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EXHIBIT (b)(2)
September 28, 2000
Cemex S.A. de C.V.
Av. Constitucion 444 Pte.
Monterey, N.L. 64000
Mexico
Attention: Rodrigo Trevino Muguerza
Chief Financial Officer
$350,000,000 364-Day Revolving Credit Facility
$500,000,000 364-Day Revolving Credit Facility
$550,000,000 5-Year Term Loan
COMMITMENT LETTER
Ladies and Gentlemen:
Cemex S.A. de C.V. (the "Company") has advised Salomon Smith Barney Inc.
("SSB") and Citibank, N.A. ("Citibank"; collectively, with SSB, "Citi/SSB")
that the Company intends to cause its majority-owned subsidiary, Cia.
Valenciana De Cementos Portland S.A., to organize a single-purpose, wholly-
owned acquisition vehicle ("Bid Co") that will offer to acquire through a
tender offer all of the shares of the outstanding capital stock (the "Target
Stock") of a publicly-held corporation code named "Spur" (the "Target"), but in
any event not less than sufficient shares of Target Stock to enable Bid Co,
voting without any other shareholders of the Target, to approve a merger (the
"Merger") of Bid Co with the Target. As promptly as practicable after the
closing of the Tender Offer, Bid Co will consummate a merger with the Target in
which the Target will be the surviving corporation (the "Surviving
Corporation"). The Company has further advised Citi/SSB that it desires to
establish, for Bid Co and following the merger, the Surviving Corporation, a
$350,000,000 364-Day Revolving Credit Facility, a $500,000,000 364-Day
Revolving Credit Facility and a $550,000,000 5-Year Term Loan (collectively the
"Facilities"), which would be used for the purposes described in Annex 1.
Subject to the terms and conditions of this letter and the attached Annex I
(collectively, and together with the Fee Letter referred to below, this
"Commitment Letter"), Citibank is pleased to inform the Company of Citibank's
commitment to provide the entire amount of the Facilities.
Section 1. Conditions Precedent. Citibank's commitment hereunder is subject
to: (i) the preparation, execution and delivery of mutually acceptable loan
documentation, including, without limitation, a guarantee of the Facilities
provided by Cia. Valenciana De Cementos Portland S.A.; (the "Operative
Documents"); (ii) the accuracy and completeness of all representations that the
Company, Bid Co and their affiliates make to Citi/SSB and all information that
the Company, Bid Co and their affiliates furnish to Citi/SSB and the Company's
compliance with the terms of this Commitment Letter; and (iii) the payment in
full of all fees, expenses and other amounts payable under this Commitment
Letter.
Section 2. Commitment Termination. Citibank's commitment hereunder will
terminate on the earlier of (a) the date the Operative Documents have been
executed, and (b) December 15, 2000. Before such date, Citibank may terminate
its commitment hereunder if (i) the Company fails to comply with the provisions
of the third paragraph of Section 3 hereof, (ii) any event occurs or
information becomes available that, in its judgment, results or is likely to
result in the failure to satisfy any condition set forth in Section 1 or (iii)
any condition or event occurs that results in (A) a material adverse change in
the business, condition (financial or otherwise), operations, performance,
properties or prospects of (1) the Company or the Company and its subsidiaries;
including the Target, taken as a whole since December 31, 1999, or (B) any
change in loan syndication, financial or capital market conditions generally
that, in the judgment of SSB, would materially impair syndication of the
Facilities. Once the Operative Documents have been executed, the commitments
shall terminate on May 31, 2001 if the conditions to effectiveness of the
Operative Documents have not been satisfied on or prior to such date.
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Section 3. Syndication. Citibank reserves the right, before or after the
execution of the Operative Documents, to syndicate all or a portion of its
commitment to one or more other financial institutions reasonably acceptable to
the Company that will become parties to the Operative Documents pursuant to a
syndication to be managed by SSB (the financial institutions becoming parties
to the Operative Documents being collectively referred to herein as the
"Lenders"). SSB will manage all aspects of the syndication in consultation with
the Company, including the timing of all offers to potential Lenders, the
determination of the amounts offered to potential Lenders, the acceptance of
commitments of the Lenders and the compensation to be provided to the Lenders.
