<PAGE> 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
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(Title of Class of Securities)
237823109
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(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
<PAGE> 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.
<PAGE> 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
<PAGE> 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
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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
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NUMBER EXHIBIT NAME
- ----------------- -----------------------------------------------------------
<S> <C>
(b)(1) Commitment Letter, dated June 29, 1999, from Morgan Stanley
Senior Funding, Inc. and Comerica Bank to Compuware
Corporation.
</TABLE>
6
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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").
<PAGE> 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
<PAGE> 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.
<PAGE> 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.
<PAGE> 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.
<PAGE> 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
<PAGE> 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).
<PAGE> 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.
<PAGE> 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.
<PAGE> 15
Schedule I
Pricing Grid
<TABLE>
<CAPTION>
Ratings(1) Eurodollar Margin Base Rate Margin Commitment Fee
- ---------- ----------------- ---------------- --------------
<S> <C> <C> <C>
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%
</TABLE>
- ----------
(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%.
