-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JCoY5jKYKgdQFDhh38vz1NDmehHjlWGWyl5LqSFrQbDp/U0lNQx/qovsQndO6m7W L/OqV4cD44JU8u6etyvvsw== 0000891618-99-002999.txt : 19990707 0000891618-99-002999.hdr.sgml : 19990707 ACCESSION NUMBER: 0000891618-99-002999 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19990706 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: DATA PROCESSING RESOURCES CORP CENTRAL INDEX KEY: 0001005700 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 953931443 STATE OF INCORPORATION: CA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: SEC FILE NUMBER: 005-48251 FILM NUMBER: 99659554 BUSINESS ADDRESS: STREET 1: 18301 VON KARMAN STREET 2: STE 600 CITY: IRVINE STATE: CA ZIP: 92612 BUSINESS PHONE: 9495531102 MAIL ADDRESS: STREET 1: 18301 VON KARMAN STREET 2: STE 600 CITY: IRVINE STATE: CA ZIP: 92612 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: COMPUWARE CORPORATION CENTRAL INDEX KEY: 0000859014 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 382007430 STATE OF INCORPORATION: MI FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: 31440 NORTHWESTERN HWY CITY: FARMINGTON HILLS STATE: MI ZIP: 48334-2564 BUSINESS PHONE: 8107377300 MAIL ADDRESS: STREET 1: 31440 NORTHWESTERN HIGHWAY CITY: FARMINGTON HILLS STATE: MI ZIP: 48334-2564 SC 14D1/A 1 AMENDMENT #1 TO 14(D)(1) 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------- SCHEDULE 14D-1 TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. 1) DATA PROCESSING RESOURCES CORPORATION ------------------------------------------------------------- (Name of Subject Company COMP ACQUISITION CO. COMPUWARE CORPORATION ------------------------------------------------------------- (Bidder) COMMON STOCK, NO PAR VALUE ------------------------------------------------------------- (Title of Class of Securities) 237823109 ------------------------------------------------------------- (CUSIP Number of Class of Securities) THOMAS COSTELLO, JR., ESQ. COMP ACQUISITION CO. COMPUWARE CORPORATION 31440 NORTHWESTERN HIGHWAY FARMINGTON HILLS, MI 48334-2564 TELEPHONE: (248) 737-7300 ------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Bidder) COPIES TO: DAVID W. HEALY, ESQ. DOUGLAS N. COGEN, ESQ. FENWICK & WEST LLP TWO PALO ALTO SQUARE PALO ALTO, CA 94306 TELEPHONE: (650) 494-0600 2 This Amendment No. 1 (this "Amendment") amends and supplements the Tender Offer Statement on Schedule 14D-1 filed with the Securities and Exchange Commission on June 30, 1999, as amended (the "Schedule 14D-1"), relating to the offer by COMP Acquisition Co., a California corporation ("Purchaser") and wholly owned subsidiary of Compuware Corporation, a Michigan corporation ("Compuware"), to purchase all outstanding shares of Common Stock, no par value (the "Shares"), of Data Processing Resources Corporation, a California corporation (the "Company"), at $24.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated June 30, 1999 (the "Offer to Purchase"), and in the related Letter of Transmittal (which, together with any amendments and supplements thereto, collectively constitute the "Offer"). Capitalized terms used and not defined herein shall have the meanings assigned to such terms in the Offer and the Schedule 14D-1. Item 4 of the Schedule 14D-1 is hereby amended to read in its entirety as follows: ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. (a)-(c) The total amount of funds required by Purchaser to consummate the Offer and the Merger is estimated to be approximately $354 million (assuming the purchase of all Shares outstanding), plus approximately $2.5 million to pay related fees and expenses. In addition, as indicated in Section 10 of the Offer to Purchase under the heading "Convertible Notes," the Company will be required to offer to repurchase its 5 1/4% Convertible Subordinated Notes due 2005 (the "Notes") following the earlier of the consummation of the Offer or the Merger, for the aggregate principal amount of $115 million plus accrued interest. Purchaser plans to obtain all the funds needed for the Offer and the Merger, and to repurchase the Notes, from Compuware. Compuware will obtain such funds in part from the credit facility referred to below. As of March 31, 1999, Compuware had approximately $193 million in cash and cash equivalents and approximately $310 million in short term investments. Neither Purchaser nor Compuware has conditioned the Offer or the Merger on obtaining financing. On June 30, 1999, Compuware countersigned a commitment letter, dated June 29, 1999, from Morgan Stanley Senior Funding, Inc. ("Morgan Stanley") and Comerica Bank ("Comerica") pursuant to which Morgan Stanley and Comerica have committed to provide to Compuware, on specified terms and subject to specified conditions, up to $700 million in a credit facility, a portion of which funds are expected to be used to finance the purchase of the Shares pursuant to the Offer and the Merger, to finance the payments to be made upon the exercise of options to purchase Shares, to finance the Company's repurchase of its Notes tendered in response to the Company's offer to repurchase described above and in Section 10 of the Offer to Purchase, and to pay related fees and expenses. The balance of the credit facility is expected to be used for other corporate purposes. Morgan Stanley has committed to provide $420 million of the total commitment, and Comerica has committed to provide $280 million. They reserve the right to act as agents for a syndicate of financial institutions which, together with Morgan Stanley and Comerica, will provide the credit facility. 