Exhibit 10.6
(J.P. MORGAN LOGO)
J.P. MORGAN SECURITIES INC.
270 Park Avenue
New York, New York 10017
JPMORGAN CHASE BANK, N.A.
270 Park Avenue
New York, New York 10017
October 2, 2005
Commitment Letter
R.H. Donnelley Corporation
1001 Winstead Drive
Cary, North Carolina 27513
Attention: Steven Blondy
Ladies and Gentlemen:
R.H. Donnelley Corporation ("you" or the "Company") has advised J.P.
Morgan Securities Inc. ("JPMorgan") and JPMorgan Chase Bank, N.A. ("JPMCB" and,
together with JPMorgan, the "Commitment Parties") that it intends to enter into
a merger agreement (the "Merger Agreement") pursuant to which it will acquire
(the "Acquisition") all of the outstanding capital stock of the company
separately identified to us as "Delta" (the "Target") from the existing holders
of such capital stock (the "Sellers"). We understand that the Acquisition will
be effected by merging (the "Merger") the Target with and into a newly formed
subsidiary of the Company with such newly formed subsidiary being the survivor
of the Merger. You have also advised us of the following in connection with the
Acquisition: (a) you intend to redeem your outstanding 8% redeemable convertible
cumulative preferred stock (the "Preferred Stock"); (b) the consummation of the
Acquisition will trigger a requirement to offer (the "Change of Control Offers")
to repurchase the outstanding bonds of the Target and its subsidiaries described
on Schedule I hereto (collectively, the "Delta Bonds") at a purchase price equal
to 101% of the outstanding principal amount thereof or, in the case of the
Target's 9% Senior Discount Notes due 2013, at 101% of the Accreted Value (as
defined in the applicable indenture); (c) the consummation of the Acquisition
and other transactions contemplated hereby will require consents and other
amendments (the "Delta Credit Agreement Amendments") under the Credit Agreement,
dated as of November 8, 2002 (as amended, the "Delta East Credit Agreement") and
the Credit Agreement, dated as of September 9, 2003 (as amended, the "Delta West
Credit Agreement" and, together with the Delta East Credit Agreement, the "Delta
Credit Agreements"), in each case as described on Schedule II and other such
amendments necessary or appropriate to consummate the Acquisition and the other
transactions contemplated hereby
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as may be mutually agreed; and (d) you will seek approval of amendments (the
"RHD Credit Agreement Amendments" and, together with the Delta Credit Agreement
Amendments, the "Amendments") to the existing Amended and Restated Credit
Agreement, dated as of September 1, 2004 (as amended, the "RHD Credit
Agreement") with your subsidiary R.H. Donnelley Inc. ("RHD") as described on
Schedule III and other such amendments necessary or appropriate to consummate
the Acquisition and the other transactions contemplated hereby as may be
mutually agreed. References herein to the "Transaction" shall include the
financings described herein, including, without limitation, the redemption of
the Preferred Stock and the Change of Control Offers, and all other transactions
related to the Transaction, including, without limitation, the Acquisition. The
borrower under the Delta West Credit Agreement is referred to herein as "Delta
West", and the borrower under the Delta East Credit Agreement is referred to
herein as "Delta East".
You have further advised us that you propose to finance the
Transaction and the related fees and expenses from the following sources: (a)
the issuance of at least 36.3 million new shares of common stock of the Company
valued at approximately $2,359,500,000, based on the September 20, 2005 closing
price of $65 per share, to the Sellers (the "New Equity"); (b) $503,000,000 from
incremental senior secured term loan facilities (the "Incremental Tranche B
Delta West Facility") to be made available under the Delta West Credit
Agreement; (c) $1,842,000,000 (as such amount may be increased in connection
with the Company Bond Backstop (as defined below)) in cash proceeds from either
(i) the issuance by the Company of senior notes (the "Company Holdco Notes") in
a public offering or Rule 144A private placement or (ii) in the event the
Company is unable to issue the full amount of the Company Holdco Notes at or
prior to the time the Acquisition is consummated, borrowings under a senior
bridge facility of the Company (the "Company Holdco Facility"); and (d)
$250,000,000 in cash proceeds from either (i) the issuance by the Target of
senior notes (the "Target Holdco Notes" and, together with the Company Holdco
Notes, the "Holdco Notes") in a public offering or Rule 144A private placement
or (ii) in the event the Target is unable to issue the full amount of the Target
Holdco Notes at or prior to the time the Acquisition is consummated, borrowings
under a senior bridge facility of the Target (the "Target Holdco Facility";
together with the Company Holdco Facility, the "Holdco Facilities"; and the
Holdco Facilities, together with the Incremental Tranche B Delta West Facility,
the "Credit Facilities"). It is understood that the Change of Control Offers
will be commenced prior to the Closing Date (as defined in the Term Sheets) and
that any funding required in connection with the Change of Control Offers will
occur on the Closing Date.
