Commitment Letter for $50 Million Incremental Term Loan, $175 Million Bridge Facility, and $310 Million Replacement Bank Facilities between Alion Science and Technology Corporation and Credit Suisse
Alion Science and Technology Corporation and Credit Suisse have entered into a commitment letter in which Credit Suisse agrees to provide a $50 million senior secured incremental term loan, a $175 million senior unsecured bridge loan, and, if needed, $310 million in replacement bank facilities. These loans are intended to support Alion’s acquisition of certain contracts from Anteon Corporation. The agreement outlines Credit Suisse’s roles as sole administrative and collateral agent, and Credit Suisse Securities as sole bookrunner and arranger. The commitment is subject to specific conditions, including possible syndication to other lenders and amendments to existing credit agreements.
CREDIT SUISSE SECURITIES (USA) LLC | CREDIT SUISSE | |
Eleven Madison Avenue | Eleven Madison Avenue | |
New York, NY 10010 | New York, NY 10010 |
1750 Tysons Boulevard
McLean, VA 22102
Attention: | John M. Hughes Chief Financial Officer |
$50,000,000 Senior Secured Incremental Term Loan Facility
$175,000,000 Senior Unsecured Increasing Rate Bridge Facility
$310,000,000 Senior Secured Replacement Bank Facilities
Commitment Letter
Very truly yours, | ||||||||
CREDIT SUISSE SECURITIES (USA) LLC | ||||||||
by | ||||||||
/s/ Christopher G. Cunningham | ||||||||
Name: Christopher G. Cunningham | ||||||||
Title: Managing Director | ||||||||
CREDIT SUISSE, CAYMAN ISLANDS BRANCH | ||||||||
by | ||||||||
/s/ Robert Hetu | ||||||||
Name: Robert Hetu | ||||||||
Title: Managing Director | ||||||||
By | ||||||||
/s/ Cassandra Droogan | ||||||||
Name: Cassandra Droogan | ||||||||
Title: Vice President |
Accepted and agreed as of the date first above written: | ||||||
ALION SCIENCE AND TECHNOLOGY CORPORATION | ||||||
by | /s/ John M. Hughes | |||||
Title: Executive Vice President and CFO |
CONFIDENTIAL May 25, 2006 | EXHIBIT A |
$310,000,000 Senior Secured Replacement Bank Facilities
Summary of Principal Terms and Conditions
Borrower: | Alion Science and Technology Corporation, a Delaware corporation (the Borrower). | |
Transactions: | The Borrower intends to enter into a Purchase Agreement (the Purchase Agreement) with Anteon Corporation (the Seller), pursuant to which the Borrower will acquire (the Acquisition) all of the Sellers rights, and assume the Sellers obligations, under certain government contracts (the Anteon Contracts) in consideration of the payment by the Borrower to the Seller of approximately $225,000,000 in cash (the Acquisition Consideration). In connection with the foregoing, (a) the Borrower will obtain Senior Unsecured Term Loans in an aggregate amount of $175,000,000 (the Senior Unsecured Term Loans), (b) either (i) the Borrowers existing Credit Agreement dated as of August 2, 2004, as amended (the Existing Credit Agreement) will be amended to, among other things, permit the Acquisition and the financing therefor and the Borrower will (x) obtain an Incremental Term Facility under the Existing Credit Agreement, as so amended, in the aggregate amount of $50,000,000, and (y) borrow $21,000,000 of delayed draw term loans (the Delayed Draw Term Loans) thereunder, or (ii) the Borrower will prepay in full, and terminate, the Existing Credit Agreement, using the proceeds of the Replacement Bank Facilities described below under the caption Replacement Bank Facilities, and (c) fees and expenses incurred in connection with the foregoing will be paid. The transactions described in this paragraph are collectively referred to herein as the Transactions. | |
Sources and Uses: | The approximate sources and uses of the funds necessary to consummate the Transactions are set forth on Exhibit C to the Commitment Letter (the Commitment Letter) to which this Term Sheet is attached. | |
Agent: | Credit Suisse, acting through one or more of its branches or affiliates (CS), will act as sole and exclusive administrative agent and collateral agent (collectively, the Agent) for a syndicate of banks, financial institutions and other institutional lenders |
(together with CS, the Lenders), and will perform the duties customarily associated with such roles. | ||||
Sole Bookrunner and Sole Lead Arranger: | Credit Suisse Securities (USA) LLC will act as sole bookrunner and sole lead arranger for the Senior Facilities described below (the Arranger), and will perform the duties customarily associated with such roles. | |||
Syndication Agent: | At the option of the Arranger, a financial institution identified by the Arranger and acceptable to the Borrower (the Syndication Agent). | |||