3 The commitment letter contemplates that the credit facility will be a four year senior bank revolving credit facility, with scheduled reductions of the commitments under the facility of $100 million, $100 million and $500 million at the end of the second, third and fourth years. Outstanding loans under the credit facility are to be repaid if at any time their aggregate principal amount exceeds the then total credit facility commitment. The commitment letter provides for interest rates on outstanding loans under the credit facility, at Compuware's option, of either (i) the Eurodollar rate determined by Comerica, plus a margin of 1.25% initially, or (ii) the higher of the Comerica prime rate or 0.5% over the federal funds rate, plus a margin of 0.25% initially. In addition, the commitment letter provides for commitment fees on the unutilized commitments under the credit facility of 0.25% per annum initially. The interest rate margins and commitment fees will be adjusted after six months according to Compuware's then credit rating. Morgan Stanley's and Comerica's commitment to provide the credit facility is subject to satisfaction of certain conditions, including (i) satisfactory completion of a due diligence review, (including receipt and review of Compuware's financial statements for the fiscal year ended March 31, 1999), (ii) the repayment and termination of Compuware's existing credit facility, (iii) the absence of a material adverse change since March 31, 1999 (the date of Compuware's audited financial statements) in the ability of Compuware or its subsidiaries to perform their obligations to the lenders or with respect to the business, operations, assets, liabilities, condition or prospects of Compuware and its subsidiaries, (iv) the absence of any material change in the syndication market for credit facilities or in the financial, banking or capital markets that in the opinion of Morgan Stanley or Comerica would have a material adverse effect on the satisfactory syndication of the credit facility, (v) the absence of certain litigation, (vi) the negotiation and execution of definitive documentation for the credit facility by September 15, 1999, (vii) Morgan Stanley's and Comerica's approval of the structure, terms and documentation for the Offer and the Merger, (viii) all conditions precedent to the consummation of the Offer and the Merger (as set forth in the documentation therefor) having been satisfied to the satisfaction of Morgan Stanley and Comerica or waived with their consent, (ix) all necessary governmental approvals and all material third party approvals in connection with the credit facility, the Offer and the Merger having been obtained and remaining in effect, and all applicable waiting periods having expired without any action being taken by any competent authority which, in the judgment of Morgan Stanley and Comerica, restrains, prevents or imposes materially adverse conditions on the consummation of the Offer, the Merger or the credit facility, and (x) the absence of any judgment, order, injunction or other restraint prohibiting or imposing materially adverse conditions on the Offer, the Merger or the credit facility. The definitive documentation with respect to the credit facility also will contain representations, warranties, covenants, events of default and conditions customary for credit facilities of this size and type. Compuware has agreed to pay certain fees to Morgan Stanley and Comerica with respect to the commitment letter and to Morgan Stanley, Comerica and the other lenders with respect to the credit facility. Compuware also has agreed to reimburse certain expenses of Morgan Stanley and Comerica in connection with the commitment letter and to provide customary indemnities to Morgan Stanley, Comerica and the other lenders in connection with the credit facility. 3 4 The foregoing summary of the sources and amount of funds is qualified in its entirety by reference to the text of the commitment letter, a copy of which is an exhibit to this Amendment. If and when definitive agreements with respect to the credit facility are executed, copies will be filed as exhibits to amendments to the Schedule 14D-1. Although no definitive plan or arrangement for repayment of borrowings under the credit facility has been made, Compuware anticipates such borrowings will be repaid with internally generated funds (including, if the Merger is consummated, funds of the Company) and from other sources which may include the proceeds of future bank financings or the public or private sale of debt or equity securities. No decision has been made concerning the method Compuware will use to repay the borrowings under the credit facility. Such decision will be made based on Compuware's review from time to time of the advisability of particular actions, as well as prevailing interest rates, financial and other economic conditions and such other factors as Compuware may deem appropriate. ITEM 11. MATERIALS TO BE FILED AS EXHIBITS. (b)(1) Commitment Letter, dated June 29, 1999, from Morgan Stanley Senior Funding, Inc. and Comerica Bank to Compuware Corporation. 