Attached files
file | filename |
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EX-2.3 - EXHIBIT 2.3 - MSCI Inc. | dp16657_ex0203.htm |
EX-99.1 - EXHIBIT 99.1 - MSCI Inc. | dp16657_ex9901.htm |
EX-2.1 - EXHIBIT 2.1 - MSCI Inc. | dp16657_ex0201.htm |
EX-2.4 - EXHIBIT 2.4 - MSCI Inc. | dp16657_ex0204.htm |
8-K - FORM 8-K - MSCI Inc. | dp16657_8k.htm |
Exhibit
2.2
MORGAN STANLEY SENIOR FUNDING,
INC.
1585 Broadway
New York, New York 10036
February 28, 2010
MSCI Inc.
Wall Street Plaza, 88 Pine Street
New York, New York 10005
Attention: Gary Retelny,
Managing Director
Project Fox
Commitment
Letter
Ladies and
Gentlemen:
MSCI Inc. (“you” or the “Borrower”) has advised Morgan Stanley Senior
Funding, Inc. (“MSSF,” “we,” “us” or the “Commitment
Party”) that you intend to
acquire (the “Acquisition”) 100% of the outstanding capital stock of
a company previously identified to us and code-named Fox (the “Target”) pursuant to an agreement and plan of
merger (the “Acquisition
Agreement”) among you, a wholly owned subsidiary
of the Borrower (“MergerCo”) and Target. Pursuant to
the Acquisition Agreement, MergerCo will merge with and into the Target, with
the Target surviving such merger as a wholly-owned
subsidiary of the Borrower. All references to “dollars” or “$” in this Commitment Letter (as defined
below) are references to United States dollars.
We understand that the total funding
required to pay the cash consideration for the Acquisition, to repay the
existing credit facilities of the Borrower and the Target (the “Refinancing”), to pay the fees and expenses
incurred in connection therewith and to provide for the ongoing working capital
and general corporate needs of the Borrower and its
subsidiaries shall be provided solely from (a) cash and cash equivalents on
hand at the Borrower and the Target and (b) the incurrence by the Borrower of senior secured credit
facilities consisting of (i) a term loan facility in the amount of $1,275.0
million (the “Term Loan
Facility”) and (ii) a
revolving credit facility in the amount of $100.0 million (the “Revolving
Facility”; the Revolving
Facility and the Term Loan Facility are hereinafter referred to
individually as a “Facility” and, collectively, as the
“Facilities”), in each case, as described in the
summary of terms and conditions attached hereto as Exhibit A (the “Bank Term
Sheet”).
The Acquisition, the Refinancing, the
entering into of this Commitment Letter, the entering into of the Facilities and
the initial borrowings thereunder and the related transactions contemplated by the foregoing, as well as
the payment of fees, commissions and expenses in connection with each of the
foregoing, are collectively referred to as the “Transactions.” No other financing will be required for the
Transactions. The date of consummation of the Acquisition is referred
to in this Commitment Letter as the “Closing Date.”
1. Commitments. The Commitment Party is
pleased to commit to provide 100% of the Facilities subject to and on
the terms and conditions set forth herein and in the Bank Term Sheet and the additional conditions
attached as Exhibit B (the “Conditions Term
Sheet”, together with the
Bank Term Sheet, the “Term
Sheets” and together with
this agreement, the “Commitment
Letter”). It is
agreed that MSSF shall act as sole and exclusive lead arranger, book-runner and
syndication agent for the
Facilities (in such capacity, the
“Lead
Arranger”) and as
administrative agent for the Facilities (in such capacity, the “Administrative
Agent”). It is
further agreed that no additional agents, co-agents, arrangers or bookmanagers
will be appointed in respect of any of the Facilities, and no Lender (as defined below)
will receive compensation with respect to any of the Facilities outside the
terms contained in this Commitment Letter and the fee letter (the
“Fee
Letter”) executed simultaneously herewith in order
to obtain its commitment to participate in the Facilities, in each case unless you and we so
agree.
The aggregate commitments in respect of
the Term Loan Facility shall be permanently reduced dollar-for-dollar by an
amount equal to the aggregate cash proceeds (net of fees and expenses and, in the case of Asset
Dispositions, taxes payable or expected to be payable in respect thereof)
(“Net
Cash Proceeds”) received by
the Borrower or any of its subsidiaries from the consummation of all Debt Incurrences,
Equity Issuances and Asset Dispositions (each as defined below) subsequent to the date hereof and on or
prior to the Closing Date;
provided that such reduction shall only be
required to the extent such Net Cash Proceeds exceed $10.0
million in the aggregate from the date hereof.
“Debt
Incurrence” means any incurrence of debt for
borrowed money (including debt securities convertible into equity securities,
and whether in a public offering or private placement or otherwise) by the Borrower or
any of its subsidiaries other than (i) debt owed to the Borrower or any of its
subsidiaries, (ii) borrowings of revolving loans under the Borrower’s
Credit Agreement dated November 20, 2007, as amended
prior to the date hereof (the “Current Credit
Facility”) and (iii) borrowings under the
Facilities.
“Equity
Issuance” means any
issuance of equity or equity-linked securities (in a public offering or private
placement) by the Borrower (excluding equity issued pursuant to any
employee or director stock plan or employee or
director compensation plan).
“Asset
Disposition” means (a) any
conveyance, sale, lease, sublease, assignment, transfer or other disposition
(including by way of merger or consolidation and including any sale and
leaseback transaction) of any property by the Borrower or any of its
subsidiaries, excluding any
such transaction in the
ordinary course of business not exceeding $1.0 million per
transaction or series of related transactions, and (b) any issuance or sale
of any equity interests of any subsidiary of the Borrower, in each of
clauses (a) and (b), to any person other than the Borrower or any of its
subsidiaries; provided that the amount of Net Cash Proceeds
from an Asset Disposition shall be deemed to be reduced by the amount of term
loans under the Current Credit Facility that are prepaid with proceeds of such
Asset Disposition pursuant to the mandatory prepayment requirements under the
Current Credit Facility.
The commitment and other obligations of
the Commitment Party hereunder are subject to the satisfaction of the following
conditions:
(a) the negotiation, execution and delivery
by the Borrower and each
Guarantor party thereto of
definitive loan documentation for the Facilities (the “Documentation”), consistent with the terms and conditions set
forth in the Commitment Letter and the Fee Letter and otherwise reasonably satisfactory to the Commitment
Party and the Borrower (for the avoidance of doubt, the Commitment Party’s
willingness to present documentation for syndication as contemplated by Section
8.02(e) of the Acquisition Agreement shall not be deemed to evidence the
Commitment Party’s satisfaction with such documentation and shall not in any way
affect the terms set forth in this Commitment Letter and the Fee
Letter);
(b) except as disclosed in any Company SEC
Document (as defined in the Acquisition Agreement) filed after December 31,
2009 and before the date hereof (excluding any information contained in any part thereof
entitled “Risk Factors” or containing a description or explana-
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tion of “Forward-Looking Statements”) or
as set forth in the Company Disclosure Schedule (as defined in the Acquisition
Agreement), since December 31, 2009, there shall not have been any event,
occurrence or development or state of circumstances or facts that has had or
would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect (as defined below) on the Target;
(c) the final confidential information
memoranda referred to below under “Syndication” shall have been delivered to the
Lead Arranger, and the Borrower shall have used best efforts to receive the Ratings (as defined
below), in each case, within 45 days after your acceptance of this Commitment
Letter (or such later date as the Commitment Party shall agree to in its sole
discretion); the requirements referred to in clauses (c) and (e) under the
heading “Syndication” below shall have been satisfied; and the
Closing Date shall not occur less than 30 days after both receipt of the Ratings and such delivery
of the final confidential information memoranda; and
(d) the conditions set forth (i) under the
heading “Conditions Precedent to Initial Funding” in Exhibit A and (ii) in Exhibit
B.
“Material Adverse
Effect” means, with respect
to any person, a material adverse effect on (i) the financial condition,
business, assets or results of operations of such person and its subsidiaries,
taken as a whole, other than, in the case of any of the foregoing, any such
effect to the extent resulting from (A) changes in the financial or securities
markets or general economic or political conditions in the United States
or any other market in which such person or its subsidiary operates not having a
materially disproportionate effect on such person and its subsidiaries, taken as
a whole, relative to other participants in the industry in which such person and
its subsidiaries operate, (B) changes required by generally accepted
accounting principles or changes required by the regulatory accounting
requirements applicable to any industry in which such person and its
subsidiaries operate, (C) changes (including changes of applicable law) or conditions generally
affecting the industry in which such person and its subsidiaries operate and not
specifically relating to or having a materially disproportionate effect on such
person and its subsidiaries, taken as a whole, (D) any
engagement in hostilities, whether or not pursuant to the declaration of a
national emergency or war, or the occurrence of any acts of war, sabotage or
terrorism or natural disasters involving the United States of
America occurring prior to, on or after the date of this Commitment Letter not
having a materially disproportionate effect on such person and its subsidiaries,
taken as a whole, relative to other participants in the
industry in which such person and its subsidiaries operate, (E) the entry
into or announcement of the transactions contemplated by the Acquisition
Agreement or the consummation of the transactions contemplated thereby
(including any impact on customers or employees), (F) any failure by such person
and its subsidiaries to meet any internal or published budgets, projections, forecasts or
predictions of financial performance for any period (it being understood that
this clause (F) shall not prevent a party from asserting that any fact, change,
event, occurrence, circumstance or effect that may
have contributed to such failure independently constitutes or contributes to a
Material Adverse Effect), (G) a change in the
trading prices or volume of such person’s common stock (it being understood that
this clause (G) shall not prevent a party from asserting that any fact, change,
event, occurrence, circumstance or effect that may
have contributed to such change independently constitutes or contributes to a Material Adverse Effect)
or (H) any action taken (or omitted to be taken) as required by the Acquisition
Agreement or at the written request of the Borrower with the consent of the Lead
Arranger (such consent not to be unreasonably withheld or delayed) or (ii) such
person’s ability to consummate the transactions contemplated by the Acquisition
Agreement.
