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EXHIBIT 99.(a)(6)
MERRILL LYNCH CAPITAL CORPORATION NATIONSBANK, N.A.
World Financial Center 800 Market Street
North Tower St. Louis, Missouri 63101
250 Vesey Street
New York, New York 10281
September 15, 1998
FPK, LLC
106 East 6th Street
Suite 300
Austin, Texas 78216
Attention: Frank P. Krasovec, Chairman & Chief Executive Officer
Re:Commitment Letter
Ladies and Gentlemen:
You have advised Merrill Lynch Capital Corporation ("Merrill
Lynch"), NationsBank, N.A. ("NationsBank") and NationsBanc Montgomery
Securities LLC ("NMS" and together with Merrill Lynch, the "Joint Lead
Arrangers") that (i) FPK, LLC, a Delaware limited liability Company ("LLC")
formed by Frank P. Krasovec intends to form a new corporation ("Newco"); (ii)
LLC has entered into a merger agreement (the "Merger Agreement") with Norwood
Promotional Products, Inc. ("Target" or "Borrower") to effect the
recapitalization of Borrower (the "Recapitalization"); (iii) pursuant to the
Merger Agreement, Newco will merge with and into Borrower with Borrower as the
survivor (the "Merger"); (iv) pursuant to the Merger Agreement, after giving
effect to the Merger and the other transactions contemplated thereby, the
Buyout Group (as defined in the Merger Agreement), Liberty Capital Partners, LP
or its affiliates (collectively, "Liberty") and certain other third parties
will own all of the capital stock of Borrower; (v) the consideration per share
to be paid
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pursuant to the Merger Agreement to the holders of Borrower's common stock that
are cashed out in the Recapitalization shall not exceed $20.70 per share and
$91 million in the aggregate, except as a result of the valid exercise of
appraisal rights in accordance with Texas law.
In addition, you have also advised the Joint Lead Arrangers
and NationsBank that, in connection with and simultaneously with the
Recapitalization, Borrower will (i) raise gross cash proceeds of up to $37
million from the issuance by Borrower of its unsecured subordinated notes due
six months after all the terms loans under the Term Loan Facilities have been
paid in full (the "Subordinated Notes") arranged by Liberty on terms and
conditions and pursuant to documentation reasonably satisfactory to Merrill
Lynch, NationsBank and NMS in their sole discretion (the "Subordinated
Financing"); (ii) raise gross cash proceeds of up to $20 million from the
issuance by Borrower of its pay-in-kind preferred stock (the "PIK Preferred")
to Liberty on terms and conditions and pursuant to documentation reasonably
satisfactory to Merrill Lynch, NationsBank and NMS (the "Preferred Stock
Financing"); (iii) raise gross cash proceeds of up to $3 million from the
issuance by Borrower of its common stock (the "Common Stock") to Liberty on
terms and conditions and pursuant to documentation reasonably satisfactory to
Merrill Lynch, NationsBank and NMS (the "Common Stock Financing"); (iv) raise
gross proceeds of at least $22 million provided by the Buyout Group (including
the amount provided by the Buyout Group by converting their common stock,
valued at the Consideration (as defined in the Merger Agreement) of $20.70 per
share, into Common Shares of Borrower) and certain other third parties
previously disclosed to Merrill Lynch, NationsBank and NMS; and (v) enter into
the Credit Facilities described herein.
In addition, you have advised the Joint Lead Arrangers and
NationsBank that, upon consummation of the Recapitalization, Borrower will
repay (the "Existing Debt Repayment") all indebtedness, and terminate all
commitments to make extensions of credit, under its existing $125.0 million
credit facility arranged by Merrill Lynch (the "Existing Debt").
The Recapitalization, the Merger, the Subordinated Financing,
the Preferred Stock Financing, the Common Stock Financing, the Existing Debt
Repayment, and the entering into and borrowings under the Credit Facilities by
the parties herein described are herein referred to as the "Transactions".
