<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 3, 1998
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
AMENDMENT NO. 2
to
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
CORPORATE EXPRESS, INC.
(Name of Issuer)
CORPORATE EXPRESS, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK
(Title of Class of Securities)
219888-10-4
(CUSIP Number of Class of Securities)
RICHARD L. MILLETT, JR.
VICE PRESIDENT AND GENERAL COUNSEL
CORPORATE EXPRESS, INC.
1 ENVIRONMENTAL WAY
BROOMFIELD, COLORADO 80021
(303) 664-2000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of the Person(s) Filing
Statement)
Copies To:
JUSTIN P. KLEIN, ESQ.
GERALD J. GUARCINI, ESQ.
BALLARD SPAHR ANDREWS & INGERSOLL, LLP
1735 MARKET STREET, 51ST FLOOR
PHILADELPHIA, PENNSYLVANIA 19103
February 6, 1998
(Date Tender Offer First Published,
Sent or Given to Security Holders)
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
=======================================================================================================
TRANSACTION AMOUNT OF
VALUATION* FILING FEE
- -------------------------------------------------------------------------------------------------------
<S> <C>
$402,500,000 $80,500
=======================================================================================================
</TABLE>
* Calculated solely for the purpose of determining the filing fee, based upon
the purchase of 35,000,000 shares of Common Stock at the maximum tender
offer price per share of $11.50.
[X] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount Previously Paid: $80,500 Filing Party: Corporate Express, Inc.
Form or Registration No.: Schedule 13E-4 Date Filed: February 6, 1998
</TABLE>
================================================================================
<PAGE> 2
The Issuer Tender Offer Statement on Schedule 13E-4 dated February 6, 1998
as amended by Amendment No. 1 to Schedule 13E-4 dated March 2, 1998 relating to
the offer by Corporate Express, Inc. (the "Company") to purchase up to
35,000,000 shares (or the maximum of any lesser number of shares as are
validly tendered and not withdrawn) of its Common Stock, par value $.0002 per
share (such shares, together with the associated purchase rights, the
"Shares"), at prices not greater than $11.50 nor less than $10.00 net per Share
in cash upon the terms and subject to the conditions set forth in the Company's
Offer to Purchase dated February 6, 1998 and in the related Letter of
Transmittal (together, the "Offer"), is hereby amended as follows:
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(b) The information set forth in the Press Release dated April 2, 1998
included herewith as Exhibit (a)(13) and in the Commitment Letter
dated March 19, 1998 included herewith as Exhibit (b)(1) is
incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a) (13) Form of Press Release issued by the Company on
April 2, 1998.
(b) (1) Commitment letter dated March 19, 1998.
2
<PAGE> 3
\
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Amendment No. 2 to Schedule 13E-4
is true, complete and correct.
CORPORATE EXPRESS, INC.
By: /s/ SAM R. LENO
-------------------------------
Name: Sam R. Leno
Title: Executive Vice President and
Chief Financial Officer
Dated: April 2, 1998
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<S> <C> <C>
(a) (13) -- Form of Press Release issued by the Company on
April 2, 1998.
(b) (1) -- Commitment Letter dated March 19, 1998.
</TABLE>
<PAGE> 1
EXHIBIT (a)(13)
CORPORATE EXPRESS ANNOUNCES
NEW $1 BILLON CREDIT FACILITY
BROOMFIELD, COLORADO (April 2, 1998) - - Corporate Express, Inc., (Nasdaq:
CEXP) a leading supplier of non-production goods and services to large
corporations, announced today the financing for its issuer tender offer to
purchase up to 35,000,000 shares of its common stock at a purchase price not
greater than $11.50 nor less than $10.00 per share. The Company will fund the
purchase of such shares and the payment of related fees and expenses through
borrowings by its wholly owned subsidiary, CEX Holdings, Inc., under a new $1
billion senior secured bank credit facility underwritten by Bankers Trust
Company. CEX Holdings will also use borrowings under the new credit facility to
repay and terminate its existing bank credit facility and for general corporate
and working capital requirements. Under the new facility, The First National
Bank of Chicago is expected to serve as syndication agent; DLJ Capital Funding,
Inc. and The Bank of New York are expected to serve as co-documentation agents;
and, Bankers Trust Company is expected to serve as administrative agent for a
syndicate of financial institutions. The new credit facility will consist of a
$250 million seven-year senior secured term loan facility and a $750 million
five-year senior secured revolving credit facility.
The Company and its domestic subsidiaries will guarantee the credit
facilities. The credit facilities and guarantees will be secured by a security
interest in all the assets of CEX Holdings and the guarantors, subject to
certain exceptions to be agreed upon by the lenders and the Company.
<PAGE> 2
CEX Holdings may elect that borrowings under the credit facilities bear
interest at an applicable margin above the prime lending rate or LIBOR, with the
applicable margin based upon the ratio of total debt to earnings before
interest, taxes, depreciation and amortization. The new credit facility will
also contain certain customary representations and warranties, covenants and
conditions. A copy of the final Commitment Letter between the Company and
Bankers Trust Company will be filed as an exhibit to an amended Issuer Tender
Offer Statement on Schedule 13E-4/A being filed with the Securities and Exchange
Commission this week.
