Citi vs Terra Firma

From: Andrew C SHUTTER <[email protected]>To: Richard Ginsburg <[email protected]>; David Billington <[email protected]>Cc: Alistair Russell <[email protected]>; billington <[email protected]>; Bojana Petrovic <[email protected]>; David Dubin <[email protected]>; karen dolenec <[email protected]>; Kunal Govindia <[email protected]>; Mark Lorkin <[email protected]>; paul simpkin <[email protected]>; Peter Rawlings <[email protected]>; ricardo coats <[email protected]>; trudy cooke <[email protected]>; Faisal Ramzan <[email protected]>; peter schwartz <[email protected]>

Subject: Dice - Citi's position after 9am call

Thanks for your time this morning. See below a summary of points following that call. Revised drafts ofthe Term Sheet, Fee Letter and Commitment Letter will follow separately ahead of the 6pm call. Pleaselet us have any comments on the high yield engagement letter.

Commitment Letter

Successful Syndication -HY Bridge is £180m if transfers restricted or £100m if transfers not restrictedTLB and RCF is £100mSecuritistion Bridge is £350mAcquisition Facility is £15m

Certain Funds Period - 270 days from date of Commitment Letter (which is assumed to be same dateas for Interim Facility which will have the same 270 day Certain Funds Period and a 60 day period tomaturity)

Fee Letter -

Alternative Transaction Fee should be reinstated but fee is 1.75% if HY bridge is replaced or refinancedby private sales of equity or sub debt pre IPO (this should be the standard for Equity Contribution inTerm Sheet). If Citi were to agree to allow "stub equity" and the HY bridge were reduced as a result, thefull 2.5% fee would be payable

Securities Demand - TF request to delete is accepted

Securitistion Bridge Funding Fee - no rebates will applySee mark up

Margin Flex - to be 25bps for each facility including the securitisation bridge facility (calculated on aweighted average basis)

Go to market - TF to respond on long stop date of [3] years and cap of [3%]

Date: Sun May 20 2007 16:24:20 WATAttachments:

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Proprietary and Confidential - Do Not Copy

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Citi to be engaged for roles as set out in Citi's draft of fee letter and HY engagement letter

Additional Arrangers - stet "absolute or" so it is clear no other underwriter can receive more fees thanCiti

Term Sheets

Release of security requires consent of 90% of HY lenders

Extended High Yield Loans - Margin 4.50 cash 4.50 PIK or if no restriction on transfers 4.25 cash and4.25 PIK

No ability to term out to Extended HighYield Bridge Loans before first anniversry of Closing Date aswould not be consistent with prepayment schedule

Financial covenants agreed as drafted by you (ie without flex on cure) but interest cover still underconsideration

Please feel free to call if I can help explain any of these points or the mark-ups. +447979690043.

Kind regards

Andrew C. ShutterCleary Gottlieb Steen & Hamilton LLPCity Place House, 55 Basinghall Street, London EC2V 5EHTel: +442076142273Fax: +442076001698

http://www.clearygottlieb.com

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----- Original Message ----- From: richard.ginsburg Sent: 20/05/2007 08:16 CET To: David Billington Cc: Alistair Russell; Andrew SHUTTER; [email protected]; Bojana Petrovic; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected]; [email protected] Subject: Re: Term sheet and commitment letter

Dear All:

Attached are revised drafts of the Commitment Letter, Fee Letter and Term Sheet, reflecting ourdiscussions overnight and our review of the comments received earlier today. I have endeavoured toincorporate as many of your comments as possible and have put some of the requested changes insquare brackets pending review by Terra Firma.


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To facilitate your review I have attached a clean version of each of the documents (the WORDversions), along with comparisons to our last draft and to your markup (the .PDF versions in the zip-file)-- other than the Fee Letter where I have only included a comparison to your last markup. In theinterest of time these revised drafts are being circulated to all parties simultaneously, including to TerraFirma, and accordingly the remain subject to further review and comment.

Kind regards.

Richard A. Ginsburg--------------------------------Weil, Gotshal & Manges

* One South Place, London EC2M 2WG' (0)20 7903-1311 (Direct)7 (0)20 7903-0990 (Fax)' (0)7787 564 049 (Mobile)* [email protected]

"David Billington" <[email protected]>

05/20/2007 03:50 AM

[email protected], [email protected], [email protected], [email protected], [email protected]

cc"Home" <[email protected]>, "Andrew Shutter" <[email protected]>, "Alistair Russell"<[email protected]>, [email protected], [email protected], [email protected], [email protected], [email protected], [email protected], [email protected]

SubjectTerm sheet and commitment letter

Dear all,


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Please find attached our comments on the revised versions of the term sheetand commitment letter. These documents remain subject to further review andcomment by Citi pending receipt of a revised fee letter.

We look forward to finalising the outstanding points later today.