We further understand that the precise structure of the
Transactions will be under continuing consideration, may vary from the
foregoing and will be subject to the mutual agreement of the parties hereto.
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You have requested that Merrill Lynch and NationsBank commit
to provide to Borrower $100 million aggregate principal amount of senior
secured credit facilities (the "Credit Facilities") (of which $50 million will
be provided by Merrill Lynch and $50 million by NationsBank) comprising (a) a
senior secured term loan A facility in an aggregate principal amount of $35
million (the "Term Loan A Facility"), (b) a senior secured term loan B facility
in an aggregate principal amount of $40 million (the "Term Loan B Facility",
together with the Term Loan A Facility, the "Term Loan Facilities"), and (c) a
senior secured revolving credit facility in an aggregate principal amount of
$25 million (the "Revolving Facility") (of which up to $10 million will be
drawn on the Closing Date (as defined below)). A portion of the Revolving
Facility to be mutually determined will be available as a letter of credit
subfacility.
In addition, you have advised the Joint Lead Arrangers and
NationsBank that the Term Loan Facilities and not more than $10 million of the
Revolving Facility will be used to (i) finance the Recapitalization and the
Existing Debt Repayment, and (ii) pay fees and expenses in connection with the
Recapitalization and the Existing Debt Repayment. Following and including the
date of the initial borrowings under the Credit Facilities (the "Closing
Date"), the Revolving Facility will be available for working capital, capital
expenditures and general corporate purposes of Borrower and its subsidiaries.
Accordingly, subject to the terms and conditions set forth
below, Merrill Lynch, NationsBank and NMS hereby severally agree with you as
follows:
1. Commitment. Merrill Lynch hereby severally commits
to provide $50 million of the Credit Facilities and NationsBank hereby
severally commits to provide $50 million of the Credit Facilities, in each case
to Borrower upon the terms and subject to the conditions set forth or referred
to herein, in the fee letter (the "Fee Letter") dated the date hereof and
delivered to you herewith and in the Summary of Terms and Conditions attached
hereto (and incorporated by reference herein) as Exhibit A (the "Term Sheet").
It is a condition of Merrill Lynch's, NationsBank's and NMS's
respective obligations and commitments hereunder that (a) Merrill Lynch, Pierce
Fenner & Smith Incorporated ("MLPF&S") act as the syndication agent (in such
capacity, the "Syndication Agent") and MLPF&S and NMS act as the Joint Lead
Arrangers for the Credit Facilities, it being understood and agreed that the
Syndication Agent, together with NationsBank as the administrative agent (in
such capacity , the "Administrative Agent") will perform all functions and
exercise all authority (including, without
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limitation, (i) serving as the lead manager of the syndication effort, (ii)
selecting counsel for the Credit Facilities, and (iii) negotiating definitive
documentation for the Credit Facilities (the "Credit Documents")) customarily
performed and exercised by agent banks in such capacities, and (b) NationsBank
will act as the Administrative Agent for the Credit Facilities, it being
understood and agreed that the Administrative Agent will perform all
ministerial and administrative functions and exercise all authority customarily
performed and exercised by agent banks in such capacities.
2. Syndication. Merrill Lynch, NationsBank and NMS
reserve the right and intends, prior to the execution of the Credit Documents,
to syndicate all or a portion of the commitments of Merrill Lynch and
NationsBank to one or more financial institutions (Merrill Lynch, NationsBank
and such financial institutions being referred to herein as the "Lenders") that
will become parties to the Credit Documents, and in that connection, promptly
following your acceptance of Merrill Lynch's and NationsBank's commitments
hereunder, Merrill Lynch, NationsBank and NMS will commence the syndication of
the Credit Facilities to such Lenders. Upon your acceptance of the commitment
of any Lender to provide a portion of the Credit Facilities, Merrill Lynch and
NationsBank shall each be released from a portion of its commitment hereunder
in an aggregate amount equal to 50% and 50%, respectively, of the commitment of
such Lender. You agree that no Lender will receive compensation outside the
terms contained herein and in the Fee Letter in order to obtain its commitment
to participate in the Credit Facilities. It is understood and agreed that,
except as otherwise provided in the Fee Letter, the amount and distribution of
the fees and other compensation referred to herein among the Lenders and to any
co-agent will be at the sole discretion of Merrill Lynch, NationsBank and NMS.