Notwithstanding anything to the contrary
in this Commitment Letter, the Fee Letter, the Documentation or any other
agreement or other undertaking concerning the financing of the Transactions, (i)
(x) the only representations and warranties relating to the Target and its
subsidiaries and businesses the
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accuracy of which shall be a condition to
the availability of the Facilities on the Closing Date shall be (A) such of the
representations and warranties made by the Target in the Acquisition Agreement
that are material to the interests of the Lenders,
but only to the extent that you have (or your subsidiary has) the right to
terminate your (or its) obligations under the Acquisition Agreement as a result
of a breach of such representations and warranties in the
Acquisition Agreement (the “Acquisition Agreement
Representations”) and (B) the Specified Representations
(as defined below) and (y) the only representations and warranties relating to
the Borrower and its subsidiaries and businesses the accuracy of which shall be
a condition to the availability of the Facilities on the Closing Date shall be
the Specified Representations and (ii) the terms of the Documentation shall be in a form such that they
do not impair availability of the Facilities on the Closing Date if the
conditions set forth in this Commitment Letter are satisfied, it being understood
that (A) other than with respect to any UCC Filing Collateral or Stock
Certificates (each as defined below), to the extent any Collateral is
not provided on the Closing Date after your use of commercially reasonable efforts to do so or without
undue burden or expense, the delivery of such Collateral shall not
constitute a condition precedent to the
availability of the Facilities on the Closing Date but may instead be required
to be delivered after the Closing Date pursuant to arrangements and timing to be
mutually agreed by the parties hereto
acting reasonably, (B) with respect to perfection of security interests in UCC
Filing Collateral, your sole obligation shall be to deliver, or cause to be
delivered, necessary UCC financing statements
to the Administrative Agent and to irrevocably authorize and to cause the
applicable guarantors to irrevocably authorize the Administrative Agent
to file necessary UCC financing statements, (C) with respect to perfection of
security interests in Stock Certificates, your sole obligation shall be to use
commercially reasonable efforts to deliver
to the Administrative Agent Stock Certificates together with undated stock powers in blank and (D)
except as expressly set forth in the preceding clause (i) or (ii), nothing in
the preceding clause (ii) shall be construed to limit the applicability of the
individual conditions expressly set forth in this Section
1, in Exhibit A under the
heading “Conditions Precedent to Initial Funding” or in Exhibit B. For purposes hereof, (1)
“UCC
Filing Collateral” means Collateral located in any state of the United
States or the District of Columbia consisting solely of assets of the
Target and its subsidiaries or Borrower and its
subsidiaries for which a security interest can be perfected by filing a
Uniform Commercial Code financing
statement, (2) “Stock
Certificates” means
Collateral consisting of stock certificates representing capital stock of
the Target and its subsidiaries or subsidiaries of the Borrower required as Collateral pursuant to the
Term Sheets for which a security interest can be perfected by delivering such stock certificates, and (3) “Specified
Representations” means the
representations and warranties referred to in the Bank Term Sheet relating to
corporate existence, corporate power and authority, the due authorization,
execution, delivery and enforceability of the Documentation, in each case as
they relate to entering into and performance of
the Documentation, solvency of the Borrower and its subsidiaries on a
consolidated basis after giving effect to the Transactions, accuracy of financial statements,
Federal Reserve margin regulations, Investment
Company Act and validity, priority and perfection of security interests (subject to the limitations set
forth in the preceding sentence). Notwithstanding anything in this Commitment
Letter, the Fee Letter, the Documentation or any other agreement or other
undertaking concerning the financing of the
transactions contemplated hereby to the contrary (but subject to termination of
the commitments provided hereunder pursuant to Section 10), the only conditions
to availability of the Facilities on the Closing
Date are those set forth in this Section 1 and in Exhibit A under the heading “Conditions Precedent
to Initial Funding” and in Exhibit B.
2. Syndication. The Lead Arranger reserves the right, prior to or
after execution of the Documentation, to syndicate all or part of the Commitment
Party’s commitments for the Facilities to one or more financial institutions or
institutional lenders in
consultation with you. Notwithstanding the Lead
Arranger’s right to syndicate the Facilities and receive commitments with respect thereto or any other provision of
this Commitment Letter to the contrary, (i) the Commitment Party will not be
relieved of or novated from all or any portion of its commitments
hereunder prior to the initial funding of the Facilities, and (ii) the Commitment Party
shall retain exclusive control over all rights and obligations with
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respect to its commitments in respect of
the Facilities, including all rights with respect to consents, modifications, supplements and amendments,
until the initial funding of the Facilities has occurred. Without limiting your obligations to
assist with syndication efforts as set forth herein, the Commitment Party agrees
that completion of such syndications is not a condition to its commitments
hereunder.
The Lead Arranger intends to commence
syndication efforts promptly after the execution of this Commitment Letter by
you, and you agree, until the end of the Applicable Period (as defined in the
Fee Letter), to actively assist the Lead Arranger in achieving a syndication of
the Facilities that is reasonably satisfactory to the Lead
Arranger. Such syndication will be accomplished by a variety of
means, including direct contact during the syndication between senior management
and advisors of the Borrower and the proposed syndicate members and
your using commercially reasonable efforts to provide such direct contact
between senior management and advisors of the Target and the proposed syndicate
members (such members being referred to as
the “Lenders”). The Lead Arranger will
exclusively manage, in consultation with you, all aspects of the syndication,
including the timing, scope and identity of potential
lenders, any agency or other title designations or roles awarded to any
potential lender, any compensation provided to each potential lender from the
amount paid to the Lead Arranger pursuant to this Commitment Letter and the Fee Letter and the
final allocation of the commitments in respect of the Facilities among the
Lenders.
To assist the Commitment Party in its
syndication efforts, you hereby covenant and agree during the Applicable Period:
(a) to provide and (subject to customary
non-disclosure letters) cause your advisors to provide, and use your
commercially reasonable efforts to cause the Target, its subsidiaries and
(subject to customary non-disclosure letters) its advisors to provide, the Lead
Arranger and the other Lenders upon request with all information reasonably
requested by the Lead Arranger and that is customary for transactions of this
type, including but not limited to the Projections (as defined below) and
financial and other information, reports, memoranda and evaluations
prepared by, on behalf or at the direction
of you, the Target or its subsidiaries or your or their respective
advisors;
(b) to assist in the preparation of one or
more confidential information memoranda (including public and private versions
thereof) and other materials, in each case in form and substance customary for
transactions of this type and otherwise reasonably satisfactory to the Lead
Arranger, to be used in connection with the syndication of each
Facility;
(c) to use your commercially reasonable
efforts to ensure that the syndication efforts of the Lead Arranger benefit
materially from your existing lending and banking relationships and the existing
lending and banking relationships of the Target and its
subsidiaries;
(d) to obtain corporate credit or family
ratings of the Borrower after giving effect to the Transactions and ratings for
each of the Facilities, from Moody’s Investors Service, Inc. (“Moody’s”) and Standard & Poor’s Rating
Services, a division of The McGraw-Hill Companies, Inc. (“S&P”) (collectively, the “Ratings”);
(e) to otherwise assist the Lead Arranger in
its syndication efforts, including by making available your, and using your
commercially reasonable efforts to make available the Target’s, officers, representatives and
advisors, in each case from time to time and to attend and make presentations regarding the business and
prospects of the Borrower at one or more meetings of Lenders; and
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(f) that there shall be no issues of debt
securities or commercial bank or other debt facilities or securitizations
(including any renewals or refinancing thereof) by the Borrower, the Target or
any of their respective subsidiaries being discussed, attempted, offered, placed
or arranged (other than the
Facilities, the Refinancing as contemplated hereby, borrowings by the
Borrower under the Current Credit Facility,
borrowings by the Target under its existing credit facility and the Basket Debt
(as defined in Exhibit B)).
3. Information. You represent and warrant
that (which representation and warranty with respect to Information and
Projections relating to the Target, its subsidiaries and their business is made
to your knowledge) (a) all written information (other than the Projections
referred to below and information of a general economic or
industry specific nature) that has been or will hereafter be made
available by or on behalf of you or any of
your agents or representatives (including filings by the Target with the
Securities and Exchange Commission since January 30, 2008 and prior to the date
hereof) in connection with the Transactions (the “Information”) to the Commitment Party or any of its
affiliates, agents or representatives or to any Lender or any
potential Lender, when taken as a whole, did not and will not, when furnished,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in the light of the circumstances under which such statements were or
are made, as supplemented and updated and (b) all financial projections and
other forward looking information (the “Projections”), if any, that have been or will be
prepared by you or on your behalf or by any of your representatives and made
available to the Commitment Party or any of its affiliates, agents or representatives or to
any Lender or any potential Lender in connection with the Transactions have been
or will be prepared in good faith based upon assumptions believed by you to be reasonable at the
time such Projections were prepared (it being understood that such
Projections are subject to significant
uncertainties and contingencies and that no assurance can be given that any
particular Projections will be realized). You agree that, if at any
time prior to the Closing Date and, if requested by us, for such period
thereafter as is necessary to complete the syndication of the Facilities (but not beyond the Applicable
Period) you become aware that any of the representations or warranties in the
preceding sentence would be incorrect in any material
respect if the Information or Projections were being furnished, and such
representations and warranties were being made, at such time, then you will use
your commercially reasonable efforts to promptly supplement, or cause to be
supplemented, the Information and Projections so that (with respect to
Information and Projections relating to the Target, its subsidiaries and their
business, to your knowledge) such representations and warranties will be correct in
all material respects at such time. You also agree to promptly advise
the Lead Arranger and the Commitment Party of all developments
materially affecting the Borrower or any of its subsidiaries or the Transactions
and all developments materially affecting the Target or any of its
subsidiaries that become known to you at such time, in each case, to the extent
not publicly announced promptly following such development. You
understand that, in issuing the commitments hereunder and in arranging and
syndicating the Facilities, we will be entitled to use and
rely on the Information and the Projections furnished by you or on your behalf
or on behalf of the Target without independent verification thereof.