The Company shall take all action as SSB may reasonably request to assist
SSB in forming a syndicate acceptable to SSB and the Company. The Company's
assistance in forming such a syndicate shall include but not be limited to (i)
making senior management and representatives of the Company, and to the extent
practicable, the Target available to participate in information meetings with
potential Lenders at such times and places as SSB may reasonably request; (ii)
using the Company's best efforts to ensure that the syndication efforts benefit
from the Company's and the Target's lending relationships; and (iii) providing
SSB with all information reasonably deemed necessary by it to successfully
complete the syndication.
To ensure an effective syndication of the Facilities, the Company agrees
that until the termination of the syndication (as determined by SSB), the
Company will not, and will not permit any of its affiliates to, syndicate or
issue, attempt to syndicate or issue, announce or authorize the announcement of
the syndication or issuance of, or engage in discussions concerning the
syndication or issuance of, any debt facility or debt security (including any
renewals thereof) in the commercial bank market, without the prior written
consent of SSB; provided, however, that the foregoing shall not limit the
Company's ability to issue (i) commercial paper, (ii) other short-term debt
programs currently in place, (iii) equity or public debt securities, (iv) a
$200 to $300 million commercial paper program syndication for the Company., (v)
a $70 to $100 million pre-export facility for the Company's Venezuela
operations, (vi) a $1 billion medium term note issue in euros or dollars for
Cia. Valenciana De Cementos Portland S.A., (vii) a $500 million syndicated
credit facility or bond offering for the Company or (viii) the execution of the
syndication to not more than eight financial institutions of the $1.5 billion
European Equity Swap facility in favor of Cia. Valenciana De Cementos Portland
S.A.
Citibank will act as the sole Administrative Agent for the Facilities and
SSB will act as sole lead arranger and syndication agent. No additional agents,
co-agents or arrangers will be appointed, or other titles conferred, without
the consent of SSB and Citibank; provided, however, to the extent that the
Company identifies another financial institution satisfactory to SSB in its
reasonable discretion that will commit $700,000,000 to the Facilities, such
financial institution will be designated as an arranger; provided further,
however, to the extent that the Company identifies another financial
institution satisfactory to SSB that will commit $100,000,000 to the
Facilities, such financial institution will be given an agent title.
SSB reserves the right at any time (whether prior to or after the execution
and delivery of the Operative Documents and any borrowings thereunder) to
change any or all of the terms, structure, tenor, or pricing (but not the
aggregate amount) of the Facilities if SSB determines that such changes would
be advisable in order to ensure a successful syndication of the Facilities (as
determined by SSB). SSB's rights under this paragraph and the other provisions
of this Section 3 will survive the execution and delivery of the Operative
Documents and any borrowings thereunder and continue in effect until such
syndication efforts shall be completed. The Company agrees that the Operative
Documents shall grant Citi/SSB such rights, and, if such rights are exercised,
be amended if necessary in connection with the syndication to include any such
changes deemed advisable by SSB.
Section 4. Fees. In addition to the fees described in Annex I, the Company
shall pay the non-refundable fees set forth in that certain letter agreement
dated the date hereof (the "Fee Letter") between the Company and Citi/SSB. The
terms of the Fee Letter are an integral part of Citibank's commitment hereunder
and constitute part of this Commitment Letter for all purposes hereof.
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Section 5. Indemnification. The Company shall indemnify and hold harmless
Citi/SSB, each Lender and each of their respective affiliates and each of their
respective officers, directors, employees, agents, advisors and representatives
(each, an "Indemnified Party") from and against any and all claims, damages,
losses, liabilities and expenses (including, without limitation, fees and
disbursements of counsel), joint or several, that are incurred by or asserted
or awarded against any Indemnified Party (including, without limitation, in
connection with any investigation, litigation or proceeding or the preparation
of a defense in connection therewith), in each case arising out of or in
connection with or by reason of this Commitment Letter or the Operative
Documents or the transactions contemplated hereby or thereby or any actual or
proposed use of the proceeds of the Facilities, except to the extent such
claim, damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Company, the Target
or any of their respective directors, security holders or creditors, an
Indemnified Party or any other person or an Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated hereby are
consummated.