It is understood and agreed the Syndication Agent, together with the
Administrative Agent (or one of their respective affiliates) will manage all
aspects of the syndication (but will consult with you in such matters),
including, without limitation, decisions as to the selection of potential
Lenders reasonably acceptable to you to be approached and when they will be
approached, when their commitments will be accepted, which Lenders will
participate, any naming rights (including the naming of co-agents, subject to
your reasonable approval) and the final allocations of the commitments among
the Lenders (which are likely not to be pro rata across facilities among
Lenders).
You agree actively to assist Merrill Lynch, NationsBank and
NMS in achieving a timely syndication that is satisfactory to Merrill Lynch,
NationsBank and NMS. The syndication efforts will be accomplished by a variety
of means, including direct contact during the syndication between senior
management (including, but not limited to, the chief executive officer, chief
financial officer and treasurer of Newco and/or Borrower) and advisors and
affiliates of Newco and Borrower on the one
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hand and the proposed syndicate Lenders on the other hand. To assist Merrill
Lynch, NationsBank and NMS in its syndication efforts, you agree that you will,
with reasonable promptness, upon Merrill Lynch's, NationsBank's and NMS's
request, (a) provide, and cause Borrower and your and Borrower's affiliates and
advisors to provide, to Merrill Lynch, NationsBank and NMS all information
reasonably deemed necessary by Merrill Lynch, NationsBank and NMS to complete
successfully the syndication, including but not limited to, information and
projections (including, without limitation, any updated projections requested
by Merrill Lynch, NationsBank and NMS) prepared by you or Borrower or on your
or Borrower's behalf relating to the transactions contemplated hereby, and (b)
assist, and cause Borrower and your and Borrower's affiliates and advisors to
assist, Merrill Lynch, NationsBank and NMS in the preparation of a confidential
information memorandum and other marketing materials to be used in connection
with the syndication, including making available representatives of Newco and
Borrower and its subsidiaries. You also agree to use your best efforts to
ensure that Merrill Lynch's, NationsBank's and NMS's syndication efforts
benefit from your and Borrower's existing lending relationships. You further
agree that Merrill Lynch, NationsBank and NMS shall have a reasonable period of
time to syndicate the Credit Facilities, but syndication will not delay
Closing. It is understood and agreed that Merrill Lynch, NationsBank and NMS,
shall be entitled, with your prior written consent (which shall not be
unreasonably withheld or delayed), to change the structure and/or pricing of
the Credit Facilities as described herein and in the Term Sheet (provided that
the aggregate principal amount of the Credit Facilities, taken as a whole,
remains the same) if Merrill Lynch, NationsBank and NMS deem such action
advisable in order to ensure a successful syndication or an optimal credit
structure.
To ensure an orderly and effective syndication of the Credit
Facilities, you agree that until the termination of the syndication (as
determined by Merrill Lynch), you will not, and will not permit any of your
subsidiaries to, syndicate or issue, attempt to syndicate or issue, announce or
authorize the announcement of the syndication or issuance of, or engage in
discussions concerning the syndication or issuance of, any debt or credit
facility or debt security of Newco, Borrower or any of its subsidiaries,
including any renewals thereof, (other than Subordinated Notes and PIK
Preferred) without the prior written consent of Merrill Lynch, NationsBank and
NMS.
3. Fees. As consideration for Merrill Lynch's,
NationsBank's and NMS's commitments hereunder and their agreement to arrange,
manage, structure and syndicate the Credit Facilities, you agree to pay to
Merrill Lynch (for the account of Merrill Lynch, NationsBank and NMS) the fees
as set forth in the Term Sheet and in the
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Fee Letter. You agree that, once paid, such fees and any part thereof shall be
nonrefundable under any and all circumstances and regardless of whether the
transactions or borrowings contemplated hereby are consummated. All such fees
shall be paid by wire transfer of immediately available funds in United States
dollars at the times specified in the Fee Letter.