You agree that the Lead Arranger may
make available any Information and Projections (collectively, the “Company
Materials”) to potential
Lenders by posting the Company Materials on IntraLinks, the Internet or another
similar electronic system. You further agree to assist, at the
request of the Lead Arranger, in the preparation of a version of a confidential
information memorandum and other marketing materials and presentations to be
used in connection with the syndication of each Facility, consisting exclusively of information or
documentation that is either (i) publicly available or (ii) not material
with respect to the Borrower, the Target or their respective subsidiaries or any
of their respective securities for purposes of foreign, United
States federal and state securities laws (all such information and
documentation being “Public Lender
Information”). Any information and
documentation that is not Public Lender Information is referred to herein as
“Private Lender
Information.” You further agree that
each
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document to be disseminated by the Lead
Arranger to any Lender or potential Lender in connection with the
syndication of such Facility will be identified by you as either (x) containing
Private Lender Information or (y) containing solely Public
Lender Information. You acknowledge that the following documents will
contain solely Public Lender Information (unless, in the case of schedules to
the definitive documentation, you notify us otherwise and
provided that you have been given a reasonable opportunity to review such
documents and, if necessary, comply with U.S. Securities and Exchange Commission
disclosure obligations): (1) drafts and final
definitive documentation with respect to the Facilities; (2) administrative
materials prepared by the Lead Arranger for potential Lenders (e.g., a lender meeting invitation,
allocation and/or funding and closing
memoranda); and (3) notification of changes in the terms of such
Facility.
4. Costs,
Expenses and Fees. You agree to pay or
reimburse the Lead Arranger, the Administrative Agent and the Commitment Party
for all reasonable out-of-pocket costs and expenses incurred by the Lead
Arranger, the Administrative Agent and the
Commitment Party or its affiliates (whether incurred before or after the date
hereof) in connection with the Facilities and the preparation, negotiation,
execution and delivery of this Commitment Letter and Fee Letter, the
Documentation and any security arrangements in connection therewith, including
without limitation, the reasonable fees and disbursements of one counsel to the Lead
Arranger, the Administrative Agent and the Commitment Party and their affiliates
taken together (and, if necessary, of one local counsel in each applicable
jurisdiction), regardless of whether any of the
Transactions is consummated. You further agree to pay all reasonable
out-of-pocket costs and expenses of the Lead Arranger, the Administrative Agent
and the Commitment Party and its affiliates (including, without limitation, the
reasonable fees and disbursements of one counsel to the Lead Arranger, the
Administrative Agent and the Commitment Party and their affiliates taken
together (and, if necessary, of one local counsel in each applicable
jurisdiction)) incurred in connection with the enforcement of any of its rights and remedies
hereunder. In addition, you hereby agree to pay when and as due the
fees described in the Fee Letter. Once paid, such fees shall not be
refundable under any circumstances.
5. Indemnity. You agree to indemnify and
hold harmless the Lead Arranger, the Administrative Agent and their respective
affiliates (including, without limitation, controlling persons) and each director,
officer, employee, advisor, agent, affiliate, successor, partner,
representative and assign of each of the forgoing
(each an “Indemnified
Person”) from and against
any and all actions, suits, investigation, inquiry, claims, losses,
damages, liabilities, expenses or proceedings of any kind or nature
whatsoever which may be incurred by or
asserted against or involve any such Indemnified Person as a result of or
arising out of or in any way related to or resulting from this Commitment
Letter, the Fee Letter, the Facilities, the use of proceeds
thereof, the Transactions or the other transactions contemplated thereby
(regardless of whether any such Indemnified Person is a party thereto and
regardless of whether such matter is initiated by a third party or
otherwise) (any of the foregoing, a “Proceeding”), and you agree to reimburse each Indemnified Person for any
reasonable legal or other out-of-pocket expenses incurred in connection with investigating,
defending, preparing to defend or participating in any such Proceeding (provided that you shall not be required to
reimburse the costs and expenses of more than one counsel for all the
Indemnified Persons taken as a whole (and one local counsel, if necessary, in
each applicable jurisdiction) and, if there is a conflict of
interests, one additional counsel to the affected Indemnified Persons taken as a whole);
provided, however, that no Indemnified Person will be
indemnified for any such cost, expense or liability to the extent determined by
a final, nonappealable judgment of a court of competent jurisdiction to have
resulted from (x) the gross negligence or willful misconduct of such Indemnified
Person or (y) a material breach by such
Indemnified Person of its obligations under this Commitment Letter. In the case of any
Proceeding to which the indemnity in this paragraph applies, such indemnity and
reimbursement obligations shall be
effective, whether or not such Proceeding is brought by you, the Borrower,
the Target, any of your or their respective securityholders or creditors, an Indemnified Person
or any other person, or an Indemnified Person is otherwise a party thereto and
whether or not any aspect of the Com-
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mitment Letter, the Fee Letter, the
Facilities or any of the Transactions is consummated. Notwithstanding any
other provision of this Commitment Letter, (i) no Indemnified Person shall
be responsible or liable for damages arising from the unauthorized use by others
of information or other materials obtained through internet, electronic,
telecommunications or other information transmission, except to the extent such damages are found by a final, nonappealable judgment of a
court of competent jurisdiction to have resulted from the willful misconduct or gross
negligence of such Indemnified Person and (ii) no Indemnified
Person shall have any liability (whether
direct or indirect, in contract, tort or otherwise) to you, the Borrower, the
Target, or any of your or their respective
securityholders or creditors arising out of, related to or in connection with the Commitment Letter, the Fee
Letter, the Facilities or any of the Transactions or the other transactions
contemplated thereby, except to the extent of direct (as opposed to special, indirect,
consequential or punitive) damages determined in a final, nonappealable judgment
by a court of competent jurisdiction to have resulted from
such Indemnified Person’s gross negligence or willful misconduct, and it is
further agreed that the Commitment Party shall have liability only to you (as
opposed to any other person).
You will not, without the prior written
consent of the Lead Arranger and the Administrative Agent (such consent not to be unreasonably
delayed or withheld),
settle, compromise, consent to the entry of any judgment in or
otherwise seek to terminate any Proceeding in respect of which
indemnification may be sought hereunder (whether or
not any Indemnified Person is a party thereto) unless such settlement,
compromise, consent or termination
(i) includes an unconditional release of each Indemnified Person from all
liability arising out of such Proceeding and (ii) does not include a
statement as to, or an admission of, fault, culpability, or a failure to act by
or on behalf of any Indemnified Person.
6. Confidentiality. This Commitment Letter is
furnished solely for your benefit, and may not be relied upon or enforced by any
other person or entity other than the parties hereto, the Lenders and the
Indemnified Persons. This Commitment
Letter is delivered to you on the condition that neither the existence of this
Commitment Letter nor the Fee Letter nor any of their contents shall be
disclosed, directly or indirectly, to any other person or entity
except (i) to your directors, officers, employees and advisors on a “need to
know” and confidential basis and only in connection with the evaluation of the
Transactions, (ii) this Commitment Letter and the Fee Letter (redacted in a
manner reasonably satisfactory to the Commitment Party) may be disclosed to the
Target and its directors, officers and
advisors on a “need-to-know” basis and only in connection with the evaluation of
the Transactions, (iii) as may be compelled in a legal, judicial or
administrative proceeding or as otherwise required by law, (iv) this
Commitment Letter and the existence and
contents hereof (but not the Fee Letter or the contents thereof other than the
existence thereof and the contents thereof as part of projections, pro forma
information and a generic disclosure of aggregate sources and uses to the extent
customary in marketing materials and other disclosures) may be disclosed in any syndication or other
marketing material in connection with the Facilities or in connection with any
public filing requirement, and (v) the Term Sheets may be disclosed to potential
Lenders and to any rating agency in
connection with the
Acquisition.
Each of the Lead Arranger, the
Administrative Agent, the Commitment Party and their respective affiliates shall use all
nonpublic information received by them in connection with the Transactions solely for the purposes of
providing the services that are the subject of this Commitment Letter and shall
treat confidentially all such information;
provided, however, that nothing herein shall prevent any
such person from disclosing any such information (a) to rating agencies, (b) to
any Lenders or participants or prospective Lenders or participants, (c) in any
legal, judicial or administrative proceeding or other compulsory process or otherwise as required
by applicable law or regulations (in which case such person shall use
commercially reasonable efforts to promptly
notify you, in advance, to the extent permitted by law), (d) upon the request or
demand of any regulatory authority having jurisdiction over such person or its
affiliates, (e) to the employees, legal
counsel, independent auditors, professionals and
other experts or agents
- 8
-
of such person (collectively, “Representatives”) who need to know such information and
are informed of the confidential nature of such information and are or have been
advised of their obligation to keep information of this type confidential, (f) to
any of its respective affiliates (provided that any such affiliate is advised of
its obligation to retain such information as
confidential, and such person shall be responsible for its affiliates’
compliance with this paragraph) solely in
connection with the Transactions and (g) to the extent any such information
becomes publicly available other than by reason of disclosure by such
person, its affiliates or Representatives
in breach of this Commitment Letter; provided, that the disclosure of any such
information to any Lenders or prospective Lenders or participants or
prospective participants referred to above shall be made subject to the
acknowledgment and acceptance by such Lender or prospective Lender or
participant or prospective participant that such information is being
disseminated on a confidential basis in accordance with the
standard syndication processes of such person or customary market
standards for dissemination of such type of
information. The provisions of this paragraph shall terminate on the
first anniversary of the date
hereof.