No Indemnified Party shall have any liability (whether in contract, tort or
otherwise) to the Company or any of its security holders or creditors for or in
connection with the transactions contemplated hereby, except for direct damages
(as opposed to special, indirect, consequential or punitive damages (including,
without limitation, any loss of profits, business or anticipated savings))
determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.
Section 6. Costs and Expenses. The Company shall pay, or reimburse Citi/SSB
on demand for, all reasonable out-of-pocket costs and expenses incurred by
Citi/SSB (whether incurred before or after the date hereof) in connection with
the Facilities and the preparation, negotiation, execution and delivery of this
Commitment Letter, including, without limitation, the disclosed reasonable fees
and expenses of counsel, regardless of whether any of the transactions
contemplated hereby are consummated. The Company shall also pay all costs and
expenses of Citi/SSB (including, without limitation, the reasonable fees and
disbursements of counsel) incurred in connection with the enforcement of any of
its rights and remedies hereunder.
Section 7. Confidentiality. By accepting delivery of this Commitment Letter,
the Company agrees that this Commitment Letter is for the Company's
confidential use only and that neither its existence nor the terms hereof will
be disclosed by the Company to any person other than the Company's, Bid Co's
their respective officers, directors, employees, accountants, attorneys and
other advisors, and then only on a confidential and "need to know" basis in
connection with the transactions contemplated hereby; provided, however, that
the Company may make such other public disclosures of the terms and conditions
hereof as the Company is required by law, in the opinion of the Company's
counsel, to make.
Section 8. Representations and Warranties of the Company. The Company
represents and warrants that (i) all information that has been or will
hereafter be made available to Citi/SSB, any Lender or any potential Lender by
the Company, or the Target (after the acquisition thereof) or any of their
representatives in connection with the transactions contemplated hereby is and
will be complete and correct in all material respects and does not and will not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements contained therein not misleading
in light of the circumstances under which such statements were or are made and
(ii) all financial projections, if any, that have been or will be prepared by
the Company, or the Target (after the acquisition thereof) and made available
to Citi/SSB, any Lender or any potential Lender have been or will be prepared
in good faith based upon reasonable assumptions (it being understood that such
projections are subject to significant uncertainties and contingencies, many of
which are beyond the Company's, and the Target's control, and that no assurance
can be given that the projections will be realized). The Company agrees to
supplement the information and projections from time to time until the
Operative Documents become effective so that the representations and warranties
contained in this paragraph remain correct.
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In providing this Commitment Letter, Citi/SSB is relying on the accuracy of
the information furnished to it by or on behalf of the Company and its
affiliates without independent verification thereof.
Section 9. No Third Party Reliance, Etc. The agreements of Citi/SSB
hereunder and of any Lender that issues a commitment to provide financing under
the Facilities are made solely for the benefit of the Company and the Borrower
and may not be relied upon or enforced by any other person. Please note that
those matters that are not covered or made clear herein are subject to mutual
agreement of the parties. The Company may not assign or delegate any of its
rights or obligations hereunder without Citi/SSB's prior written consent. This
Commitment Letter may not be amended or modified except in a written agreement
signed by all parties hereto. This Commitment Letter is not intended to create
a fiduciary relationship among the parties hereto.
The Company should be aware that Citi/SSB and/or one or more of its
affiliates may be providing financing or other services to parties whose
interests may conflict with the Company's interests. Consistent with Citi/SSB's
longstanding policy to hold in confidence the affairs of its customers, neither
Citi/SSB nor any of its affiliates will furnish confidential information
obtained from the Company to any of Citi/SSB's other customers. Furthermore,
neither Citi/SSB nor any of its affiliates will make available to the Company
confidential information that Citi/SSB obtained or may obtain from any other
customer.
Section 10. Governing Law, Etc. This Commitment Letter shall be governed by,
and construed in accordance with, the law of the State of New York. This
Commitment Letter sets forth the entire agreement between the parties with
respect to the matters addressed herein and supersedes all prior
communications, written or oral, with respect hereto. This Commitment Letter
may be executed in any number of counterparts, each of which, when so executed,
shall be deemed to be an original and all of which, taken together, shall
constitute one and the same Commitment Letter. Delivery of an executed
counterpart of a signature page to this Commitment Letter by telecopier shall
be as effective as delivery of an original executed counterpart of this
Commitment Letter. Sections 3 through 8, 10 and 11 hereof shall survive the
termination of Citibank's commitment hereunder.