4. Conditions. Merrill Lynch's, NationsBank's NMS's
respective obligations and commitments hereunder are subject to the
negotiation, execution and delivery of definitive Credit Documents reasonably
satisfactory in all respects to Merrill Lynch, NationsBank and NMS and their
counsel. Such definitive documentation shall reflect the terms and conditions
set forth herein and in the Term Sheet and contain such other indemnities,
covenants, representations and warranties, events of default, conditions
precedent, security arrangements and other terms and conditions as are
satisfactory to Merrill Lynch, NationsBank, NMS and Borrower, modified as
appropriate to reflect the terms of the Transactions and the financial
condition and prospects of Newco and Borrower and its subsidiaries. Our
willingness to provide the Credit Facilities is further subject to review of
the documents relating to the Transactions and to Merrill Lynch's,
NationsBank's and NMS's reasonable satisfaction with the terms and conditions
thereof. Those matters that are not covered by or made clear under the
provisions hereof or of the Term Sheet are subject to the approval and
agreement of Merrill Lynch, NationsBank and you (it being understood that the
terms and conditions of the Credit Documents shall not be inconsistent with the
terms and conditions set forth herein or in the Term Sheet).
Merrill Lynch's, NationsBank's and NMS's respective
obligations and commitments hereunder are also subject to the following: (a)
there shall not have occurred or become known (i) in the reasonable judgment of
Merrill Lynch, NationsBank or NMS, any material adverse change (or any
development involving a prospective material adverse change) or any condition
or event that could reasonably be expected to result in a material adverse
change in the business, assets, liabilities (contingent or otherwise),
operations, condition (financial or otherwise), solvency, properties, prospects
or material agreements of Borrower, individually or together with its
subsidiaries taken as a whole, as the case may be (and before and after giving
effect to the Transactions), in each case since the date of the latest audited
financial statements of Borrower delivered prior to the execution and delivery
of this letter to Merrill Lynch, NationsBank and NMS, (ii) any facts or
circumstances discovered by Merrill Lynch, NationsBank or NMS in the course of
each of their respective ongoing due diligence investigation of Borrower and
its subsidiaries and the Transactions, including (without limitation) their
review and investigation of acquisition plans, environmental and other
contingent obligations, and the historical, pro forma and
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projected consolidated financial statements of Borrower and its subsidiaries,
which Merrill Lynch, NationsBank or NMS believes could, individually or in the
aggregate, have a material adverse effect on the Transactions or the business,
assets, liabilities (contingent or otherwise), operations, condition (financial
or otherwise), solvency, properties, prospects or material agreements of
Borrower, individually or together with its subsidiaries taken as a whole, as
the case may be (and before and after giving effect to the Transactions), (iii)
any transaction (other than the Transactions) entered into by Borrower or any
of its subsidiaries, whether or not in the ordinary course of business, that in
Merrill Lynch's, NationsBank's or NMS's judgment is materially adverse to
Borrower, individually or together with its subsidiaries, taken as a whole, or
(iv) any dividend or distribution of any kind declared or paid by Borrower on
its capital stock since the date of the latest audited financial statements of
Borrower delivered prior to the execution and delivery of this Commitment
Letter to Merrill Lynch, NationsBank and NMS (other than regular quarterly
dividends in an amount consistent with past practices); (b) no material adverse
change (or development involving a prospective material adverse change) shall
have occurred in the loan syndication or financial, banking, currency or
capital market conditions generally from those in effect on the date hereof
that, individually or in the aggregate, in the judgment of Merrill Lynch,
NationsBank or NMS could reasonably be expected to adversely affect the
consummation of the Transactions or the other transactions contemplated by this
Commitment Letter or adversely affect the ability of Merrill Lynch, NationsBank
and NMS to successfully syndicate the Credit Facilities; no banking moratorium
shall have been declared by federal or New York State banking authorities and
shall be continuing; (c) Merrill Lynch's, NationsBank's or NMS's satisfaction
(in their reasonable judgment) with the actual capitalization and corporate and
organizational structure of Newco and Borrower and its subsidiaries (after
giving effect to the Transactions), including as to direct and indirect