The Company currently anticipates that borrowings under the credit
facilities will be repaid out of cash generated from the Company's operations.
In addition, depending on business and market conditions, the Company intends to
refinance a portion of the borrowings with proceeds from the sale of debt
securities in the near future.
The Company also announced that, as a result of the tender offer, the
Company's November 1997 acquisition of Data Documents Incorporated, previously
accounted for as a pooling of interests, would be reclassified to the purchase
method of accounting. The Company announced that it will promptly file a Form
10-Q/A with the Securities and Exchange Commission to amend its Quarterly Report
for the period ending November 29, 1997 to reflect this accounting
reclassification.
2
<PAGE> 1
EXHIBIT (b)(1)
BANKERS TRUST COMPANY
ONE BANKERS TRUST PLAZA
NEW YORK, NEW YORK 10006
March 19, 1998
Corporate Express, Inc.
1 Environmental Way
Broomfield, Colorado 80021
Attention: Jirka Rysavy
re Stock Repurchase Transaction -
Senior Secured Financing Commitment Letter
Gentlemen:
You have advised Bankers Trust Company ("BTCo") that Corporate
Express, Inc. (the "Parent"), parent to CEX Holdings, Inc. (the "Borrower"),
plans to consummate a transaction whereby the Borrower would (i) repurchase
(the "Stock Repurchase") up to $600 million of the Parent's common stock, no
more than $500 million of which may be repurchased on the Closing Date, and
(ii) refinance certain of its existing indebtedness (collectively, the
"Refinancing") consisting of the repayment of all indebtedness (with
approximately $250 million outstanding on the date hereof) under, and the
termination of the existing commitments under, the Borrower's existing credit
facility. It is our understanding that the aggregate amount needed to effect
the Stock Repurchase and the Refinancing and to pay fees and expenses in
connection with the Transaction (as defined below) on the Closing Date shall
not exceed $765 million (reduced by an amount equal to the difference between
$500 million and the purchase price of the Parent's common stock actually
repurchased pursuant to the Stock Repurchase on the Closing Date if less than
$500 million).
In connection with the Stock Repurchase and Refinancing and to
finance same, you have informed us that senior secured bank financing of up to
$1.0 billion (the "Senior Secured Financing") is required by the Borrower (with
the incurrence of the Senior Secured Financing, together with the Stock
Repurchase and the Refinancing being herein collectively referred to as the
"Transaction").
The sources of funds needed to effect the Transaction and to
pay all fees and expenses incurred in connection with the Transaction and to
provide for ongoing working capital and general corporate purposes (including
Permitted Acquisitions (as defined herein)), shall be
<PAGE> 2
provided through the Senior Secured Financing, and after giving effect thereto
on the Closing Date the Parent and its subsidiaries shall have no other
indebtedness except (i) up to $325,000,000 in aggregate principal amount of the
Parent's existing convertible debt securities (the "Existing Convertible
Notes"), (ii) $90 million of the Borrower's existing 9-1/8% senior subordinated
notes ("the Existing Senior Subordinated Notes"), and (iii) up to $125 million
of other indebtedness. A summary of certain terms of the Senior Secured
Financing 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 Exhibit
A or in the related fee letter dated the date hereof (the "Fee Letter") are
subject to mutual agreement of the parties. The terms and conditions of this
commitment may be modified only in writing signed by each of the parties
hereto.
BTCo is pleased to confirm that, subject to the terms and
conditions set forth herein and in the Term Sheet, it commits to provide 100%
of the $1.0 billion Senior Secured Financing. BTCo shall in any event act as
Administrative Agent (in such capacity, the "Administrative Agent"), and BTCo
(or an affiliate designated by BTCo) shall act as an arranger, with respect to
the Senior Secured Financing. It is understood that certain other Lenders (as
defined below) may be given titles with respect to the Senior Secured Financing
as may be mutually agreed by BTCo and you; provided that the roles of such
other Lenders, and all compensation payable thereto, shall be required to be
satisfactory to BTCo and (except for compensation paid by BTCo to such Lender
or Lenders) you.
BTCo reserves the right, prior to or after execution of the
definitive credit documentation for the Senior Secured Financing, to syndicate
all or part of its commitment for the Senior Secured Financing 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
BTCo. BTCo may commence syndication efforts promptly after the execution of
this letter by you and you agree actively to assist BTCo in achieving a
syndication that is satisfactory to BTCo. Such syndication will be carried out
in consultation with you (with the Lenders included in the syndication to be
subject to your consent, not to be unreasonably withheld or delayed) and will
be accomplished by a variety of means, including direct contact during the
syndication between senior management and advisors of the Parent, the Borrower
and the proposed syndicate members. To assist BTCo in its syndication efforts,
you hereby agree (i) to provide and cause your advisors to provide BTCo and the
other prospective syndicate members upon request with all information
reasonably deemed necessary by BTCo to complete syndication, including but not
limited to information and evaluations prepared by you and your advisors or on
your behalf relating to the Transaction contemplated hereby, (ii) to assist
BTCo, upon request, in the preparation of an Information Memorandum to be used
in connection with the syndication of the Senior Secured Financing and (iii) to
make available the senior officers and representatives of the Parent and the
Borrower, in each case from time to time and to attend and make presentations
regarding the business and prospects of the Parent and its subsidiaries at a
meeting or meetings of Lenders or prospective Lenders.
It is understood and agreed that BTCo shall be entitled, after
consultation with you, to allocate (and following the initial allocation, to
re-allocate) the aggregate amount of its commitments with respect to the Senior
Secured Financing to the sub-facilities (i.e., the Term Loan Facility and/or
the Revolving Facility) in a manner different from that set forth herein and in
-2-
<PAGE> 3
the Term Sheet, if BTCo deems such actions advisable in order to ensure
successful syndication, provided that the aggregate of its commitment under the
facilities remains the same.
BTCo's commitment hereunder (and willingness to provide and/or
participate in the Senior Secured Financing) is subject to (a) there not
occurring or becoming known to BTCo any material adverse condition or material
adverse change in or affecting the business, property, assets, nature of
assets, liabilities, condition (financial or otherwise) or prospects of the
Borrower or of the Parent and its subsidiaries taken as a whole, (b) BTCo not
becoming aware after the date hereof of any information not previously known to
BTCo which BTCo believes is materially negative information with respect to the
condition (financial or otherwise), business, operations, assets, liabilities
or prospects of the Borrower or the Parent and its subsidiaries taken as a
whole, or which is inconsistent in a material and adverse manner with any such
information or other matter disclosed to such BTCo prior to the date hereof,
(c) there not having occurred a material disruption of or material adverse
change in financial, banking or capital market conditions that, in the BTCo's
reasonable judgment, could materially impair the syndication of the Senior
Secured Financing, (d) BTCo's reasonable satisfaction that prior to and during
the syndication of the Senior Secured Financing there shall be no competing
offering, placement or arrangement of any debt securities or bank financing by
or on behalf of the Parent or any of its subsidiaries or affiliates and (e) the
other conditions set forth or referred to in the Term Sheet. As of the date
hereof, BTCo is not aware of any conditions listed in clauses (a) through (d)
above that would cause its commitment to terminate.
To induce BTCo to issue this letter, you hereby agree that all
reasonable out-of-pocket fees and expenses (including the reasonable fees and
expenses of counsel) of BTCo and its affiliates arising after the date hereof
(and in the case of counsel, reasonable fees and expenses arising on or prior
to the date hereof) in connection with this letter (and the syndication efforts
in connection herewith) and in connection with the transactions described
herein shall be for your account, whether or not the Transaction is
consummated, the Senior Secured Financing 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 enclosed Fee Letter. You further agree to
indemnify and hold harmless each of the Lenders (including, in any event, BTCo)
and each director, officer, employee 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
Transaction or the extension of the Senior Secured Financing contemplated by
this letter, or in any way arising from any use or intended use of this letter
or the proceeds of the Senior Secured Financing contemplated by this letter,
and you agree to reimburse each indemnified person for any legal or other
out-of-pocket expenses incurred in connection with investigating, defending or
preparing to defend any such action, suit, proceeding (including any inquiry or
investigation) or claim (whether or not such 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. This letter is issued for your benefit only and no other person or
entity may
-3-
<PAGE> 4
rely hereon. Neither BTCo nor any Lender shall be responsible or liable to you
or any other person for consequential damages which may be alleged as a result
of this letter.
BTCo 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 BTCo in such
manner as BTCo and such affiliates may agree in their sole discretion. You
acknowledge that BTCo may share with any of its affiliates, and such affiliates
may share with BTCo, any information related to the Transaction, the Parent,
the Borrower and their respective subsidiaries and affiliates, or any of the
matters contemplated hereby.
The provisions of the immediately preceding two paragraphs
shall survive any termination of this letter.
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. 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 us (including by way of facsimile transmission) the enclosed copy of
this letter, together with the Fee Letter, no later than 5:00 p.m., Mountain
Standard time, on March 19, 1998. 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 LAWS 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,
BANKERS TRUST COMPANY
By /s/ Victoria Page
------------------------------------
Title:
Agreed to and Accepted this
19th day of March, 1998:
CORPORATE EXPRESS, INC.
By /s/ Gary M. Jacobs
--------------------------------
Title: EVP
-5-
<PAGE> 6
EXHIBIT A
SUMMARY OF CERTAIN TERMS
OF CREDIT FACILITIES
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 Credit Facilities
Borrower: CEX Holdings, Inc. (the "Borrower")
Total Credit
Facility: $1,000,000,000.
Credit
Facilities: 1. Term Loan Facility in an aggregate
principal amount of $250,000,000 (the
"Term Loan Facility").
2. Revolving Credit Facility in an
aggregate principal amount of
$750,000,000 (the "Revolving
Facility").
A. Term Loan Facility
Use of
Proceeds: The loans made pursuant to the Term Loan Facility
(the "Term Loans") may only be incurred on
the Closing Date and the proceeds thereof shall be
utilized solely to finance, in part, the Transaction
and the payment of fees and expenses relating
thereto.
Maturity: The final maturity of the Term Loan Facility shall be
7 years from the Closing Date (the "Term Maturity
Date").
Amortizations: (i) During the first 5 years following the Closing
Date, annual amortization (payable in equal
quarterly installments) of the Term Loans shall be
required in an amount equal to 1% of the initial
aggregate principal amount of Term Loans.
(ii) The remaining aggregate principal amount of Term
Loans originally incurred shall be subject to eight
equal quarterly amortization payments occurring in
the sixth and seventh years after the Closing Date.
Availability: Term Loans may only be incurred on the Closing Date.
No amount of Term Loans once repaid may be reborrowed.
<PAGE> 7
Exhibit A
Page 2
B. Revolving Facility
Use of Proceeds: The loans made pursuant to the Revolving Facility
(the "Revolving Loans") shall be utilized for
the Borrower's and its subsidiaries' general
corporate and working capital requirements, including
funding the portion of the Stock Repurchase which is
not consummated on the Closing Date and Permitted
Acquisitions; provided that no more than $515,000,000
(reduced by an amount equal to the difference between
$500 million and the purchase price of the Parent's
common stock actually repurchased pursuant to the
Stock Repurchase on the Closing Date if less than
$500 million) of Revolving Loans may be used to
finance the Transaction; provided, further, no
proceeds of Revolving Loans may be used to redeem
Existing Convertible Notes at maturity or otherwise
except as expressly set forth in subsection (a)(x) of
the Covenants section below. A sub-limit of the
Revolving Facility to be agreed upon will be
available for the issuance of stand-by and trade
letters of credit ("Letters of Credit") to support
obligations of the Borrower and its subsidiaries of
types to be specified in the credit documentation.
Maturities for the Letters of Credit will not exceed
twelve months, renewable annually thereafter and, in
any event, shall not extend beyond the tenth business
day prior to the Revolving Maturity Date.
Maturity: The final maturity of the Revolving Facility shall be
the fifth anniversary of the Closing Date (the
"Revolving Maturity Date").
Availability: Revolving Loans may be borrowed, repaid and
reborrowed on and after the Closing Date and prior
to the Revolving Maturity Date.
II. Terms Applicable to All Credit Facilities
Administrative
Agent: BTCo.
Lenders: BTCo and/or a syndicate of lenders formed by BTCo
(the "Lenders").
Required Lenders: Lenders having aggregate commitments and/or
outstandings (as appropriate) pertaining to all
tranches (taken in the aggregate) in excess of 50%.
Guaranties: Parent and each direct and indirect domestic
subsidiary (other than the Borrower) of the Parent or
the Borrower (each a "Guarantor" and, collectively,
the "Guarantors") shall be required to provide an
unconditional guaranty of all amounts owing under the
Senior Secured Financing (the "Guaranties"), with
such exceptions (including without limitation
exceptions to be agreed for insignificant
subsidiaries) as are
<PAGE> 8
Exhibit A
Page 3
satisfactory to BTCo. The Guaranties shall contain
terms and conditions satisfactory to BTCo and
customary for transactions of this type.
Security: All amounts owing under the Senior Secured Financing
(and all obligations under the Guaranties) will be
secured by (x) a first priority perfected security
interest in all stock and promissory notes owned by
the Borrower and the Guarantors and (y) a first
priority perfected security interest in all other
tangible and intangible assets (including
receivables, contract rights, securities, patents,
trademarks, other intellectual property, inventory,
equipment, real estate and leasehold interests) owned
by the Borrower and each Guarantor, subject (in each
case) to exceptions satisfactory to BTCo. Such
exceptions shall include, without limitation, (i)
vehicles where security interests cannot be perfected
by UCC filings, (ii) real estate with an aggregate
value (net of mortgage liens) of less than $10
million and (iii) other exceptions to be agreed upon
where the expense of perfecting security interests is
large in relation to the liquidation value of the
collateral which would otherwise be required to be
subject to perfected security interests. It is
expressly understood that landlord lien waivers and
fixture filings (except where the fixtures relate to
real property in which mortgages are being granted)
will generally not be required.
All documentation (collectively referred to herein as
the "Security Agreements") evidencing the security
required pursuant to the immediately preceding
paragraph shall be in form and substance satisfactory
to BTCo and customary for transactions of this type,
and shall effectively create first priority security
interests in the property purported to be covered
thereby, with such exceptions as are acceptable to
BTCo in its reasonable discretion. With respect to
certain intervening liens (to be agreed), the
Borrower shall have a period of time to be agreed
with BTCo to cause the removal thereof. Furthermore,
to the extent security interests are required to be
granted as described above (with respect to
collateral other than securities and collateral a
security interest in which may be perfected by UCC
filings), the Borrower shall (to the extent such
security interests are not perfected at closing) be
granted a period of time to be agreed by BTCo for the
completion of the actions needed to obtain perfected
security interests as required above.
Optional Commitment
Reductions: The unutilized portion of the total commitments may
be reduced or terminated by the Borrower at any time
without penalty.
Voluntary
Prepayments: Voluntary prepayments may be made at any time on one
business days' notice without premium or penalty,
provided that voluntary prepayments of Eurodollar
Loans made on a date other than the last day of an
interest
<PAGE> 9
Exhibit A
Page 4
period applicable thereto shall be subject to
customary breakage costs. Voluntary prepayments of
Term Loans shall be applied to reduce future
scheduled amortization payments on a pro rata basis.
Mandatory
Repayments: Mandatory repayments of Term Loans shall be required
from (a) 100% of the proceeds (net of taxes and costs
and expenses in connection with the sale) from asset
sales by the Borrower and its subsidiaries (subject
to (x) reinvestment rights (including without
limitation Permitted Acquisitions) with respect to
asset sales generating net cash proceeds below a
threshold to be negotiated and from proceeds of the
sale of Existing Negotiable Securities and (y) de
minimis exceptions to be negotiated), (b) 100% (which
percentage will be reduced based on the satisfaction
of performance criteria to be agreed upon) of the net
proceeds from issuances of senior debt (subject to
the immediately succeeding sentence and with other
appropriate exceptions (including exceptions for
certain debt to be incurred by foreign subsidiaries)
to be mutually agreed upon) by the Borrower and its
subsidiaries and (c) 100% of the net proceeds from
casualty and condemnation insurance recovery events
aggregating over $10 million in any fiscal year of
the Borrower and its subsidiaries (subject to certain
reinvestment rights to be negotiated). Mandatory
repayments of outstanding Revolving Loans shall be
required from 100% of the proceeds (to be defined in
a manner to be mutually agreed upon) of the Permitted
Receivables Facility. At all time after a Permitted
Receivables Facility is entered into, there shall at
all times be "Blocked Commitments" under the
Revolving Facility (which may not be utilized) in an
amount (if greater than zero) equal to the remainder
of (x) 100% of the outstandings (to be defined in a
manner to be mutually agreed upon) under the
Permitted Receivables Facility from time to time less
(y) the aggregate amount of all permanent reductions
to the Revolving Facility theretofore effected
pursuant to the following proviso; provided that at
any time when an amount of Blocked Commitments has
continued in effect for a period of 180 consecutive
days, there shall be a permanent reduction of the
Revolving Facility in an amount equal to the lowest
amount of the "Blocked Commitments" during such 180
day period. As used herein, the term "Existing
Negotiable Securities" shall mean certain existing
investments of the Borrower in either unrelated third
parties or unrestricted subsidiaries disclosed to
BTCo, so long as the aggregate fair market value
thereof does not exceed $30 million; provided that in
no event shall the term Existing Negotiable
Securities include any stock, debt or other
securities of any restricted subsidiaries or joint
venture of the Parent, the Borrower or any of their
respective subsidiaries.
All mandatory repayments of Term Loans made pursuant
to clauses (a) through (c) above will be applied to
reduce future scheduled amortization
<PAGE> 10
Exhibit A
Page 5
payments on a pro rata basis. To the extent the
amount of any mandatory repayment which would
otherwise be required as provided above exceeds the
aggregate principal amount of Term Loans then
outstanding, such excess shall apply to reduce the
commitments under the Revolving Facility. In
addition, if at any time the outstandings pursuant to
the Revolving Facility exceed the aggregate
commitments with respect thereto, prepayments shall
be required in an amount equal to such excess.
Interest
Rates: At the Borrower's option, Loans under the Term Loan
Facility and the Revolving Facility 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, provided, that
until the earlier of (x) the date upon which BTCo
shall determine in its sole discretion that the
primary syndication has been completed and (y) the
65th day after the Closing Date, the following
restrictions shall apply: (i) prior to the fifth day
after the Closing Date, no Eurodollar Loans may be
incurred and (ii) thereafter (and until the 65th day
after the Closing Date) no more than two Eurodollar
Loans may be incurred, each of which shall have a one
month interest period and the second such Eurodollar
Loan may only be incurred on the last day of the
first such interest period.
"Applicable Margin" shall mean a percentage per annum
equal to the respective margins set forth on Annex I
hereto for Base Rate Loans or Eurodollar Loans, as
the case may be; provided that at any time when a
default or event of default is in existence, the
highest pricing set forth on Annex I hereto shall
apply.
"Base Rate" shall mean the highest of (x) 1/2 of 1%
in excess of the Federal Reserve reported certificate
of deposit rate, (y) the rate that the Administrative
Agent announces from time to time as its prime
lending rate, as in effect from time to time and (z)
1/2 of 1% in excess of the adjusted certificate of
deposit rate.
Interest periods of 1, 2, 3 and 6 months shall be
available in the case of Eurodollar Loans.
The Credit Facilities shall include customary
protective provisions for such matters as defaulting
banks, 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
<PAGE> 11
Exhibit A
Page 6
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
commitment fees shall be based on a 360-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
(determined by reference to the highest pricing set
forth on Annex I hereto) of the respective tranche
from time to time and (ii) the rate which is 2% in
excess of the rate then borne by such borrowings
(determined by reference to the highest pricing set
forth on Annex I hereto). Such interest shall be
payable on demand.
Commitment Fees: Commitment Fees shall be payable at a rate per annum
equal to the Applicable Commitment Commission
Percentage of the unutilized commitments (with both
Loans and outstanding Letters of Credit being
utilizations of the commitments) of each Lender under
the Credit Facilities, as in effect from time to
time, commencing on the Closing Date to and including
the termination of the Senior Secured Financing,
payable quarterly in arrears.
"Applicable Commitment Commission Percentage" shall
mean the percentage per annum specified in Annex I
hereto under the heading "Applicable Commitment
Commission Percentage"; provided that any time when a
default or event of default is in existence, the
highest margin set forth on Annex I hereto shall
apply.
Letter of Credit
Fees: A letter of credit fee equal to the Applicable Margin
for Revolving Loans maintained as Eurodollar Loans
(the "Letter of Credit Fee") to be shared
proportionately by the Lenders in accordance with
their participation in the respective Letter of
Credit, and a facing fee of 1/4 of 1% per annum (the
"Facing Fee") to be paid to the issuer of each 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.
Letter of Credit Fees and Facing Fees shall be
payable quarterly in arrears. 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.
<PAGE> 12
Exhibit A
Page 7
BTCo/Lender Fees: BTCo and the other Lenders shall receive such fees as
have been separately agreed upon.
Assignments and
Participations: The Borrower may not assign its rights or obligations
under the Senior Secured Financing without the prior
written consent of the Lenders. Any Lender may
assign, and may sell participations in, its rights
and obligations under the Senior Secured Financing,
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 BTCo
(including a (i) minimum assignment amount of
$10,000,000 (or, if less, the entirety of such
assignor's commitments), (ii) assignment fees in the
amount of $5,000 to be paid by the respective
assignor or assignee to the Administrative Agent and
(iii) the receipt of the consent of the
Administrative Agent). The Senior Secured Financing
shall provide for a mechanism which will allow for
each assignee to become a direct signatory to the
Senior Secured Financing and will relieve the
assigning Lender of its obligations with respect to
the assigned portion of its commitment.
Documentation;
Governing Law: The Lenders' commitments will be subject to the
negotiation, execution and delivery of definitive
financing agreements (and related security
documentation, guaranties, etc.) consistent with the
terms of this Term Sheet, in each case prepared by
counsel to BTCo, and satisfactory to BTCo 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.
Commitment
Termination: The commitments hereunder shall terminate on May 15,
1998 unless definitive documentation has been
executed and delivered and the initial borrowing has
occurred under the Credit Facilities (with the date
of such initial borrowing being herein called the
"Closing 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. To the Initial Loans
(i) All terms, conditions and documentation
(collectively, the "Stock Repurchase
Documents") in respect of the Stock
Repurchase shall
<PAGE> 13
Exhibit A
Page 8
be reasonably satisfactory to BTCo. All
conditions precedent to the consummation of
the Stock Repurchase as set forth in the
Stock Repurchase Documents shall have been
satisfied, and not waived except with the
consent of BTCo, to the reasonable
satisfaction of BTCo. The Stock Repurchase
shall have been consummated in accordance
with the Stock Repurchase Documents and all
applicable laws.
(ii) BTCo shall have completed and be satisfied
with (x) its legal and business due diligence
(including, without limitation, as to
environmental and tax matters) with respect
to the Parent, the Borrower and their
respective subsidiaries and (y) its review of
the structure of the Transaction, including
legal and tax aspects.
(iii) Each element of the Transaction shall have
been consummated to the reasonable
satisfaction of BTCo. After giving effect to
the consummation of the Transaction, the
Parent and its subsidiaries shall have no
outstanding indebtedness, except for
indebtedness incurred pursuant to (i) the
Senior Secured Financing (ii) the Existing
Convertible Notes, (iii) the Existing Senior
Subordinated Notes and (iv) up to $125
million of other secured and unsecured
indebtedness as described in the third
paragraph of the Commitment Letter. The
terms of all indebtedness which is to remain
outstanding after giving effect to the
consummation of the Transaction shall be
reasonably satisfactory to BTCo and there
shall exist no default or event of default
thereunder, no change of control or similar
event which would require any offers to
repurchase same, and no uncured breach
thereof (except to the extent that the
occurrences described above relate to an
immaterial portion of the indebtedness
described in clause (iv) of the immediately
preceding sentence). All stock of the
Parent's direct and indirect subsidiaries
(except to the extent of minority interests
in subsidiaries existing prior to the Closing
Date which have previously been disclosed to
BTCo) shall be owned by the Parent (or the
respective subsidiary which is the direct
owner of equity interests in any indirect
subsidiary of the Parent), in each case free
and clear of liens (other than those securing
the Senior Secured Financing).
(iv) All necessary governmental (domestic and
foreign) and third party approvals and/or
consents in connection with the Transaction,
the transactions contemplated by the Credit
Facilities and otherwise referred to herein
shall have been obtained and remain in effect
(other than immaterial approvals and/or
consents with respect to the Stock
Repurchase) and all applicable waiting
periods shall have
<PAGE> 14
Exhibit A
Page 9
expired without any action being taken by any
competent authority which, in the judgment of
BTCo, restrains, prevents, or imposes
materially adverse conditions upon, the
consummation of the Transaction or the
transactions contemplated by the Credit
Facilities 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 Transaction or
the transactions contemplated by the Credit
Facilities.
(v) Nothing shall have occurred (and BTCo shall
have become aware of no facts or conditions
not previously known) which BTCo shall
determine is reasonably likely to have a
material adverse effect on the rights or
remedies of the Lenders or BTCo, or on the
ability of the Parent, the Borrower or their
respective subsidiaries to perform their
obligations to the Lenders or which is
reasonably likely to have a materially
adverse effect on the business, property,
assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or of
the Parent and its subsidiaries taken as a
whole, in each case after giving effect to
the consummation of the Transaction.
(vi) No litigation by any entity (private or
governmental) shall be pending or threatened
with respect to the Credit Facilities or any
documentation executed in connection
therewith, or with respect to the
Transaction, or which BTCo shall determine is
reasonably likely to have a materially
adverse effect on the Transaction or on the
business, property, assets, liabilities,
condition (financial or otherwise) or
prospects of the Borrower or of the Parent
and its subsidiaries taken as a whole, in
each case after giving effect to the
consummation of the Transaction.
(vii) The Lenders shall have received legal
opinions from counsel, and covering matters,
reasonably acceptable to BTCo.
(viii) All agreements relating to, and the corporate
and capital structure of, the Parent and its
subsidiaries, and all organizational
documents of the Parent and its subsidiaries,
in each case as the same will exist after
giving effect to the consummation of the
Transaction, shall be reasonably satisfactory
to BTCo.
(ix) All loans and other financing to be made
pursuant to the Transaction shall be in full
compliance with all applicable requirements
of the margin regulations.
<PAGE> 15
Exhibit A
Page 10
(x) All costs, fees, expenses (including, without
limitation, reasonable legal fees and
expenses) and other compensation contemplated
hereby, payable to the Lenders and BTCo or
payable in respect of the Transaction, shall
have been paid to the extent due.
(xi) The Lenders shall have received a solvency
certificate in form and substance
satisfactory to BTCo, from the chief
financial officer of the Borrower, setting
forth the conclusions that, after giving
effect to the Transaction and the incurrence
of all the financings contemplated herein,
each of the Borrower, individually, and the
Parent and its subsidiaries, taken as a
whole, are not insolvent and will not be
rendered insolvent by the indebtedness
incurred in connection therewith, and will
not be left with unreasonably small capital
with which to engage in their businesses and
will not have incurred debts beyond their
ability to pay such debts as they mature.
(xii) The Lenders shall have received environmental
and hazardous substance disclosure schedules
which are acceptable to BTCo. The Lenders
shall also have received such other
information with respect to environmental
matters as may have been reasonably requested
by BTCo, and BTCo shall be reasonably
satisfied therewith.
(xiii) After giving effect to the Transaction, the
financings incurred in connection therewith
and the other transactions contemplated
hereby, there shall be no conflict with, or
default under, any material agreement of the
Parent or any of its subsidiaries.
(xiv) The Guaranties and Security Agreements
required hereunder shall have been executed
and delivered in form, scope and substance
satisfactory to BTCo, and the Lenders shall
have a first priority perfected security
interest in all assets of the Parent and the
other Guarantors as and to the extent
required above.
(xv) Receipt by BTCo of satisfactory historical
financial statements for the Parent and its
subsidiaries, a pro forma balance sheet of
the Parent and its subsidiaries after giving
effect to the Transaction, and projections
for the Parent and its subsidiaries after
giving effect to the Transaction, in each
case for periods, and in form and substance,
satisfactory to BTCo.
(xvi) There shall have been no material adverse
change, after the date hereof and prior to
the completion as determined by BTCo of the
primary syndication of the Senior Secured
Financing, to the syndication market for
credit facilities similar in nature to the
Credit
<PAGE> 16
Exhibit A
Page 11
Facilities 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 the primary
syndication, in each case as determined by
BTCo in its reasonable discretion. The
Parent and the Borrower shall have fully
cooperated in the syndication efforts,
including without limitation by promptly
providing BTCo with all information
reasonably deemed necessary by it to
successfully complete the syndication.
B. To All Loans
Absence of material adverse change, absence
of material litigation, absence of default or
unmatured default under the Senior Secured
Financing, and continued accuracy of
representations and warranties in all
material respects.
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.
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 Parent 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 (with exceptions
to include indebtedness
incurred in connection with
the Permitted Receivables
Facility (as defined below)
and Acquired Indebtedness in
amounts and on terms and
conditions satisfactory to
the Required Lenders).
(ii) Limitations on mergers,
acquisitions, joint ventures,
partnerships and acquisitions
and dispositions of assets,
provided that (x) the
Borrower shall be permitted
to enter into an accounts
receivable facility (in an
amount to be determined), on
terms and conditions
satisfactory to the Required
Lenders (the "Permitted
Receivables Facility"), (y)
the Borrower shall be
permitted to sell a division
of the Borrower previously
identified to BTCo. (as same
currently exists) at fair
market
<PAGE> 17
Exhibit A
Page 12
value (as determined in faith
by the Borrower) so long as
at least 75% of aggregate
consideration therefor
consists of cash (and so long
as all mandatory repayments
as described above under the
heading "Mandatory
Repayments" are made with the
net cash proceeds therefrom)
and (z) the Borrower shall be
permitted to sell, for cash
and at fair market value (as
determined in good faith by
the Borrower) the Existing
Negotiable Securities, the
proceeds of which will not be
required to be applied as
otherwise required under the
heading " Mandatory
Repayments" above.
(iii) Limitations on dividends and
other restricted payments
provided that so long as no
default or event of default
then exists (and would not
exist after giving effect
thereto), the Borrower shall
be able to advance funds to
the Parent to pay interest on
the Existing Convertible
Notes (or any replacement or
refinancing thereof).
