THIRD AMENDMENT TO
NOTE PURCHASE AGREEMENT
THIS THIRD AMENDMENT TO NOTE PURCHASE
AGREEMENT (“ Amendment ”), dated as of
June 2, 2005, is entered into by and among ARBITRON INC.
(f/k/a Ceridian Corporation), a Delaware corporation (the “
Company" ), and each of the Note Holders party to the Note
Agreement referred to below (collectively, the “ Note
Holders ”).
RECITALS
A. The Company and the Note
Holders are parties to a Note Purchase Agreement dated as of
January 31, 2001, as amended on March 29, 2001 and
June 10, 2002 (collectively, the ‘ ‘Note
Agreement ”) pursuant to which the Company has issued
certain Senior Secured Notes to the Note Holders.
B. The Company has requested
that the Note Holders agree to certain amendments of the Note
Agreement and the schedules thereto.
C. The Note Holders are willing
to amend the Note Agreement and the schedules thereto, subject to
the terms and conditions of this Amendment.
NOW, THEREFORE, for valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
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1.
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Defined Terms . Unless otherwise
defined herein, capitalized terms used herein shall have the
meanings, if any, assigned to them in the Note Agreement.
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2.
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Amendments to Note Agreement . The Note
Agreement shall be amended as follows, effective as of the
Effective Date:
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(a) Definitions .
The definition of “
Aggregate Distributable Income ” in Section 1.01
of the Note Agreement is hereby amended in its entirety to provide
as follows:
“ Aggregate Distributable Income ” means an
amount equal to 50% of Consolidated Net Income (positive or
negative) calculated on a cumulative basis through
December 31, 2004, plus an amount equal to 75% of
Consolidated Net Income (positive or negative) calculated on a
cumulative basis from and after January 1, 2005, based on the
year-end financial statements delivered to the Note Holders
pursuant to Section 6.01(a) ,; provided that any
and all amounts paid out of Aggregate Distributable Income pursuant
to Section 7.07(a)(ii) , Section 7.07(a)(iv) or
pursuant to any equivalent provision in the Loan Documents shall
reduce the amount of Aggregate Distributable Income on a dollar for
dollar basis.
The definition
of “ Compensation Equity Issuance Proceeds ”
shall hereby be added to Section 1.01 of the Note Agreement to
provide as follows:
“ Compensation Equity Issuance Proceeds ” means
all proceeds received by the Company or its Subsidiaries from the
sale or issuance of any of its respective capital stock, to the
extent in connection with or arising out of any stock-based
employee compensation plan (including without limitation, stock
option and restricted stock plans) operated by the Company or a
Subsidiary since the Spin-Off Consummation Date.
The definition
of “ Contingent Obligation ” is hereby amended
by inserting the following at the end of subparagraph (a)
thereof:
and without duplication with respect to any other obligation
hereunder and to the extent not otherwise Indebtedness of the
Company or any Subsidiary, any obligation, whether, direct or
indirect, or primary or secondary, to maintain the financial
condition of any Permitted Joint Venture or to pay any obligation
of any Permitted Joint Venture or to pay any obligation incurred in
connection with exiting or terminating a Permitted Joint
Venture
The definition
of “ Foreign Permitted Joint Venture ” is hereby
amended in its entirety to provide as follows:
“
Foreign Permitted Joint Venture ” means any Permitted
Joint Venture organized and existing under the laws of any
jurisdiction other than the United States or any state
thereof.”
The definition
of “ Leverage Ratio ” is hereby amended in its
entirety to provide as follows:
“
Leverage Ratio ” means, as of any date of
determination, for Company and its Subsidiaries on a consolidated
basis, the ratio of ( a ) Consolidated Funded Indebtedness,
plus Contingent Obligations described in Sections 7.05(h)
and 7.05(i) , as of such date plus, without duplication with
any of the foregoing, the amount of any unfunded or unperformed
commitment by the Company or any Subsidiary to provide funding to
or make an investment in a Permitted Joint Venture to ( b )
Consolidated EBITDA for the period of the four fiscal quarters
ending on such date.
The definition
of “ Note Documents ” in
Section 1.01 is hereby amended in its entirety to
provide as follows:
“ Loan Documents ” means the New Credit
Facility, the Intercreditor Agreement and each note, security
agreement, pledge agreement, control agreement, borrowing request,
fee letter, certificate and other agreement, document or instrument
executed or delivered in connection therewith.