ownership and as to the terms of the indebtedness and capital stock of Newco
and Borrower and its subsidiaries; (d) Borrower and its subsidiaries shall not
have syndicated or issued, attempted to syndicate or issue, announced or
authorized the announcement of the syndication or issuance of, or engaged in
any discussion concerning the syndication or issuance of, any debt facility or
debt security of Borrower or any of its subsidiaries (other than Subordinated
Notes and PIK Preferred), including renewals thereof; and (e) the satisfaction
of the other terms and conditions set forth or referred to herein (including,
without limitation, those set forth in Sections 1, 2 and 5) and in the Term
Sheet. For purposes of this Commitment Letter and the Term Sheet, the
"subsidiaries" of Borrower shall be deemed to include those who will become
subsidiaries of Borrower.
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5. Information and Investigations. You hereby represent
and covenant that (a) all information and data (excluding financial
projections) concerning Newco, Borrower and its subsidiaries, the Transactions
and the other transactions contemplated hereby (the "Information") that have
been made or will be prepared by or on behalf of you or any of your affiliates
or authorized representatives or advisors and that have been or will be made
available to Merrill Lynch, NationsBank or NMS by you or on your behalf in
connection with the transactions contemplated hereby, taken as a whole, is and
will be complete and correct in all material respects and does not and will
not, taken as a whole, contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such
statements are made, and (b) all financial projections concerning Newco,
Borrower and its subsidiaries and the transactions contemplated hereby (the
"Projections") that have been prepared by or on behalf of you or any of your
affiliates or authorized representatives and that have been or will be made
available to Merrill Lynch, NationsBank or NMS by you or on behalf of you or
any of your affiliates or authorized representatives or advisors in connection
with the transactions contemplated hereby have been and will be prepared in
good faith based upon assumptions believed by you to be reasonable. You agree
to supplement the Information and the Projections from time to time until the
Closing Date and, if requested by Merrill Lynch, NationsBank or NMS, for a
reasonable period thereafter necessary to complete the syndication of the
Credit Facilities so that the representation and covenant in the preceding
sentence remain correct. In arranging the Credit Facilities, including the
syndication thereof, Merrill Lynch, NationsBank and NMS will be using and
relying primarily on the Information and the Projections without independent
check or verification thereof.
Merrill Lynch's, NationsBank's and NMS's respective
obligations and commitments hereunder are based upon the accuracy and
completeness of the financial and other information provided to us by or on
behalf of you and Borrower. If any of the Information proves to have been, or
Merrill Lynch, NationsBank or NMS reasonably concludes that any of the
Information is, inaccurate, incomplete or misleading in any material respect or
if Merrill Lynch's, NationsBank's and NMS's ongoing due diligence investigation
discloses information, or Merrill Lynch, NationsBank or NMS otherwise discovers
information not previously disclosed to it, or Merrill Lynch, NationsBank or
NMS discovers or otherwise learns of new information or additional developments
concerning conditions or events previously disclosed to it, that Merrill Lynch,
NationsBank or NMS believes in their sole discretion, (x) has had or could
have, individually or in the aggregate, a material adverse impact on the
business, assets, liabilities (contingent or otherwise), operations, condition
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(financial or otherwise), solvency, properties, prospects or material
agreements of Borrower, individually or together with its subsidiaries taken as
a whole, as the case may be (and before and after giving effect to the
Transactions), or on the tax or accounting consequences of the Transactions, or
(y) would be materially inconsistent with the assumptions underlying the
Projections, then Merrill Lynch, NationsBank and NMS (a) shall be entitled to
terminate their commitments hereunder (and thereafter have no other or further
obligations hereunder or in connection with the Credit Facilities or any of the
other Transactions) or (b) may, in their sole discretion, suggest alternative
financing amounts, structures or pricing that ensure adequate protection for
Merrill Lynch, NationsBank and the other Lenders. In any such event, Merrill
Lynch, NationsBank and NMS shall not be responsible or liable for any damages
which may be alleged as a result of their failure, in accordance with the terms
of this Commitment Letter, to provide the Credit Facilities.