Section 11. Waiver of Jury Trial. Each party hereto irrevocably waives all
right to trial by jury in any action, proceeding or counterclaim (whether based
on contract, tort or otherwise) arising out of or relating to this Commitment
Letter or the transactions contemplated hereby or the actions of the parties
hereto in the negotiation, performance or enforcement hereof.
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Please indicate the Company's acceptance of the provisions hereof by signing
the enclosed copy of this Commitment Letter and the Fee Letter and returning
them, together with the fees then payable under the Fee Letter, to Steven R.
Victorin, Managing Director, Salomon Smith Barney Inc., 390 Greenwich Street,
1st Floor, New York, NY, 10013 (fax: 212 723 8692) at or before 5 p.m. (New
York City time) on September 29, 2000, the time at which Citibank's commitment
hereunder (if not so accepted prior thereto) will terminate. If the Company
elects to deliver this Commitment Letter by telecopier, please arrange for the
executed original to follow by next-day courier.
Very truly yours,
SALOMON SMITH BARNEY INC.
/s/ Steven R. Victorin
By___________________________________
Steven R. Victorin
Managing Director
CITIBANK, N.A.
/s/ Candy Miller
By __________________________________
Candy Miller
Vice President
ACCEPTED AND AGREED
on September 28, 2000:
Cemex S.A. de C.V.
/s/ Ramiro Villarreal
By __________________________________
Ramiro Villarreal
General Counsel
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Summary of Terms and Conditions
US$1,400,000,000 Senior Credit Facilities
Borrower: Bid Co, a subsidiary of Cemex, and, following
the consummation of the Merger, the Surviving
Corporation.
Guarantors: Cia. Valenciana De Cementos Portland S.A. (the
"Parent Guarantor").
Facility Amount: Tranche A: US$500,000,000.
Tranche B: US$350,000,000.
Tranche C: US$550,000,000.
Type of Facility: Tranche A: Senior Unsecured 364 Day Revolving
Credit Facility Bridge.
Tranche B: Senior Unsecured 364 Day Revolving
Credit Facility.
Tranche C: Senior Unsecured 5-Term Loan.
Purpose: To finance Bid Co's purchase of not less than a
mutually agreed percentage of the issued and
outstanding capital stock of the Target;
refinance certain indebtedness of the Target;
commercial paper backstop; and general
corporate purposes.
Administrative Agent: Citibank, N.A. (the "Agent").
Lead Arranger: Salomon Smith Barney Inc.
Lenders: Financial institutions acceptable to the Lead
Arranger and the Borrower.
Final Maturity Date: Tranche A: 364 days from the Closing Date.
Tranche B: 364 days from the Closing Date.
Tranche C: 5 Years from the Closing Date.
Amortization: None.
Closing Date: December 15, 2000.
Commitment Reduction: The Borrower will have the right, upon at least
3 business days' notice, to terminate or
cancel, in whole or in part, the unused portion
of the Facility Amount of any Tranche in excess
of the aggregate outstanding Advances under
such Tranche, provided that each partial
reduction shall be in a minimum amount of
$10,000,000 or any whole multiple of $1,000,000
in excess thereof. Once terminated, a
commitment may not be reinstated.
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Facility Fee: Facility Fee will be based on the attached
Pricing Grid, based on the long-term senior
unsecured non credit enhanced debt ratings of
the Parent Guarantor until the consummation of
the Merger, and thereafter on the long-term
unsecured non credit enhanced debt ratings of
the Surviving Corporation. The Facility Fee
will be payable from the Closing Date and will
be calculated on a 360-day basis.
Interest Rates and
Interest Periods:
At the Borrower's option, any Advance that is
made to it will be available at the rates and
for the Interest Periods stated below:
. Base Rate: a fluctuating rate equal to
Citibank's Base Rate plus the Applicable
Margin.