Documentation Agent: | At the option of the Arranger, a financial institution identified by the Arranger and acceptable to the Borrower (the Documentation Agent). | |||
Replacement Bank Facilities: | (A) | A senior secured term loan facility in an aggregate principal amount of up to $260,000,000 (the Term Facility). | ||
(B) | A senior secured revolving credit facility in an aggregate principal amount of up to $50,000,000 (the Revolving Facility and, together with the Term Facility, the Senior Facilities), of which up to $5,000,000 will be available in the form of letters of credit. | |||
In connection with the Revolving Facility, CSFB (in such capacity, the Swingline Lender) will make available to the Borrower a swingline facility under which the Borrower may make short-term borrowings of up to $5,000,000. Except for purposes of calculating the Commitment Fee described below, any such swingline borrowings will reduce availability under the Revolving Facility on a dollar-for-dollar basis. Each Lender under the Revolving Facility shall, promptly upon request by the Swingline Lender, fund to the Swingline Lender its pro rata share of any swingline borrowings. | ||||
Purpose: | (A) | The proceeds of the Term Facility will be used by the Borrower on the date of the initial borrowing under the Senior Facilities (the Closing Date), solely (a) to refinance the Existing Credit Agreement and (b) together with the proceeds of the Senior Unsecured Term Loans, (i) to finance the Acquisition and (ii) to pay related fees and expenses. |
(B) | The proceeds of loans under the Revolving Facility will be used by the Borrower solely for working capital and other general corporate purposes, including for Permitted Acquisitions (as defined below). | |||
(C) | Letters of credit will be used solely to support payment obligations incurred in the ordinary course of business by the Borrower and its subsidiaries. | |||
Availability: | (A) | The full amount of the Term Facility will be drawn in a single drawing on the Closing Date. Amounts borrowed under the Term Facility that are repaid or prepaid may not be reborrowed. | ||
(B) | No loans under the Revolving Facility may be made on the Closing Date. Thereafter, loans under the Revolving Facility will be available at any time prior to the final maturity of the Revolving Facility, in minimum principal amounts to be agreed upon. Amounts repaid under the Revolving Facility may be reborrowed. | |||
Incremental Term Facility: | The definitive credit agreement for the Senior Facilities will provide for an uncommitted incremental term loan facility in an aggregate principal amount not to exceed $200,000,000. | |||
Interest Rates and Fees: | As set forth on Annex I hereto. | |||
Default Rate: | The applicable interest rate plus 2.0% per annum. | |||
Letters of Credit: | Letters of credit under the Revolving Facility will be issued by CS or another Lender acceptable to the Borrower and the Agent (the Issuing Bank). Each letter of credit shall expire not later than the earlier of (a) 12 months after its date of issuance and (b) the fifth business day prior to the final maturity of the Revolving Facility; provided, however, that any letter of credit may provide for renewal thereof for additional periods of up to 12 months (which in no event shall extend beyond the date referred to in clause (b) above). | |||
Drawings under any letter of credit shall be reimbursed by the Borrower on the same business day. To the extent that 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 |
pro rata based upon their respective Revolving Facility commitments. | ||||
The issuance of all letters of credit shall be subject to the customary procedures of the Issuing Bank. | ||||
Final Maturity and Amortization: | (A) | Term Facility | ||
The Term Facility will mature on the date that is five years after the Closing Date, and will amortize in equal quarterly installments in an aggregate annual amount equal to 1% of the original principal amount of the Term Facility with the balance payable at the Maturity thereof. | ||||
(B) | Revolving Facility | |||
The Revolving Facility will mature on the date that is five years after the Closing Date. | ||||
Guarantees: | All obligations of the Borrower under the Facilities and under any interest rate protection or other hedging arrangements entered into with a Lender or any affiliate thereof (Hedging Arrangements) will be unconditionally guaranteed (the Guarantees) by each existing and subsequently acquired or organized domestic and, to the extent no adverse tax consequences to the Borrower would result therefrom, foreign subsidiary of the Borrower (the Subsidiary Guarantors). | |||