4 5 SIGNATURE After due inquiry and to the best of the undersigned's knowledge and belief, the undersigned certify that the information set forth in this Statement is true, complete and correct. July 6, 1999 COMP ACQUISITION CO. By: /S/ THOMAS COSTELLO, JR --------------------------------- Name: Thomas Costello, Jr. Title: Vice President, Secretary and Treasurer COMPUWARE CORPORATION By: /S/ LAURA FOURNIER --------------------------------- Name: Laura Fournier Title: Senior Vice President and Chief Financial Officer 5 6 EXHIBIT INDEX
EXHIBIT NUMBER EXHIBIT NAME - ----------------- ----------------------------------------------------------- (b)(1) Commitment Letter, dated June 29, 1999, from Morgan Stanley Senior Funding, Inc. and Comerica Bank to Compuware Corporation.
6 EX-99.(B)(1) 2 COMMITMENT LETTER DATED JUNE 29, 1999 1 EXHIBIT (b)(1) MORGAN STANLEY SENIOR FUNDING, INC. 1585 Broadway New York, New York 10036 COMERICA BANK 500 Woodward Avenue Detroit, Michigan 48226 June 29, 1999 Compuware Corporation 31440 Northwestern Highway Farmington Hills, Michigan 48334-2534 Attention: Elliot R. Stark Executive Vice President re Commitment Letter Dear Elliot: You have advised Morgan Stanley Senior Funding, Inc. ("MSSF") and Comerica Bank ("Comerica", and together with MSSF, the "Agents") that Compuware Corporation (the "Borrower") intends to (i) purchase all of the outstanding shares of capital stock of Data Processing Resources Corporation ("DPRC") for an aggregate purchase price of $470 million (which amount includes the refinancing of up to $115 million in principal amount of existing convertible subordinated debt of DPRC) (collectively, the "DPRC Acquisition") and (ii) repay in full, and terminate, its existing line of credit with Comerica (the "Existing Credit Facility"). We understand that except for the existing debt of DPRC which is to be refinanced, neither DPRC nor any of its subsidiaries will have any other material debt. MSSF and Comerica understand that the sources of funds needed to effect the DPRC Acquisition, to terminate the Existing Credit Facility, to pay related fees and expenses and to provide for the ongoing working capital and general corporate needs of the Borrower and its subsidiaries shall be provided through the incurrence by the Borrower of a $700 million senior bank reducing revolving credit facility (the "Revolving Credit Facility"). A summary of certain of the terms and conditions of the Revolving Credit Facility is set forth in Exhibit A attached hereto (the "Term Sheet"). Please note that those matters that are not covered or made clear herein or in the Term Sheet or in the related fee letter dated the date hereof (the "Fee Letter") are 2 subject to mutual agreement of the parties hereto. The terms and conditions of this commitment may be modified only in writing signed by each of the parties hereto. Each of MSSF and Comerica is pleased to confirm that (i) each of MSSF and Comerica severally commits to provide, subject to the terms and conditions set forth herein and in the Term Sheet, $420 million and $280 million, respectively, of the Revolving Credit Facility (each a "Commitment"), (ii) MSSF shall act as lead arranger and book manager for the Revolving Credit Facility and (iii) Comerica shall act as co-arranger and as administrative agent for the Revolving Credit Facility. You agree that no other agents, co-agents or arrangers will be appointed, no other titles will be awarded and no compensation (other than that expressly contemplated by the Term Sheet and the Fee Letter) will be paid in connection with the Revolving Credit Facility unless you and we shall so agree. MSSF and Comerica reserve the right, prior to or after execution of the definitive credit documentation for the Revolving Credit Facility, to syndicate all or part of their Commitment for the Revolving Credit Facility to one or more lending institutions (the "Lenders") that will become parties to such definitive credit documentation pursuant to a syndication to be managed by the Agents. To the extent that the Agents receive commitments with respect to the Revolving Credit Facility from one or more other Lenders, the Agents shall be relieved of their Commitment for the Revolving Credit Facility. The Agents may commence syndication efforts promptly after the execution of this letter by you and you agree actively to assist the Agents in achieving a syndication that is satisfactory to the Agents. Such syndication will be carried out in consultation with you and will be accomplished by a variety of means, including direct contact during the syndication between your senior management and advisors and the proposed syndicate members. To assist the Agents in their syndication efforts, you hereby agree, both before and after the closing of the Revolving Credit Facility, (i) to provide and cause your advisors to provide the Agents and the other prospective syndicate members upon request with all information reasonably deemed necessary by the Agents to complete syndication, including but not limited to information and evaluations prepared by you and your advisors or on your behalf relating to you, DPRC and the transactions contemplated hereby (it being understood that your obligation under this clause (i) is subject to any third party binding confidentiality provisions that you are subject to, although you agree to use your reasonable efforts to obtain any necessary consents so that such confidential information may be provided to the Agents), (ii) to assist the Agents, upon request, in the preparation of an Information Memorandum to be used in connection with the syndication of the Revolving Credit Facility and (iii) to make available your senior officers and representatives, in each case from time to time and to attend and make presentations regarding the business and prospects of the Borrower, DPRC and your and their subsidiaries at a meeting or meetings of Lenders or prospective Lenders. As you are aware, the Agents have not had the opportunity to complete their business, financial, accounting and legal due diligence analysis and review with respect to the transactions contemplated hereby and the Borrower, DPRC and their respective subsidiaries. Each Agent's willingness to provide and/or participate in the Revolving Credit Facility contemplated by this letter is therefore subject to the completion of such analysis and review and 2 3 its satisfaction with the results thereof, and to the satisfaction of the conditions precedent contained in the Term Sheet. Furthermore, if prior to the Closing Date (as defined in the Term Sheet) either of the Agents discovers information not known to it which such Agent reasonably believe has had, or is likely to have, a materially adverse effect on the transactions contemplated hereby or on the condition (financial or otherwise), business, property, operations, assets, liabilities or prospects of the Borrower, DPRC or any of their respective subsidiaries, the Agents (or either of them) may, in their sole discretion, suggest alternative financing amounts or structures that assure adequate protection for the Lenders or decline to provide or participate in the proposed financing. To induce the Agents to issue this letter, you hereby agree that all reasonable out-of-pocket fees and expenses (including the reasonable fees and expenses of counsel and consultants) of each of the Agents and their affiliates arising in connection with this letter (and their due diligence and syndication efforts in connection herewith) and in connection with the transactions described herein shall be for your account, whether or not the transactions contemplated hereby are consummated, the Revolving Credit Facility is made available or definitive credit documents are executed. In addition, you hereby agree to pay, when and as due, the fees described in the Fee Letter. You further agree to indemnify and hold harmless each of the Lenders (including, in any event, each of the Agents) and each director, officer, employee, agent and affiliate thereof (each an "indemnified person") from and against any and all actions, suits, proceedings (including any investigations or inquiries), claims, losses, damages, liabilities or expenses 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 letter, the transactions contemplated hereby or the extension (or use of proceeds) of the Revolving Credit Facility contemplated by this letter, and you agree to reimburse each indemnified person for any reasonable legal or other reasonable out-of-pocket expenses incurred in connection with investigating, defending or preparing to defend any such action, suit, proceeding (including any investigation or inquiry) or claim (whether or not any Agent or any such other indemnified person is a party to any action or proceeding out of which any such expenses arise); provided, however, that you shall not have to indemnify any indemnified person against any loss, claim, damage, expense or liability to the extent that same resulted primarily from the gross negligence or willful misconduct of such indemnified person (as determined by a court of competent jurisdiction in a final and non-appealable decision). This letter is issued for your benefit only and no other person or entity may rely hereon. Neither of the Agents nor any Lender shall be responsible or liable to you or any other person or entity for any consequential damages which may be alleged as a result of this letter or the failure to provide the Revolving Credit Facility. Each Agent reserves the right to employ the services of its affiliates in providing services contemplated by this letter and to allocate, in whole or in part, to such affiliates certain fees payable to the Agents in such manner as the Agents and such affiliates may agree in their sole discretion. You acknowledge that the Agents may share with any of their affiliates, and such affiliates may share with the Agents, any information related to the transactions contemplated hereby, the Borrower, DPRC and your and their respective