. Eurodollar Rate: a periodic fixed rate equal
to LIBOR plus the Applicable Margin.
The Eurodollar Rate will be fixed for Interest
Periods of 1, 2, 3, or 6 months or 9 or 12
months if available by all Lenders.
Upon the occurrence and during the continuance
of any Event of Default, each Eurodollar Rate
Advance will convert to a Base Rate Advance at
the end of the Interest Period then in effect
for such Eurodollar Rate Advance.
Applicable Margin: The Applicable Margin means, for each of
Tranches A, B and C:
. for Base Rate Advances, zero basis points per
annum; and
. for Eurodollar Rate Advances, an amount which
will vary as per the attached Pricing Grid,
based on the long-term senior unsecured non-
credit-enhanced debt ratings of the Parent
Guarantor until the consummation of the
Merger, and thereafter on the long-term
unsecured non credit enhanced debt ratings of
the Surviving Corporation.
Upon the occurrence and during the continuance
of any Event of Default, the Applicable Margin
will increase by 200 basis points per annum.
Utilization Fee:
Utilization Fee for Tranches A and B will be
based on attached Pricing Grid, based on the
long-term senior unsecured non-credit-enhanced
debt ratings of the Parent Guarantor until the
consummation of the Merger, and thereafter on
the long-term unsecured non credit enhanced
debt ratings of the Surviving Corporation. The
Utilization Fee will be added to the Applicable
Margin for any date where outstanding Advances
under the applicable Tranche exceed 33% of
commitments. The Utilization Fee will be
calculated on a 360-day basis and will be
payable on the same basis as interest.
Interest Payments: At the end of each Interest Period for each
Advance, but no less frequently than quarterly.
Interest will be computed on a 365/366-day
basis for Base Rate Advances and a 360-day
basis for Eurodollar Rate Advances.
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Borrowings: Borrowings will be in minimum principal amounts
of $10,000,000 and integral multiples of
$1,000,000 in excess thereof. All Advances
(other than Competitive Bid Advances) will be
made by the Lenders ratably in proportion to
their respective commitments. Borrowings will
be available on same day notice for Base Rate
Advances and 3 business days' notice for
Eurodollar Rate Advances. Tranche C will be
fully drawn on the date that the conditions
precedent to effectiveness have been satisfied.
Competitive Bid Option: The Borrower may request the Agent to solicit
competitive bids from the Lenders for Advances
under Tranche A or Tranche B with requested
maturities of 30 days or more. Each Lender will
bid at its discretion. The Borrower's notice
requesting such bids will be given to the Agent
at least 1 business day prior to the proposed
Advance date for fixed rate bids and at least 4
business days prior to the proposed Advance
date for LIBOR based bids, and will specify the
proposed date of Advance, amount and maturity
date of the proposed Advance, interest payment
schedule, the interest rate basis to be used by
the Lenders in bidding, and such other terms as
the Borrower may specify. The Agent will advise
the Lenders of the terms of the Borrower's
notice, and such Lenders as elect may submit
bids, which the Agent will provide to the
Borrower.
The Borrower may accept one or more bids,
provided that the aggregate outstanding
Advances of all Lenders on the date of, and
giving effect to, any Competitive Bid Advance
may not exceed the aggregate commitments for
the applicable Tranche at such time. Bids will
be accepted in order of the lowest to the
highest rates ("Bid Rates"). The Borrower may
not accept bids in excess of the requested bid
amount for any maturity. If two or more Lenders
bid at the same Bid Rate, the amount to be
borrowed at such Bid Rate will be allocated
among such Lenders in proportion to the amount
which each Lender bid at such Bid Rate.
Each Borrowing under the Competitive Bid Option
will be in an amount of not less than
$10,000,000 and integral multiples of
$1,000,000 in excess thereof. While any such
Borrowing is outstanding, it will be deemed
usage of the applicable Tranche for the
purposes of availability, and the commitment of
each Lender under the applicable Tranche will
be reduced and deemed used for all purposes by
its pro rata share (based on its respective
commitment) of an amount equal to the
outstanding amount of such Borrowing. However,
each Lender's Advance made under the
Competitive Bid Option will not reduce such
Lender's obligation to lend its pro rata share
of the remaining undrawn commitment under the
applicable Tranche.
Repayment:
The Borrower will repay (i) each Advance (other
than a Competitive Bid Advance) under each
Tranche no later than on the Final Maturity
Date for such Tranche and (ii) each Competitive
Bid Advance at the maturity date specified in
the Borrower's notice requesting such
Competitive Bid Advance.
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Optional Prepayment: Advances (other than Competitive Bid Advances)
may be prepaid without penalty, on same day
notice for Base Rate Advances and 2 business
days' notice for Eurodollar Rate Advances, in
minimum amounts of $10,000,000 and increments
of $1,000,000 in excess thereof. The Borrower
will bear all costs related to the prepayment
of a Eurodollar Rate Advance prior to the last
day of the Interest Period. Competitive Bid
Advances may not be prepaid.
Loan Documentation: The commitments will be subject to preparation,
execution and delivery of mutually acceptable
loan documentation, which will contain
conditions precedent, representations and
warranties, covenants, events of default and
other provisions customary for facilities of
this nature, including, but not limited to,
those noted below.
Conditions Precedent to
Effectiveness: Customary for facilities of this nature
including, but not limited to:
1. Board resolutions.
2. Incumbency/specimen signature
certificate.
3. Favorable legal opinion from counsel for
the Agent.
4. Favorable legal opinion from counsel for
the Borrower.
5. Accuracy of Representations and
Warranties.
6. No Event of Default or event which, with
the giving of notice or passage of time
or both, would be an Event of Default,
has occurred and is continuing, or would
result from such Borrowing.
7. Disclosure of material agreements, if
any, of the Target.
8. No law, regulation or decree that
imposes materially adverse conditions
upon the Borrower; and neither the
Facilities nor the transactions
contemplated by the Facilities will
conflict with, violate or result in a
default under any contract, agreement or
instrument to which the Borrower is a
party.
9. The Borrower shall have acquired
sufficient shares of Target Stock to
enable Bid Co, voting without any other
shareholders of the Target, to approve a
merger of Bid Co with the Target.
10. The Borrower shall have received no less
than $1.5 billion as a capital
contribution from the Parent Guarantor
from the proceeds of a European equity
swap facility.
Conditions Precedent to all
Borrowings: Customary for facilities of this nature
including, but not limited to:
1. All representations and warranties are
true and correct in all material respects
on and as of the date of the Borrowing,
before and after giving effect to such
Borrowing and to the
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application of the proceeds therefrom, as
though made on and as of such date; provided
that the representation as to no material
adverse change and no material adverse
litigation shall be made only at the date of
effectiveness.
2. No Event of Default or event which, with the
giving of notice or passage of time or both,
would be an Event of Default, has occurred
and is continuing, or would result from such
borrowing.
Representations and Customary for facilities of this nature
Warranties: including, but not limited to:
1. Confirmation of corporate status and
authority.
2. Due authorization of the legal
documentation.
3. Execution, delivery, and performance of the
legal documentation do not violate law or
existing agreements.
4. All required governmental and regulatory
approvals have been obtained and remain in
full force and effect.
5. No litigation which would have a material
adverse effect on the business, condition
(financial or otherwise) or operations or
which would affect the legality, validity
and enforceability of legal documentation.
6. No material adverse change in the business,
condition (financial or otherwise)
operations, performance, properties or
prospects of the Parent Guarantor and the
Target taken as a whole.
7. Accuracy of information, financial
statements.
8. Material compliance with laws and
regulations, including ERISA and applicable
environmental laws and regulations.
9. Legality, validity, binding effect and
enforceability of the legal documentation.
10. Margin regulation.
11. Not an investment company.
12. The termination of the commitment of the
lenders and payment in full of all debt
outstanding under the existing Target's $250
million credit agreement at the Merger.
Financial Covenants: To be agreed between the Borrower and the
Lenders, will include:
1. Ratio of Total Debt to EBITDA to be
determined at a later date.
2. Ratio of EBITDA to Interest to be determined
at a later date.
Covenants:
Customary for facilities of this nature
including, but not limited to:
1. Preservation and maintenance of corporate
existence.