Security: | The Facilities, the Guarantees and any Hedging Arrangements will be secured by substantially all the assets of the Borrower and each Subsidiary Guarantor (collectively, the Collateral), including but not limited to: (a) a perfected first-priority pledge of all the capital stock or other equity interests held by the Borrower or any Subsidiary Guarantor (which pledge, in the case of any foreign subsidiary, shall be limited to 100% of the non-voting stock or other equity interests (if any) and 65% of the voting stock or other equity interests of such foreign subsidiary to the extent the pledge of any greater percentage would result in adverse tax consequences to the Borrower) and (b) perfected first-priority security interests in, and mortgages on, substantially all tangible and intangible assets of the Borrower and each Subsidiary Guarantor (including but not limited to accounts receivable, inventory, equipment, general intangibles, investment property, intellectual property, real |
property, cash, commercial tort claims, letter of credit rights, intercompany notes and proceeds of the foregoing) except for those assets for which the Agent shall determine, in its reasonable judgment, that the costs of obtaining such security interest are excessive in relation to the value of the security afforded thereby. | ||
All the above-described pledges, security interests and mortgages shall be created on terms, and pursuant to documentation, consistent with those under the Existing Credit Agreement or otherwise satisfactory to the Borrower and the Lenders, and, subject to customary and limited exceptions to be agreed upon, none of the Collateral shall be subject to any other pledges, security interests or mortgages. | ||
Mandatory Prepayments: | Loans under the Term Facility shall be prepaid with (a) 50% of Excess Cash Flow (as defined in the Existing Credit Agreement) for each fiscal year, reducing to 25% if the Leverage Ratio (as defined in the Existing Credit Agreement) at the end of such fiscal year was less than 2.0 to 1.0, (b) 100% of the net cash proceeds of all non-ordinary course asset sales or other dispositions of property by the Borrower and its subsidiaries (including insurance and condemnation proceeds) (subject to exceptions and reinvestment provisions as provided for in the Existing Credit Agreement), (c) 100% of the net cash proceeds of issuances of debt obligations of the Borrower and its subsidiaries (subject to exceptions as provided for in the Existing Credit Agreement), (d) 50% of the net cash proceeds of issuances of equity securities of the Borrower and its subsidiaries (subject to exceptions as provided for in the Existing Credit Agreement, including an exception for issuances of equity pursuant to the Borrowers Employee Stock Ownership Plan (the ESOP) and reducing to 25% if the Leverage Ratio at the time would be less than 2.0 to 1.0), and (e) 100% of the amount of any purchase price adjustment received by the Borrower or any of its subsidiaries in cash pursuant to the Purchase Agreement. | |
The above-described mandatory prepayments shall be applied first to any amortization payments payable in the immediately succeeding 24 months and thereafter, pro rata to the remaining amortization payments thereunder. |
Voluntary Prepayments and Reductions in Commitments: | Voluntary reductions of the unutilized portion of the Facilities commitments and prepayments of borrowings will be permitted at any time, in minimum principal amounts of $1,000,000, without premium or penalty, subject to reimbursement of the Lenders breakage costs in the case of a prepayment of Adjusted LIBOR borrowings other than on the last day of the relevant interest period. All voluntary prepayments of the Term Facility will be applied to the remaining amortization payments thereunder as directed by the Borrower. | |
Representations and Warranties: | Substantially as provided for in the Existing Credit Agreement, including accuracy of financial statements and other information; no material adverse change; absence of litigation; no violation of material agreements or instruments; compliance with laws (including ERISA, margin regulations and environmental laws); payment of taxes; ownership of properties; inapplicability of the Investment Company Act; solvency; effectiveness of governmental approvals; labor matters; environmental and other regulatory matters; and validity, priority and perfection of security interests in the Collateral. | |