Kind regards

David

David BillingtonCleary Gottlieb Steen & Hamilton LLPCity Place House55 Basinghall StreetLondon EC2V 5EH

Direct line: +44 20 7614 2263Mobile: +44 7725 447 529Email: [email protected]

This message is being sent from a law firm and may contain confidential or privileged information. Ifyou are not the intended recipient, please advise the sender immediately by reply e-mail and delete thismessage and any attachments without retaining a copy.[attachment "Dice Term Sheet.DOC" deleted by Richard Ginsburg/LO/WGM/US] [attachment "DiceCommitment Letter.DOC" deleted by Richard Ginsburg/LO/WGM/US]

< END >

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From: Rawlings, Peter [CMB-GFICC] <[email protected]>To: [email protected] <[email protected]>Cc: Dubin, David [CMB-GFICC] <[email protected]>; Lorkin, Mark [CMB-GFICC] <[email protected]>; [email protected] <[email protected]>; Coats, Ricardo [CMB-GFICC] <[email protected]>; Simpkin, Paul [CMB-GFICC] <[email protected]>; Govindia, Kunal [CMB-GFICC] <[email protected]>; [email protected] <[email protected]>

Subject: Re: Dice

Thanks Karen - Let's dial in at 6.15pm on:Dial-in:01452 586 935P/word : 42 52 82 97 77Regards--------------------------Peter RawlingsCitigroup Global Markets LimitedTel: +44 20 7986 4969Fax: +44 20 7986 4704Mobile: +447702 778 740E-mail: [email protected]

Registered in England with number 1763297. Registered office: Citigroup Centre, Canada Square,London E14 5LB. Authorised and regulated by the Financial Services Authority.

The information contained in this electronic message and any attachments (the "Message") is intendedfor one or more specific individuals or entities, and may be confidential, proprietary, privileged orotherwise protected by law. If you are not the intended recipient, please notify the sender immediately,delete this Message and do not disclose, distribute, or copy it to any third party or otherwise use thisMessage. Electronic messages are not secure or error free and can contain viruses or may be delayed,and the sender is not liable for any of these occurrences. The sender reserves the right to monitor,record and retain electronic messages.

-----Original Message-----From: Karen Dolenec <[email protected]>To: Rawlings, Peter [CMB-GFICC]CC: Dubin, David [CMB-GFICC]; Lorkin, Mark [CMB-GFICC]; Trudy Cooke <[email protected]>Sent: Sun May 20 15:14:19 2007Subject: RE: Dice

As mentioned this morning, we are ready whenver you are. We are on acall right now so I suppose we will have to take the after 6 slot.


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Regards,

Karen

-----Original Message-----From: Rawlings, Peter [mailto:[email protected]]Sent: 20 May 2007 14:54To: Karen DolenecCc: Dubin, David ; Lorkin, MarkSubject: Dice

KarenJust in terms of planning the next 18 hours - do you have a feel forwhen you will be able to revert on the points we discussed this morning?Any time before 4 and again after 6 works for us to discuss the fewremaining points. Please let us know. Regards

--------------------------Peter RawlingsCitigroup Global Markets LimitedTel: +44 20 7986 4969Fax: +44 20 7986 4704Mobile: +447702 778 740E-mail: [email protected]

Registered in England with number 1763297. Registered office: CitigroupCentre, Canada Square, London E14 5LB. Authorised and regulated by theFinancial Services Authority.

The information contained in this electronic message and any attachments(the "Message") is intended for one or more specific individuals orentities, and may be confidential, proprietary, privileged or otherwiseprotected by law. If you are not the intended recipient, please notifythe sender immediately, delete this Message and do not disclose,distribute, or copy it to any third party or otherwise use this Message.Electronic messages are not secure or error free and can contain virusesor may be delayed, and the sender is not liable for any of theseoccurrences. The sender reserves the right to monitor, record and retainelectronic messages.

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PLEASE READ: The information contained in this email is confidential andintended for the named recipient(s) only. If you are not an intended recipientof this email you must not copy, distribute or take any further action inreliance on it and you should delete it and notify the sender immediately. Emailis not a secure method of communication and Terra Firma Capital Partners Ltdcannot accept responsibility for the accuracy or completeness of this message orany attachment(s). Please examine this email for virus infection, for whichTerra Firma Capital Partners Ltd accepts no responsibility. If verification ofthis email is sought then please request a hard copy. Unless otherwise stated


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any views or opinions presented are solely those of the author and do notrepresent those of Terra Firma Capital Partners Ltd. This email is intended forinformational purposes only and is not a solicitation or offer to buy or sellsecurities or related financial instruments. Terra Firma Capital PartnersLimited Registered in England no. 04219556. Registered Office: 2 More LondonRiverside, London SE1 2AP. Authorised and regulated by the Financial ServicesAuthority.