6. Indemnification. By executing this Commitment
Letter, you agree to indemnify and hold harmless Merrill Lynch, NationsBank,
NMS and each of the other Lenders and their respective officers, directors,
employees, affiliates, agents and controlling persons (Merrill Lynch,
NationsBank, NMS and each such other person being an "Indemnified Party") from
and against any and all losses, claims, damages and liabilities, joint or
several, to which any such Indemnified Party may become subject arising out of
or in connection with or relating to this Commitment Letter, the Fee Letter,
the Term Sheet, (including the fee letter, term sheet and commitment letter
dated March 12, 1998 between you and us relating to the transactions as
discussed in Borrower's proxy statement dated July 22, 1998) the Credit
Facilities, the loans under the Credit Facilities, the use of proceeds of any
such loan, any of the Transactions or any related transaction and the
performance by Merrill Lynch, NationsBank, NMS or any of their respective
affiliates of the services contemplated by this Commitment Letter and will
reimburse any Indemnified Party for any and all reasonable expenses (including
counsel fees and expenses) as they are incurred in connection with the
investigation of or preparation for or defense of any pending or threatened
claim or any action or proceeding arising therefrom, whether or not such
Indemnified Party is a party, whether or not such claim, action or proceeding
is initiated or brought by or on behalf of Borrower or any of its affiliates
and whether or not any of the transactions contemplated hereby are consummated
or this Commitment Letter is terminated. You will not be liable under the
foregoing indemnification provision to an Indemnified Party to the extent that
any loss, claim, damage, liability or expense is found in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's bad faith or gross negligence.
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You also agree that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or otherwise) to
Newco, Borrower or their respective security holders or creditors related to or
arising out of or in connection with this Commitment Letter, the Fee Letter,
the Term Sheet, the Credit Facilities, the loans under the Credit Facilities,
the use of proceeds of any such loan, any of the Transactions or any related
transaction or the performance by Merrill Lynch, NationsBank or any of their
respective affiliates of the services contemplated by this Commitment Letter,
except to the extent that any loss, claim, damage or liability is found in a
final non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's bad faith or gross negligence.
You agree that, without Merrill Lynch's, NationsBank's and
NMS's prior written consent, which will not be unreasonably withheld or
delayed, you will not settle, compromise or consent to the entry of any
judgment in any pending or threatened claim, action or proceeding in respect of
which indemnification has been sought under the indemnification provisions of
this Commitment Letter (whether or not Merrill Lynch, NationsBank, NMS or any
other Indemnified Party is an actual or potential party to such claim, action
or proceeding), unless such settlement, compromise or consent (i) includes an
unconditional written release in form and substance satisfactory to the
Indemnified Parties of each Indemnified Party from all liability arising out of
such claim, action or proceeding and (ii) does not include any statement as to
an admission of fault, culpability or failure to act by or on behalf of any
Indemnified Party.
In the event that an Indemnified Party is requested or
required to appear as a witness in any action brought by or on behalf of or
against you or any of your affiliates in which such Indemnified Party is not
named as a defendant, you agree to reimburse such Indemnified Party for all
reasonable expenses incurred by either of them in connection with such
Indemnified Party's appearing and preparing to appear as such a witness,
including, without limitation, the fees and disbursements of its legal counsel,
and to compensate such Indemnified Party in an amount to be mutually agreed
upon.