Conditions Precedent to Initial Borrowing: | Usual for facilities and transactions of this type, including delivery of satisfactory legal opinions; first-priority perfected security interests in the Collateral (free and clear of all liens, other than permitted liens); delivery of Assignment of Claims Act filings; execution of the Guarantees, which shall be in full force and effect; accuracy of representations and warranties; absence of defaults, prepayment events or creation of liens under debt instruments or other agreements; evidence of authority; absence of material adverse change; payment of fees and expenses; and obtaining of satisfactory insurance. | |
The initial borrowing under the Senior Facilities will also be subject to the applicable conditions precedent set forth in Exhibit D to the Commitment Letter. | ||
Conditions Precedent to all Borrowings: | Delivery of notice, accuracy of representations and warranties and absence of defaults. | |
Affirmative Covenants: | Substantially as provided for in the Existing Credit Agreement, including maintenance of corporate existence and rights; performance of material obligations; delivery of annual and quarterly financial statements, other financial information and |
information required under the PATRIOT Act; delivery of notices of default, litigation, ERISA events and material adverse change; maintenance of properties in good working order; maintenance of satisfactory insurance; use of commercially reasonable efforts to maintain a rating of the Facilities by each of Standard & Poors Ratings Service (S&P) and Moodys Investors Service, Inc. (Moodys); compliance with laws; inspection of books and properties; hedging arrangements; further assurances; and payment of taxes. | ||
Negative Covenants: | Substantially similar to the Existing Credit Agreement (as modified to give effect to the Transactions), including limitations on dividends on, and redemptions and repurchases of, capital stock (except as required pursuant to ERISA, the ESOP and other existing contractual and statutory obligations); limitations on prepayments, redemptions and repurchases of debt (other than loans under the Senior Facilities); limitations on liens and sale-leaseback transactions; limitations on loans and investments; limitations on debt, guarantees and hedging arrangements; limitations on mergers, acquisitions and asset sales; limitations on transactions with affiliates; limitations on changes in business conducted by the Borrower and its subsidiaries; limitations on amendments of debt and other material agreements; and limitations on capital expenditures. | |
Notwithstanding the foregoing, the Borrower will be permitted to make Permitted Acquisitions, as defined in the Existing Credit Agreement, which includes the following principal elements: (a) the acquired entity is a business unit, or would become a wholly owned subsidiary of the Borrower, and is in a similar line of business; (b) no default or event of default shall have occurred and be continuing and the Borrower would be in pro forma compliance with its covenants; (c) on a pro forma basis, the Borrowers ratio of Total Debt to EBITDA would be at least 0.25 to 1.00 lower than the required covenant level at the time; and (d) after giving effect to the acquisition and the financing therefor, there would be at least $5,000,000 of available commitments under the Revolving Facility. |
Selected Financial Covenants: | The definitive credit documentation for the Facilities will contain the following financial covenants (with financial definitions and levels to be agreed upon): (a) maximum ratios of Total Debt to EBITDA and (b) minimum interest coverage ratios. | |
Events of Default: | Substantially as provided for in the Existing Credit Agreement, including nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; cross default and cross acceleration; bankruptcy; material judgments; ERISA events; actual or asserted invalidity of guarantees or security documents; and Change of Control (as defined in the Existing Credit Agreement). | |
Voting: | Amendments and waivers of the definitive credit documentation will require the approval of Lenders holding more than 50% of the aggregate amount of the loans and commitments under the Senior Facilities (with certain amendments and waivers also requiring class votes), except that the consent of each Lender directly adversely affected thereby shall be required with respect to, among other things, (a) increases in the commitment of such Lender, (b) reductions of principal, interest or fees, (c) extensions of final maturity or scheduled amortization and (d) releases of guarantors or all or substantially all of the Collateral. | |