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From: Simpkin, Paul [CMB-GFICC] <[email protected]>To: [email protected] <[email protected]>; Tabet, Kamal [CMB-GBKG] <[email protected]>; Wormsley, David [CMB-GBKG] <[email protected]>Cc: [email protected] <[email protected]>

Subject: Re:

Thanks Karen.Re 1 that works for us ........ But as you and I discussed we are happy with your proposal or ourproposal as you choose. I think the breakeven is around 150 days ie my proposal is lower cost for TFbefore this point and your proposal is lower cost for TF after this point. Let us know which you prefer -we are happy either way.Re 2 my sec colleagues are ok with your termination right if it is 12 months following thecommencement of actively engaging the rating agenciesRe 3 that works for us if we can change 50 per cent to 66.7 per centRe 4 thank youRe 5 yes - that is rightRe 6 yes - that is rightOn your final point, there would be no change to the Securitisation as Publishing will be ring-fenced butwe would propose the following on recorded music. We would reduce the fees on the term loan B by25bp as the company is a better credit with no sub debt but increase the fees on the revolver by 25bpas without the ability to be able to give away high yield bond co-manager slots/fees the revolver will beharder and more expensive to syndicate.. Effectively you therefore make a saving of 25bp on a littlemore then half the term loan. Best, Paul--------------------------Sent from my BlackBerry Wireless Handheld

-----Original Message-----From: Karen Dolenec <[email protected]>To: Tabet, Kamal [CMB-GBKG]; Simpkin, Paul [CMB-GFICC]; Wormsley, David [CMB-GBKG]CC: Guy Hands <[email protected]>Sent: Sun May 20 22:01:01 2007Subject: RE:

Dear all,

I have now discussed your overall package with Guy, and the points are as follows:

1. Break fees - on the high yield bridge and on the securitisation bridge, we are willing to pay 1% if wedo not take up such facilities. We would point out that this is something you raised with us only Fridaynight. We had assumed that there would be no break fees as we are paying you 2% in funding fees onthe high yield bridge and 1.5% in funding fees on the securitisation bridge.

2. You have asked for joint appointment on the securitisation which we are happy to give you.However, once appointed, if the securitisation is not done satistfactorily within 12 months we wouldrequire the right to terminate you without the payment of any break fee. With regards to the high yield


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we would go with sole or joint appointment on a 12 month term and the ability to appoint up to twoothers as you suggested.

3. On hedging, you have a right to match for up to 50% of your pro rata share.

4. On the go-to-market clause for the securitisation, we can agree your proposal of the 2.5% cap onmargin.

5. We understand that a refund of 25 bps from the funding fee would be available if the securitisation isdone within 270 days.

6. We are also assuming that there will be no interest coverage covenant consistent with all of ourprevious discussions.

One final point, which is a new one we are raising with you, is we would like you to consider taking outthe whole high yield bridge and ask you to come back to us with regard to what your fees would be onthe overall transaction if this tranche were taken out tomorrow by equity. In other words, if we can getequity signed up by tomorrow morning and no longer need the high yield bridge because we would bereplacing it with equity, does this reduce the overall fees on this transaction? Our belief is that basedon conversations this evening that we can raise £365m of additional equity and therefore quite probablydo not need the high yield bridge.

Please could you come back on this note as quickly as possible.

Regards,

Karen

-----Original Message-----From: Guy HandsSent: 20 May 2007 21:27To: 'Tabet, Kamal 'Cc: 'Wormsley, David '; Karen DolenecSubject: RE:

Dear Kamel,

This is not what Karen said. We have now gone round in circles on the same economic points for twodays and I have tied up our lawyers working with you. At this point I have instructed our lawyers to workwith alternative providers and will reply by e mail with our final position once I have discussed in detailthe still outstanding points. Most of which were only raised after we originally decided to go with you.

Best Wishes Guy

-----Original Message-----From: Tabet, Kamal [mailto:[email protected]]Sent: 20 May 2007 21:19To: Guy HandsSubject:

Dear Guy,

I just left you a vm.

I have circled the team and it sounds like they believe there are no outstanding issues, or if there is 1 or2, they are relatively insignificant and both positions are very close.


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Paul Simpkin also told me that Karen told him she did not think there were any real issues left and it isnow in your hands (no pun intended).

I can only hope you are hearing similar feedback from your team.

Either way, I am at your disposal to discuss further.

Regards, K


PLEASE READ: The information contained in this email is confidential andintended for the named recipient(s) only. If you are not an intended recipientof this email you must not copy, distribute or take any further action inreliance on it and you should delete it and notify the sender immediately. Emailis not a secure method of communication and Terra Firma Capital Partners Ltdcannot accept responsibility for the accuracy or completeness of this message orany attachment(s). Please examine this email for virus infection, for whichTerra Firma Capital Partners Ltd accepts no responsibility. If verification ofthis email is sought then please request a hard copy. Unless otherwise statedany views or opinions presented are solely those of the author and do notrepresent those of Terra Firma Capital Partners Ltd. This email is intended forinformational purposes only and is not a solicitation or offer to buy or sellsecurities or related financial instruments. Terra Firma Capital PartnersLimited Registered in England no. 04219556. Registered Office: 2 More LondonRiverside, London SE1 2AP. Authorised and regulated by the Financial ServicesAuthority.



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Citi vs Terra Firma

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