We also understand that you are considering making an offer to
repurchase the outstanding 8.875% Senior Notes of RHD (the "RHD Bond
Repurchase"), which would be financed with an incremental term loan facility
(the "Incremental RHD Facility") in an aggregate amount equal to $325,000,000
(plus the amount of any premiums paid in connection with the RHD Bond
Repurchase) and with substantially the same terms and conditions as those
applicable to the Tranche A-2 Term Loans (as defined in the RHD Credit
Agreement) outstanding thereunder.
You have requested that (a) JPMorgan agree to act as the sole lead
arranger and sole bookrunner for the Credit Facilities, (b) JPMCB commit to
provide the Credit Facilities, (c) JPMorgan agree to assist in obtaining the
consents required (the "Required Bank Consents") in connection with the approval
of the Amendments, (d) JPMCB agree to offer to acquire commitments and/or loans
of Non-Consenting Lenders (as defined below) in connection with the solicitation
of the Required Bank Consents as described below, (e) JPMCB commit to provide
the financing required to fund any purchases required to be made pursuant to the
Change of Control Offers (the "Put Financing") and (f) JPMorgan agree to act as
sole lead arranger and sole bookrunner for the Incremental RHD Facility. It is
understood and agreed that any Put Financing shall, at JPMCB's option, after
consultation with the Company, be comprised of (a) an increase to the Delta
Credit Agreements, (b) an increase to the Company Holdco Facility and/or the
Target Holdco Facility, (c) an increase in the amount of Holdco Notes, (d)
borrowings under bridge
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facilities (the "Delta Bridge Facilities" and, together with the Holdco
Facilities, the "Bridge Facilities") at Delta East and/or Delta West, as the
case may be, and/or (e) the purchase or issuance of notes with the same terms
and conditions as the notes tendered pursuant to the associated Change of
Control Offer (any Put Financing described in clauses (a), (b) and (d) above is
referred to herein as a "Bank Put Financing"), provided that any Put Financing
and any other Facility (as defined below) shall be in compliance with all other
debt instruments and credit agreements of the Company, the Target and their
respective subsidiaries. In addition, to the extent the 6.875% Senior Notes due
2013 of the Company (the "Existing Company Bonds") need to be refinanced in
connection with the Transaction, it is understood and agreed that the Company
Holdco Facility or the Company Holdco Notes shall be increased by an amount
equal to $300,000,000 (the "Company Bond Backstop") to finance the tender of the
Existing Company Bonds.
JPMorgan is pleased to advise you that it is willing to act as the
sole lead arranger and sole bookrunner for the Credit Facilities and any Bank
Put Financing, and JPMCB is pleased to advise you of its commitment to provide
the entire amount of the Credit Facilities and any Put Financing. This
Commitment Letter and the Summaries of Terms and Conditions attached as Exhibits
A, B, C, D, E and F hereto (the "Term Sheets") set forth the principal terms and
conditions on and subject to which JPMCB is willing to make available the Credit
Facilities and any Put Financing. It is agreed that JPMorgan will act as the
sole lead arranger and sole bookrunner in respect of the Credit Facilities and
any Bank Put Financing, and that JPMCB will act as the sole administrative agent
in respect of the Credit Facilities and any Bank Put Financing.
JPMorgan is also pleased to advise you that it is willing to act as
(a) the sole lead arranger and the sole bookrunner for the Amendments, any
Acquired Facilities (as defined below) and any Refinanced Facilities (as defined
below) and, as such, it will use its commercially reasonable efforts to solicit
the Required Bank Consents and (b) the sole lead arranger and the sole
bookrunner for the Incremental RHD Facility and, as such, to use its
commercially reasonable efforts to arrange a syndicate of Lenders (as defined
below) to provide the Incremental RHD Facility and to obtain any consents
required under the RHD Credit Agreement in connection therewith. In the event
that, notwithstanding JPMorgan's efforts pursuant to clause (a) of the preceding
sentence, one or more lenders which are parties to the Delta Credit Agreements
or the RHD Credit Agreement, as applicable (the "Existing Lenders"), and whose
consent is required for the Amendments to become effective, are not willing to
approve the Amendments (each, a "Non-Consenting Lender"), JPMCB is pleased to
advise you of its commitment (a) to offer to acquire (and, if such offer is
accepted, to acquire) by assignment on the Closing Date (as defined in the Term
Sheets) at par and pursuant to customary documentation sufficient commitments
and/or loans of Non-Consenting Lenders necessary to cause the Amendments to
become effective (any such commitments and/or loans so acquired by assignment,
the "Acquired Facilities") or (b) if one or more Non-Consenting Lenders whose
consent is required for the Amendments to become effective are unwilling to
assign their commitments and/or loans to JPMCB pursuant to the preceding clause
(a), to refinance the Delta Credit Agreements and/or the RHD Credit Agreement,
as applicable, upon the terms and subject to the conditions set forth or
referred to in this Commitment Letter (the "Refinanced Facilities" and together
with the Credit Facilities, the Acquired Facilities, the Incremental RHD
Facility and any Bank Put Financing, the "Facilities") (it being understood, in
each case, that, concurrently with the consummation of the Acquisition, the
terms of the Acquired Facilities or the Refinanced Facilities, as the case may
be, will be amended in the manner contemplated by this Commitment Letter but
will otherwise be on substantially the same terms as the Delta Credit Agreements
or the RHD Credit Agreement, as applicable).
You agree that, as a condition to the commitments and agreements
hereunder, no other agents, co-agents or arrangers will be appointed, no other
titles will be awarded and no compensation (other than that expressly
contemplated by the Term Sheets and Fee Letter referred to below) will be paid
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in connection with the Credit Facilities, the Amendments or any Bank Put
Financing unless you and we shall so agree.
JPMorgan intends to syndicate the Facilities to a group of financial
institutions (together with JPMCB and the Existing Lenders (other than
Non-Consenting Lenders), the "Lenders") identified by us in consultation with
you. JPMorgan intends to commence syndication efforts in respect of the
Facilities and solicitation efforts in respect of the Amendments promptly
following the execution of the Merger Agreement, and you agree actively to
assist JPMorgan in completing a syndication and solicitation satisfactory it.
Your assistance in respect of our syndication and solicitation efforts shall
include (a) your using commercially reasonable efforts to ensure that the
syndication and solicitation efforts benefit from your existing lending and
investment banking relationships, (b) direct contact between your senior
management and advisors and the proposed Lenders, (c) assistance in the
preparation of a Confidential Information Memorandum and other marketing
materials to be used in connection with the syndication and solicitation efforts
and (d) the hosting, with JPMorgan, of one or more meetings of prospective
Lenders. You also agree that, at your expense, you will work with JPMorgan to
procure, on or prior to the commencement of general syndication of the
Facilities, a rating for the Facilities (after giving effect to the Transaction)
by Moody's Investors Service, Inc. and Standard & Poor's Ratings Group.
JPMorgan will manage, in consultation with you, all aspects of the
syndication and solicitation efforts, including decisions as to the selection of
institutions to be approached and when they will be approached, when their
commitments or approvals will be accepted, which institutions will participate,
the allocations of the commitments among the Lenders and the amount and
distribution of fees among the Lenders. To assist JPMorgan in its syndication
and solicitation efforts, you agree promptly to prepare and provide to JPMorgan
all information with respect to the Company and the Transaction, including all
financial information and projections through 2011 (such projections, together
with all other forward-looking information, collectively called the
"Projections"), as we may reasonably request in connection with the arrangement
and syndication of the Facilities and the approval of the Amendments. At our
request, you also agree to assist in the preparation of a version of the
information package and presentation consisting exclusively of information and
documentation that is either publicly available or not material with respect to
you and your affiliates and any of your or their securities for purposes of
United States federal and state securities laws. You hereby represent and
covenant that (a) to the best of your knowledge, all written information other
than the Projections (the "Information") that has been or will be made available
to us by you or any of your representatives, when taken as a whole, is or will
be true and correct in all material respects and does not or will not, when
furnished, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained therein not
materially misleading in light of the circumstances under which such statements
are made and (b) the Projections that have been or will be made available to us
by you or any of your representatives, have been or will be prepared in good
faith based upon assumptions believed by you to be reasonable at the time
prepared (it being understood that Projections are subject to significant
uncertainties and contingencies, many of which are beyond your control, and that
no assurance is given that such Projections will be realized). You agree to
supplement the Information and Projections from time to time until the Closing
Date so that the representations in the preceding sentence remain correct. You
understand that in arranging and syndicating the Facilities and in soliciting
the approval of the Amendments we may use and rely on the Information and the
Projections without independent verification thereof.
As consideration for JPMCB's commitment hereunder and JPMorgan's
agreement to perform the services described herein, you agree to pay, or to
cause the applicable Borrower to pay, to the Commitment Parties the
nonrefundable fees set forth in the Term Sheets and in the Fee Letter dated the
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date hereof and delivered herewith (the "Fee Letter"), which fees and other
expenses required to be paid on or before the Closing Date may be netted out of
any initial funding under the Facilities.
Each Commitment Party's commitments and agreements hereunder are
subject to (a) such Commitment Party's satisfaction that since June 30, 2005, no
event has occurred that has had or would reasonably be expected to have,
individually or in the aggregate, a material adverse effect on (i) the business,
results of operations or financial condition of the Target and its subsidiaries,
taken as a whole (provided, however, that with respect to this clause (i),
material adverse effect will be deemed not to include effects to the extent
resulting from (A) changes in or relating to the United States economy or United
States financial, credit or securities markets in general or (B) changes in or
relating to the industries in which the Target operates or the markets for any
of the Target's products or services in general, which changes in the case of
clauses (A) and (B) do not affect the Target to a materially disproportionate
degree relative to other entities operating in such markets or industries or
serving such markets) or (ii) the ability of the Target to consummate the
transactions contemplated by the Merger Agreement in the manner contemplated
thereby, (b) the negotiation, execution and delivery of definitive documentation
with respect to the Facilities and the Amendments, the terms and conditions of
which shall be consistent with the terms set forth in this Commitment Letter and
the Term Sheets, including the funding conditions attached hereto as Exhibit F,
and in a form reasonably satisfactory to the Administrative Agent and the
Lenders (the "Credit Documentation"), it being understood that there shall be no
conditions to closing or the initial funding other than conditions expressly set
forth in this Commitment Letter and the Term Sheets, and the Commitment Parties
agree to provide Credit Documentation, including financial covenants, in such
form that the terms thereof do not impair availability of the Credit Facilities
on the Closing Date or result in an immediate or likely default thereunder at or
immediately after the Closing Date, and (c) the other conditions set forth in
Exhibit F.
You agree that during the syndication of the Facilities or the
solicitation of approvals for the Amendments that there shall be no competing
offering, placement or arrangement of any debt securities or bank financing by
or on behalf of you or your subsidiaries or the Target or any of its
subsidiaries.
You agree (a) to indemnify and hold harmless each Commitment Party,
its affiliates and its and its affiliates' officers, directors, employees,
advisors and agents (each, an "Indemnified Person") as set forth in Annex A
hereto and (b) to reimburse each Commitment Party and its affiliates on demand
for all reasonable out-of-pocket expenses (including due diligence expenses,
syndication expenses, consultant's fees and expenses, travel expenses, and
reasonable fees, charges and disbursements of counsel) incurred in connection
with the Facilities or the Amendments and any related documentation (including
this Commitment Letter, the Term Sheets, the Fee Letter and the definitive
financing documentation) or the administration, amendment, modification or
waiver thereof. No Indemnified Person shall be liable (i) for any damages
arising from the use by unauthorized persons of Information or other materials
sent through electronic, telecommunications or other information transmission
systems that are intercepted by such persons except to the extent resulting from
the gross negligence or willful misconduct of such Indemnified Person or (ii)
for any special, indirect, consequential or punitive damages in connection with
the Facilities or the Amendments.
You acknowledge that each Commitment Party and its affiliates (the
term "Commitment Party" as used below in this paragraph being understood to
include such affiliates) may be providing debt financing, equity capital or
other services (including financial advisory services) to other companies in
respect of which you may have conflicting interests regarding the Transaction
and otherwise. Such Commitment Party will not use confidential information
obtained from you by virtue of the Transaction or its other relationships with
you in connection with the performance by such Commitment Party of services for
other companies, and such Commitment Party will not furnish any such information
to other
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companies. You also acknowledge that such Commitment Party has no obligation to
use in connection with the Transaction, or to furnish to you, confidential
information obtained from other companies.
This Commitment Letter shall not be assignable by you without the
prior written consent of each Commitment Party (and any purported assignment
without such consent shall be null and void), 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 and
the Indemnified Persons. This Commitment Letter may not be amended or waived
except by an instrument in writing signed by you and each of us. This Commitment
Letter may be executed in any number of counterparts, each of which shall be an
original, and all of which, when taken together, shall constitute one agreement.
Delivery of an executed signature page of this Commitment Letter by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. This Commitment Letter and the Fee Letter are the only agreements that
have been entered into among us with respect to the Facilities and the
Amendments and set forth the entire understanding of the parties with respect
thereto. This Commitment Letter shall be governed by, and construed in
accordance with, the laws of the State of New York. This Commitment Letter is
not intended to create a fiduciary relationship among the parties hereto.
This Commitment Letter is delivered to you on the understanding that
neither this Commitment Letter, the Term Sheets or the Fee Letter nor any of
their terms or substance shall be disclosed, directly or indirectly, by you to
any other person except (a) to your officers, agents and advisors who are
directly involved in the consideration of this matter, (b) as may be compelled
in a judicial or administrative proceeding (in which case you agree to inform us
promptly thereof) or as otherwise required by law or (c) in the case of the
Commitment Letter and Term Sheets only, on a confidential basis, to the Sellers
and the advisors to the Board of Directors of the Target (it being understood
that the Fee Letter may not be disclosed).
The compensation, reimbursement, indemnification and confidentiality
provisions contained herein and in the Fee Letter shall remain in full force and
effect regardless of whether definitive financing documentation shall be
executed and delivered and notwithstanding the termination of this Commitment
Letter or the JPMCB's commitment hereunder.
You hereby irrevocably submit to the non-exclusive jurisdiction of any
court of the State of New York located in the Borough of Manhattan in the City
of New York or the United States District Court for the Southern District of the
State of New York, or any appellate courts from any thereof, for the purpose of
any suit, action or other proceeding arising out of this Commitment Letter, the
Fee Letter, the Amendments or any of the agreements or transactions contemplated
hereby, which is brought by or against you and you (i) hereby irrevocably agree
that all claims in respect of any such suit, action or proceeding may be heard
and determined in any such court and (ii) hereby agree not to commence any
action, suit or proceeding relating to this Commitment Letter, the Fee Letter or
any such other agreements or transactions other than in such court except to the
extent mandated by applicable law. You hereby waive any objection that you may
now or hereafter have to the venue of any such suit, action or proceeding in any
such court or that such suit, action or proceeding was brought in an
inconvenient court and agree not to plead or claim the same. You hereby
acknowledge that you have been advised by counsel in the negotiation, execution
and delivery of this Commitment Letter, the Fee Letter and the other agreements
and transactions contemplated hereby, that no Commitment Party has any fiduciary
relationship with or fiduciary duty to you or any other person arising out of or
in connection with this Commitment Letter, the Fee Letter or any of the other
agreements or transactions contemplated hereby and that no Commitment Party has
been retained to advise or has advised you or any other person regarding the
wisdom, prudence or advisability of entering into or consummating the
Facilities. YOU HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS COMMITMENT LETTER, THE FEE
LETTER
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OR ANY OF THE OTHER AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY
COUNTERCLAIM RELATING THERETO.