Yield Protection and Illegality: | Substantially as provided for in the Existing Credit Agreement, including protection with respect to breakage costs, changes in capital requirements or their interpretation, changes in circumstances, reserves, illegality and taxes. | |
Assignments and Participations: | The Lenders will be permitted to assign loans and commitments under the Senior Facilities to other Lenders or their affiliates without the consent of the Borrower and to other persons with the consent of the Borrower (and, if a Revolving Facility commitment is being assigned, the Swingline Lender and the Issuing Bank), in each case not to be unreasonably withheld or delayed; provided that the consent of the Borrower shall not be required after the occurrence and during the continuance of an Event of Default. All assignments will require the consent of the Agent, not to be unreasonably withheld or delayed. Each assignment will be in an amount of an integral multiple of $1,000,000. Assignments will be by |
novation and will not be required to be pro rata between the Senior Facilities. | ||
The Lenders will be permitted to sell participations in loans and commitments without restriction. Voting rights of participants shall be limited to matters in respect of (a) increases in commitments, (b) reductions of principal, interest or fees, (c) extensions of final maturity or scheduled amortization and (d) releases of guarantors or all or substantially all of the Collateral. | ||
Expenses and Indemnification: | The Borrower will indemnify the Arranger, the Agent, the Syndication Agent, the Documentation Agent and the Lenders and hold them harmless from and against all reasonable costs, expenses (including reasonable fees, disbursements and other reasonable charges of counsel) and liabilities of the Arranger, the Agent, the Syndication Agent, the Documentation Agent and the Lenders arising out of or relating to any claim or any litigation or other proceeding (regardless of whether the Arranger, the Agent, the Syndication Agent, the Documentation Agent or any Lender is a party thereto) that relates to the Transactions, including the financing contemplated hereby or any transactions connected therewith, provided that none of the Arranger, the Agent, the Syndication Agent, the Documentation Agent or any Lender will be indemnified for any cost, expense or liability to the extent determined in the final, non-appealable judgment of a court of competent jurisdiction to have resulted from its gross negligence or willful misconduct. In addition, all reasonable out-of-pocket expenses (including, without limitation, reasonable fees, disbursements and other charges of counsel) of the Arranger, the Agent, the Syndication Agent, the Documentation Agent and the Lenders for enforcement costs and documentary taxes associated with the Senior Facilities will be paid by the Borrower. | |
Governing Law and Forum: | New York. | |
Counsel to Agent and Arranger: | Cravath, Swaine & Moore LLP. |
Interest Rates: | The interest rates under the Senior Facilities will be as follows: | |
Term Facility | ||
At the option of the Borrower, Adjusted LIBOR plus 2.50% or ABR plus 1.50%. | ||
Revolving Facility | ||
At the option of the Borrower, Adjusted LIBOR plus 2.75% or ABR plus 1.75% | ||
Both Facilities | ||
The Borrower may elect interest periods of 1, 2, 3 or 6 months (or, if agreed to by all relevant Lenders, 9 or 12 months) for Adjusted LIBOR borrowings. | ||
Calculation of interest shall be on the basis of the actual days elapsed in a year of 360 days (or 365 or 366 days, as the case may be, in the case of ABR loans based on the Prime Rate) and interest shall be payable at the end of each interest period and, in any event, at least every 3 months. | ||
ABR is the Alternate Base Rate, which is the higher of CSFBs Prime Rate and the Federal Funds Effective Rate plus 1/2 of 1.0%. | ||
Adjusted LIBOR will at all times include statutory reserves. | ||
Letter of Credit Fee: | A per annum fee equal to the spread over Adjusted LIBOR under the Revolving Facility will accrue on the aggregate face amount of outstanding letters of credit under the Revolving Facility, payable in arrears at the end of each quarter and upon the termination of the Revolving Facility, in each case for the actual number of days elapsed over a 360-day year. Such fees shall be distributed to the Lenders participating in the Revolving Facility pro rata in accordance with the amount of each such Lenders Revolving Facility commitment. In addition, the Borrower shall pay to the Issuing Bank, for its own account, (a) a fronting fee equal to a percentage per annum to be agreed upon of the aggregate face amount of outstanding letters of credit, payable in arrears at the end of each quarter and upon the termination of the Revolving Facility, calculated based upon the actual number of days elapsed over a 360-day year, and (b) customary issuance and administration fees. | |