7. Costs and Expenses. By executing this Commitment
Letter, you agree to reimburse Merrill Lynch, NationsBank and NMS and their
respective affiliates upon request made from time to time for their reasonable
out-of-pocket expenses (including, without limitation, reasonable expenses of
Merrill Lynch's, NationsBank's and NMS's due diligence investigation,
consultants' fees (if such consultants are engaged by Merrill Lynch,
NationsBank and NMS with your consent (which consent shall not be unreasonably
withheld or delayed)), syndication expenses, appraisal and valuation
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fees and expenses, travel expenses, and the reasonable fees, disbursements and
other reasonable charges of counsel) incurred in connection with the Credit
Facilities and the negotiation, preparation, execution and delivery, waiver or
modification, administration, collection and enforcement of this Commitment
Letter, the Term Sheet, the Fee Letter, the Credit Documents and the security
arrangements in connection therewith.
8. Confidentiality. You agree that this Commitment
Letter, the Term Sheet, the Fee Letter, the contents of any of the foregoing
and Merrill Lynch's, NationsBank's, NMS's and/or their respective affiliates'
activities pursuant hereto or thereto are confidential and shall not be
disclosed by you to any person without the prior written consent of Merrill
Lynch, NationsBank and NMS, other than to your and the Borrower's officers,
directors, employees, accountants, attorneys and other advisors, and then only
in connection with the Transactions and on a confidential and need-to-know
basis, except that you may make such other public disclosures of the terms and
conditions hereof as you are required by applicable law or compulsory legal
process to make; provided, however, that if such disclosure is required by
applicable law or compulsory legal process you agree to give Merrill Lynch,
NationsBank and NMS reasonable notice to afford Merrill Lynch, NationsBank and
NMS the opportunity to seek a protective order and to cooperate with Merrill
Lynch, NationsBank and NMS in securing such a protective order. You agree that
you will permit Merrill Lynch, NationsBank and NMS to review and approve any
reference to Merrill Lynch, NationsBank or NMS in connection with the Credit
Facilities or the transactions contemplated hereby contained in any press
release or similar public disclosure prior to public release.
9. Termination. In the event that (i) you have not
accepted this Commitment Letter by September 18, 1998; (ii) the Closing Date
does not occur on or before November 30, 1998; or (iii) any of the conditions
described in clause (a), (b), or (d) of the second paragraph of Section 4 shall
have failed to be satisfied at any time, this Commitment Letter and Merrill
Lynch's, NationsBank's and NMS's commitments hereunder shall terminate (upon
written notice by Merrill Lynch, NationsBank and NMS with respect to clause
(iii) of this sentence) unless Merrill Lynch, NationsBank and NMS shall, in
their respective discretion, agree to an extension (it being understood that an
extension by Merrill Lynch shall not bind NationsBank, and vice versa).
Notwithstanding the foregoing, the compensation, reimbursement, indemnification
and confidentiality provisions hereof and of the Term Sheet and the Fee Letter
and Sections 11 and 14 of this Commitment Letter shall survive any termination
of this Commitment Letter or Merrill Lynch's or NationsBank's commitment
hereunder.
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10. Assignment, Etc. This Commitment Letter and Merrill
Lynch's, NationsBank's and NMS's respective commitments hereunder shall not be
assignable by any party hereto without the prior written consent of Merrill
Lynch and NationsBank, and any attempted assignment shall be void and of no
effect; provided, however, that nothing contained in this Section shall
prohibit Merrill Lynch, NationsBank or NMS (in their respective sole
discretion) from (i) performing any of its duties hereunder through any of its
affiliates (including in the case of Merrill Lynch, Merrill Lynch, Pierce,
Fenner & Smith Incorporated), and you will owe any related duties (including
those set forth in Section 2 above) to any such affiliate, and (ii) granting
participations in, or selling assignments of all or a portion of, the
commitments or the loans under the Credit Facilities pursuant to arrangements
satisfactory to the Lenders. This Commitment Letter is intended to be solely
for the benefit of the parties hereto and is not intended to confer any
benefits upon, or create any rights in favor of, any person other than the
parties hereto.