subsidiaries' affiliates, or any of the matters contemplated hereby. Each Agent agrees to treat, and cause any such 3 4 affiliate of such Agent to treat, all non-public information provided to it by you as confidential information in accordance with its customary practices for handling such information or as otherwise may be agreed to by such Agent. The provisions of the immediately preceding two paragraphs shall survive any termination of this letter. Each Agent's commitment to provide its portion of the Revolving Credit Facility as set forth above shall terminate on September 15, 1999 unless a definitive credit agreement evidencing the Revolving Credit Facility has been executed and delivered and the DPRC Acquisition has been consummated by such date. You are not authorized to show or circulate this letter to any other person or entity (other than your legal and financial advisors in connection with your evaluation hereof) until such time as you have accepted this letter as provided in the immediately succeeding paragraph at which time you may show a copy of this letter and the Term Sheet (but not the Fee Letter) to DPRC and their respective legal and financial advisors in connection with your proposal for the DPRC Acquisition contemplated hereby (except that, notwithstanding the foregoing, you may make such public disclosures as, and to the extent, you are required by law, in the opinion of your counsel, to make). If this letter is not accepted by you as provided in the immediately succeeding paragraph, you are to immediately return this letter (and any copies hereof) to the undersigned. This letter may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts shall be an original, but all of which shall together constitute one and the same instrument. If you are in agreement with the foregoing, please sign and return to the Agents (including by way of facsimile transmission) the enclosed copy of this letter, together with the Fee Letter, no later than 6:00 p.m., New York time, on June 30, 1999. This letter shall terminate at the time and on the date referenced in the immediately preceding sentence unless this letter and the Fee Letter are executed and returned by you as provided in such sentence. * * * 4 5 THIS LETTER AND THE FEE LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, AND ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM, ACTION, SUIT OR PROCEEDING ARISING OUT OF OR CONTEMPLATED BY THIS LETTER AND/OR THE FEE LETTER IS HEREBY WAIVED. THE PARTIES HERETO HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS LETTER AND/OR THE FEE LETTER OR ANY MATTERS CONTEMPLATED HEREBY OR THEREBY. Very truly yours, MORGAN STANLEY SENIOR FUNDING, INC. By /s/ Lucy K. Galbraith ------------------------------------- Title: Principal COMERICA BANK By /s/ Timothy O'Rourke ------------------------------------- Title: Vice President Agreed to and Accepted this 30 day of June, 1999: COMPUWARE CORPORATION By Laura Fournier -------------------------------- Title: Sr. Vice President, CFO 5 6 Schedule I SUMMARY OF CERTAIN TERMS AND CONDITIONS OF THE REVOLVING CREDIT FACILITY Unless otherwise defined herein, capitalized terms used herein and defined in the letter to which this Exhibit A is attached (the "Commitment Letter") are used herein as therein defined. I. Description of the Revolving Credit Facility Borrower: Compuware Corporation (the "Borrower"). Lead Arranger and Book Manager: Morgan Stanley Senior Funding, Inc. ("MSSF"). Co-Arranger and Administrative Agent: Comerica Bank ("Comerica", and together with MSSF, the "Agents"). Lenders: MSSF, Comerica and/or a syndicate of lenders formed by the Agents (the "Lenders"). Required Lenders: Majority. Amount: $700 million reducing revolving credit facility (the "Revolving Credit Facility"), with a sub-limit to be determined for the issuance of standby and trade letters of credit ("Letters of Credit"). Use of Proceeds: The loans made pursuant to the Revolving Credit Facility (the "Loans") shall be utilized to finance the DPRC Acquisition, the payment of fees and expenses relating thereto, the payment of any outstanding loans under the Existing Credit Facility and for the Borrower's and its subsidiaries' working capital and general corporate purposes. Maturity: The final maturity of the Revolving Credit Facility shall be four years from the closing date of the Revolving Credit Facility (the "Closing Date"), with all outstanding Loans to be repaid in full on (and all Letters of Credit to be terminated by) such date (the "Maturity Date"). 