Commitment Fees: | 0.50% per annum on the undrawn portion of the commitments in respect of the Senior Facilities, payable |
quarterly in arrears after the Closing Date and upon the termination of the commitments, calculated based on the number of days elapsed in a 360-day year. | ||
Changes in Interest Rates: | The definitive documentation for the Senior Facilities will contain provisions under which, from and after the date of delivery of the Borrowers financial statements covering a period of at least six full months after the Closing Date, and so long as no default shall have occurred and be continuing, interest rates under the Revolving Facility will be subject to reduction in increments to be agreed upon based upon performance goals to be agreed upon. |
CONFIDENTIAL May 25, 2006 | EXHIBIT B |
$175,000,000 Senior Unsecured Increasing Rate Bridge Loans
Summary of Principal Terms and Conditions1
Borrower: | Alion Science and Technology Corporation, a Delaware corporation (the Borrower). | |
Agent: | Credit Suisse, acting through one or more of its branches or affiliates (CS), will act as sole administrative agent (in such capacity, the Agent) for a syndicate of banks, financial institutions and other institutional lenders (together with CS, the Lenders), and will perform the duties customarily associated with such roles. | |
Sole Bookrunner and Sole Lead Arranger: | Credit Suisse Securities (USA) LLC will act as sole bookrunner and sole lead arranger for the Senior Unsecured Increasing Rate Bridge Facility described below (collectively, in such capacities, the Arranger), and will perform the duties customarily associated with such roles. | |
Syndication Agent: | At the option of the Arranger, one or more financial institutions identified by the Arranger and acceptable to the Borrower (in such capacity, the Syndication Agent). | |
Documentation Agent: | At the option of the Arranger, one or more financial institutions identified by the Arranger and acceptable to the Borrower (in such capacity, the Documentation Agent). | |
Senior Unsecured Bridge Facility: | Senior unsecured increasing rate bridge loans in an aggregate principal amount of up to $175,000,000 (the Senior Unsecured Term Loans). | |
Purpose: | The proceeds of the Senior Unsecured Term Loans will be used by the Borrower on the Closing Date, together with the proceeds of the Incremental Term Facility, solely (a) to pay the Acquisition Consideration, (b) to prepay loans outstanding under the Existing Credit Agreement and (c) to pay related fees and expenses. |
1 | All capitalized terms used but not defined herein have the meanings given to them in the Commitment Letter to which this term sheet is attached, including Exhibit A thereto. |
Availability: | The full amount of the Senior Unsecured Term Loans must be drawn in a single drawing on the date of the borrowing of the Senior Unsecured Term Loans (the Closing Date). Senior Unsecured Term Loans that are repaid or prepaid may not be reborrowed. | |
Guarantees: | Each existing and subsequently acquired or organized subsidiary of the Borrower that is or that is required to be a Subsidiary Guarantor under and as defined in the Existing Credit Agreement will guarantee (the Guarantees) the Senior Unsecured Term Loans. | |
Interest Rates: | Interest for the six-month period commencing on the Closing Date shall be paid at the London interbank offered rate for U.S. dollars (for a three-month interest period) (the LIBO Rate) plus 550 basis points. Thereafter, interest shall be paid at (a) for the six-month period commencing on the six-month anniversary of the Closing Date, the LIBO Rate plus 625 basis points and (b) for the six-month period commencing on the first anniversary of the Closing Date, the LIBO Rate plus 700 basis points. Any Extended Loans (as defined below) shall bear interest at the LIBO Rate plus 900 basis points; provided that the portion of any interest payment representing a per annum interest rate in excess of the LIBO Rate plus 700 basis points shall be paid by capitalizing such excess portion of interest as additional Extended Loans. All references herein to Extended Loans shall include additional Extended Loans owed and outstanding as a result of the preceding sentence. | |
