 days thereafter, to secure
Indebtedness assumed or incurred to finance all or any part of
the purchase price of such property, provided that the
aggregate principal amount of Indebtedness secured by all such
Liens shall not exceed the cost of such property and any
improvements then being financed;
(ii) in the case of any Person that after the date of
this Agreement becomes a Subsidiary or is consolidated with or
merged with or into the Company or any Subsidiary or sells,
leases or otherwise disposes of all or substantially all of
its property to the Company or such Subsidiary, Liens existing
at the time such
20
Person becomes a Subsidiary or is so consolidated or merged or
effects such sale, lease or other disposition of property (and
not incurred in anticipation thereof); or
(iii) in the case of any property acquired by the
Company or any Subsidiary after the date of this Agreement,
Liens existing on such property at the time of acquisition
thereof (and not incurred in anticipation thereof), whether or
not the Indebtedness secured thereby is assumed by the Company
or such Subsidiary;
provided that in any such case no such Lien shall extend to or
cover any other property of the Company or such Subsidiary, as
the case may be;
(c) Liens created by a Subsidiary in favor of the Company
securing Indebtedness owed by such Subsidiary to the Company;
(d) Liens on property sold or transferred pursuant to a Sale
and Leaseback Transaction permitted under Section 10.5;
(e) Liens resulting from any judgment rendered by a court of
competent jurisdiction, the appeal of which the Company or a Subsidiary
is prosecuting on a timely basis in good faith by appropriate
proceedings and for which the Company or a Subsidiary, as applicable,
has established adequate reserves on its books in accordance with GAAP;
(f) Liens for taxes or other governmental charges or levies
not yet due and payable;
(g) Liens arising by operation of law in the ordinary course
of business of the Company and its Subsidiaries, which Liens secure
obligations (other than Indebtedness) not more than 60 days overdue,
including, without limitation, landlords' liens and statutory liens of
carriers, warehousemen, mechanics, materialmen and vendors;
(h) Liens incurred or deposits made in the ordinary course of
business of the Company and its Subsidiaries (i) in connection with
workers' compensation, unemployment insurance and other types of social
security or (ii) to secure (or obtain letters of credit that secure)
surety and appeal bonds, the performance of tenders, statutory
obligations, bids, leases, performance bonds, purchase contracts and
other similar obligations;
(i) minor encumbrances, covenants, easements or reservations
for rights-of way, utilities and other similar purposes, or zoning and
other restrictions as to the use of real properties, any and all of
which are necessary for the conduct of the activities of the Company
and its Subsidiaries or which customarily exist on properties of
companies engaged in similar activities and similarly situated and
which do not in any event materially impair the use or diminish the
value of any of such properties as used in the operation of the
business of the Company and its Subsidiaries;
21
(j) Liens not otherwise permitted by clauses (a) through (i) above to
secure Indebtedness of the Company or any of its Subsidiaries, provided that,
immediately after giving effect thereto, the sum (without duplication) of:
(1) the aggregate amount of Indebtedness of the Company and
its Subsidiaries secured by Liens pursuant to this clause (j),
including (without duplication) all renewals, extensions and
replacements thereof permitted by clause (k) below; and
(2) the aggregate unpaid principal amount of Attributable Debt
of the Company and its Subsidiaries related to all Sale and Leaseback
Transactions entered into after the date of Closing in accordance with
the provisions of Section 10.5,
(3) shall not exceed 25% of Permitted Indebtedness; and
(k) Liens renewing, extending or replacing any Lien permitted under
clauses (a) through (j) above, provided that,
(1) the principal amount of Indebtedness secured by any such
Lien at the time of such renewal, extension or replacement is not
increased; and
(2) any such renewed, extended or replaced Lien shall only
extend to that property which was the subject of such Lien immediately
prior to such renewal, extension or replacement.
10.5 LIMITATION ON SALE AND LEASEBACK TRANSACTIONS.
The Company will not and will not permit any Subsidiary to, directly or
indirectly, make any sale, transfer, lease, loan or other disposition of any
asset on terms whereby the asset owned at the time of such sale, transfer,
lease, loan or other disposition is then or thereafter leased by the Company or
any such Subsidiary (as lessee) (a "SALE AND LEASEBACK TRANSACTION"), unless
after giving effect to such Sale and Leaseback Transaction the sum (without
duplication) of:
(a) the aggregate principal amount of Indebtedness of the Company and
its Subsidiaries secured by all Liens permitted by Section 10.4(j); plus
(b) the aggregate unpaid principal amount of Attributable Debt of the
Company and its Subsidiaries related to all Sale and Leaseback Transactions
entered into after the date of Closing in accordance with the provisions of this
Section 10.5,
shall not exceed 25% of Permitted Indebtedness.