7 Scheduled Commitment Reductions: The commitments under the Revolving Credit Facility shall be permanently reduced on the second, third and fourth anniversaries of the Closing Date in the amounts of $100 million, $100 million and $500 million, respectively. Availability: Loans may be borrowed, repaid and reborrowed on or after the Closing Date and prior to the Maturity Date; provided that a portion of the Revolving Credit Facility to be determined only be available to fund other permitted acquisitions on terms and conditions to be determined. Guaranties: Each direct and indirect material domestic subsidiary of the Borrower (each a "Guarantor" and, collectively, the "Guarantors") shall be required to provide an unconditional guaranty of all amounts owing by the Borrower under the Revolving Credit Facility (the "Guaranties"), with such exceptions as are satisfactory to the Agents. The Guaranties shall contain terms and conditions satisfactory to the Agents and customary for transactions of this type. Voluntary Prepayments and Commitment Reductions: Permitted in whole or in part with prior notice but without premium or penalty, provided that voluntary prepayments of Eurodollar Loans made on a date other than the last day of an interest period applicable thereto shall be subject to customary breakage costs. Mandatory Repayments: Loans shall be required to be prepaid (and Letters of Credit cash collateralized) if at any time the aggregate principal amount thereof exceeds the total Revolving Credit Facility commitments, with such prepayment (and/or cash collateralization) to be in an amount equal to such excess. Interest Rates: At the Borrower's option, Loans may be maintained from time to time as (x) Base Rate Loans, which shall bear interest at the Base Rate in effect from time to time plus the Applicable Margin or (y) Eurodollar Loans which shall bear interest at the Eurodollar Rate (adjusted for maximum reserves) as determined by the Administrative Agent for the respective interest period plus the Applicable Margin. The Applicable Margin shall be determined 8 by reference to the Borrower's long-term senior unsecured debt rating as set forth on Schedule I attached hereto. "Base Rate" shall mean the higher of (x) 1/2 of 1% in excess of the overnight federal funds rate and (y) the rate that the Administrative Agent announces from time to time as its prime lending rate, as in effect from time to time. Interest periods of 1, 2, 3 and 6 months shall be available in the case of Eurodollar Loans. The Revolving Credit Facility shall include customary protective provisions for such matters as capital adequacy, increased costs, reserves, funding losses, illegality and withholding taxes. The Borrower shall have the right to replace any Lender that charges a material amount in excess of that being charged by the other Lenders with respect to contingencies described in the immediately preceding sentence. Interest in respect of Base Rate Loans shall be payable quarterly in arrears on the last business day of each calendar quarter. Interest in respect of Eurodollar Loans shall be payable in arrears at the end of the applicable interest period and every three months in the case of interest periods in excess of three months. Interest will also be payable at the time of repayment of any Loans and at maturity. All interest on Base Rate Loans, Eurodollar Loans and any fees shall be based on a 360-day year and actual days elapsed, provided that interest on Base Rate Loans determined by reference to the prime lending rate shall be based on a 365- (or 366-, as the case may be) day year and actual days elapsed. Default Interest: Overdue principal, interest and other amounts shall bear interest at a rate per annum equal to the greater of (i) the rate which is 2% in excess of the rate otherwise applicable to Base Rate Loans from time to time and (ii) the rate which is 2% in excess of the rate then borne by such borrowings. Such interest shall be payable on demand. Commitment Fees: The applicable percentage per annum as set forth on Schedule I hereto of the unutilized commitments under the Revolving Credit Facility, as in effect from time to time, commencing on the Closing Date to and including the termination of the Revolving Credit Facility, payable quarterly in arrears and upon the termination of the Revolving Credit Facility. 9 Letter of Credit Fees: The Applicable Margin as in effect from time to time for Loans maintained as Eurodollar Loans to be shared proportionately by the Lenders in accordance with their participation in the respective Letter of Credit, and a facing fee of 1/8 of 1% per annum to be paid to the issuer of the Letter of Credit for its own account, in each case calculated on the aggregate stated amount of all Letters of Credit for the stated duration thereof. In addition, the issuer of a Letter of Credit will be paid its customary administrative charges in connection with each Letter of Credit issued by it. Agent/Lender Fees: The Agents and the Lenders shall receive such other fees as have been separately agreed upon. Assignments and Participations: The Borrower may not assign its rights or obligations under the Revolving Credit Facility without the prior written consent of the Lenders. Any Lender may assign, and may sell participations in, its rights and obligations under the Revolving Credit Facility, subject (x) in the case of participations, to customary restrictions on the voting rights of the participants and (y) in the case of assignments, to such limitations as may be established by the Agents (including (i) a minimum assignment amount of $5 million (or if less, the entire amount of such assignor's outstanding commitment and Loans at such time), (ii) an assignment fee in the amount of $3,500 (or $1,500 in the case of assignments between existing Lenders) to be paid by the