Interest Payments: | Interest on the Loans (as defined below) will be payable in cash (except as provided above), quarterly in arrears. | |
Default Rate: | The applicable interest rate plus 2.0%. | |
Notwithstanding anything to the contrary set forth herein, in no event shall any limit upon the amount of interest payable in cash with respect to the Extended Loans affect the payment in cash of any default rate of interest in respect of any Extended Loans. | ||
Initial Maturity Date: | The eighteen-month anniversary of the Closing Date (the Initial Maturity Date). | |
Exchange: | If the Senior Unsecured Term Loans have not been previously repaid or prepaid in full in cash on or prior to the Initial Maturity Date (with such non-payment on such date not being an event of default), the maturity of |
the Senior Unsecured Term Loans shall automatically be extended to the date that is five years and six months following the Closing Date (the Extended Loan Maturity Date; such extended Senior Unsecured Term Loans, the Extended Loans and, together with the Senior Unsecured Term Loans, the Loans). Extended Loans will bear interest as described above and will have covenants, events of default and mandatory redemption provisions identical to the Senior Unsecured Term Loans except to the extent set forth herein. | ||
Extended Loan Maturity Date: | The Borrower shall repay the Extended Loans in full in cash on the Extended Loan Maturity Date at a price (expressed as a percentage of the outstanding principal amount of such Extended Loans) of 103%. | |
Mandatory Prepayments: | The Loans shall be prepaid with, subject to certain exceptions to be agreed upon, (i) the net proceeds from the issuance, offering or placement of any debt obligations or equity securities by the Borrower or any of its subsidiaries, other than borrowings under the Existing Credit Agreement (with such proceeds being applied to repay the Loans prior to the repayment of loans outstanding under the Existing Credit Agreement); and (ii) the net proceeds from any asset sales by the Borrower or any of its subsidiaries (including proceeds from the sale of stock of any subsidiary of the Borrower) in excess of the amount required to be paid to the lenders under the Existing Credit Agreement. Such mandatory prepayments made pursuant to clauses (i) or (ii) of the preceding sentence during the periods set forth below shall be payable at the prices set forth below: | |
Months after Closing Date | Price2 | |||
0-6 | 100% | |||
7-12 | 101% | |||
13-18 | 102% | |||
19-30 | 101% | |||
31-42 | 102% | |||
43-Extended Loan Maturity Date | 103% |
Change of Control: | The Borrower will be required to offer to prepay the Loans following the occurrence of a Change of Control (to be defined) at 100% of the outstanding principal |
2 | Price is expressed as a percentage of the aggregate principal amount of Loans being prepaid. |
amount thereof (if such Change of Control occurs prior to the Initial Maturity Date) or at 101% of the outstanding principal amount thereof (if such Change of Control occurs on or after the Initial Maturity Date). | ||
Voluntary Prepayments: | The Senior Unsecured Term Loans may be prepaid, in whole or in part, upon not less than 5 days prior written notice, at the option of the Borrower at any time during the periods set forth below at the prices set forth below: |
Months after Closing Date | Price3 | |||
0-6 | 100% | |||
7-12 | 101% | |||
13-Initial Maturity Date | 102% |
The Extended Loans may be prepaid, in whole or in part, upon not less than 5 days prior written notice, at the option of the Borrower at any time during the periods set forth below at the prices set forth below: |
Months after Closing Date | Price4 | |||
19-30 | 101% | |||
31-42 | 102% | |||
43-Extended Loan Maturity Date | 103% |
Assignments and Participations: | Each Lender shall have the absolute and unconditional right to assign or participate the Loans held by it in compliance with applicable law to any third party at any time and shall give notice to the Borrower of any such assignment. | |
Representations and Warranties: | The definitive documentation relating to the Loans (the Loan Documents) will contain representations and warranties relating to the Borrower and its subsidiaries that are usual and customary for transactions of this nature or required by the Agent for this transaction in particular, including but not limited to those set forth in the Existing Credit Agreement, with such changes as are appropriate in connection with the Loans. |
3 | Price is expressed as a percentage of the aggregate principal amount of Senior Unsecured Term Loans being prepaid. | |
4 | Price is expressed as a percentage of the aggregate principal amount of Senior Unsecured Term Loans being prepaid. |
Conditions Precedent to Borrowing: | Usual for facilities and transactions of this type and others to be reasonably specified by the Agent, including, without limitation, delivery of satisfactory legal opinions, corporate documents and officers and public officials certifications; execution of the Guarantees, which shall be in full force and effect; evidence of authority; and payment of fees and expenses. | |
The borrowing under the Senior Unsecured Term Facility will also be subject to the applicable conditions precedent set forth in Exhibit D to the Commitment Letter. | ||
Covenants: | The Loan Documents will contain covenants relating to the Borrower and its subsidiaries that are usual and customary for transactions of this nature or required by the Agent for this transaction in particular, including but not limited to those set forth in the Existing Credit Agreement, with such changes as are appropriate in connection with the Loans. | |
Events of Default: | Customary for the type of transactions proposed and others to be reasonably specified by the Agent relating to the Borrower and its subsidiaries (subject, where appropriate, to thresholds and grace periods to be agreed upon), including, but not limited to, nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; cross default and cross acceleration; bankruptcy; material judgments; ERISA events; or actual or asserted invalidity of guarantees. | |
Voting: | Amendments and waivers of the Loan Documents will require the approval of Lenders holding more than 50% of the aggregate amount of the Loans, except that the consent of each Lender shall be required with respect to, among other things, (a) reductions of principal, interest or fees payable to such Lender, (b) extensions of the Initial Maturity Date or the Extended Loan Maturity Date, as applicable, and (c) releases of all or substantially all of the value of the Guarantees. | |
Cost and Yield Protection: | Usual for facilities and transactions of this type, including customary tax gross-up provisions. | |
Expenses and Indemnification: | The Borrower will indemnify the Arranger, the Agent, the Syndication Agent, the Documentation Agent, the |
Lenders, their respective affiliates, successors and assigns and the officers, directors, employees, agents, advisors, controlling persons and members of each of the foregoing (each an Indemnified Person) and hold them harmless from and against all costs, expenses (including reasonable fees, disbursements and other charges of counsel) and liabilities of such Indemnified Person arising out of or relating to any claim or any litigation or other proceeding (regardless of whether such Indemnified Person is a party thereto) that relates to the Transactions, including the financing contemplated hereby, the Acquisition or any transactions connected therewith, provided that no Indemnified Person will be indemnified for any cost, expense or liability to the extent determined in the final, non-appealable judgment of a court of competent jurisdiction to have resulted primarily from its gross negligence or willful misconduct. In addition, all out-of-pocket expenses (including, without limitation, fees, disbursements and other charges of counsel) of the Arranger, the Agent, the Syndication Agent, the Documentation Agent and the Lenders for enforcement costs and documentary taxes associated with the Loans will be paid by the Borrower. | ||
Governing Law: | New York. | |
Counsel to the Agent and the Arranger: | Cravath, Swaine & Moore LLP. |
(in millions of dollars)
(all figures are approximate)
Sources of Funds | Uses of Funds | |||||||||
Revolving Facility1 | $ | 0.0 | Acquisition Consideration | $ | 225.0 | |||||
Delayed Draw Term Loans | 21.0 | |||||||||
Incremental Term Facility2 | 50.0 | Prepay Existing Revolving Facility | 10.0 | |||||||
Senior Unsecured Bridge Facility | 175.0 | Transaction Costs | 11.0 | |||||||
Total Sources | $ | 246.0 | Total Uses | $ | 246.0 | |||||
1 | Represents amount to be drawn under the $50,000,000 Revolving Facility on the Closing Date. | |
2 | Assumes Proposed Amendment is obtained and Replacement Bank Facilities not provided. |
$50,000,000 Senior Secured Incremental Term Facility
$175,000,000 Senior Unsecured Increasing Rate Bridge Facility
$310,000,000 Senior Secured Replacement Bank Facilities
Summary of Additional Conditions Precedent1
1 | All capitalized terms used but not defined herein have the meanings given to them in the Commitment Letter, including Exhibit A thereto, to which this Exhibit D is attached. |