11. Governing Law. THIS COMMITMENT LETTER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW).
12. Execution in Counterparts. This Commitment Letter
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Commitment Letter by
telecopier shall be effective as delivery of a manually executed counterpart of
this Commitment Letter.
13. Amendments, etc. No amendment or waiver of any
provision of this Commitment Letter, nor any consent or approval to any
departure therefrom, shall be effective unless the same shall be in writing and
signed by the parties hereto and then any such waiver, consent or approval
shall be effective only in the specific instance and for the specific purpose
for which given. By executing this letter, you acknowledge that this
Commitment Letter and the Fee Letter are the only agreements between you and
Merrill Lynch and NationsBank with respect to the Credit Facilities and set
forth the entire understanding of the parties with respect thereto.
14. Waiver of Jury Trial. Each of the parties hereto (in
each case on its own behalf and, to the extent permitted by applicable law, on
behalf of its shareholders) waive all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise)
related to or arising out of any of
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the Transactions, the other transactions contemplated hereby, or the
performance by Merrill Lynch, NationsBank or NMS or any of their respective
affiliates of the services contemplated by, this Commitment Letter.
15. Public Announcements. You acknowledge that Merrill
Lynch, NationsBank and NMS may (after the consummation of the
Recapitalization), at their respective option and expense, place an
announcement in such newspapers and periodicals as it may choose, stating that
Merrill Lynch, NationsBank or NMS, as the case may be, has acted in the
capacity set forth in this Commitment Letter.
16. Notices. Any notice given pursuant to any of the
provisions of this Commitment Letter shall be in writing and shall be mailed or
delivered, (i) if to you, at the address set forth on page one of this
Commitment Letter to the attention of Chief Financial Officer, with a copy to
Richard McMahon, Esq., at Blank, Rome, Comisky & McCauley LLP, One Logan
Square, Philadelphia, PA 19103 and (ii) if to Merrill Lynch, at World Financial
Center, North Tower, 250 Vesey Street, New York, New York 10281, Attention:
Brian E. O'Callahan, or if to NMS, at 100 North Trion Street, Charlotte, North
Carolina 28255, Attention Joseph R. Netzel, or if to NationsBank, at 800 Market
Street, St. Louis, Missouri 63101, Attention: Steve A. Linton, in each case
with a copy to Michael E. Michetti, Esq., at Cahill Gordon & Reindel, 80 Pine
Street, New York, New York 10005.
[Signature Page Follows]
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Please confirm that the foregoing correctly sets forth our
agreement of the terms hereof and of the Fee Letter by signing and returning to
Merrill Lynch (on behalf of Merrill Lynch and NationsBank) the duplicate copy
of this letter and the Fee Letter enclosed herewith. Upon your acceptance
hereof, this letter shall constitute a binding agreement between you and
Merrill Lynch and NationsBank; provided that Merrill Lynch (on behalf of
Merrill Lynch and NationsBank) shall have received your executed duplicate
copies not later than 5:00 p.m., New York City time, on September 18, 1998, at
which time Merrill Lynch's and NationsBank's respective commitments hereunder
will expire in the event Merrill Lynch has not received such executed duplicate
originals.
We are pleased to have this opportunity and we look forward to
working with you on this transaction.
Very truly yours,
MERRILL LYNCH CAPITAL
CORPORATION
By: /s/ BRIAN O'CALLAHAN
----------------------------------
Name:
Title:
NATIONSBANK, N.A.
By: /s/ STEVEN A. LINTON
----------------------------------
Name:
Title:
NATIONSBANC MONTGOMERY
SECURITIES LLC
By: /s/ JOSEPH R. NETZEL
----------------------------------
Name:
Title:
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Accepted and agreed to as of the date first written above:
FPK, LLC
By: /s/ FRANK P. KRASOVEC
----------------------------------
Name: Frank P. Krasovec
Title: