April 21, 2004
CONFIDENTIAL
infoUSA Inc.
5711 South 86th Circle
Omaha, Nebraska 68127
Attention: Raj Das
Re: $250,000,000 Senior Secured Credit Facilities - Commitment Letter
Ladies and Gentlemen:
infoUSA Inc. (the "Borrower"), various lenders (the "Existing Lenders"),
and Wells Fargo Bank, National Association, as sole lead arranger, sole book
runner and administrative agent (in such capacity, the "Administrative Agent"),
are parties to a Credit Agreement dated as of March 25, 2004 (the "Existing
Credit Agreement"). Under the Existing Credit Agreement, the Existing Lenders
have extended $170 million of revolving and term credit.
The Borrower has advised Wells Fargo Bank, National Association ("Wells
Fargo"), that it intends, through certain wholly-owned subsidiaries (the
"Acquisition Sub"), to acquire OneSource Information Services, Inc., a Delaware
corporation (the "Target"), by means of a tender offer for not less than 51% of
the outstanding shares of the Target followed by a merger (the "Acquisition").
The Borrower has also advised Wells Fargo that in connection with such
transaction, certain existing indebtedness of the Target will be refinanced (the
"Refinancing") and related premiums, fees and expenses (the "Fee and Expense
Payments") will be paid.
The Acquisition, Refinancing, Fee and Expense Payments and other related
transactions are collectively referred to herein as the "Transaction". The
approximate amounts to be expended in connection with the Transaction, and
assuming that the Existing Credit Agreement is refinanced, are set forth in the
Sources and Uses Table attached as Addendum II to the Summary of Terms, Senior
Secured Credit Facilities (the "Senior Term Sheet") attached hereto as Annex A.
The term "Credit Parties" as used herein refers collectively to the Borrower,
the Target, the Acquisition Sub and all subsidiary guarantors of such companies
after giving effect to the consummation of the Transaction. The Senior Secured
Credit Facilities described in the Senior Term Sheet are referred to herein as
the "Senior Secured Credit Facilities".
Wells Fargo is pleased to inform the Borrower that it hereby commits to
provide the entire principal amount of the Senior Secured Credit Facilities and
to act as the sole and exclusive lead arranger, administrative agent and sole
book runner (the "Lead
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April 21, 2004
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Arranger") for the Senior Secured Credit Facilities and to arrange for a
syndicate of financial institutions and other "accredited investors" (as defined
in SEC regulations; each such financial institution and accredited investor,
including Wells Fargo, being a "Lender" and, collectively, the "Lenders") to
participate in the Senior Secured Credit Facilities. The Lead Arranger shall
determine whether to amend the Existing Credit Agreement or to refinance the
indebtedness arising under the Existing Credit Agreement in connection with
providing the Senior Secured Credit Facilities.
The Lead Arranger's fees for such services are set forth in the
accompanying confidential fee letter (the "Fee Letter"). The Borrower agrees
that no other agents or advisors will be engaged or appointed and no
compensation (other than that expressly contemplated by the Fee Letter) will be
paid for the placement of the Facilities unless the Borrower and the Lead
Arranger shall so agree.
Wells Fargo is satisfied with the results of its diligence investigation
of the Borrower, the Target and their subsidiaries. Wells Fargo's commitment
shall not be subject to further diligence unless Wells Fargo shall become aware
of any information relating to conditions or events not previously disclosed to
Wells Fargo or constituting new information or additional developments
concerning conditions or events previously disclosed to Wells Fargo which, in
its judgment, is inconsistent with the information theretofore provided to Wells
Fargo and which Wells Fargo reasonably deems materially adverse in respect of
the condition (financial or otherwise), business, operations, debt service
capacity, properties, assets, accounting treatment, liabilities (including
environmental liabilities ) or prospects of the Borrower, the Target and their
subsidiaries.
The foregoing commitment and all undertakings and agreements hereunder are
expressly subject to (i) no material adverse change in the business, assets,
condition (financial or otherwise), operations, liabilities (whether
contractual, environmental or otherwise), properties, Projections or prospects
of the Borrower and its subsidiaries taken as a whole or the Target since
December 31, 2003, or in the facts and information as represented to date, (ii)
no material disruption or material adverse change in the financial or capital
markets generally or in the market for syndicated credit facilities that could
in the sole discretion of the Lead Arranger be expected to materially adversely
affect the syndication of the Senior Secured Credit Facilities, (iii) the
satisfaction of the terms and conditions of this letter, the Senior Term Sheet
and the other annexes and schedules attached hereto (together, this "Commitment
Letter") and the Fee Letter in a manner acceptable to Wells Fargo, and (iv) the
absence of any competing offering, placement or arrangement for any debt
security or bank financing by or on behalf of any of the Credit Parties.
The Lead Arranger will manage all aspects of the syndication, including
decisions as to the selection of institutions to be approached and when they
will be approached, when their commitments will be accepted, which institutions
will participate, the allocations of the commitments among potential Lenders,
any titles offered to potential Lenders and the amount and distribution of fees
among the Lenders. The Borrower agrees
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April 21, 2004
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that no other agents, co-agents or arrangers will be appointed, no other titles
will be awarded and no compensation other than as expressly set forth in the
Senior Term Sheet and the Fee Letter will be paid in connection with the Senior
Secured Credit Facilities unless the Borrower and the Lead Arranger shall so
agree. The Borrower shall actively assist the Lead Arranger in completing a
syndication satisfactory to it. Such assistance shall include (i) the Borrower
using reasonable efforts to ensure that the syndication efforts benefit
materially from the existing lending and investment banking relationships of the
Credit Parties, (ii) the Borrower using reasonable efforts to make certain
members of the management of the Credit Parties, as well as its consultants and
advisors, are available during regular business hours to answer questions
regarding the Senior Secured Credit Facilities, (iii) the Credit Parties
providing or causing to be provided to the Lead Arranger all information
reasonably deemed necessary by it to complete syndication and the Credit Parties
assisting in the preparation of a confidential informational memorandum to be
used in connection with the syndication, and (iv) the hosting by the Credit
Parties of meetings with prospective Lenders. Unless this letter is terminated
by the Lead Arranger or the Borrower, the Borrower also agrees to refrain from
any activity in the capital markets and the private placement market from the
date the Borrower signs this letter until the execution and delivery of the
Credit Agreement by the parties thereto (the "Closing") and the arrangement and
syndication has been successfully completed.
The Borrower hereby represents that (i) all information, other than
Projections (as defined below), which has been or is hereafter made available to
the Lead Arranger or the other Lenders by any of the Credit Parties or any of
their representatives in connection with the transactions contemplated hereby
(the "Information") has been reviewed and analyzed by the Borrower in connection
with the performance of its own due diligence and is or will be, in the case of
Information made available after the date hereof, complete and correct in all
material respects and does not or will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements were or are made, and (ii) all financial projections
concerning the Credit Parties that have been or are hereafter made available to
the Lenders by the Credit Parties or any of their representatives in connection
with the transactions contemplated hereby (the "Projections") have been or will
be, in the case of Projections made available after the date hereof, prepared in
good faith based upon reasonable assumptions. The Borrower shall supplement the
Information and the Projections from time to time until the closing date so that
the representation and warranty in the preceding sentence is correct on the
closing date. In arranging and syndicating the Senior Secured Credit Facilities,
Wells Fargo and each Lender that issues a commitment letter to provide a portion
of the Senior Secured Credit Facilities or agrees to amend the Existing Credit
Facility will be using and relying on the Information and the Projections
without independent verification thereof. The representations and covenants
contained in this paragraph shall remain effective until the initial funding
under a definitive financing agreement and thereafter the disclosure
representations contained herein shall be superseded by those contained in such
definitive financing agreement.
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April 21, 2004
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The Borrower shall pay the Lead Arranger's reasonable costs and expenses
(including the reasonable fees and expenses of counsel (including allocated
costs of internal counsel), reasonable professional fees of consultants and
other experts and reasonable out-of-pocket expenses, including without
limitation syndication expenses) incurred before or after the date of this
Commitment Letter arising in connection with this Commitment Letter, the
definitive financing agreement, the syndication of the Senior Secured Credit
Facilities and the other transactions contemplated hereby.
The Borrower shall indemnify and hold harmless the Lead Arranger and each
Lender (including Wells Fargo) and their respective affiliates and each
director, officer, employee, agent, attorney and affiliate thereof (each such
person, an "indemnified person") from and against any losses, claims, damages,
liabilities or other expenses to which an indemnified person may become subject,
insofar as such losses, claims, damages, liabilities (or actions or other
proceedings commenced or threatened in respect thereof) or other expenses arise
out of or in any way relate to or result from the Transaction, whether or not
actually completed and the other transactions contemplated by this Commitment
Letter, the Fee Letter, the extension of the financing contemplated hereby, the
Senior Secured Credit Facilities or any use or intended use of the proceeds of
any of the loans and other extensions of credit contemplated hereby, and to
reimburse each indemnified person for any reasonable legal or other expenses
incurred in connection with investigating, defending or participating in any
such investigation, litigation or other proceeding (whether or not any such
investigation, litigation or other proceeding involves claims made between any
Credit Party or any third party and any such indemnified person, and whether or
not any such indemnified person is a party to any investigation, litigation or
proceeding out of which any such expenses arise); provided, however, that the
indemnity contained herein shall not apply to the extent that it is determined
in a final nonappealable judgment by a court of competent jurisdiction that such
losses, claims, damages, liabilities or other expenses result from the gross
negligence or willful misconduct of such indemnified person. The obligations to
indemnify each indemnified person and to pay such legal and other expenses shall
remain effective until the initial funding under a definitive financing
agreement and thereafter the indemnification and expense reimbursement
obligations contained herein shall be superseded by those contained in such
definitive financing agreement. No indemnified person shall be liable for any
damages arising from the use by others of Information or other materials
obtained through internet, Intralinks or similar information transmission
systems in connection with the Senior Secured Credit Facilities. No indemnified
person shall be responsible or liable to any other party or any other person for
any indirect, consequential or special damages. The foregoing provisions of this
paragraph shall be in addition to any rights that any indemnified person may
have at common law or otherwise.
Wells Fargo and its affiliates may be providing or proposing to provide
debt financing, equity capital or other services (including financial advisory
services) to other companies in respect of which the Credit Parties or their
affiliates may have conflicting interests because of the Transaction or other
relationships. The Borrower acknowledges that
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Wells Fargo has no obligation to use any confidential information from such
other companies in connection with the Transaction, or to furnish any such
confidential information to any Credit Parties.