The definition of “
Permitted Acquisition ” in Section 1.01 of
the Note Agreement is hereby amended in its entirety to provide as
follows:
“ Permitted Acquisition ” means any Acquisition
as to which all of the following conditions are satisfied: (
a ) (i) total cash and non-cash consideration
(including any deferred payment) paid or required to be paid by the
Company and its Subsidiaries in connection with such Acquisition
does not exceed $30,000,000 and after giving effect to such
Acquisition, total cash and non-cash consideration (including any
deferred payment) paid or required to be paid by the Company and
its Subsidiaries in connection with all such Acquisitions in any
fiscal year does not exceed $50,000,000, or (ii) with respect
to any Acquisition which does not satisfy the conditions set forth
in subsection (a)(i) above, on or before the consummation thereof,
the Company shall have provided Note Holders a certificate executed
by a Responsible Officer of the Company presenting calculations
showing compliance with the covenants set forth in
Sections 7.10 and 7.11 for the Test Period then most
recently ended, on a pro forma basis, as if such Acquisition
had occurred on the first day of such Test Period (including giving
effect on such date to any new Indebtedness incurred in connection
with such Acquisition); ( b ) after giving effect to such
Acquisition, the Person, or business or division of such Person, so
acquired shall be a Wholly Owned Subsidiary of the Company or one
of its Subsidiaries; and ( c ) immediately after giving
effect to such Acquisition, there shall exist no Default or Event
of Default.
The definition of “
Permitted Joint Ventures ” shall hereby be added to
Section 1.01 of the Note Agreement to provide as
follows:
“ Permitted Joint Ventures ” means (A) any
joint venture between (x) the Company and/or one or more of
its Subsidiaries and (y) any Person involving any Intellectual
Property or Proprietary Information of the Company or any
Subsidiary; provided the following conditions are at all times
satisfied: ( i ) such Person is an entity duly formed and
existing under the Laws of its jurisdiction of incorporation or
organization; ( ii ) the assets and property of such joint
venture consisting of Intellectual Property or Proprietary
Information made available by the Company or any Subsidiary to the
joint venture may be licensed to the joint venture pursuant to
license agreements that provide such license and the right of the
joint venture or such Person to use such Intellectual Property or
Proprietary Information (I) is revocable or non-revocable
and/or (II) is exclusive or non-exclusive; and ( iii )
the amount of any Investment made by the Company or Subsidiary in,
or the value of any assets and property of such Person not
consisting of Intellectual Property or Proprietary Information
contributed by such Person to, such joint venture does not cause a
breach of Section 7.11 or any other Default or Event of
Default and (B) any Permitted Nielsen JV.
The definition of “
Permitted Nielsen JV ” is hereby amended by deleting
everything following the word “Agreement” in clause
(iv) thereof and replacing it with a period, and inserting the
word “and” immediately prior to clause (iv).
The definition of “ Priority
Debt ” shall hereby be added to Section 1.01
of the Note Agreement to provide as follows:
“ Priority Debt ” means at any time, without
duplication, the sum of ( a ) all Indebtedness of the
Company and of any Subsidiaries secured by Liens other than by
Liens permitted by Sections 7.01 (b), (g), (h), (k) and
(l), and ( b ) all unsecured Indebtedness of Subsidiaries;
provided , that there shall be excluded from the definition
of Priority Debt ( i ) any Indebtedness of a Wholly Owned
Subsidiary to the Company or a Wholly Owned Subsidiary, and (
ii ) the Guaranties by Subsidiaries of the Notes and
guaranties of any other Indebtedness incurred after the date hereof
if the holders of the Guaranties and such other guaranties execute
and deliver an intercreditor agreement providing for the pro rata
sharing of payments made pursuant to such Guaranties and
guaranties, on terms reasonably satisfactory to the Required Note
Holders.
(b) Mandatory Offers to
Make Prepayments . Section 2.05 of the Note
Agreement shall be hereby amended by deleting
Section 2.05 in its entirety, and all references to
Section 2.05 or any subsection of
Section 2.05 appearing elsewhere in the Note Agreement
are hereby also deleted.
(c) Affirmative
Covenants .
(i) Forecasts .
Section 6.01(d) of the Note Agreement is hereby amended
in its entirety to provide as follows:
(d) on or before January 31 of each fiscal year, a
consolidated financial forecast for the Company and its
Subsidiaries for such fiscal year, including forecasted
consolidated balance sheets, consolidated statements of income,
shareholders’ equity and cash flows of the Company and its
Subsidiaries, which forecast shall ( A ) state the
assumptions used in the preparation thereof, ( B ) contain
such other information as reasonably requested by any Note Holder
and ( C ) be in form reasonably satisfactory to the Required
Note Holders.
(ii) Notice of Material
Litigation . Section 6.03(c) of the Note Agreement
is hereby amended in its entirety to provide as follows:
(c) of the commencement of, or any material development in,
any litigation or proceeding affecting the Company or any
Subsidiary which would reasonably be expected to: ( i ) have
a Material Adverse Effect (and taking into account the reasonable
likelihood of an adverse decision), ( ii ) if adversely
resolved against such Person, result in the imposition of an
injunction or other stay of the performance of this Agreement or
any Note Document or the consummation of the Spin-Off Transaction,
or ( iii ) involve an aggregate liability of $2,000,000 (or
its equivalent in another currency) or more.
(iii) JV Notices .
Section 6.03(k) of the Note Agreement is hereby amended
in its entirety to provide as follows:
(k) of ( i ) the exercise or termination of any option
under the Nielsen JV Option Agreement or any other joint venture
involving the Company or any Subsidiary, ( ii ) the
formation of the Nielsen JV or any other joint venture involving
the Company or any Subsidiary, ( iii ) any decision by the
Company not to commercially deploy the PPM Technology, and (
iv ) the occurrence of any material breach or default under
the terms of the Nielsen JV Option Agreement, the Scarborough
Partnership Agreement or any other Permitted Joint Venture.
(iv) Notice of Loss or
Disposition . Section 6.03(m) of the Note Agreement
is hereby amended in its entirety to provide as follows:
(m) of the occurrence of any Event of Loss or Disposition with
respect to any assets of the Company or any Material Subsidiary
(other than New Ceridian), where the fair value of the assets
exceed on an aggregate basis, for each such occurrence,
$1,000,000.
(v) Interest Rate
Protection . Section 6.10 of the Note Agreement is
hereby amended in its entirety to provide as follows:
6.10 Interest Rate Protection. [Intentionally Omitted]
(d) Negative Covenants
.
Article VII of the Note
Agreement is hereby amended in its entirety to provide as
follows:
Article VII . Negative Covenants . The
Company hereby covenants and agrees that, so long as any of the
Notes shall remain outstanding, or any other Obligation shall
remain unpaid or unsatisfied, unless the Required Note Holders
waive compliance in writing.
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7.01
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Limitation on Liens. The Company shall
not, and shall not suffer or permit any of its Subsidiaries to,
directly or indirectly, make, create, incur, assume or suffer to
exist any Lien upon or with respect to any part of its property
(including Intellectual Property, Proprietary Information and
accounts and notes receivable, with or without recourse), whether
now owned or hereafter acquired, other than the following (“
Permitted Liens ”):
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(a) any Lien created under any
Note Document;
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(b)
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(i) Liens existing on the Closing Date
and listed on Schedule 7.01 and any renewals or
extensions thereof, provided that the property covered
thereby is not increased and any renewal or extension of the
obligations secured or benefited thereby is permitted by Section
7.03(a)(iii) ; and (ii) at any time prior to the Spin-Off
Consummation Date, Liens on New Ceridian Assets that would, if such
assets were at such time owned or held by New Ceridian, constitute
“Permitted Liens” under and as defined in the New
Ceridian Credit Agreement.
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(c)
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Liens for taxes, fees, assessments or other
governmental charges or statutory obligations which are not
delinquent or remain payable without penalty, or to the extent that
non-payment thereof is permitted by Section 6.07 ,
provided that no Notice of Lien has been filed or recorded
under the Code;
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(d)
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Liens arising in the Ordinary Course of
Business in connection with obligations (other than obligations for
borrowed money) that are not overdue or which are being contested
in good faith and by appropriate proceedings, including, but not
limited to Liens under bid, performance and other surety bonds,
supersede as and appeal bonds, Liens on advance or progress
payments received from customers under contracts for the sale,
lease or license of goods, software, services or real estate and
upon the products being sold or licensed, in each case securing
performance of the underlying contract or the repayment of such
advances in the event final acceptance of performance under such
contracts does not occur; and Liens upon funds collected
temporarily from others pending payment or remittance on their
behalf; provided that the aggregate value of all collateral
pledged by the Company together with its Subsidiaries to secure
Liens arising under this subsection and subsection (e) of this
Section do not exceed on an aggregate, consolidated basis at any
time outstanding the amount of $2,500,000;
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(e)
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Liens (other than any Lien imposed by ERISA)
required in the Ordinary Course of Business in connection with
workers’ compensation, unemployment insurance and other
social security legislation; provided that the aggregate
value of all collateral pledged by the Company together with its
Subsidiaries to secure Liens arising under this subsection and
subsection (d) of this Section do not exceed on an aggregate,
consolidated basis at any time outstanding the amount of
$2,500,000;
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(f)
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easements, rights-of-way, restrictions and
other similar encumbrances incurred in the Ordinary Course of
Business which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of
the property subject thereto or interfere with the ordinary conduct
of the businesses of the Company and its Subsidiaries;
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(g)
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purchase money security interests on any
property acquired or held by the Company or its Subsidiaries in the
Ordinary Course of Business securing Indebtedness incurred or
assumed for the purpose of financing all or any part of the cost of
acquiring such property to the extent permitted under
Section 7.03 ; provided , however , that
( i ) any such Lien attaches to such property concurrently
with or within 20 days after the acquisition thereof, (
ii ) such Lien attaches solely to the property so acquired
in such transaction, and ( iii ) the principal amount of the
debt secured thereby does not exceed 100% of the cost of such
property;
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(h)
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Liens securing the property of any Person that
is acquired by the Company or any of its Subsidiaries after the
Effectiveness Date; provided that ( a ) such Liens
existed prior to the date of such acquisition and were not created
in contemplation thereof or for purposes of circumventing this
Agreement;