respective assignor or assignee to the Administrative Agent and (iii) the receipt of the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed). The Revolving Credit Facility shall provide for a mechanism which will allow for each assignee to become a direct signatory to the Revolving Credit Facility and will relieve the assigning Lender of its obligations with respect to the assigned portion of its outstanding Loans. Documentation; Governing Law: The Lenders' commitments will be subject to the negotiation, execution and delivery of definitive financing agreements (and related guaranties, etc.) consistent with the terms of this Term Sheet, in each case prepared by counsel to the Agents, and satisfactory to the Borrower, the Agents and the Lenders (including, without limitation, as to the terms, conditions, representations, covenants and events of default contained therein). All documentation shall be governed by New York law. 10 Commitment Termination: The commitments hereunder shall terminate on September 15, 1999 unless definitive documentation for the Revolving Credit Facility has been executed and delivered and the Closing Date has occurred by such date. Conditions Precedent: Those conditions precedent that are usual and customary for these types of facilities, and such additional conditions precedent as are appropriate under the circumstances. Without limiting the foregoing, the following conditions shall apply: A. Conditions to the Closing Date (i) The structure and all terms of, and the documentation for, the DPRC Acquisition shall be reasonably satisfactory in form and substance to the Agents. All conditions precedent to the consummation of the DPRC Acquisition as set forth in the documentation relating thereto shall have been satisfied, and not waived except with the consent of the Agents, to the satisfaction of the Agents. The DPRC Acquisition shall have been consummated (or concurrently with the incurrence of Loans shall be consummated) in accordance with the documentation therefor and all applicable laws. (ii) The Existing Credit Facility shall have been (or concurrently with the incurrence of Loans shall be) terminated and all amounts outstanding thereunder shall have been (or concurrently with the incurrence of Loans shall be) repaid in full. (iii) All necessary governmental (domestic and foreign) and material third party approvals and/or consents in connection with the DPRC Acquisition, the Revolving Credit Facility and otherwise referred to herein shall have been obtained and remain in effect, and all applicable waiting periods shall have expired without any action being taken by any competent authority which, in the judgment of the Agents, restrains, prevents, or imposes materially adverse conditions upon, the consummation of the DPRC Acquisition, the Revolving Credit Facility or otherwise referred to herein. Additionally, there shall not exist any judgment, order, injunction or other restraint prohibiting or imposing materially adverse conditions upon the DPRC Acquisition or the Revolving Credit Facility. 11 (iv) Since March 31, 1999 (or July 31, 1998 in the case of DPRC), nothing shall have occurred (and neither of the Agents shall have become aware of any facts or conditions not previously known) which the Agents (or either of them) shall determine has had, or is reasonably likely to have, a material adverse effect on the rights or remedies of the Lenders, or on the ability of the Borrower or its subsidiaries to perform their obligations to the Lenders or which is reasonably likely to have a materially adverse effect on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Borrower and its subsidiaries taken as a whole or DPRC and its subsidiaries taken as a whole. (v) No litigation by any entity (private or governmental) shall be pending or threatened with respect to the DPRC Acquisition or the Revolving Credit Facility or any documentation executed in connection therewith, or which the Agents (or either of them) shall determine is reasonably likely to have a materially adverse effect on the DPRC Acquisition or on the business, property, operations, assets, liabilities, condition (financial or otherwise) or prospects of the Borrower and its subsidiaries taken as a whole or DPRC and its subsidiaries taken as a whole. (vi) The Lenders shall have received legal opinions from counsel, and covering matters, reasonably acceptable to the Agents. (vii) All agreements relating to, and the corporate and capital structure of, the Borrower and its subsidiaries, and all organizational documents of the Borrower and its subsidiaries, in each case shall be reasonably satisfactory to the Agents. (viii) All Loans and other financing to be made pursuant to the Revolving Credit Facility shall be in full compliance with all applicable requirements of the margin regulations. (ix) All costs, fees, expenses (including, without limitation, reasonable legal fees and expenses) and other compensation contemplated hereby and payable to the Lenders and the Agents shall have been paid to the extent due. (x) The Guaranties required hereunder shall have been executed and delivered in form, scope and substance satisfactory to the Agents. (xi) Receipt by the Agents of (i) satisfactory historical financial statements for the Borrower and its subsidiaries (including the 12 Borrower's 1999 fiscal year end audited financial statements) and DPRC and its subsidiaries and (ii) pro forma financial statements of, and projections for, the Borrower and its subsidiaries, in each case for periods, and in form and substance, reasonably satisfactory to the Agents. (xii) The Agents shall have completed their business, financial, accounting and legal due diligence analysis and review and shall be satisfied with the results thereof. (xiii) There shall have been no material adverse change, after the date hereof and prior to the completion as determined by the Agents of the primary syndication of the Revolving Credit Facility, to the syndication market for credit facilities similar in nature to the Revolving Credit Facility contemplated herein and there shall not have occurred and be continuing during such period a material disruption of or material adverse change in financial, banking or capital markets that would have a material adverse effect on such primary syndication, in each case as determined by the Agents (or either of them) in their sole discretion. The Borrower shall have fully cooperated in the syndication efforts, including, without limitation, by promptly providing the Agents with all information reasonably deemed necessary by it to successfully complete the syndication. B. Conditions to all Loans and Letters of Credit (i) All representations and warranties shall be true and correct in all material respects both before and after giving effect to either the incurrence of the respective Loans and the application of the proceeds therefrom or the issuance of the respective Letter of Credit. (ii) No event of default, or event which with the giving of notice or lapse of time or both would be an event of default, shall have occurred and be continuing, or would result from the incurrence of the respective Loans or the issuance of the respective Letter of Credit. Representations and Warranties: Those representations and warranties usual and customary for these types of facilities, and such additional representations and warranties as are appropriate under the circumstances (including no material adverse change and no material litigation). 13 Covenants: Those covenants usual and customary for these types of facilities, and such additional covenants as are appropriate under the circumstances (with customary and appropriate exceptions to be agreed upon). Although the covenants applicable to the Borrower and its subsidiaries have not yet been specifically determined, we anticipate that the covenants shall in any event include, but not be limited to: (i) Limitations on other indebtedness. (ii) Limitations on mergers and restrictions on the sale of all or substantially all of the assets of the Borrower and its subsidiaries. (iii) Limitations on sale-leaseback transactions. (iv) Limitations on investments (including minority investments). (v) Limitations on transactions with affiliates. (vi) Maintenance of existence and material properties. (vii) Limitations on liens. (viii) The following financial covenants, with appropriate levels to be determined: (a) Minimum Interest Coverage (i.e., EBITDA/ interest expense); (b) Maximum Leverage (i.e., Total Debt/EBITDA); and (c) Total Debt/Total Book Capitalization. (ix) Customary insurance coverage. (x) Financial reporting, notice of material environmental and ERISA matters, notice of material litigation and visitation and inspection rights. (xi) Compliance with laws, including environmental laws. (xii) Payment of taxes and other material liabilities. (xiii) Limitations on changes in nature of business. (xiv) Use of proceeds. 14 (xv) Limitations on restrictive agreements. Events of Default: Those events of default usual and customary for these types of facilities, and such additional events of default as are appropriate under the circumstances, including, without limitation, a change of control (to be defined to the satisfaction of the Agents) of the Borrower. Indemnification: The documentation for the Revolving Credit Facility will contain customary indemnities for the Lenders (other than as a result of a Lender's gross negligence or willful misconduct). Agents' Counsel: White & Case LLP. 15 Schedule I Pricing Grid
Ratings(1) Eurodollar Margin Base Rate Margin Commitment Fee - ---------- ----------------- ---------------- -------------- Baa1/BBB+ or higher 1.00% 0% .200% Baa2/BBB 1.25% .25% .250% Baa3/BBB- 1.50% .50% .300% Ba1/BB+ or below 1.75% .75% .375%
- ---------- (1) If there is a split rating or only one rating, then the pricing shall be determined by reference to the lower credit rating or the only rating, as the case may be. In addition, if both rating agencies fail to maintain a rating, then the highest pricing level on the grid shall apply. Notwithstanding the foregoing, for the first six months following the Closing Date, (i) the interest rate margin shall be (x) 1.25% in the case of Eurodollar Loans and (y) .250% in the case of Base Rate Loans and (ii) the Commitment Fee shall be .250%. -----END PRIVACY-ENHANCED MESSAGE-----