7. Patriot
Act. We hereby
notify you that pursuant to the requirements of the USA Patriot Act, Title III
of Pub. L. 107-56 (October 26, 2001) (as amended, the “Patriot
Act”), we and the other
Lenders are required to obtain, verify and record information that identifies
the Borrower and the Target and its subsidiaries, which information includes the
name, address, tax identification number and other information
regarding them that will allow any of us or such Lender to identify the Borrower
and the Target in accordance with the Patriot Act. This notice is
given in accordance with the requirements of the
Patriot Act and is effective on behalf of the Commitment Party
and each other Lender.
8. Governing
Law, etc. This Commitment
Letter and the Fee Letter shall be governed by, and construed in accordance
with, the laws of the State of New York without regard to principles of
conflicts of law to the extent that the application of the laws of another
jurisdiction will be required thereby. Any right to trial by jury
with respect to any claim, action, suit or proceeding arising out
of or contemplated by this Commitment Letter and/or the related Fee Letter is
hereby waived. You and we hereby
irrevocably and unconditionally submit to the exclusive jurisdiction of the
federal and New
York State courts located in the City of
New York, Borough of Manhattan (and appellate courts
thereof) in connection with any dispute related to this Commitment Letter or the
Fee Letter or any matters contemplated hereby or thereby. You agree
that any service of process, summons, notice or document by registered mail
addressed to you at the address set forth above shall be effective service of
process for any suit, action or proceeding relating to any such
dispute. You and we irrevocably and unconditionally waive, to the
maximum extent permitted by law, any objection to
the laying of venue of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding has been brought in an
inconvenient forum. A final judgment in any such suit, action or
proceeding may be enforced in any jurisdiction by suit on the judgment or in
any other manner provided by law. Nothing herein will affect the
right of any party hereto to serve legal process in any other manner
permitted by law.
9. Other
Activities; No Fiduciary Relationship; Other Terms. As you know, Morgan Stanley
is a full service securities firm engaged, either directly or indirectly through
its affiliates in various activities,
including securities trading, investment management, financing and brokerage
activities and financial planning and benefits
counseling for both companies and individuals. In the ordinary course
of these activities, Morgan Stanley or its affiliates may actively trade the
debt and equity securities (or related derivative
securities) of the Borrower, the Target or other companies which may be the
subject of the arrangements contemplated by this
Commitment Letter for their own account and for the accounts of their customers
and may at any time hold long and short positions in such
securities. Morgan Stanley or its affiliates may also co-invest with,
make direct investments in, and invest or co-invest client monies in or with
funds or other investment vehicles managed by other parties, and such funds or
other invest-
- 9
-
ment vehicles may trade or make
investments in securities or other debt
obligations of the Borrower or other companies which may be the subject of the
arrangements contemplated by this Commitment Letter.
The Lead Arranger, the Administrative
Agent and the Commitment Party and their respective affiliates may have economic
interests that conflict with those of Target or the Borrower and may provide
financing or other services to parties whose interests conflict with
yours. You agree that the Lead Arranger, the Administrative Agent and
the Commitment Party will act under this agreement as an independent contractor
and that nothing in this Commitment Letter or the Fee Letter or otherwise will be deemed to create an
advisory, fiduciary or agency relationship or fiduciary or other implied duty
between the Lead Arranger, the Administrative Agent and the Commitment Party on
the one hand and Target or the Borrower, or their respective management,
stockholders or affiliates on the other
hand. You acknowledge and agree that (i) the transactions
contemplated by this Commitment Letter and the Fee Letter are arm’s-length commercial
transactions between the Lead Arranger, the Administrative Agent and the
Commitment Party, on the one hand, and you, on the other, (ii) in connection
therewith and with the process leading to such transaction the Commitment
Party is acting solely as a principal and not as a fiduciary of you, your
management, stockholders, creditors or any other person, (iii) the Lead
Arranger, the Administrative Agent and the Commitment Party
have not assumed an advisory or fiduciary responsibility in favor of you with
respect to the Transactions or the process leading thereto (irrespective of
whether the Lead Arranger, the Administrative Agent or the Commitment Party or
any of their respective affiliates had advised or is currently advising you on
other matters) or any other obligation to you except the obligations expressly set forth in this
Commitment Letter and the Fee Letter and (iv) you have consulted your own
legal and financial advisors to the extent you deemed
appropriate. You
further acknowledge that one or more affiliates of the Commitment Party has been
retained by you as a buy-side financial advisor (in such capacity, the
“Financial
Advisor”) in connection
with the Transactions. You agree not to assert any claim you might
allege based on any actual or potential conflict of interest that might be
asserted to arise or result from, on the
one hand, the engagement of the Financial Advisor and, on the other hand, our
obligations hereunder.
You further acknowledge and agree that
you and your subsidiaries are responsible for making your and their own
independent judgment with respect to the Transactions and the process leading thereto. In
addition, please note that the Lead Arranger, the Administrative Agent and the
Commitment Party and their respective
affiliates do not provide accounting, tax or legal advice. You and
your subsidiaries agree that you will not claim that the Lead Arranger, the
Administrative Agent or the Commitment Party or any of their respective
affiliates has rendered advisory services in any nature or
respect, or owes a fiduciary or similar duty to you or your subsidiaries,
arising out of this Commitment Letter or the Fee Letter. Nothing in
this paragraph or elsewhere in this Commitment Letter is intended to, or shall,
diminish the obligations or liabilities of the parties under the engagement
letter agreement between the Borrower and the Financial Advisor.
We reserve the right to employ the
services of one or more of our affiliates in providing services contemplated by
this Commitment Letter and to allocate, in whole or in part, to such affiliates
certain fees payable to us in such manner as we and such
affiliates may agree in our sole discretion. You also agree that the
Commitment Party may at any time and from time to time assign all or any portion
of its commitments hereunder to one or more of its affiliates; provided that no such assignment shall relieve
the Commitment Party of its commitments
hereunder.
10. Acceptance,
Termination, Amendment, etc. Please indicate your
acceptance of the terms of this Commitment Letter and the Fee Letter by
returning to us executed counterparts hereof and thereof by no later
than the earlier of (i) 11:00 p.m., New York time, on February 28, 2010 and (ii)
the public announcement by the Target and you
of the Acquisition, whereupon the undertakings of the parties will become
effective to the extent and in the manner provided hereby. This offer
shall terminate if not so
- 10
-
accepted by you at or prior to that
time. Thereafter, the commitments and other obligations of the
Commitment Party set forth in this
Commitment Letter shall automatically terminate unless the Commitment Party
shall in its discretion agree to an extension, upon the earliest to occur of (i)
the execution and delivery of Documentation by all of the parties thereto and the
consummation of the Acquisition; (ii) 5:00 p.m., New York time, on the date
which is 30 days after the date you deliver to us executed counterparts of this
Commitment Letter, if by such time you have not publicly announced the
Acquisition; (iii) 5:00 p.m., New York time, on September 1, 2010, if the Closing Date
shall not have occurred prior to such time; and (iv) the date of termination or
abandonment of the Acquisition Agreement.
This Commitment Letter and the Fee
Letter constitute the entire agreement and understanding between you and your
subsidiaries and affiliates and the Commitment Party with respect to the
Facilities and supersedes all prior written or oral agreements and
understandings relating to the specific matters hereof. No
individual has been authorized by the Commitment Party or any of its affiliates
to make any oral or written statements that are inconsistent with this
Commitment Letter or the Fee Letter.
Headings are for convenience of
reference only and shall not affect the construction of, or be taken into
consideration when interpreting, this Commitment Letter. Delivery of
an executed counterpart of a signature page to this
Commitment Letter and the Fee Letter by facsimile or electronic .pdf shall be
effective as delivery of a manually executed counterpart of this
Commitment Letter and the Fee
Letter. This Commitment Letter and the Fee Letter may be executed in
any number of counterparts, and by the
different parties hereto on separate counterparts, each of which counterpart
shall be an original, but all of which shall together constitute one and the
same instrument. The provisions of Sections 2, 3, 4, 5, 6, 8 and
9 and this Section 10 shall survive termination of this Commitment Letter,
provided that Sections 2 and 3 shall
survive only if the Closing Date occurs and the first sentence of Section 4
shall automatically be superseded by the comparable provisions of the Documentation when executed
and delivered by the parties thereto. This Commitment Letter may
not be amended or any provision hereof waived or modified except by an instrument in writing
signed by the parties hereto. This Commitment Letter shall not be
assignable by you without our prior
written consent and any purported assignment without such consent shall be null
and void. This Commitment Letter is intended to be solely for the
benefit of the parties hereto and is not intended to confer any benefits upon, or create any
rights in favor of, any person other than the parties hereto (and any
Indemnified Persons). For the avoidance of doubt, in no event shall
any Indemnified Person be liable to pay the Parent Termination Fee (as defined
in the Acquisition Agreement) or any portion thereof, or any settlement in lieu
thereof.
[Remainder of page intentionally left
blank]
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-
We are pleased to have been given the
opportunity to assist you in connection with the financing for the
Transactions.
Very
truly yours,
MORGAN
STANLEY SENIOR FUNDING, INC.
|
||||
By:
|
/s/ Andrew Wyatt Earls | |||
Name: | Andrew Wyatt Earls | |||
Title: | Authorized Signatory | |||
Agreed to and accepted as
of
the date first written
above:
MSCI
INC.
|
|||
By: | /s/ Gary Retelny | ||
Name: | Gary Retelny | ||
Title: | Managing Director |
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-
EXHIBIT A
SENIOR SECURED BANK
FACILITIES
SUMMARY OF
CERTAIN TERMS AND CONDITIONS
All capitalized terms used herein but
not defined shall have the meanings provided in the Commitment
Letter.
Borrower:
|
MSCI Inc. (the “Borrower”). The Borrower will
own all of the capital stock of the Target on the Closing
Date.
|
Sole Lead
Arranger,
Sole Book-Runner
and
Administrative
Agent:
|
Morgan Stanley Senior Funding,
Inc. (“MSSF,” the “Lead
Arranger” or the “Administrative
Agent”).
|
Collateral
Agent:
|
Morgan Stanley & Co.