This Commitment Letter and the Fee Letter are intended solely for the
benefit of the Borrower, Wells Fargo, each Lender who issues a commitment letter
to provide a portion of the Senior Secured Credit Facilities or agrees to amend
the Existing Credit Facility and each indemnified person and nothing in this
Commitment Letter or the Fee Letter, express or implied, shall give any person
other than the foregoing, any beneficial or legal right, remedy or claim
hereunder. Neither this Commitment Letter nor the Fee Letter is assignable (and
any purported assignment shall be null and void) and neither may be relied upon
by any other person or entity. Each of this Commitment Letter and the Fee Letter
is confidential and shall not be disclosed by any of the parties hereto to any
person other than such party's accountants, attorneys and other advisors, and,
in the case of Wells Fargo, its affiliates and prospective Lenders, purchasers
and assignees, and then only on a confidential basis and in connection with the
Transaction and the related transactions contemplated herein. Any disclosure to
an advisor may be made for the sole purpose of evaluating and advising on the
offer of financing made in this Commitment Letter and may not be used by such
advisor in formulating any offer of financing by such advisor or an affiliate.
Additionally, any of the parties hereto may make such disclosures of this
Commitment Letter as are required by regulatory authority, law or judicial
process or as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation; provided that such party will use
its commercially reasonable efforts to notify the other parties hereto of any
such disclosure prior to making such disclosure. The Lead Arranger hereby
consents to the disclosure of this Commitment Letter (but not the Fee Letter) on
a confidential basis to the Target and its financial and legal advisors for
their use in connection with their evaluation of the Borrower's proposal for the
Acquisition.
If this Commitment Letter and the Fee Letter are not accepted by the
Borrower as provided for below, the Borrower shall immediately return this
Commitment Letter and the Fee Letter (and any copies hereof and thereof) to the
undersigned or confirm to the undersigned that they have been destroyed.
Notwithstanding anything herein to the contrary, Wells Fargo, the Borrower
and each of their respective affiliates (and each of their respective employees,
representatives or other agents) are expressly authorized to disclose to any and
all persons, without limitation of any kind, the "tax treatment" and "tax
structure" (in each case, within the meaning of Treasury Regulation Section
1.6011-4) of any of the transactions contemplated hereunder and all materials of
any kind (including opinions or other tax analyses) that are provided to Wells
Fargo, the Borrower or any of their respective affiliates (and any such
employees, representatives or agents) relating to such tax treatment and tax
structure; provided that, with respect to any document or similar item that in
either case contains information concerning the tax treatment or tax structure
of such transactions as well as other information, this
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April 21, 2004
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sentence shall only apply to such portions of the document or similar item that
relate to the tax treatment or tax structure of such transactions.
This offer will terminate on April 22, 2004, unless on or before that date
the Borrower signs and returns a copy of this Commitment Letter and the Fee
Letter to Wells Fargo at MAC N9305-051, Sixth and Marquette, Minneapolis, MN
55479, Fax: (612) 667-7266, attention Steven R. Ashley. The commitments herein
provided for will also expire at the earliest of (i) the termination of any
acquisition or merger agreement; (ii) the closing of the Transaction without the
use of the Senior Secured Credit Facilities; or (iii) the close of business on
August 31, 2004, if the closing of the tender offer portion of the Transaction
has not occurred by such time; provided, however, that any term or provision
hereof to the contrary notwithstanding all of the Borrower's obligations
hereunder in respect of indemnification, confidentiality and fee and expense
reimbursement shall survive any termination of the commitments pursuant to this
paragraph.
THIS COMMITMENT LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF MINNESOTA. Each of the undersigned
parties hereby knowingly, voluntarily and intentionally waives any rights it may
have to a trial by jury in respect of any litigation based hereon, or arising
out of or in connection with, this Commitment Letter and the Fee Letter, and any
course of conduct, course of dealing, statements (whether oral or written) or
actions of any of the undersigned parties in connection herewith or therewith.
The parties hereto submit to the nonexclusive jurisdiction of the Federal and
State courts located in Hennepin County, Minnesota in connection with any
dispute related to this Commitment Letter, the Fee Letter or any of the matters
contemplated hereby or thereby. This Commitment Letter and the Fee Letter
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof and replace and supersede all prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof. This Commitment Letter may not be amended or
waived except by an instrument in writing signed by each party hereto. 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 and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument.
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Wells Fargo appreciates having been given the opportunity to be involved
in the Transaction.
Very truly yours,
WELLS FARGO BANK,
NATIONAL ASSOCIATION
By: /s/ Steven R. Ashley
-----------------------------------
Name: Steven R. Ashley
Title: Senior Vice President
Acknowledged and Agreed:
infoUSA Inc.
By: /s/ Raj Das
_______________________________
Name: Raj Das
Title: Chief Financial Officer
CONFIDENTIAL ANNEX A INFOUSA INC.
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ANNEX A
SUMMARY OF TERMS
SENIOR SECURED CREDIT FACILITIES
The following summarizes selected terms for certain senior secured
credit facilities (the "Senior Secured Credit Facilities") to be made available
to infoUSA Inc.(the "Borrower") by Wells Fargo Bank, National Association
("Wells Fargo"), in the aggregate amount of $250 million, the proceeds of which
would be used, among other things, in connection with the proposed acquisition
(the "Acquisition") of OneSource Information Services, Inc. (the "Target") by
the Borrower and certain of its affiliates.
The Borrower, various lenders (the "Existing Lenders"), and Wells
Fargo Bank, National Association, as sole lead arranger, sole book runner and
administrative agent, are parties to a Credit Agreement dated as of March 25,
2004 (the "Existing Credit Agreement"). Under the Existing Credit Agreement, the
Existing Lenders have extended $170 million of revolving and term credit.
The Senior Secured Credit Facilities described below shall be made
available to the Borrower by means of amending the Existing Credit Agreement to
increase the amount of term debt or refinancing all indebtedness arising under
the Existing Credit Agreement so that the Borrower has combined revolving and
term credit facilities in the amount of $250 million.
This Summary of Terms is intended merely as an outline of certain of
the material terms of the Senior Secured Credit Facilities and does not include
descriptions of all of the terms, conditions and other provisions that are to be
contained in the definitive documentation relating to the Senior Secured Credit
Facilities and it is not intended to limit the scope of discussion and
negotiation of any matters not inconsistent with the specific matters set forth
herein.
BORROWER: infoUSA Inc., a Delaware corporation (the "Borrower").
LEAD ARRANGER AND Wells Fargo Bank, National Association ("Administrative
SOLE BOOK RUNNER: Agent" or "Wells Fargo").
ADMINISTRATIVE Wells Fargo will act as sole and exclusive administrative
AGENT: and collateral agent.
LENDERS: A syndicate of financial institutions (including Wells
Fargo) arranged by Wells Fargo, which institutions shall
be acceptable to the Administrative Agent in
consultation with the Borrower
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CONFIDENTIAL ANNEX A INFOUSA INC.
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(collectively, the "Lenders").
TRANSACTION: The acquisition by a tender offer for not less than 51%
of the shares, followed by the merger, of OneSource
Information Services, Inc. ("Target") with a newly
created subsidiary of the Borrower, and the amendment or
refinancing (if necessary) of the Borrower's existing
bank credit facilities under the Credit Agreement dated
as of March 25, 2004 by and among the Borrower, the
Administrative Agent and various lenders (the "Existing
Credit Agreement").
GUARANTORS: The Senior Secured Credit Facilities shall be guaranteed
by all existing and future direct and indirect
subsidiaries of the Borrower (collectively, the
"Guarantors"); provided, however, that non-U.S.
subsidiaries shall only be required to deliver
guaranties to the extent it would not result in material
increased tax liabilities for the Credit Parties. All
guarantees shall be guarantees of payment and not of
collection.
SENIOR SECURED An aggregate principal amount of up to $250 million
CREDIT FACILITIES: consisting of a Revolving Facility, a Term Facility A
and a Term Facility B.
REVOLVING FACILITY: $50 million revolving credit facility (the "Revolving
Facility"), which will include a $10 million sublimit
for the issuance of standby and commercial letters of
credit (each a "Letter of Credit") and a $5 million
sublimit for swing line loans (each a "Swing Line
Loan"). Letters of Credit will be issued by Wells Fargo
(in such capacity, the "Letter of Credit Issuing
Lender") and Swing Line Loans will be made available by
Wells Fargo, and each Lender having a revolving
commitment will purchase an irrevocable and
unconditional participation in each Letter of Credit and
Swing Line Loan.
TERM FACILITIES: $120 million term credit facility, already outstanding
under the Existing Credit Agreement ("Term Facility A");
and
$80 million multiple advance term credit facility
("Term Facility B").
PURPOSE: The proceeds of the Senior Secured Credit Facilities
shall be used to finance: (i) the Transaction; (ii)
permitted acquisitions; (iii) working capital; (iv)
capital expenditures; (v) Transaction fees and expenses;
and (vi) lawful, general corporate purposes.
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CONFIDENTIAL ANNEX A INFOUSA INC.
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INITIAL CLOSING The Existing Credit Agreement closed on March 25, 2004
DATE: (the "Initial Closing Date").
TERM FACILITY B The date the initial loans are made under Term Facility
CLOSING DATE B which shall not be later than June 30, 2004 ("Term
Facility B Closing Date"). The final disbursement of
loans under Term Facility B shall be made not later than
August 31, 2004.
INTEREST RATES: As set forth in Addendum I.
MATURITY: The Revolving Facility shall terminate and all amounts
outstanding thereunder shall be due and payable in full
on the third anniversary of the Initial Closing Date.
Term Facility A shall be subject to repayment according
to the Term A Scheduled Amortization (defined below) and
mandatory prepayment events, with the final payment of
all amounts outstanding thereunder being due and payable
in full on March 25, 2009 (i.e., the fifth anniversary
of the Initial Closing Date).
Term Facility B shall be subject to repayment according
to the Term B Scheduled Amortization (defined below) and
mandatory prepayment events, with the final payment of
all amounts outstanding thereunder being due and payable
in full on the sixth anniversary of the Term Facility B
Closing Date.
TERM A SCHEDULED Term Facility A will be payable in quarterly principal
AMORTIZATION: installments as shown below:
SCHEDULED REPAYMENT DATE AMOUNT
the last business day of the calendar $ 5,000,000
quarter ending June 30, 2004, and the last
business day of each calendar quarter
thereafter to and including the calendar
quarter ending March 31, 2005
the last business day of the calendar $6,250,000
quarter ending June 30, 2005,
and the last business day of each
calendar quarter thereafter to and
including the calendar quarter ending
December 31, 2008
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CONFIDENTIAL ANNEX A INFOUSA INC.
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on the fifth anniversary of the Initial all remaining
Closing Date principal
TERM B SCHEDULED Term Facility B will be payable beginning September 30,
AMORTIZATION: 2004, in quarterly principal installments equal to 0.25%
of the outstanding principal balance of Term Facility B
loans immediately after the final disbursement under
that facility, and in one final payment on the sixth
anniversary of the Term Facility B Closing Date equal to
the remaining unpaid principal balance.
MANDATORY In addition to the scheduled amortization, the Term
PREPAYMENTS OF Facilities shall be prepaid by an amount equal to (i)
TERM FACILITIES: 100% of the net cash proceeds of all asset sales by the
Borrower or any subsidiary of the Borrower (including
sales of stock of subsidiaries), net of selling expenses
and taxes to the extent such taxes are paid; (ii) 100%
of casualty insurance net proceeds not reinvested in the
Borrower (iii) 100% of the net cash proceeds from the
issuance of any debt by the Borrower or any of its
subsidiaries (other than pursant to this Term Sheet);
(iv) 50% of the net cash proceeds from the issuance of
equity by the Borrower or any of its subsidiaries, and
(v) as set forth below under the heading "Excess Cash
Flow Recapture"
EXCESS CASH FLOW Until the Borrower's Leverage Ratio is 2.50x or less for
RECAPTURE: two consecutive quarters, each year, not later than 15
days after the Borrower's audited financial statements
are due, the Borrower shall prepay the Term Facilities
in an aggregate amount equal to 50% of Excess Cash Flow
(to be defined) from the prior year's operations, such
amount to be divided pro-rata among Term Facility A and
Term Facility B.
APPLICATION OF Mandatory prepayments will be applied pro-rata to the
MANDATORY Term Facilities and shall be applied to principal
PREPAYMENTS; installments in inverse order of maturity. If Term
OPTION NOT TO Facility A has been fully repaid, the entire amount of
RECEIVE: mandatory prepayments shall be applied to Term Facility
B. Notwithstanding the foregoing, each Lender having a
Term Facility B commitment may elect not to accept a
mandatory prepayment, in which case such Lender's
portion shall be applied to Term Facility A.
SECURITY: The Senior Secured Credit Facilities will be secured by
a first
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CONFIDENTIAL ANNEX A INFOUSA INC.
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priority perfected security interest in (i) all
of the capital stock of each of the existing and future
domestic subsidiaries (direct or indirect) of the
Borrower, which capital stock shall not be subject to
any other lien or encumbrance; (ii) the capital stock of
each existing and future foreign subsidiary (direct or
indirect) of the Borrower, to the extent doing so would
not result in material increased tax liabilities for the
Credit Parties, which capital stock shall not be subject
to any other lien or encumbrance; and (iii) all other
present and future assets and properties of the Borrower
and its subsidiaries (including, without limitation,
accounts receivable, real property, equipment,
contracts, trademarks, copyrights, patents, license
rights and general intangibles), provided, however, that
non-U.S. subsidiaries shall only be required to grant
security interests to the extent doing so would not
result in material increased tax liabilities for the
Credit Parties.
The foregoing security shall ratably secure the Senior
Secured Credit Facilities and any interest rate
swap/foreign currency swap or similar agreements with a
Lender or its affiliates under the Senior Secured Credit
Facilities.
Negative pledge on all assets of the Borrower and
Guarantors other than the stock of the Target, subject
to customary permitted liens to be agreed upon.
OPTIONAL The Borrower may prepay the Senior Secured Credit
PREPAYMENTS AND Facilities in whole or in part at any time without
COMMITMENT penalty, subject to reimbursement of the Lenders'
REDUCTIONS: breakage and redeployment costs in the case of
prepayment of LIBOR borrowings. Prepayments of the Term
Facility shall be applied to installments in inverse
order of maturity. The unutilized portion of any
commitment under the Senior Secured Credit Facilities in
excess of the Swing Line Loans and the stated amount of
all Letters of Credit may be irrevocably canceled by the
Borrower in whole or in part.
CONDITIONS The closing of the Senior Secured Credit Facilities will
PRECEDENT TO be subject to satisfaction of the conditions precedent
CLOSING: deemed appropriate by the Administrative Agent and the
Lenders including, but not limited to, the following:
1. The acquisition of the Target (the "Acquisition")
shall be accomplished by a tender offer for not less
than 51% of the common stock of the Target followed by a
merger. All aspects
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CONFIDENTIAL ANNEX A INFOUSA INC.
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of the structure used to consummate the Acquisition and
the definitive documentation relating thereto (the
"Definitive Acquisition Documents") shall be in form and
substance satisfactory to Lead Arranger and Lenders. The
Definitive Acquisition Documents shall be in full force
and effect and in compliance in all material respects
with applicable laws and regulations. All aspects of the
Acquisition shall be consummated in accordance with the
Definitive Acquisition Documents and no provision
thereof shall have been amended, supplemented, waived or
otherwise modified in any material respect without the
prior written consent of Lead Arranger and Lenders.
2. No material change to the corporate and capital
structure of Borrower and Guarantors.
3. The definitive documentation evidencing the Credit
Facilities (the "Definitive Financing Documents") shall
be prepared by counsel to Lead Arranger and shall be in
form and substance satisfactory to Lead Arranger and
Lenders and shall have been executed and delivered by
Borrower and Guarantors. Such Definitive Financing
Documents shall include (i) customary closing
documentation, including legal opinions, officers'
certificates, solvency opinions or certificates,
resolutions, corporate and public records and the like,
and (ii) such documentation and actions as may be
necessary to create a perfected first priority lien in
the collateral described above.
4. The Lead Arranger and Lenders shall have received (i)
the unaudited financial statements of Borrower and its
subsidiaries and the Target and its subsidiaries dated
March 31, 2004; (ii) a final statement of sources and
uses of funds regarding the Transaction; (iii) final
projected financial statements (including balance sheets
and statements of operations, stockholders' equity and
cash flow) of Borrower and its subsidiaries for the
six-year period after the Term Facility B Closing Date;
and (iv) a pro forma opening balance sheet for Borrower
and its subsidiaries as of the Term Facility B Closing
Date after giving effect to the Transaction and the
financings contemplated hereby.
5. At least 51% of the issued and outstanding shares of
the Target shall have been tendered and not withdrawn.
6. Closing Leverage Ratio (Total Funded Debt at
Closing/Combined EBITDA) not greater than 3.00x on the
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CONFIDENTIAL ANNEX A INFOUSA INC.
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Term Facility B Closing Date, assuming (i) Total Funded
Debt on the Term Facility B Closing Date means Total
Funded Debt of Borrower minus all cash of Target greater
than $3 million, (ii) 100% of the Target's shares have
been tendered, (iii) the entire purchase price for the
Target's stock had been funded, including all costs
associated with the Acquisition such as breakup and
underwriting fees and fees associated with redemption
and repayment of the Target's indebtedness, and (iv)
Combined EBITDA means the combined EBITDA of the
Borrower and the Target. "EBITDA" means, with respect to
any period: (i) (A) net income for such period,
determined in accordance with GAAP, excluding (B)
non-operating gains and losses, plus (ii) (A) interest
expense, (B) tax expense (C) depreciation and
amortization expense, (D) transaction expenses incurred
in connection with the Transaction that are not
capitalized (E) other extraordinary and non-recurring
items to be agreed on (to include litigation charges
relating to the Claude Shoch matter), (F) accounting
adjustments relating to the treatment of deferred
revenue of the Target, (G) prepayment premiums incurred
in retiring subordinated notes, and (H) unamortized fees
related to the Borrower's indebtedness under the Bank of
America credit facility.
7. Except as specifically disclosed in the Borrower's or
the Target's SEC Documents, since December 31, 2003,
there has been no change in the business, assets,
liabilities, results of operations or financial
condition of the Borrower or the Target which
individually or in the aggregate would reasonably be
expected to have a material adverse effect on the
Borrower or the Target.
8. All material governmental, shareholder and third
party approvals necessary or advisable in connection
with the Transaction, the financings contemplated hereby
and the continuing operations of the business of
Borrower and Target and their respective subsidiaries
shall have been obtained and be in full force and effect
and all applicable waiting periods shall have expired
without any action being taken or threatened by any
competent authority which would restrain, prevent or
otherwise impose material adverse conditions on the
Transaction or the financing thereof and no law or
regulation shall be applicable which could reasonably be
expected to have such effect.
9. Target shall have repaid in full and terminated all
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commitments relating to its credit facility with Silicon
Valley National Bank and all liens related thereto shall
have been released.
10. Lead Arranger and Lenders shall have received any
information reasonably necessary to conduct legal due
diligence investigations of the Borrower, Target their
respective subsidiaries and the Transaction, and shall
be satisfied with the results of such investigations.
11. There shall not exist any material disruption or
material adverse change in the financial or capital
markets generally or for Borrower or Guarantors in
particular or in the market for syndicated credit
facilities that could in the good faith judgment of Lead
Arranger be expected to materially adversely affect the
syndication of the Credit Facilities; and there shall
not exist any competing offering, placement or
arrangement for any debt security or bank financing by
or on behalf of Borrower or any Guarantor.
12. All fees and expenses to be paid on or prior to the
Closing Date to Lead Arranger and Lenders shall have
been paid in full.
13. Evidence that the Borrower shall have redeemed all
notes issued under the Bond Indenture dated June 18,
1998 among the Borrower and State Street Bank and Trust
Company of California, N.A., as Trustee (the
"Indenture") or receipt of a satisfactory opinion of the
Borrower's counsel regarding the Borrower's ability to
enter into the Definitive Financing Documents under the
terms of the Indenture.
14. S&P and Moodys shall have reviewed the proforma
combined financial statements of the Borrower and the
Target (after giving effect to the Transaction) and
assigned a rating.
CONDITIONS Usual and customary for transactions of this type, to
PRECEDENT TO ALL include without limitation: (i) all representations and
LOANS: warranties are true and correct as of the date of each
loan, (ii) no event of default under the Senior Secured
Credit Facilities or incipient default has occurred and
is continuing, or would result from such loan, and (iii)
until consummation of the merger with the Target, afer
giving effect to any requested loan, the sum of the
amount available to be drawn on the Revolving Facility
plus cash at the Target shall be not less than $25
million.
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REPRESENTATIONS Usual and customary for transactions of this type, to
AND WARRANTIES: include without limitation: (i) corporate existence and
status; (ii) corporate power and
authority/enforceability; (iii) no violation of law or
contracts or organizational documents; (iv) no material
litigation; (v) correctness of specified financial
statements and no material adverse change; (vi) no
absence of required governmental or third party
approvals; (vii) use of proceeds/compliance with margin
regulations; (viii) status under Investment Company Act;
(ix) ERISA matters; (x) environmental matters; (xi)
payment of taxes; and (xii) accuracy of disclosure; and
(xiii) perfected liens and security interests.
COVENANTS: Usual and customary for transactions of this type, to
include without limitation: (i) delivery of financial
statements and other reports; (ii) delivery of
compliance certificates; (iii) delivery of notices of
default, material litigation and material governmental
and environmental proceedings; (iv) compliance with laws
(including environmental laws and ERISA matters) and
material contractual obligations; (v) payment of taxes;
(vi) maintenance of insurance; (vii) limitation on
liens; (viii) limitation on mergers, consolidations and
sales of assets; (ix) limitation on incurrence of debt;
(x) limitation on transactions with affiliates; (xi)
limitations on restricted payments, (xii) limitation on
permitted acquisitions and investments, and (xiii) a
basket for cash dividends paid on common stock during
each period set forth below:
Common Stock
Period Cash Dividend Basket
------ --------------------
before March 25, 2005 Up to $10,000,000
March 25, 2005 through Up to $15,000,000
March 24, 2006
March 25, 2006 and Up to $20,000,000
thereafter per loan year
All dividend payments will be contingent upon no Event
of Default existing immediately before or after such
declaration or payment and the Borrower's Leverage Ratio
being not more than 2.50x after giving effect to any
payment.
The Borrower shall not take any action to stop or
interfere with
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the Trustee's actions to redeem the notes issued under
the Indenture.
FINANCIAL COVENANTS: Financial covenants shall include
1. Maximum Total Leverage Ratio. Maintenance on a
rolling four quarter basis of a Maximum Total Leverage
Ratio (Total Funded Debt/EBITDA) of 3.50x on the Term
Facility B Closing Date, with step-downs to be agreed
upon.
2. Minimum Fixed Charge Coverage Ratio. Maintenance on a
rolling four quarter basis of a Minimum Fixed Charge
Coverage Ratio (EBITDA less Capital Expenditures)/(Cash
Interest Expense plus Scheduled Principal Repayments
plus Cash Taxes plus Restricted Payments) of 1.15x.
3. Minimum Net Worth. Maintenance at all times of a
Minimum Net Worth of 80% of Borrower's stockholder's
equity as of December 31, 2003, with step-ups equal to
50% of net income (with no deduction for net losses) and
100% of the proceeds of any equity issuances.
EVENTS OF DEFAULT: Usual and customary in transactions of this type, to
include without limitation: (i) nonpayment of principal,
interest, fees or other amounts, (ii) violation of
covenants (with cure periods as applicable), (iii)
inaccuracy of representations and warranties, (iv)
cross-default to other material agreements and
indebtedness, (v) bankruptcy and other insolvency
events, (vi) material judgments, (vii) ERISA matters,
(viii) actual or asserted invalidity of any loan
documentation or security interests, and (ix) change of
control.
ASSIGNMENTS AND The Lenders may assign all or in acceptable minimum
PARTICIPATIONS: amounts any part of their shares of the Senior Secured
Credit Facilities to their affiliates, to other Lenders,
or to one or more financial institutions or other
accredited investors that are Eligible Assignees (to be
defined) which are acceptable to the Borrower (unless a
default has occurred and is continuing) and the
Administrative Agent, such consent not to be
unreasonably withheld, provided that the Borrower's
consent need not be obtained for assignments occurring
during the first 30 days following the Term Facility B
Closing Date. Assignments will be in minimum amounts of
$5,000,000 for the Revolving Facility and $1,000,000 for
the Term Facilities and shall be subject to payment of a
fee to the Administrative Agent. The Lenders will have
the right to sell participations, subject to
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customary limitations on voting rights, in their shares
of the Senior Secured Credit Facilities.
WAIVERS AND Amendments and waivers of the provisions of the loan
AMENDMENTS: agreement and other Definitive Financing Documents will
require the approval of Lenders holding loans and
commitments representing more than 50% of the aggregate
amount of loans and commitments under the Senior Secured
Credit Facilities, except that the consent of all of the
Lenders affected thereby shall be required with respect
to (a) increases in the commitment of such Lenders, (b)
reductions of principal, interest or fees, (c)
extensions of scheduled maturities or times for payment,
and (d) releases of all or substantially all of the
collateral and the Guarantors.
INDEMNIFICATION: The Borrower shall indemnify the Administrative Agent,
Wells Fargo and the Lenders and their respective
affiliates from and against all losses, liabilities,
claims, damages or expenses arising out of or relating
to the Senior Secured Credit Facilities, the Borrower's
use or proposed use of loan proceeds (including but not
limited to the Acquisition, whether or not completed) or
the commitments, including, but not limited to,
reasonable attorneys' fees (including the allocated cost
of internal counsel) and settlement costs. This
indemnification shall survive and continue for the
benefit of the indemnitees at all times after the
Borrower's acceptance of the Lenders' commitments for
the Senior Secured Credit Facilities, notwithstanding
any failure of the Senior Secured Credit Facilities to
close.
GOVERNING LAW: State of Minnesota.
LEAD ARRANGER AND Faegre & Benson, LLP
ADMINISTRATIVE
AGENT'S COUNSEL:
PRICING/FEES/ As set forth in Addendum I.
EXPENSES:
OTHER: This Summary of Terms is intended as an outline of
certain of the material terms of the Senior Secured
Credit Facilities and does not purport to summarize all
of the conditions, covenants, representations,
warranties and other provisions, which would
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be contained in definitive documentation for the Senior
Secured Credit Facilities.
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ADDENDUM I
INTEREST RATES, FEES AND EXPENSES
COMMITMENT FEE: The Borrower will pay a fee (the "Commitment Fee"),
determined in accordance with the Performance Pricing
grid set forth below, on the unused portion of each
Lender's share of the Senior Secured Credit Facilities.
The Commitment Fee is payable quarterly in arrears
commencing upon Closing. Swing Line Loans will not be
deemed to be utilization for purposes of calculating the
Commitment Fee.
INTEREST RATES: The Revolving Facility and Term Facility shall bear
interest at a rate equal to LIBOR plus the Applicable
Margin or the Alternate Base Rate (to be defined as the
higher of (i) the Wells Fargo prime rate and (ii) the
Federal Funds rate plus 0.50%) plus the Applicable
Margin. The Applicable Margin in each case shall be
determined in accordance with the Performance Pricing
grid set forth below.
If during the 180 day period following the initial
funding, any breakage costs, charges or fees are
incurred with respect to LIBOR loans on account of the
syndication of the Senior Secured Credit Facilities, the
Borrower shall immediately reimburse the Administrative
Agent for any such costs, charges or fees. Such right of
reimbursement shall be in addition to and not in
limitation of customary cost and yield protections. Each
Swing Line Loan shall bear interest at the Alternate
Base Rate plus the Applicable Margin.
The Borrower may select interest periods of 1, 2, 3 or 6
months for LIBOR loans, subject to availability.
Interest shall be payable at the end of the selected
interest period, but no less frequently than quarterly.
A default rate shall apply on all loans in the event of
default under the Senior Secured Credit Facilities at a
rate per annum of 2% above the applicable interest rate.
PERFORMANCE The Commitment Fee and Applicable Margin for any fiscal
PRICING: quarter, shall be the applicable rate per annum set
forth in the table below opposite the Total Leverage
Ratio determined as of the last day of the immediately
preceding fiscal quarter.
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Applicable Margin for LIBOR Loans Applicable Margin for Alternate
Base Rate Loans
- --------------------------------------------------------------------- -----------------------------
Term Term Term Term
Total Commitment Revolving Facility Facility Revolving Facility Facility
Level Leverage Ratio Fee Facility A B Facility A B
- ----- ------------------- ---------- --------- -------- -------- --------- -------- --------
I > or equal to 3.00x 0.50% 2.75% 2.75% 3.00% 1.75% 1.75% 2.00%
II > or equal to 2.50x 0.50% 2.50% 2.50% 2.75% 1.50% 1.50% 1.75%
< 3.00x
III > or equal to 2.00x 0.40% 2.25% 2.50% 2.75% 1.25% 1.50% 1.75%
< 2.50x
IV < 2.00x 0.30% 2.00% 2.50% 2.75% 1.00% 1.50% 1.75%
CALCULATION OF Other than calculations in respect of interest at the
INTEREST AND FEES: Wells Fargo prime rate (which shall be made on the basis
of actual number of days elapsed in a 365/366 day year),
all calculations of interest and fees shall be made on
the basis of actual number of days elapsed in a 360-day
year.
COST AND YIELD Customary for transactions and facilities of this type,
PROTECTION: including, without limitation, in respect of breakage or
redeployment costs incurred in connection with
prepayments, changes in capital adequacy and capital
requirements or their interpretation, illegality,
unavailability, reserves without proration or offset and
payments free and clear of withholding or other taxes.
LETTER OF CREDIT Letter of credit fees are due quarterly in arrears to be
FEES: shared proportionately by the Lenders. Fees will be
equal to the Applicable Margin for revolving LIBOR loans
on a per annum basis plus a fronting fee of 0.125% per
annum to be paid to the Letter of Credit Issuing Lender
for its own account. Fees will be calculated on the
aggregate stated amount for each Letter of Credit for
the stated duration thereof.
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EXPENSES: The Borrower will pay all reasonable costs and expenses
associated with the preparation, due diligence,
administration, syndication and enforcement of all
documentation executed in connection with the Senior
Secured Credit Facilities, including, without
limitation, the legal fees of counsel to the
Administrative Agent (including the allocated cost of
internal counsel), regardless of whether or not the
Senior Secured Credit Facilities close. The Existing
Credit Agreement will be amended or used as the basis
for the new Credit Agreement. After the occurrence of an
Event of Default, the Borrower will also pay the
expenses of each Lender in connection with any workout,
restructuring or enforcement of the loan documents.
This Summary of Terms and Conditions is not intended to be, and should not be
construed as, a commitment to lend, nor should it be construed as an attempt to
establish all of the terms and conditions relating to the Senior Secured Credit
Facilities. It is intended only to be indicative of certain terms and conditions
around which how the loan documents might be structured and credit approval
might be pursued, and not to preclude negotiations within the general scope of
these terms and conditions. The loan documents containing final terms and
conditions will be subject to approval by Borrower, Wells Fargo and all Lenders.
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ADDENDUM II
Sources and Uses of Funds at Closing assuming 100% of Target's shares are
tendered and the Existing Credit Facility is refinanced
SOURCES
Revolving Facility and Term A Facility $127,000,000
Term Facility B $ 80,000,000
Cash/Revolving Facility Advances $ 29,209,000
Shares of Target held by Borrower $ 2,288,000
Total $238,497,000
USES
Refinance Existing Credit Facility $127,000,000
Acquisition of Target $104,497,000
Breakup fee to Value Act $ 4,000,000
Transaction Fees and Expenses $ 3,000,000
Total $238,497,000
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[_ON infoUSA LETTERHEAD_]
April 23, 2004
Mr. Steven R. Ashley By Facsimile
Senior Vice President (612) 667-7266
Wells Fargo Bank, National Association
MAC N9305-051
Sixth and Marquette
Minneapolis, MN 55479
Dear Mr. Ashley:
infoUSA, Inc. (the "Borrower) has received the Commitment Letter of Wells Fargo
Bank, National Association (the "Wells Fargo"), dated as of April 21, 2004,
under which Wells Fargo agrees to provide up to $250 million of revolving and
term financing to the Borrower. Attached to the Commitment Letter as Annex A is
a Summary Of Terms - Senior Secured Credit Facilities (the "Term Sheet").
The Borrower hereby requests that Wells Fargo agree that the Term Sheet be
amended by deleting Paragraph 10 under the heading, "Conditions Precedent to
Closing".
Please evidence Wells Fargo granting of this request by executing the
acknowledgment below and returning a facsimile of this letter to Raj Das at
(402) 596-8902 and by email to raj.das@infousa.com.
Very truly yours,
infoUSA, Inc.
By /s/ Raj Das
___________________
Name: Raj Das
Title: Chief Financial Officer
ACKNOWLEDGED AND AGREED TO:
WELLS FARGO BANK, NATIONAL ASSOCIATION
By /s/ Steven R. Ashley
_________________________
Name: Steven R. Ashley
Title: Senior Vice President