(iv) Limitations on voluntary
prepayments of other
indebtedness (with exceptions
to be agreed) and amendments
thereto, and amendments to
organizational documents.
(v) Limitations on transactions
with affiliates.
(vi) Limitations on investments
provided that so long as no
default or event of default
then exists (and would not
exist after giving effect
thereto), the Borrower shall
be permitted to make certain
investments in unrestricted
subsidiaries and other
investments in amounts and on
terms acceptable to BICo, and
in any event with proceeds of
any sale of Existing
Negotiable Securities.
(vii) Maintenance of existence and
properties.
(viii) Limitations on liens.
(ix) Various financial covenants to
be agreed, including, but not
limited to:
<PAGE> 18
Exhibit A
Page 13
(a) Minimum Interest Coverage
(defined as the ratio of
Consolidated EBITDA of the
Borrower to Consolidated
Interest Expense of the
Parent);
(b) Minimum Fixed Charge
Coverage Ratio (defined as
the ratio of Consolidated
EBITDAR of the Borrower to
the sum of Consolidated
Interest Expense and Rent
Expense of the Parent); and
(c) Maximum Leverage Ratio
(defined as the ratio of
Consolidated Debt of the
Borrower to Consolidated
EBITDA of the Borrower),
which Maximum Leverage Ratio
shall initially be 5.0 x,
reducing after the Closing
Date on a basis to be agreed.
(xi) Limitations on capital
expenditures.
(xii) Adequate insurance coverage.
(xiii) ERISA covenants.
(xiv) Financial reporting, notice of
environmental, ERISA-related
matters and material
litigation and visitation and
inspection rights.
(xv) Compliance with laws,
including environmental and
ERISA.
(xvi) Payment of taxes and other
liabilities.
(xvii) Limitations on material
changes in nature of business.
(xviii) The obtaining of interest rate
protection in amounts and for
periods to be mutually
agreed.
Notwithstanding anything to the contrary contained
above, the covenants described above shall expressly
permit the following:
(a) So long as no default or event of default
then exists (and would not exist after giving
effect thereto), the Borrower may (x) fund
that portion of the Stock Repurchase (to the
extent not consummated
<PAGE> 19
Exhibit A
Page 14
on the Closing Date) which requires the
utilization of an amount equal to the
difference between $500 million and the
purchase price of the Parent's common stock
actually repurchased pursuant to the Stock
Repurchase on the Closing Date if less than
$500 million, (y) fund the last $100 million
of the Stock Repurchase and redeem Existing
Convertible Notes at maturity, but in each
case described in this clause (y) only
following a new senior subordinated notes
offering which generates net cash proceeds of
$250 million (after reduction for amounts
used to redeem, repay or repurchase Existing
Senior Subordinated Notes) and (z) fund
Permitted Acquisitions (to be defined)
subject to a cap of $200 million for any
individual acquisition; provided that after
giving effect to any action as described
above in clause (x), (y) or (z) immediately
above, the Borrower shall be required to have
available liquidity of at least $75 million
and the Leverage Ratio shall be less than or
equal to 4.50 x, which ratio shall step down
over time in relation to the Maximum Leverage
covenant described above;
(b) So long as no default or event of default
then exists (and would not exist after giving
effect thereto), the Borrower shall be
permitted to transfer assets to wholly or
partially owned subsidiaries (and such
transfers shall not be subject to mandatory
prepayments) (x) so long as fair market value
is received by the transferor or (y) the
aggregate amount of such asset transfers do
not exceed a basket to be agreed upon; and
(c) So long as no default or event of default
then exists (and would not exist after giving
effect thereto), the Borrower shall be
permitted to repurchase shares of non-wholly
owned subsidiaries at prices not to exceed
the fair market value thereof; provided that
the Leverage Ratio after giving effect
thereto does not exceed 4.50 x and the
Borrower shall have available liquidity after
giving effect thereto of at least $75
million.
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
BTCo) of the Parent or the Borrower.
Indemnification: The documentation for the Senior Secured
Financing will contain customary indemnities
for the Lenders (other than as a result of a
Lender's gross negligence or willful
misconduct).
<PAGE> 20
ANNEX 1
<TABLE>
<CAPTION>
Applicable
Commitment
Term Loan Revolving Facility Commission
Leverage Ratio Eurodollar Margin Eurodollar Margin Percentage
- -------------- ----------------- ----------------- ----------
<S> <C> <C> <C>
x > 4.25 2.500% 2.250% 0.500%
3.75 < x < or = 4.25 2.000% 1.750% 0.375%
3.25 < x < or = 3.75 1.750% 1.500% 0.350%
3.00 < x < or = 3.25 1.750% 1.250% 0.300%
2.50 < x < or = 3.00 1.500% 1.000% 0.275%
2.00 < x < or = 2.50 1.500% 0.875% 0.250%
x < or = 2.00 1.500% 0.750% 0.250%
</TABLE>
Base Rate Loans shall carry an Applicable Margin (but in no
event less than 0%) which is 1.25% lower than the Applicable Margin for
Eurodollar Loans of the respective tranche.