Incorporated.
|
Lenders:
|
MSSF and a syndicate of financial
institutions and institutional lenders arranged by the Lead Arranger in
consultation with the
Borrower.
|
Guarantors:
|
All obligations under the
Facilities and under any interest rate protection or other hedging
arrangements entered into with, or cash management obligations owing to,
the Administrative Agent, any Lender, or any affiliates of the foregoing
shall be fully and unconditionally guaranteed by (i) each of the
Borrower’s existing subsidiaries that is a guarantor under the
Current Credit Facility, (ii) each of
the Target’s subsidiaries that is a guarantor under the Target’s existing
credit facility and (iii) each subsequently acquired or organized direct
or indirect subsidiary that is a wholly-owned Material Domestic Subsidiary
(as defined in the Current Credit Facility), subject to limited exceptions
(if any) to be agreed (each such subsidiary, a “Guarantor” and, collectively, the
“Guarantors”).
|
Facilities:
|
(A) A term loan facility (the
“Term
Facility”) in an
aggregate principal amount of $1,275.0 million, as such amount may be
reduced pursuant to the second
paragraph of Section 1 of the Commitment
Letter.
|
|
(B) A revolving credit facility (the
“Revolving
Facility” and
together with the Term Facility, the “Facilities”) in an aggregate principal
amount of $100.0 million, of which (i) an amount to be mutually agreed
will be available for the issuance of letters of credit (“Letters of
Credit”) and (ii) an
amount to be mutually agreed will be available as a swingline subfacility
(the “Swingline
Facility”).
|
A-1
|
Letters of Credit issued under the
Revolving Facility will be issued by one or more Lenders
acceptable to the Borrower and the Lead Arranger (the “Issuing
Bank”). Each Letter of
Credit shall expire not later than the earlier of (i) twelve months after
the original date of issuance unless consented to by the Issuing Bank and
the Administrative Agent, and (ii) the fifth business day prior to the
Revolving Maturity Date (as defined below); provided that, subject to the
discretion of the Issuing Bank, any
Letter of Credit may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the date referred
to in clause (ii) above) pursuant to provisions consistent with those in the Current
Credit Facility.
|
|
Drawings in respect of any Letter
of Credit shall be reimbursed by the Borrower (whether with its own funds
or with the proceeds of Revolving Loans) on the
next business day. To the extent the Borrower does not
reimburse the Issuing Bank on the same business day, the Lenders under the
Revolving Facility shall be irrevocably
obligated to reimburse the Issuing Bank on a pro rata basis in accordance
with their respective commitments under the Revolving
Facility. The issuance of all Letters of Credit
shall be subject to the customary procedures of the Issuing
Bank.
|
|
Except for purposes of calculating
the commitment fee described below, any swingline borrowings will reduce
availability under the Revolving Facility on a dollar-for-dollar
basis.
|
Maturity and
Amortization:
|
Term
Facility: The Term Facility shall mature on
the sixth anniversary of the Closing Date (the “Term Loan
Maturity Date”). The loans under the
Term Facility (the “Term
Loans”) shall
amortize in equal quarterly installments in annual amounts equal to 1.0%
of the original principal amount of the Term Facility, with the final balance
payable on the Term Loan Maturity
Date.
|
|
Revolving
Facility: The Revolving Facility shall
mature on the fifth anniversary of the Closing Date (the “Revolving
Maturity Date”). There shall be no
amortization in respect of loans under
the Revolving Facility (the “Revolving
Loans”; the Term Loan
and the Revolving Loans, a “Loan” and collectively, the
“Loans”).
|
Purpose and
Availability:
|
Term
Facility: The full amount of the Term
Facility shall be available in a single borrowing on the Closing Date and
shall be utilized (a) to finance, in part, the Acquisition and the
Refinancing and (b) to pay fees and expenses incurred in connection
with the Transactions. Once repaid, no amount of Term Loans may
be reborrowed.
|
A-2
|
Revolving
Facility: Letters of Credit may be issued
under the Revolving Facility on the Closing Date to replace or provide
credit support for any existing letters of credit (including by
“grandfathering” such existing letters of credit into the Revolving
Facility). The Revolving Facility shall otherwise be unutilized
on the Closing Date. The Revolving Loans shall be available
after the Closing Date for the Borrower’s and its subsidiaries’ working capital requirements
and other general corporate purposes. Revolving Loans may be
borrowed, repaid and reborrowed.
|
Incremental
Facilities:
|
The Documentation will permit the
Borrower to add one or more incremental term loan facilities to the
Facilities (each, an “Incremental Term
Facility”) and/or
increase commitments under the Revolving Facility (any such increase, an
“Incremental
Revolving
Facility”; the
Incremental Term Facilities and the Incremental Revolving Facilities are
collectively referred to as “Incremental
Facilities”) in an
aggregate amount of up to $300.0 million; provided that (i) no Lender will be
required to participate in any such Incremental
Facility, (ii) no event of default or default exists or would exist
after giving effect thereto, (iii) the leverage ratio shall be at least 0.25
“turn” less than the maximum leverage ratio permitted under the financial
covenants, and all other financial covenants would be satisfied, in each
case, on a pro forma basis on the date of incurrence and for the most
recent determination period after giving effect to such Incremental
Facility and other customary and
appropriate pro forma adjustment events, including any acquisitions or
dispositions or repayment of indebtedness after the beginning of the relevant determination
period but prior to or simultaneous with the borrowing under such
Incremental Facility, (iv) the maturity date of any such
Incremental Term Facility shall be
no earlier than the Term Loan Maturity Date, (v) the weighted average
life to maturity of any Incremental Term Facility shall be no shorter than
the weighted average life to maturity of the Term Facility, (vi) the
interest margins for the Incremental Term Facility shall be determined by
the Borrower and the lenders of the Incremental Term Facility; provided that in the event that the
interest margins for any Incremental Term Facility are greater than the
Interest Margins for the Term Facility, then the Interest Margins for the
Term Facility shall be increased to the
extent necessary so that the Interest Margins for the Term Facility
are equal to the interest margins for the Incremental Term
Facility; provided, further, that in determining the Interest
Margins applicable to the Term Facility and the Incremental Term Facility,
(x) original issue discount (“OID”) or upfront fees (which shall be
deemed to constitute like amounts of OID) payable by the Borrower to the
Lenders of the Term Facility or the Incremental Term Facility in the
primary syndication thereof shall be included (with OID being equated to
interest based on an assumed four-year life to matur-
|
A-3
ity) and (y) customary arrangement or commitment fees
payable to the Lead Arranger (or its affiliates) in connection with the
Term Facility or to one or more arrangers (or their affiliates) of the
Incremental Term Facility shall be excluded, (vii) any
LIBOR floors or Base Rate floors applicable to any Incremental Facilities
shall be no higher than the LIBOR floor and Base Rate floor applicable to
the Facilities, (viii) each Incremental
Facility may be secured by either a pari passu or junior lien on the
Collateral securing the Facilities in each case on terms reasonably
satisfactory to the Administrative Agent and (ix) any Incremental
Revolving Facility shall be on terms and pursuant
to documentation applicable to the Revolving Facility and any Incremental
Term Facility shall be on terms and pursuant to documentation to be
determined, provided that, to the extent such terms
and documentation are not consistent with the Term Facility (except to the
extent permitted by clause (iv), (v) or (vi)
above), they shall be reasonably satisfactory to the Administrative
Agent. The Borrower shall first seek commitments in respect of
any Incremental Facility from existing Lenders (each of whom shall be
entitled to agree or decline to participate in its sole discretion) and,
thereafter, from additional banks, financial institutions and other
institutional lenders reasonably
acceptable to the Administrative Agent who will become Lenders in
connection
therewith.
|
|
Collateral:
|
The Facilities and interest rate
protection and other hedging arrangements entered into with, and
cash management obligations owing to, the Administrative Agent, any Lender
or any affiliates of the foregoing will be secured by a valid and
perfected first priority lien (subject to liens permitted under the
Documentation) on all of the following,
whether owned on the Closing Date or thereafter acquired (collectively,
the “Collateral”):
|
|
(a)
|
All equity interests (or other
ownership interests) and debt held by the Borrower or any Guarantor;
provided that, in the case of equity
interests of any foreign subsidiary, such pledge shall be
limited to 100% of the non-voting capital stock and 65% of the voting
capital stock of such
subsidiary;
|
|
(b)
|
Substantially all present and
future tangible and intangible assets of the Borrower and the Guarantors
including but not limited to, machinery and equipment, inventory and other goods,
accounts receivable, owned and leased real property, fixtures, deposit
accounts, general intangibles, intercompany debt, license
rights, intellectual property, chattel paper, insurance policies, contract
rights, hedge agreements, documents, instruments, indemnification rights, tax refunds,
investment property and cash, wherever located;
and
|
A-4
|
(c)
|
All proceeds and products of the
property and assets described in clauses (a) and (b)
above.
|
All the above-described pledges,
security interests and mortgages shall be created on terms and pursuant to
documentation reasonably satisfactory to the Administrative Agent, and none of the
Collateral shall be subject to any other pledges, security interests or
mortgages, subject to customary exceptions and other exceptions to be agreed
upon. Notwithstanding the foregoing, the following assets will be
excluded from Collateral: (i) all leasehold interests, (ii) motor
vehicles and other assets subject to certificates of title and certain
commercial tort claims, (iii) all fee-owned property that has a value less than
an amount to be agreed, (iv) all contracts, licenses and permits to the extent
the grant of a security interest therein is prohibited by the terms of such
contracts, licenses and permits, in each case after giving effect to the UCC, other applicable law
and principles of equity and (v) assets where the Collateral Agent reasonably
agrees in writing that the cost, burden or consequences (including adverse tax
consequences) of obtaining or perfecting a
security interest in such assets is excessive in relation to the practical
benefit afforded thereby.