2. Material compliance with laws.
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3. Payment of taxes.
4. Payment of material obligations.
5. Visitation and inspection rights.
6. Maintenance of books and records.
7. Maintenance of properties necessary for
the due course of business.
8. Maintenance of insurance as used in the
industry.
9. Negative pledge and certain restrictions
on liens.
10. Certain restrictions on change of
business, consolidations, mergers, and
sales of assets.
11. Certain reporting requirements.
12. Use of proceeds.
13. Prior to consummation of the Merger of
the Target into BidCo (i) restriction on
indebtedness of the Target other than in
the ordinary course of business and (ii)
the Parent Guarantor will use best
efforts to cause the Target to become a
guarantor.
Events of Default: Customary for facilities of this nature
including, but not limited to:
1. Failure to pay principal when due and
failure to pay interest, fees and other
amounts within 3 business days of when
due.
2. Representations or warranties materially
incorrect.
3. Failure to comply with covenants (with
notice and cure periods as applicable).
4. Unenforceability of the loan
documentation.
5. Bankruptcy/insolvency.
6. Change of control or ownership at any
time.
7. ERISA.
Other: Legal documentation will include:
1. Customary indemnification of the Agent
and Lenders and their respective
affiliates, officers, directors,
employees, agents and advisors for any
liabilities and expenses arising out of
the Facility or the use or proposed use
of proceeds.
2. Customary agency, set-off and sharing
language.
3. Majority Lenders, as to each Tranche,
defined as those holding greater than
50% of the outstanding committed
Advances under such Facility or, if
none, commitments. The consent of all
the Lenders under each Facility will be
required to increase the size of such
Facility, to extend the maturity or to
decrease interest rates or fees with
respect to such Facility.
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Assignments and
Participations: Each Lender will have the right to assign to
one or more eligible assignees all or a portion
of its rights and obligations under the Legal
documentation, with the consent, not to be
unreasonably withheld, of the Agent and the
Borrower. Minimum aggregate assignment level of
$10,000,000 and increments of $1,000,000 in
excess thereof. The parties to the assignment
(other than the Borrower) will pay to the Agent
an administrative fee of $3,500.
Each Lender will also have the right, without
the consent of the Borrower or the Agent, to
assign (i) as security, all or part of its
rights under the legal documentation to any
Federal Reserve Bank and (ii) with notice to
the Borrower and the Agent, all or part of its
rights and obligations under the legal
documentation to any of its affiliates.
Each Lender will have the right to sell
participations in its rights and obligations
under the legal documentation, subject to
customary restrictions on the participants'
voting rights.
Yield Protection, Taxes, and
Other Deductions: The legal documentation will contain yield
protection provisions, customary for facilities
of this nature, protecting the Lenders in the
event of unavailability of funding, funding
losses, and reserve and capital adequacy
requirements.
All payments to be free and clear of any
present or future taxes, withholdings or other
deductions whatsoever (other than income taxes
in the jurisdiction of the Lender's applicable
lending office). The Lenders will use
reasonable efforts to minimize to the extent
possible any applicable taxes and the Borrower
will indemnify the Lenders and the Agent for
such taxes paid by the Lenders or the Agent.
The Borrower will have the right to replace any
Lender which requests reimbursements for
amounts owing under (1) and (2) above, provided
that (i) no Event of Default, or event which
with the giving of notice or lapse of time or
both would be an Event of Default, has occurred
and is continuing, (ii) the Borrower has
satisfied all of its obligations under the
applicable Facility relating to such Lender,
and (iii) any replacement is acceptable to the
Agent and the Borrower has paid the Agent a
$3,500 administrative fee if such replacement
Lender is not an existing Lender.
Governing Law: New York.
Counsel to the Agent: Shearman & Sterling.
Expenses: The Borrower will reimburse the Lead Arranger
and the Agent for all reasonable out-of-pocket
expenses (including fees and expenses of
counsel to the Agent) incurred by them in the
negotiation, syndication and execution of these
facilities. Such expenses will be reimbursed by
the Borrower upon presentation of a statement
of account, regardless of whether the
transaction contemplated is actually completed
or the loan documents are signed.
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