10.6 TOTAL INDEBTEDNESS TO EBITDA RATIO.
The Total Indebtedness to EBITDA Ratio shall not exceed 4.0 to 1.0 as
measured at the end of any period of four consecutive fiscal quarters.
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10.7 INTEREST COVERAGE RATIO.
The Interest Coverage Ratio shall not be less than 3.0 to 1.0 as
measured at the end of any period of four consecutive fiscal quarters.
11.EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance
with any term contained in (1) Section 10.2 or (2) Sections 10.1 or
10.3 through 10.7, inclusive, and such default under this sub-clause
(2) is not remedied within 10 days after the earlier of (i) a
Responsible Officer obtaining actual knowledge of such default and (ii)
the Company receiving written notice of such default from any holder of
a Note (any such written notice to be identified as a "notice of
default" and to refer specifically to this paragraph (c) of Section
11); or
(d) the Company defaults in the performance of or compliance
with any term contained herein (other than those referred to in
paragraphs (a), (b) and (c) of this Section 11) and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer
obtaining actual knowledge of such default and (ii) the Company
receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to
refer specifically to this paragraph (d) of Section 11); or
(e) any representation or warranty made in writing by or on
behalf of the Company or any Subsidiary Guarantor or by any officer of
the Company or any Subsidiary Guarantor in this Agreement or in any
Subsidiary Guarantee or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect
in any material respect on the date as of which made; or
(f) (i) the Company or any Significant Subsidiary is in
default (as principal or as guarantor or other surety) in the payment
of any principal of or premium or make-whole amount or interest on any
Indebtedness that is outstanding in an aggregate principal amount of at
least $25,000,000 beyond any period of grace provided with respect
thereto, or (ii) the Company or any Significant Subsidiary is in
default in the performance of or compliance with any term of any
evidence of any Indebtedness in an aggregate outstanding principal
amount of at least $25,000,000 or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a
consequence of such default or condition such Indebtedness has become,
or has been
23
declared due and payable before its stated maturity or before its
regularly scheduled dates of payment; or
(g) the Company or any Significant Subsidiary (i) is generally
not paying, or admits in writing its inability to pay, its debts as
they become due, (ii) files, or consents by answer or otherwise to the
filing against it of, a petition for relief or reorganization or
arrangement or any other petition in bankruptcy, for liquidation or to
take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an
assignment for the benefit of its creditors, (iv) consents to the
appointment of a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action for the purpose of any of
the foregoing; or
(h) a court or governmental authority of competent
jurisdiction enters an order appointing, without consent by the Company
or any of its Significant Subsidiaries, a custodian, receiver, trustee
or other officer with similar powers with respect to it or with respect
to any substantial part of its property, or constituting an order for
relief or approving a petition for relief or reorganization or any
other petition in bankruptcy or for liquidation or to take advantage of
any bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding-up or liquidation of the Company or any of its
Significant Subsidiaries, or any such petition shall be filed against
the Company or any of its Significant Subsidiaries and such petition
shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $10,000,000 are rendered against one or more
of the Company and its Significant Subsidiaries and which judgments are
not, within 60 days after entry thereof, bonded, discharged or stayed
pending appeal, or are not discharged within 60 days after the
expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of
intent to terminate any Plan shall have been or is reasonably expected
to be filed with the PBGC or the PBGC shall have instituted proceedings
under ERISA section 4042 to terminate or appoint a trustee to
administer any Plan or the PBGC shall have notified the Company or any
ERISA Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate "amount of unfunded benefit
liabilities" (within the meaning of section 4001(a)(18) of ERISA) under
all Plans, determined in accordance with Title IV of ERISA, shall
exceed $25,000,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans, (v) the Company or any ERISA
Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare benefit plan
that provides post-employment welfare benefits in a manner that would
increase the liability of the Company or any Subsidiary thereunder, and
any such event or events described in clauses (i) through (vi) above,
either
24
individually or together with any other such event or events, would
reasonably be expected to have a Material Adverse Effect; or
(k) any Subsidiary Guarantee shall cease to be in full force
and effect (other than as contemplated by Section 9.6(b)) or any
Subsidiary Guarantor or any Person acting on behalf of any Subsidiary
Guarantor shall contest in any manner the validity, binding nature or
enforceability of any Subsidiary Guarantee.
As used in Section 11(j), the terms "employee benefit plan" and "employee
welfare benefit plan" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
12.REMEDIES ON DEFAULT, ETC.
12.1 ACCELERATION.
(a) If an Event of Default with respect to the Company described in
paragraph (g) or (h) of Section 11 (other than an Event of Default described in
clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
(b) If any other Event of Default has occurred and is continuing, the
Required Holders may at any time at their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
unpaid interest thereon and (y) the Make-Whole Amount determined in respect of
such principal amount (to the full extent permitted by applicable law), shall
all be immediately due and payable, in each and every case without presentment,
demand, protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for) and that the provision for payment
of a Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2 OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding,
25
whether for the specific performance of any agreement contained herein or in any
Note, or for an injunction against a violation of any of the terms hereof or
thereof, or in aid of the exercise of any power granted hereby or thereby or by
law or otherwise.
12.3 RESCISSION.
At any time after any Notes have been declared due and payable pursuant
to clause (b) or (c) of Section 12.1, the Required Holders, by written notice to
the Company, may rescind and annul any such declaration and its consequences if
(a) the Company has paid all overdue interest on the Notes, all principal of and
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
12.4 NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any Note
in exercising any right, power or remedy shall operate as a waiver thereof or
otherwise prejudice such holder's rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by any Note upon any holder thereof or by
any Subsidiary Guarantee shall be exclusive of any other right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute or otherwise. Without limiting the obligations of the Company under
Section 15, the Company will pay to the holder of each Note on demand such
further amount as shall be sufficient to cover all costs and expenses of such
holder incurred in any enforcement or collection under this Section 12,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements.
13.REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1 REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register for
the registration and registration of transfers of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and address
of each transferee of one or more Notes shall be registered in such register.
Prior to due presentment for registration of transfer, the Person in whose name
any Note shall be registered shall be deemed and treated as the owner and holder
thereof for all purposes hereof, and the Company shall not be affected by any
notice or knowledge to the contrary. The Company shall give to any holder of a
Note that is an Institutional Investor promptly upon request therefor, a
complete and correct copy of the names and addresses of all registered holders
of Notes.
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13.2 TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such Person as such
holder may request and shall be substantially in the form of Exhibit 1. Each
such new Note shall be dated and bear interest from the date to which interest
shall have been paid on the surrendered Note or dated the date of the
surrendered Note if no interest shall have been paid thereon. The Company may
require payment of a sum sufficient to cover any stamp tax or governmental
charge imposed in respect of any such transfer of Notes. Notes shall not be
transferred in denominations of less than $100,000, provided that if necessary
to enable the registration of transfer by a holder of its entire holding of
Notes, one Note may be in a denomination of less than $100,000. Any transferee,
by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representation set forth in Section 6.2.
13.3 REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (provided that if the holder of such Note
is, or is a nominee for, an original Purchaser or another holder of a
Note with a minimum net worth of at least $10,000,000 in excess of the
outstanding principal amount of such Note, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note, dated and bearing interest from the date to which interest shall have been
paid on such lost, stolen, destroyed or mutilated Note or dated the date of such
lost, stolen, destroyed or mutilated Note if no interest shall have been paid
thereon.
14.PAYMENTS ON NOTES.
14.1 PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in New
York, New York at the principal office of The Chase Manhattan Bank in such
jurisdiction. The Company may at any
27
time, by notice to each holder of a Note, change the place of payment of the
Notes so long as such place of payment shall be either the principal office of
the Company in such jurisdiction or the principal office of a bank or trust
company in such jurisdiction.
14.2 HOME OFFICE PAYMENT.
So long as any Purchaser or any nominee of such Purchaser shall be the
holder of any Note, and notwithstanding anything contained in Section 14.1 or in
such Note to the contrary, the Company will pay all sums becoming due on such
Note for principal, Make-Whole Amount, if any, and interest by the method and at
the address specified for such purpose below such Purchaser's name in Schedule
A, or by such other method or at such other address as such Purchaser shall have
from time to time specified to the Company in writing for such purpose, without
the presentation or surrender of such Note or the making of any notation
thereon, except that upon written request of the Company made concurrently with
or reasonably promptly after payment or prepayment in full of any Note, such
Purchaser shall surrender such Note for cancellation, reasonably promptly after
any such request, to the Company at its principal executive office or at the
place of payment most recently designated by the Company pursuant to Section
14.1 Prior to any sale or other disposition of any Note held by any Purchaser or
any nominee of such Purchaser, such Purchaser will, at its election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by any Purchaser under this
Agreement and that has made the same agreement relating to such Note as the
Purchasers have made in this Section 14.2.
15.EXPENSES, ETC.
15.1 TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including reasonable attorneys'
fees of a special counsel and, if reasonably required, local or other counsel)
incurred by the Purchasers and each other holder of a Note in connection with
such transactions and in connection with any amendments, waivers or consents
under or in respect of this Agreement, the Notes or any Subsidiary Guarantee
(whether or not such amendment, waiver or consent becomes effective), including,
without limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
this Agreement, the Notes or any Subsidiary Guarantee or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, the Notes or any Subsidiary Guarantee, or by
reason of being a holder of any Note, and (b) the costs and expenses, including
financial advisors' fees, incurred in connection with the insolvency or
bankruptcy of the Company or any Subsidiary or in connection with any work-out
or restructuring of the transactions contemplated hereby and by the Notes. The
Company will pay, and will save each Purchaser and each other holder of a Note
harmless from, all claims in respect of any fees, costs or expenses if any, of
brokers and finders (other than those retained by such Purchaser or other
holder).
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15.2 SURVIVAL.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by each Purchaser of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any subsequent holder of a Note,
regardless of any investigation made at any time by or on behalf of any
Purchaser or any other holder of a Note. All statements contained in any
certificate or other instrument delivered by or on behalf of the Company
pursuant to this Agreement shall be deemed representations and warranties of the
Company under this Agreement. Subject to the preceding sentence, this Agreement
and the Notes embody the entire agreement and understanding between the
Purchasers and the Company and supersede all prior agreements and understandings
relating to the subject matter hereof.
17.AMENDMENT AND WAIVER.
17.1 REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to any Purchaser unless consented to by
such Purchaser in writing, and (b) no such amendment or waiver may, without the
written consent of the holder of each Note at the time outstanding affected
thereby, (i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections
8,11(a),11(b),12,17 or 20.
17.2 SOLICITATION OF HOLDERS OF NOTES.
(a) Solicitation. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
29
(b) Payment. The Company will not directly or indirectly pay or cause
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
17.3 BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note shall operate as
a waiver of any rights of any holder of such Note. As used herein, the term
"this Agreement" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
17.4 NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18.NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
requested (postage prepaid), or (c) by a recognized overnight delivery service
(with charges prepaid). Any such notice must be sent:
(i) if to any Purchaser or its nominee, to such Purchaser or
nominee at the address specified for such communications in Schedule A,
or at such other address as such Purchaser or nominee shall have
specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at
such address as such other holder shall have specified to the Company
in writing, or
30
(iii) if to the Company, to the Company at its address set
forth at the beginning hereof to the attention of Jeanne Dering, with a
copy to Felix Sotomayor, or at such other address as the Company shall
have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
19.REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by any Purchaser at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to any Purchaser, may be
reproduced by such Purchaser by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and such Purchaser
may destroy any original document so reproduced. The Company agrees and
stipulates that, to the extent permitted by applicable law, any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by such Purchaser in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence. This
Section 19 shall not prohibit the Company or any other holder of Notes from
contesting any such reproduction to the same extent that it could contest the
original, or from introducing evidence to demonstrate the inaccuracy of any such
reproduction.
20.CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential Information" means
information delivered to any Purchaser by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by such
Purchaser as being confidential information of the Company or such Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to such Purchaser prior to the time of such disclosure, (b)
subsequently becomes publicly known through no act or omission by such Purchaser
or any person acting on such Purchaser's behalf, (c) otherwise becomes known to
such Purchaser other than through disclosure by the Company or any Subsidiary or
(d) constitutes financial statements delivered to such Purchaser under Section
7.1 that are otherwise publicly available. Each Purchaser will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by such Purchaser in good faith to protect confidential information of
third parties delivered to such Purchaser, provided that such Purchaser may
deliver or disclose Confidential Information to (i) such Purchaser's directors,
officers, employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of the investment
represented by such Purchaser's Notes), (ii) such Purchaser's financial advisors
and other professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20, (iii)
any other holder of any Note, (iv) any Institutional Investor to which such
Purchaser sells or offers to sell such Note or any part thereof or any
participation therein (if such Person has agreed in writing prior to its receipt
of such
31
Confidential Information to be bound by the provisions of this Section 20), (v)
any Person from which such Purchaser offers to purchase any security of the
Company (if such Person has agreed in writing prior to its receipt of such
Confidential Information to be bound by the provisions of this Section 20), (vi)
any federal or state regulatory authority having jurisdiction over such
Purchaser, (vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that requires
access to information about such Purchaser's investment portfolio or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to such Purchaser, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which such Purchaser is a
party or (z) if an Event of Default has occurred and is continuing, to the
extent such Purchaser may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the
rights and remedies under such Purchaser's Notes or this Agreement. Each holder
of a Note, by its acceptance of a Note, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this Section 20 as though it were
a party to this Agreement. On reasonable request by the Company in connection
with the delivery to any holder of a Note of information required to be
delivered to such holder under this Agreement or requested by such holder (other
than a holder that is a party to this Agreement or its nominee), such holder
will enter into an agreement with the Company embodying the provisions of this
Section 20.
21.SUBSTITUTION OF PURCHASER.
Each Purchaser shall have the right to substitute any one of such
Purchaser's Affiliates as the purchaser of the Notes that such Purchaser has
agreed to purchase hereunder, by written notice to the Company, which notice
shall be signed by both such Purchaser and such Affiliate, shall contain such
Affiliate's agreement to be bound by this Agreement and shall contain a
confirmation by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice, any
reference to such Purchaser in this Agreement (other than in this Section 21)
shall be deemed to refer to such Affiliate in lieu of such original Purchaser.
In the event that such Affiliate is so substituted as a purchaser hereunder and
such Affiliate thereafter transfers to such original Purchaser all of the Notes
then held by such Affiliate, upon receipt by the Company of notice of such
transfer, any reference to such Affiliate as a "Purchaser" in this Agreement
(other than in this Section 21) shall no longer be deemed to refer to such
Affiliate, but shall refer to such original Purchaser, and such original
Purchaser shall again have all the rights of an original holder of the Notes
under this Agreement.
22.MISCELLANEOUS.
22.1 SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or on
behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
32
22.2 PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
22.3 SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
22.4 CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any Person,
or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
22.5 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6 GOVERNING LAW.
This Agreement shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
* * * * *
33
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
MOODY'S CORPORATION
By: /s/ John J. Goggins
Title: Senior Vice President
and General Counsel
The foregoing is hereby
agreed to as of the
date thereof.
AUTO CLUB INSURANCE ASSOCIATION
By: /s/ David L. Moore, Jr.
Title: Director, Investment Management
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Robert B. Bodett
Title: Authorized Signatory
By: /s/ Patricia W. Wilson
Title: Authorized Signatory
AMERITAS LIFE INSURANCE CORP.
By: Ameritas Investment Advisors, Inc., as Agent
By: Patrick J. Henry
Title: Vice President - Fixed Income Securities
The foregoing is hereby
agreed to as of the
date thereof.
FIRST AMERITAS LIFE INSURANCE CORP. OF NEW YORK
By: Ameritas Investment Advisors, Inc., as Agent
By: /s/ Patrick J. Henry
Title: Vice President - Fixed Income Securities
34
AMERICAN INVESTORS LIFE INSURANCE COMPANY
By: /s/ Roger D. Fors
Title: V.P. Investment Management & Research
AMERUS LIFE INSURANCE COMPANY
By: /s/ Roger D. Fors
Title: V.P. Investment Management & Research
THE CANADA LIFE ASSURANCE COMPANY
By: /s/ C. Paul English
Title: Associate Treasurer.
LUTHERAN BROTHERHOOD
By: /s/ Mark O. Swenson
Title: Vice President
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: David L. Babson & Company, Inc.
its Investment Advisor
By: /s/ Richard E. Spencer, II
Title: Managing Director
The foregoing is hereby
agreed to as of the date thereof.
C.M. LIFE INSURANCE COMPANY
By: David L. Babson & Company, Inc.
its investment Advisor
By: /s/ Richard E. Spencer, II
Title: Managing Director
35
MONY LIFE INSURANCE COMPANY OF AMERICA
By: /s/ William D. Goodwin
Title: Senior Managing Director
MONY LIFE INSURANCE COMPANY
By: /s/ William D. Goodwin
Title: Senior Managing Director
FIDELITY & GUARANTY LIFE INSURANCE CO.
By: /s/ Michael J. Stafford, Jr.
Title: CIO, MWIG
NATIONWIDE LIFE INSURANCE COMPANY
By: /s/ Mark W. Poeppelman
Title: Associate Vice President
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
By: /s/ Mark W. Poeppelman
Title: Associate Vice President
The foregoing is hereby agreed to as of the date thereof.
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By its Investment Manager, NEW YORK LIFE
INVESTMENT MANAGEMENT LLC
By: /s/ David L Bangs
Title: Managing Director
36
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION INSTITUTIONALLY
OWNED LIFE INSURANCE SEPARATE
ACCOUNT
By its Investment Manager, NEW YORK LIFE INVESTMENT MANAGEMENT LLC
By: /s/ David L. Bangs
Title: Managing Director
THE NORTHWESTERM MUTUAL LIFE INSURANCE COMPANY
By: /s/ A. Kipp Koester
Title: Its Authorized Representative
THE NORTHWESTERM MUTUAL LIFE INSURANCE COMPANY
FOR ITS GROUP ANNUITY SEPARATE ACCOUNT
By: /s/ A. Kipp Koester
Title: Its Authorized Representative
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
By: /s/ John C. Litchfield, Jr.
Title: Managing Director
The foregoing is hereby agreed to as of the date thereof.
TIAA-CREF LIFE INSURANCE COMPANY
By: Teachers Insurance and Annuity
Association of America, as Investment Advisor
By: /s/ John C. Litchfield, Jr.
Title: Managing Director
37
UNITED LIFE INSURANCE COMPANY
By: /s/ Samuel E. Hague
Title: Executive Vice President and Treasurer
AID ASSOCIATION FOR LUTHERANS
By: /s/ Reginald L. Pfeifer
Title: Vice President
By: /s/ R. Jerry Scheel
Title: Second Vice President - Securities
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
By: /s/ Wayne T. Hoffmann
Title: Vice President - Investments
By: /s/ James C. Lowery
Title: Assistant Vice President - Investments
LONDON LIFE INSURANCE COMPANY
By: /s/ B.R. Allison
Title: Authorized Signatory
By: /s/ P.G. Munro
Title: Executive Vice President
Chief Investment Officer
The foregoing is hereby
agreed to as of the date thereof.
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/ Jacqueline D. Jenkins
Title: Managing Director
38
GE LIFE AND ANNUITY ASSURANCE COMPANY
By: /s/ Morian C. Mooers
Title: Investment Officer
PHYSICIANS MUTUAL INSURANCE COMPANY
By: /s/ Kathy Lange
Title: Authorized Signatory
ERC - AAM PRIVATES ONLY
By: /s/ Kathy Lange
Title: Authorized Signatory
GE REINSURANCE AAM - PRIVATES ONLY
By: /s/ Kathy Lange
Title: Authorized Signatory
MEDICAL PROTECTIVE AAM
By: /s/ Kathy Lange
Title: Authorized Signatory
KANAWHA INSURANCE COMPANY
By: /s/ Kathy Lange
Title: Authorized Signatory
The foregoing is hereby agreed to as of the
date thereof.
39
CENTRAL RE CORP. PHOENIX
By: /s/ Kathy Lange
Title: Authorized Signatory
MICHIGAN MUTUAL
By: /s/ R.C. Saranen
Title: V.P. - Investments
THE TRAVELERS INSURANCE COMPANY
By: /s/ Jordan M. Stitzer
Title: Vice President
40
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"AFFILIATE" means, at any time, and with respect to any Person, any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of the
Company.
"ASSET SALE" is defined in Section 10.3.
"ATTRIBUTABLE DEBT" means, as to any particular lease relating to a
Sale and Leaseback Transaction, the total amount of rent (discounted
semiannually from the respective due dates thereof at the interest rate implicit
in such lease) required to be paid by the lessee under such lease during the
remaining term thereof. The amount of rent required to be paid under any such
lease for any such period shall be (a) the total amount of rent payable by the
lessee with respect to such period after excluding amounts required to be paid
on account of maintenance and repairs, insurance, taxes, assessments, utilities,
operating and labor costs and similar charges plus (b) without duplication, any
guaranteed residual value in respect of such lease to the extent such guaranty
would be included in Indebtedness in accordance with GAAP.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York City are required or authorized to be
closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CLOSING" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMPANY" means Moody's Corporation, a Delaware corporation, or any
successor thereto that shall have become such in the manner prescribed in
Section 10.2.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of the Company and its Subsidiaries for such period, as determined on a
consolidated basis in accordance with GAAP, but excluding:
1
(a) any net income of any Person if such Person is not a
Subsidiary, except that equity in the net income of any such Person for
such period shall be included in Consolidated Net Income up to the
aggregate amount of cash actually distributed by such Person as a
dividend or other distribution (subject, in the case of a dividend or
other distribution to a Subsidiary, to the limitation contained in
clause (c) below);
(b) any net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition;
(c) any net income of any Subsidiary if such Subsidiary is
subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly
or indirectly, to the Company, except that equity in the net income of
any such Subsidiary for such period shall be included in Consolidated
Net Income up to the aggregate amount of cash actually distributed by
such Subsidiary during such period as a dividend or other distribution
(subject, in the case of a dividend or other distribution to another
Subsidiary, to the limitation contained in this clause (c));
(d) any gain or loss realized upon the sale or other
disposition of any property, plant or equipment (including pursuant to
any sale-leaseback arrangement) which is not sold or otherwise disposed
of in the ordinary course of business and any gain or loss realized
upon the sale or other disposition of any capital stock of any Person;
and
(e) other extraordinary items, as determined in accordance
with GAAP.
"CONSOLIDATED TOTAL ASSETS" means, for any period, the total book value
of the assets of the Company and its Subsidiaries (including goodwill, patents,
trademarks, trade names, organization expense, unamortized debt discount and
expense and other like intangibles), less reserves applicable thereto, all
determined on a consolidated basis in accordance with GAAP.
"CREDIT FACILITY" means either the Five-Year Credit Agreement or the
364-Day Credit Agreement, each dated as of September 11, 2000 and each among the
Company, certain Subsidiaries party thereto, the lenders party thereto, The
Chase Manhattan Bank, as Administrative Agent, Citibank, N.A. as Syndication
Agent, and The Bank of New York, as Documentation Agent, each as in effect from
time to time, and any extension, renewal, refunding, replacement or refinancing
of either thereof.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"DEFAULT RATE" means that rate of interest that is the greater of (i)
2% per annum above the rate of interest stated in clause (a) of the first
paragraph of the Notes or (ii) 2% over the rate of interest publicly announced
by Citibank, N.A. in New York, New York as its "base" or "prime" rate.
"EBITDA" means, for any period, the Consolidated Net Income of the
Company and its Subsidiaries for such period, plus (A) to the extent deducted in
computing Consolidated
2
Net Income for such period, an amount equal to (calculated without duplication)
(i) income tax expense, plus (ii) Interest Expense, plus (iii) depreciation and
amortization expense, plus (iv) extraordinary losses, minus (B) to the extent
included in computing Consolidated Net Income for such period, extraordinary
gains, all as determined in accordance with GAAP; provided, however, that with
respect to any such period which shall include the date on which the Spin-Off
occurred, EBITDA for such period shall be calculated on a pro forma basis as if
the Spin-Off had occurred (and any Indebtedness associated therewith had been
incurred) on the first day of such period.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414(b) or (c) of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or which
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or
3
other obligation of any other Person in any manner, whether directly or
indirectly, including (without limitation) obligations incurred through an
agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the
obligor under any Guaranty, the indebtedness or other obligations that are the
subject of such Guaranty shall be assumed to be direct obligations of such
obligor.
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
4
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTEREST COVERAGE RATIO" means, for any period, the ratio of (i)
EBITDA for such period to (b) Interest Expense for such period.
"INTEREST EXPENSE" means, for any period, the sum (without duplication)
of the following (in each case determined on a consolidated basis in accordance
with GAAP): (a) all interest in respect of Indebtedness of the Company and its
Subsidiaries (including imputed interest on Capital Leases) deducted in
determining Consolidated Net Income for such period and (b) all debt discount
and expense amortized or required to be amortized in the determination of
Consolidated Net Income for such period; provided, however, that with respect to
any such period which shall include the date on which the Spin-Off occurred,
Interest Expense for such period shall be calculated on a pro forma basis as if
the Spin-Off had occurred (and any Indebtedness associated therewith had been
incurred) on the first day of such period.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, or properties of the Company and its
Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"MEMORANDUM" is defined in Section 5.3.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NON-RECOURSE" means, in connection with any Asset Sale, an Asset Sale
that does not result in, contemplate at any time, or otherwise expressly permit,
the taking of security
5
in, or the grant of any lien or other encumbrance on or against, any property or
assets of the Company or any Subsidiary.
"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"PERMITTED INDEBTEDNESS" means, at any date, an amount equal to four
times EBITDA for the period of the four consecutive fiscal quarters ended on, or
most recently prior to, such date.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"PREFERRED STOCK" means any class of capital stock of a corporation
that is preferred over any other class of capital stock of such corporation as
to the payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.