Interest:
|
At the Borrower’s option, the
Loans will bear interest based on the Base Rate or LIBOR (in each case, as
defined below), except that all swingline
borrowings will accrue interest based only at the Base
Rate:
|
|
A. Base
Rate Option
|
|
Interest will be at the Base Rate
plus the applicable Interest Margin, calculated on the basis of the actual
number of days elapsed in a year of 365 days and payable quarterly in
arrears. “Base
Rate” shall mean, for
any day, a fluctuating rate per annum equal to the highest of (i) the
Federal Funds Rate, as published by the Federal Reserve Bank of New York,
plus 1/2 of 1.00%, (ii) the rate that the Administrative Agent
announces from time to time as its prime or base commercial lending rate, as in effect
from time to time and (iii) LIBOR for an interest period of one-month
beginning on such day plus 1.00%; provided that the Base Rate shall be
deemed to be not less than 2.50% per annum.
|
|
Base Rate borrowings will be in
minimum amounts to be agreed upon and may be borrowed with same day
notice.
|
|
B. LIBOR
Option
|
|
Interest will be determined for
periods to be selected by the Borrower (“Interest
Periods”) of one,
two, three or six months (or, if consented to by all applicable Lenders,
nine or 12 months) and will be at an annual rate equal to the London
Interbank Offered
|
A-5
Rate (“LIBOR”) for the corresponding deposits
of U.S. dollars, plus the applicable Interest
Margin; provided that (i) prior to the earlier of
(x) completion of a Successful Syndication of the Facilities and (y) 30 days after the
Closing Date, the interest period shall be one month and
(ii) LIBOR shall be deemed to be not less than 1.50% per
annum. LIBOR will be determined by reference to the rate appearing on
Reuters Screen Libor 01 for the applicable interest period (or on
any successor or substitute page of such screen, or any successor to or substitute for such
screen, providing rate quotations comparable to those currently provided
on such page of such screen, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market). Interest
will be paid at the end of each Interest Period or, in the case of
Interest Periods longer than three months, quarterly, and will be
calculated on the basis of the actual number of days elapsed in a
year of 360 days. LIBOR will be adjusted for maximum statutory
reserve requirements (if
any).
|
|
|
LIBOR borrowings will require
three business days’ prior notice and will be in minimum amounts to be agreed
upon.
|
C. Interest
Margins
The applicable Interest Margin
will be the percentages set forth in the following
table.
|
Base Rate
Loans
|
LIBOR
Loans
|
|||
Term Facility |
2.50%
|
3.50% | ||
Revolving Facility |
2.50%
|
3.50% |
From and after the date on which
the Borrower shall have delivered financial statements for the first
fiscal quarter ending at least six months after the Closing Date, and so
long as no event of default shall have occurred or be continuing, the
Interest Margins with respect to the Revolving Facility will be subject to
reduction in accordance with a
leverage-based grid to be agreed.
|
|
Default
Interest:
|
During the continuance of a
payment default, interest will accrue (a) in the case of overdue principal
or overdue interest on any loan, at a rate of 2.0% per annum plus the interest rate
otherwise applicable to such loan and (b) in the case of any other overdue
amount, at a rate of 2.0% per annum plus the non-default interest rate
then applicable to Base Rate Revolving Loans and, in each case, will be
payable on demand.
|
A-6
Unused
Commitment Fees:
|
0.75% per annum on the unused
amount of the commitments under the Revolving Facility (calculated on an
actual/360-day basis), payable (i) quarterly in arrears and (ii) on the date of
termination or expiration of the
commitments.
|
Letter of
Credit Fees:
|
The Borrower shall pay (calculated
on an actual/360-day basis) (a) to the Issuing Bank for its own account a
fronting fee equal to a percentage to be agreed between the Borrower and the Issuing
Bank (but not to exceed 0.25% per annum) on the aggregate face amount of
each Letter of Credit issued and (b) to the Lenders under the Revolving
Facility a participation fee equal to the applicable Interest Margin for
LIBOR Revolving Loans on the aggregate undrawn amount of each such Letter
of Credit. Other customary administrative, issuance, amendment
and other charges shall be payable to the Issuing Bank for its own
account.
|
Optional Prepayments and
Commitment
Reductions:
|
The Borrower may prepay, in whole
or in part, the Facilities, together with any accrued
and unpaid interest, with prior notice but without premium or penalty
(other than any breakage or redeployment costs in the case of a prepayment
of LIBOR Loans other than on the last day of the relevant interest period)
and in minimum amounts to be agreed. Voluntary reductions to
the unutilized commitments of the Revolving
Facility may be made from time to time by the Borrower without
premium or
penalty.
|
Mandatory
Prepayments:
|
The Borrower shall prepay the
Facilities by an amount equal to: (a) 100% of the net cash
proceeds from the sale or other disposition of all or any part of the
assets of the Borrower or any of its subsidiaries after the Closing Date
other than sales or dispositions of inventory in the ordinary
course of business and other exceptions to be agreed and other than
amounts used to fund permitted acquisitions or reinvested in capital
assets to be used in the Borrower’s business within 12 months of such sale
or disposition, (b) 100% of all casualty
and condemnation proceeds received by the Borrower or any of
its subsidiaries, subject to reinvestment rights to be agreed,
(c) 100% of the net cash proceeds received by the Borrower or any of
its subsidiaries from the issuance of debt or disqualified
capital stock after the Closing Date (other than exceptions to be agreed)
and
(d) commencing with the period from the beginning of the
first full fiscal quarter of the Borrower after the Closing Date through
the end of fiscal year 2010, and for each fiscal year thereafter, 50% of
excess cash flow (to
be defined) of the Borrower and its subsidiaries,
subject to stepdown to 25% based on a leverage ratio to be agreed;
provided that any voluntary prepayments of
loans (including loans under the Revolving Facility to the extent
accompanied by permanent reductions of the
commitments thereunder), other than prepayments funded with the
proceeds of indebtedness, shall be
credited against excess cash flow prepayment obligations on a
|
A-7
dollar-for-dollar
basis. Mandatory prepayments shall be applied first to the Term
Facility and, after the Term Facility has been prepaid in full, to the
Revolving Facility (without any commitment reduction
thereunder).
|
|
Application of
Prepayments:
|
Optional and mandatory prepayments
of the Term Facility will be applied to scheduled amortization payments (i) in the
case of optional prepayments, in direct order to the next four scheduled
amortization payments thereof and thereafter to the remaining scheduled
amortization payments on a pro rata basis and (ii) in the case of
mandatory prepayments, on a pro rata basis.
|
Conditions
Precedent
to Initial
Funding:
|
Conditions precedent to initial
borrowings under the Facilities shall be limited to (i) those set forth in
Section 1
of the Commitment Letter and in Exhibit B to
the Commitment Letter, (ii) the accuracy of the Acquisition Agreement
Representations and (iii) the accuracy in all material respects of the
Specified Representations.
|
Conditions Precedent
to
All Other
Extensions of Credit:
|
Conditions precedent to each
borrowing under the Facilities after the initial borrowings thereunder
shall be limited to the following: (a) delivery to the
Administrative Agent of a notice of
borrowing or letter of credit request; (b) the absence of any default or
event of default at the time of, and after giving effect to, such borrowing; and (c)
the accuracy in all material respects of the representations and
warranties of the Borrower and the Guarantors.
|
Representations
and
Warranties:
|
Representations and warranties
applicable to the Borrower and its subsidiaries customary and usual for
financings of this kind and limited to (subject to thresholds and/or
exceptions to be negotiated and reflected in the
Documentation): corporate existence; corporate power and
authority; non-contravention and enforceability of the Documentation;
no conflicts with law or contractual obligations; accuracy and completeness
of financial and other information (including pro forma financial
information); no material adverse change; compliance with applicable laws
and regulations, including ERISA, environmental laws and Federal Reserve regulations; accuracy
and completeness of disclosure; absence of undisclosed
liabilities; consents; ownership of property; no liens; absence of
burdensome restrictions; intellectual property; licenses; Patriot
Act and anti-terrorism law compliance; subsidiaries; status as
senior debt; no material litigation; inapplicability of the Investment
Company Act of 1940; solvency of the Borrower and its
subsidiaries on a consolidated basis; payment of taxes and other
obligations; no default or event
|
A-8
of default; and validity, priority
and perfection of the liens on and security interest in the
Collateral.
|
|
Affirmative
Covenants:
|
Affirmative covenants customary
and usual for financings of this kind and limited
to (subject to thresholds and/or exceptions to be negotiated and reflected
in the Documentation): delivery of certified quarterly
and audited annual financial statements, accountants’ letters, reports to
shareholders, notices of defaults, litigation and other material events,
budgets, compliance certificates and other information customarily
supplied in a transaction of this type; compliance with applicable laws and regulations,
including ERISA, environmental laws and Federal Reserve regulations;
payment of taxes and other obligations; maintenance of insurance; use of
proceeds; preservation of corporate existence,
rights (charter and statutory), franchises, permits, licenses and
approvals; compliance with terms of leaseholds; visitation and inspection
rights; keeping of proper books and records; maintenance of properties;
agreement to hold annual meetings of Lenders at the request of the
Administrative Agent (which meetings may be by teleconference);
performance of material contracts; further assurances (including, without
limitation, with respect to security interests in after-acquired
property); commercially reasonable efforts to maintain public
corporate credit/family ratings of the Borrower and ratings of the
Facilities from Moody’s and S&P (but not to maintain a specific
rating); entering into interest rate swap contracts with terms and
conditions and with a counterparty reasonably satisfactory to the
Administrative Agent covering such amount of consolidated
funded debt for borrowed money such that at least 40% of the aggregate
principal amount of consolidated funded debt for borrowed money of the
Borrower and its subsidiaries is subject to interest rate swap contracts or
interest rate caps providing for effective payment of interest on a fixed rate basis or
bears interest at fixed rates or is subject to a cap on interest rates for
a period of at least two years after the Closing Date.
|
Negative
Covenants:
|
Negative covenants customary and
usual for financings of this kind and limited
to (subject to thresholds and/or exceptions to be negotiated and reflected
in the Documentation):
|
|
1.
|
Limitations on liens and further
negative pledges.
|
|
2.
|
Limitations on sale-leaseback
transactions.
|
|
3.
|
Limitations on (i) debt
(including, without limitation, guaranties of and other contingent
obligations in respect of debt, and including the subordination of all
intercompany indebtedness owing by the Borrower or any Guarantor to a
person that is not the Borrower or a Guarantor on terms reasonably
satisfactory to the Administrative Agent)
and
|
A-9
(ii) any prepayment, redemption or
repurchase of debt (other than permitted refinancings and other exceptions
to be agreed).
|
||
|
4.
|
Limitations on mergers,
consolidations and acquisitions; provided that acquisitions shall be
permitted if (i) no default or event of default exists or would result
therefrom, (ii) the Borrower would be in pro forma compliance with the
financial covenants after giving effect thereto, and the Borrower’s total
leverage ratio shall be less than
0.25 “turn” less than the maximum total leverage ratio covenant in effect
at such time, (iii) the Borrower’s corporate credit/family ratings shall
not be adversely affected and (iv) the total consideration for all such
acquisitions in any fiscal year shall not exceed $100.0 million (excluding any such
consideration consisting of qualified equity interests or paid with net
cash proceeds of qualified equity interests of the Borrower), with a sublimit to be
agreed for the consideration attributable to acquisitions of non-wholly
owned subsidiaries.
|
|
5.
|
Limitations on sales, transfers
and other dispositions of assets.
|
|
6.
|
Limitations on loans and other
investments.
|
|
7.
|
Limitations on dividends and other
distributions, stock repurchases and redemptions and
other restricted payments.
|
|
8.
|
Limitations on creating new
subsidiaries or becoming a general partner in any
partnership.
|
|
9.
|
Limitations on capital
expenditures.
|
|
10.
|
Limitations on restrictions
affecting subsidiaries.
|
|
11.
|
Limitations on transactions with
affiliates.
|
|
12.
|
Limitations on issuances of
disqualified capital stock.
|
|
13.
|
Limitations on change in (i) the
nature of their business, (ii) accounting policies or (iii) fiscal
periods.
|
|
14.
|
No modification or waiver of
material documents (including, without limitation, charter documents of
the Borrower and its subsidiaries or any other material debt) in a manner
materially adverse to the
Lenders.
|
Financial
Covenants:
|
Limited to (in each case, to be
defined):
|
A-10
·
|
maintenance of a minimum interest
coverage ratio (EBITDA to cash interest expense);
and
|
·
|
maintenance of a maximum total
leverage ratio (total debt to
EBITDA).
|
|
The financial covenants will
initially be set using an approximately 25% cushion in EBITDA from the
base case model provided to the Lead Arranger by the
Borrower prior to the date of the Commitment Letter (with such cushion
increasing over time in a manner to be agreed) and will be calculated on a
consolidated basis for the Borrower and
its subsidiaries and for each consecutive four fiscal quarter period,
except that for fiscal quarters ending prior to the Closing Date, the Lead
Arranger and the Borrower shall agree to the adjusted EBITDA of the
Borrower on a pro forma basis for historical periods.
|
Events of
Default:
|
Events of default customary
and usual for
financings of this kind and limited to (subject to grace
periods, thresholds and/or exceptions to be negotiated and reflected in the
Documentation): failure to pay principal when due or interest
or other amounts within a specified grace period (to be determined) after
the same becomes due; breach of representations, warranties or covenants;
cross-default and cross-acceleration (with thresholds to be agreed);
bankruptcy and insolvency events; judgment defaults (with thresholds to be
agreed); actual or asserted invalidity or impairment of Documentation,
Collateral, guarantees or subordination provisions (of subordinated debt);
change of control; and customary ERISA defaults.
|
Expenses and
Indemnity:
|
The Borrower shall pay or
reimburse (i) the Lead Arranger, the Administrative Agent
and their affiliates for all reasonable and documented out-of-pocket costs
and expenses incurred in connection with the syndication of
the Facilities and with the preparation, negotiation, execution,
delivery, administration, amendment, waiver or modification
(including proposed amendments, waivers or
modifications) of the Documentation and any security arrangements in
connection therewith, including without limitation, the reasonable fees and
disbursements of one counsel to the Lead Arranger, the Administrative
Agent and their affiliates taken together (plus, if
necessary, of one local counsel in each applicable jurisdiction) and (ii)
the Issuing Bank for all reasonable and documented out-of-pocket
expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter
of Credit or any demand for payment thereunder. The Borrower
further agrees to pay all reasonable and documented out-of-pocket costs
and expenses of the Administrative Agent, the Collateral
Agent, the Issuing Bank, the Lenders and their respective affiliates
(including, without limitation, reasonable fees and
disbursements of one counsel to the Administrative Agent, the Collateral
Agent, the Issuing Bank,
|
A-11
the Lenders and their respective
affiliates taken together (and one local counsel, if necessary, in each
applicable jurisdiction) and, if there is a conflict of interests, one
additional counsel for such persons taken as a whole)) incurred in
connection with the enforcement or protection of any of its rights and
remedies under the Documentation, including in connection with
workouts.
|
|
|
The Borrower will indemnify the
Lenders, the Commitment Party, the Lead Arranger, the Administrative
Agent, the Collateral Agent and the Issuing Bank
and their respective affiliates, and hold them harmless from and against
all reasonable and documented out-of-pocket costs, expenses (including,
without limitation, reasonable fees and disbursements of one counsel for
all such indemnified persons taken as a whole (and, if necessary, of one local counsel in
each applicable jurisdiction) and, if there is a conflict of interests,
one additional counsel to the affected indemnified persons taken as a
whole) and liabilities arising out of or relating to the Transactions and
any actual or proposed use of the proceeds of any loans made under the
Facilities; provided,
however, that no such
person will be indemnified for costs, expenses or other liabilities to the
extent resulting from the gross negligence or willful misconduct of such
person or a material breach by such person of its obligations under the
Bank Documentation, in each case, as determined by a final, non-appealable
judgment of a court of competent jurisdiction; provided further than such indemnity shall not
apply to any dispute between Lenders (and not by a Lender against the Lead
Arranger, the Administrative Agent, the Collateral Agent
or the Issuing Bank in its capacity as such) and not involving the
Borrower or any of its subsidiaries or related persons.
|
Waivers and
Amendments:
|
Amendments and waivers of the
provisions of the Documentation shall require the approval of
Lenders holding not less than a majority of the aggregate
principal amount of the term loans and
revolving commitments under the Facilities (the “Required
Lenders”);
provided that (a) the consent of each
directly affected Lender shall be required
with respect to, among other things, (i) increases in the commitment of
such Lender; (ii) reductions of principal, interest or
fees of such Lender (it being understood that the applicability of the
default rate may be waived by the Required Lenders and the step-up to the
highest point in the pricing grid during an event of default may be waived
by the Lenders holding a majority of the revolving commitments under the Revolving
Facility); (iii) extensions of scheduled amortization or the final
maturity date of the loans or commitments of such Lender; and (iv)
releases of all or substantially all of the Collateral or
all or substantially all of the value of the guarantees; (b) the consent
of all of the Lenders shall be required with respect to, among
other things, modification of the voting percentages (or any of the
applicable definitions related
|
A-12
thereto); and (c) consent of the
Lenders holding not less than a majority of any class of loans under the
Facilities shall be required with respect to, among
other things, any amendment or waiver that by its terms adversely affects
the rights of such class in respect of payments or Collateral in a manner
different than such amendment or waiver affects another
class.
|
|
Defaulting
Lenders:
|
The Documentation shall contain
customary provisions relating to “defaulting” Lenders (including
provisions relating to providing cash collateral to support
swingline loans or letters of credit, the suspension of voting rights,
rights to receive certain fees, and the termination or assignment of
commitments or loans of such
Lenders).
|
Assignments and
Participations:
|
Each Lender may assign all or,
subject to minimum amounts to be agreed, a portion of its loans and
commitments under one or more of the
Facilities. Assignments will require payment of an
administrative fee to the Administrative Agent by the assignor or the
assignee and the consents of the Administrative Agent and the Borrower
(such consents not to be unreasonably withheld or delayed); provided
that no consent of
the Borrower shall be required (i) for an assignment to an existing Lender
or an affiliate of an existing Lender or (ii) during a payment or
bankruptcy event of default (relating to the Borrower) or during the
Applicable Period to lenders previously
identified to the Borrower. In addition, each Lender may sell
participations in all or a portion of its loans and commitments under one
or more of the Facilities; provided that no purchaser of a
participation shall have the right to exercise or to cause the selling
Lender to exercise voting rights in respect of the Facilities (except as
to certain unanimous issues).
|
Yield Protection, Taxes
and
Other
Deductions:
|
The Documentation will contain
customary provisions for facilities of this kind, including,
without limitation, in respect of breakage and redeployment costs,
increased costs, funding losses, capital adequacy and
illegality. Subject to customary provisions, all payments shall
be free and clear of any present or future taxes, withholdings or other
deductions whatsoever (other than income taxes in the jurisdiction of a
Lender’s applicable lending office and other customary exceptions).
|
Governing
Law:
|
The State of New York, except as to real estate and
certain other collateral documents required to be governed by
local law. Each party to
the Documentation will waive the right to trial by jury and will consent
to the exclusive jurisdiction of the state and federal courts located in
The Borough of Manhattan, The City of New
York.
|
A-13
Counsel to the
Lead
Arranger and
Administrative
Agent:
|
Cahill Gordon & Reindel
llp.
|
A-14
EXHIBIT B
CONDITIONS PRECEDENT
Capitalized terms not otherwise defined herein have
the same meanings as specified therefor in the Commitment Letter to which this
Exhibit B is attached. The
availability of the Facilities shall be subject to the
satisfaction of the following conditions:
(a) Consummation of the
Acquisition. The
Acquisition shall be consummated substantially concurrently with the initial
funding of the Facilities in accordance with the Acquisition Agreement, without
(i) any waiver or amendment thereof or any consent thereunder in any manner
materially adverse to the Lenders or (ii)
without limiting clause (i), any change in the amount or form of purchase price
or any change in the structure of the Acquisition, in each of clauses (i) and
(ii), unless consented to by the Lead Arranger (such consent not to be
unreasonably withheld or delayed).
(b)
Debt. Immediately following the
Transactions, neither the Borrower nor any of its subsidiaries shall have any
indebtedness for borrowed money or preferred equity other than (i) the
Facilities, (ii) debt owed to, and preferred stock held by, the Borrower or any
of its subsidiaries and (iii) other indebtedness in an aggregate principal
amount not to exceed $10.0 million (the “Basket
Debt”). The
Administrative Agent shall have received reasonably satisfactory evidence of
repayment of all indebtedness to be repaid on the Closing Date and the discharge
(or the making of arrangements for discharge) of all liens other than liens
permitted to remain outstanding under the Documentation. From the
date of the Commitment Letter through the Closing Date, the Borrower shall have
complied with Section 7.03 of the Current Credit Facility without relying on the
exceptions provided by clause (h) or (l) thereof and Section 7.06 of the Current
Credit Facility without relying on the exception
provided by the proviso of clause (i) thereof (it being understood that the
Borrower may consummate the Acquisition).
(c)
Fees and
Expenses. The
Borrower shall have complied with all of its material obligations under, and the material terms of, the Fee
Letter. All fees
due to the Administrative Agent, the Lead Arranger and the
Lenders shall have been paid, and all expenses to be paid or
reimbursed to the Administrative Agent and the Lead Arranger that
have been invoiced a reasonable period of time prior to the Closing Date shall
have been paid, in each case, from the proceeds of the initial funding under the
Facilities.
(d)
Financial
Statements. The
Lead Arranger shall have received (i) as soon as available and in any event
within 45 days after the end of each fiscal quarter subsequent to the fiscal year 2009 for each
of the Borrower and the Target, unaudited consolidated balance sheets and
related statements of operations or income and cash flows of
each of Borrower and the Target for such fiscal quarter, for the period elapsed from the beginning of the
most recently completed fiscal year to the end of such fiscal quarter and for
the comparable periods of the preceding fiscal year, for each of the Borrower
and the Target (the “Unaudited Financial
Statements”) (with respect
to which the independent auditors shall have performed an SAS 100 review), and (ii)
a pro forma consolidated balance sheet and related statements of
income for the Borrower (the “Pro Forma Financial
Statements”), as well as
pro forma levels of EBITDA (“Pro Forma
EBITDA”), for the fiscal
year 2009 and for the latest four-quarter period ended with the latest period
covered by the Unaudited Financial Statements of the Borrower required by clause (i), as soon as
reasonably practicable after the date of this Commitment Letter (in the case of
the Pro Forma Financial Statements for fiscal year 2009)
and as soon as reasonably practicable after the Borrower’s Unaudited Financial Statements are
available (in the case of the subsequent Pro
Forma Financial Statements), using the Target’s latest historical financial
statements available at such time), in each case after giving effect to the
Transactions. The financial statements referred to in clauses (i) and
(ii) shall, to the extent
B-1
applicable, be prepared in accordance
with accounting principles generally accepted in the United States. The Pro Forma Financial Statements
shall be prepared on a basis consistent with pro forma financial statements set
forth in a registration statement filed with the Securities and Exchange
Commission, with such adjustments as are reasonably satisfactory
to the Lead Arranger.
(e)
Maximum
Leverage. The
Lead Arranger shall be reasonably satisfied that the ratio of
(i) Consolidated Funded Indebtedness (as defined in the Current Credit
Facility) of the Borrower on the Closing Date after giving effect to the Transactions to (ii)
Pro Forma EBITDA shall be no more than 4.0 to 1.0. “Pro Forma
EBITDA” means EBITDA of the
Borrower for the four-quarter period ending with the latest fiscal quarter of
the Borrower covered by the Unaudited Financial Statements, as adjusted to give
pro forma effect, in accordance with Regulation S-X under the Securities Act of 1933, to the Transactions as
if they had occurred at the beginning of such four-quarter period, and with such
further adjustments reasonably satisfactory to the Lead Arranger (it being
understood that up to $20.0
million of cost savings
resulting from the Acquisition identified to the Lead Arranger prior to the date
hereof may be included in the calculation of Pro Forma
EBITDA). For the avoidance of doubt, in calculating Pro Forma EBITDA, the
financial results of the Target for the latest four quarter period
ending with the latest fiscal period for which financial statements of the Target are available prior to the Closing
Date shall be used. For purposes of this paragraph (e) only,
“EBITDA” means consolidated net income
attributable to the Borrower and its subsidiaries plus (or minus), to the extent
reducing (or increasing) such net income, interest expense (net), tax expense,
depreciation, amortization, non-cash
compensation expense, non-cash currency translation loss (or gain), impairment
of goodwill and intangible assets, transaction fees and expenses related to the
Transactions, restructuring charges related to the Transactions and
non-recurring expenses previously identified to the Lead Arranger of
up to $3.0 million at the Target.
(f)
Patriot
Act. The
Borrower and each of the Guarantors shall have provided the documentation and
other information to the Administrative Agent that are required by regulatory
authorities under applicable
“know-your-customer” rules and regulations, including the Patriot Act, to the
extent the Borrower shall have received written
requests therefor at least five business days prior to the Closing
Date.
(g)
Closing
Documents. The
Administrative Agent shall have received, on behalf of the Lenders, a solvency
certificate in the form
attached as Annex B-1 hereto (with such changes, if any, as the Administrative
Agent shall reasonably approve) from the Chief Financial Officer of the
Borrower certifying that
the Borrower and its subsidiaries, on a consolidated basis after giving
effect to the Transactions, are
solvent. The
Administrative Agent shall have received, on behalf of the Lenders, customary opinions of counsel for the Borrower and the Guarantors
and, if
applicable, of local
counsel, as the case may be, and customary corporate resolutions, certificates
and other closing documentation.
(h)
Collateral. Subject to the last paragraph of Section
1 of the Commitment Letter, all documents and instruments required to
perfect the Collateral
Agent’s security interest
in the Collateral shall have been executed (where
applicable) and delivered by the Borrower and each applicable Guarantor and, if
applicable, be in proper form for filing, and none of the Collateral shall be
subject to any other pledges, security
interests or mortgages, except for pledges, security interests and mortgages
permitted under the Documentation. The Lead
Arranger shall have received the results of recent lien searches in each
relevant jurisdiction with respect to the Borrower and the Guarantors. The
Borrower shall have used its commercially reasonable efforts to cause to be
issued customary
endorsements naming the Administrative Agent, on behalf of the Lenders, as
an additional insured or loss payee, as the case may be, under all insurance
policies maintained with
respect to the properties of the Borrower and its
subsidiaries forming part of the Collateral.
B-2
Annex
B-1
[FORM OF] SOLVENCY
CERTIFICATE
, 2010
The undersigned, [ ], the
Chief Financial Officer of MSCI Inc., a Delaware corporation (“MSCI”), is
familiar with the properties, businesses, assets and liabilities of MSCI and its
Subsidiaries and is duly authorized to execute this certificate
(this “Solvency Certificate”) on behalf of MSCI.
This Solvency Certificate is delivered
pursuant to Section [ ] of the Credit Agreement dated as of [ ], 2010
(the “Credit Agreement”; terms defined therein unless otherwise defined herein
being used herein as therein defined) among MSCI, each Lender from time to time
party thereto, and Morgan Stanley Senior Funding, Inc. (“MSSF”), as Syndication
Agent, Administrative Agent and Collateral Agent.1 As used herein, “Company”
means MSCI and its Subsidiaries on a consolidated basis.
1. The undersigned certifies, on behalf of
MSCI and not in his individual capacity, that he has made such investigation and
inquiries as to the financial condition of MSCI and its Subsidiaries as the
undersigned deems necessary and prudent for the purposes of providing this
Solvency Certificate. The undersigned acknowledges that the
Administrative Agent, the L/C Issuer, the Swing Line Lender and the Lenders are
relying on the truth and accuracy of this Solvency Certificate in connection
with the making of Loans and the issuance of Letters
of Credit under the Credit Agreement.
2. The undersigned certifies, on behalf of
MSCI and not in his individual capacity, that (a) the financial information,
projections and assumptions which underlie and form the basis for the representations made in this Solvency
Certificate were made in good faith and were based on assumptions reasonably
believed by MSCI to be fair in light of the circumstances existing at the time
made and continue to be fair as of the date hereof;
and (b) for purposes of providing this Solvency Certificate, the amount of
contingent liabilities has been computed as the amount that, in the light of all
the facts and circumstances existing as of the date hereof, represents the
amount that can reasonably be expected to become an actual or matured
liability.
BASED ON THE FOREGOING, the undersigned
certifies, on behalf of MSCI and not in his individual capacity, that, on the
date hereof, before and after giving effect to the Transactions (and the Loans made or to be made
and other obligations incurred or to be incurred on the Closing
Date):
(i) the fair value of the property of the
Company, is greater than the total amount of liabilities, including contingent liabilities, of the
Company;
(ii) the present fair salable value of the
assets of the Company is greater than the amount that will be required to pay
the probable liability of the Company on its debts and other liabilities, including contingent liabilities, as they become
absolute and matured;
(iii) the Company does not intend to, and does
not believe that it will, incur debts or liabilities beyond the Company’s ability to pay such
debts and liabilities as they mature; and
___________
1 To be
modified to reflect the final Credit Agreement.
(iv) the Company does not have unreasonably
small capital with which to conduct the businesses in which it is engaged as
such businesses are now conducted and are proposed to be conducted following the
Closing Date.
IN WITNESS WHEREOF, the undersigned has
executed this Solvency Certificate as of the first date written above, solely in
his capacity as the Chief Financial Officer of MSCI and not in his individual capacity.
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Name: | |||
Title: Chief Financial Officer | |||