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(i)
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Liens consisting of pledges of cash collateral
or government securities to secure on a mark-to-market basis
Permitted Swap Contracts, provided that the aggregate value
of such collateral so pledged by the Company and all Subsidiaries
in favor of all counterparties thereunder does not at any time
exceed $1,000,000;
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(j)
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Liens arising solely by virtue of any
statutory or common law provision relating to banker’s liens,
rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a creditor depository
institution; provided , however , that ( i )
such deposit account is not a dedicated cash collateral account and
is not subject to restrictions against access by the Company in
excess of those set forth by regulations promulgated by the Federal
Reserve Board, and ( ii ) such deposit account is not
intended by the Company or any of its Subsidiaries to provide
collateral to the depository institution; and
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(k)
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Liens (A) existing pursuant to the Loan
Documents or pursuant to collateral documents securing any
Specified Swap Contract or securing Indebtedness permitted under
Section 7.03(a)(ix) , and in each case, subject to an
intercreditor agreement providing for the pro rata sharing of
payments made with respect to such obligations and those owing on
the Notes on terms reasonably satisfactory to the Required Note
Holders, or (B) securing Indebtedness permitted under
Section 7.03(a)(xii) .
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7.02 Mergers and
Consolidations.
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(a)
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The Company shall not, and shall not permit
any of its Arbitron Subsidiaries to, merge, consolidate with or
into, or convey, transfer, lease or otherwise dispose of (whether
in one or a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of
any Person, except as provided in subsection (b) of this
Section.
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(b) Section 7.02(a)
shall not prohibit:
(i) Permitted Acquisitions;
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(ii)
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the merger or consolidation of any Subsidiary
(except New Ceridian) into the Company, or with or into any other
Subsidiary, provided that if any such transaction is between
a Subsidiary and a Wholly Owned Subsidiary, the Wholly Owned
Subsidiary is the continuing or surviving corporation; and
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(iii)
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dispositions of assets pursuant to a
dissolution or liquidation otherwise permitted under this Agreement
of a Subsidiary;
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(iv)
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the sale or other disposition of all or
substantially all of the assets of a Subsidiary of the Company to
the Company or to a Wholly-Owned Subsidiary of the Company; or
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(v)
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the mergers, consolidations or transfers of
assets listed on Schedule 7.02(b) attached hereto.
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7.03 Indebtedness.
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(a)
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Company and Subsidiaries . The Company
shall not, and shall not permit any Subsidiaries to, create, incur,
assume or suffer to exist any Indebtedness other than the following
(collectively referred to herein as “ Permitted
Indebtedness ”):
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(i) the Obligations;
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(ii)
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Indebtedness arising from taxes, fees,
assessments or other governmental charges or statutory obligations
which are not delinquent or remain payable without penalty, or to
the extent that non-payment thereof is permitted by
Section 6.07 ;
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(iii)
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(A) Initial Permitted Indebtedness of the
Company or any Subsidiary of the Company existing on the Closing
Date or extensions, renewals and refinancings of such Indebtedness,
provided that the principal amount of such Indebtedness
being extended, renewed or refinanced does not increase; and
(B) at all times prior to the Spin-Off Consummation Date,
Indebtedness constituting “Initial Permitted
Indebtedness” under and as defined in the New Ceridian Credit
Agreement;
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(iv)
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accounts payable of the Company or its
Subsidiaries to trade creditors for goods and services and current
operating liabilities (not the result of the borrowing of money)
incurred in the Ordinary Course of Business in accordance with
customary terms and paid within the specified time, unless
contested in good faith by appropriate proceedings and reserved for
in accordance with GAAP;
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(v)
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obligations in respect of Permitted Swap
Contracts;
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(vi)
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Indebtedness of the Company or any Subsidiary
of the Company secured by Permitted Liens of the type referred to
in Section 7.01(g) , in a principal amount (including
imputed principal for Capital Leases) not to exceed $10,000,000, in
the aggregate for the Company and all Subsidiaries of the Company,
at any time outstanding;
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(vii)
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Indebtedness not secured by any Lien, in an
outstanding principal amount not to exceed, together with the
principal amount of Indebtedness outstanding at such time under
clause (vi), $20,000,000 at any time in the aggregate for the
Company and all Subsidiaries;
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(viii)
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unsecured Indebtedness not to exceed
$14,000,000 incurred prior to December 31, 2001 in favor of
the seller of certain assets relating to a Person known as
“Coventry”, as partial consid
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