"PTE" means a Prohibited Transaction Exemption issued by the Department
of Labor.
"PURCHASER" is defined in the first paragraph of this Agreement.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14
issued by the United States Department of Labor.
"REQUIRED HOLDERS" means, at any time, the holders of greater than 50%
in principal amount of the Notes at the time outstanding (exclusive of Notes
then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
6
"SALE AND LEASEBACK TRANSACTION" is defined in Section 10.5.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"SIGNIFICANT SUBSIDIARY" means at any time any Subsidiary Guarantor and
any other Subsidiary that would at such time constitute a "significant
subsidiary" (as such term is defined in Regulation S-X of the Securities and
Exchange Commission as in effect on the date of the Closing) of the Company.
"SPIN-OFF" means the separation of The Dun & Bradstreet Corporation
into (i) The New D&B Corporation and (ii) Moody's Corporation, pursuant to the
Registration Statement on Form 10 related thereto filed with the Securities and
Exchange Commission in September, 2000.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such Person or one or
more of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"SUBSIDIARY GUARANTEE" means a guarantee of a Subsidiary Guarantor of
the obligations of the Company under this Agreement and the Notes, substantially
in the form of Exhibit 4.11.
"SUBSIDIARY GUARANTOR" means (a) as of the date of the Closing those
Subsidiaries identified as such on Schedule 5.4, and (b) thereafter, the Persons
referred to in clause (a) and each other Person which from time to time executes
and delivers a counterpart of the Subsidiary Guarantee or otherwise enters into
a Subsidiary Guarantee (unless such Person shall be released from its
obligations under its Subsidiary Guarantee pursuant to Section 9.6(b)).
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous
7
payment of amounts by and to such Person, then in each such case, the amount of
such obligation shall be the net amount so determined.
"TOTAL INDEBTEDNESS" means, at any date, all Indebtedness of the
Company and its Subsidiaries determined on a consolidated basis in accordance
with GAAP.
"TOTAL INDEBTEDNESS TO EBITDA RATIO" means, at any date, the ratio of
(a) Total Indebtedness on such date to (b) EBITDA for the period of the four
consecutive fiscal quarters ended on, or most recently prior to, such date.
Solely for purposes of calculating EBITDA with respect to any period in
connection with this definition, (i) if the Company or any of its Subsidiaries
shall have completed an acquisition of all or a substantial part of the assets,
or a going concern business or division, of any Person during such period or
(ii) if the Company shall have merged with any Person during such period or
(iii) if the Company or any of its Subsidiaries shall have disposed of all or a
substantial part of its assets or a going concern business or division during
such period, in each case, EBITDA for such period shall be determined on a pro
forma basis as if such acquisition, disposition or merger, and the incurrence of
any related Indebtedness, had occurred on the first day of such period.
"WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary of which
one hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests thereof are owned by any one or more of
the Company and the Company's other Wholly-Owned Subsidiaries at such time.
8
EXHIBIT 1
[FORM OF NOTE]
MOODY'S CORPORATION
7.61% SENIOR NOTE DUE 2005
No. [_____] [Date]
$[______] PPN: 615369 A* 6
FOR VALUE RECEIVED, the undersigned, MOODY'S CORPORATION (herein called
the "Company"), a corporation organized and existing under the laws of the State
of Delaware, hereby promises to pay to [__________________], or registered
assigns, the principal sum of [____________________] DOLLARS (or so much thereof
as shall not have been prepaid) on September 30, 2005, with interest (computed
on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid
balance thereof at the rate of 7.61% per annum from the date hereof, payable
semiannually, on the 30th day of March and September in each year, commencing
with the March 30th or September 30th next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreement referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.61% or (ii) 2% over the rate of interest publicly announced by The
Chase Manhattan Bank from time to time in New York, New York as its "base" or
"prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of The Chase Manhattan Bank in New York, New
York or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreement
referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to the Note Purchase Agreement, dated as of October 3,
2000 (as from time to time amended, the "Note Purchase Agreement"), between the
Company and the Purchasers named therein and is entitled to the benefits
thereof. Each holder of this Note will be deemed, by its acceptance hereof, (i)
to have agreed to the confidentiality provisions set forth in Section 20 of the
Note Purchase Agreement and (ii) to have made the representation set forth in
Section 6.2 of the Note Purchase Agreement.
Payment of the principal of, and Make-Whole Amount if any, and interest
on this Note may be guaranteed by certain subsidiaries of the Company.
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreement.
This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York.
MOODY'S CORPORATION
By___________________________
Title:
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