Each of the Lenders hereby notifies you that, pursuant to the
requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into
law on October 26, 2001) (the "Patriot Act"), it is required to obtain, verify
and record information that identifies the Company and its subsidiaries
(including Target and its subsidiaries), which information includes names and
addresses and other information that will allow such Lender to identify the
Company and its subsidiaries in accordance with the Patriot Act.
If the foregoing correctly sets forth our agreement, please indicate
your acceptance of the terms hereof and of the Term Sheets and the Fee Letter by
returning to us executed counterparts hereof and of the Fee Letter not later
than 12:00 p.m., New York City time, on October 3, 2005. JPMCB's commitment and
the JPMorgan's agreements herein will automatically expire at such time in the
event that we have not received such executed counterparts in accordance with
the immediately preceding sentence. If you do so execute and deliver to us this
Commitment Letter and the Fee Letter, JPMCB agrees to hold its commitment
available for you until the earliest of (i) the termination of the Merger
Agreement, (ii) the consummation of the Acquisition without the funding of the
Facilities or the Holdco Notes and (iii) 5:00 p.m., New York City time, on June
30, 2006.
We are pleased to have been given the opportunity to assist you in
connection with this important financing.
Very truly yours,
J.P. MORGAN SECURITIES INC.
By: /s/ Richard Gabriel
------------------------------------
Name: Richard P. Gabriel
----------------------------------
Title: Vice President
---------------------------------
JPMORGAN CHASE BANK, N.A.
By: /s/ Gary Spevack
------------------------------------
Name: Gary Spevack
----------------------------------
Title: Vice President
---------------------------------
Accepted and agreed to
as of the date first
written above by:
R.H. DONNELLEY CORPORATION
By: /s/ Jennifer Apker
---------------------------------
Name: Jennifer Apker
-------------------------------
Title: Vice President and Treasurer
------------------------------
Annex A
Capitalized terms used and not otherwise defined herein are used with
the meanings attributed thereto in the Commitment Letter dated October 2, 2005
(the "Commitment Letter") from J.P. Morgan Securities Inc. and JPMorgan Chase
Bank, N.A., to R.H. Donnelley Corporation (the "Indemnifying Party") of which
these Indemnification Provisions form an integral part.
To the fullest extent permitted by applicable law, the Indemnifying
Party agrees that it will indemnify and hold harmless each Indemnified Person
from and against any and all losses, claims, damages, obligations, penalties,
judgments, awards, liabilities, costs, expenses and disbursements and any and
all actions, suits, proceedings and investigations in respect thereof and any
and all reasonable legal or other costs, expenses and disbursements in giving
testimony or furnishing documents in response to a subpoena or otherwise
(including, without limitation, the costs, expenses and disbursements, as and
when incurred, of investigating, preparing or defending any such action,
proceeding or investigation (whether or not in connection with litigation in
which such Indemnified Person is a party) and including, without limitation, any
and all losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements, resulting from any negligent act
or omission of such Indemnified Person), directly or indirectly, caused by,
relating to, based upon, arising out of or in connection with (i) the
Transaction, (ii) the Commitment Letter, the Fee Letter, the Facilities or the
Amendments, or (iii) any untrue statement or alleged untrue statement of a
material fact contained in, or omissions or alleged omissions in, information
furnished by the Indemnifying Party or any of its subsidiaries or affiliates to
any of the Indemnified Persons or any other person in connection with the
Transaction or the Commitment Letter, provided, however, such indemnity
agreement shall not apply with respect to an Indemnified Person to any portion
of any such loss, claim, damage, obligation, penalty, judgment, award,
liability, cost, expense or disbursement to the extent it is found in a final
judgment by a court of competent jurisdiction (not subject to further appeal) to
have resulted primarily from the gross negligence or willful misconduct of such
Indemnified Person.
These Indemnification Provisions shall be in addition to any liability
which the Indemnifying Party may have to the Indemnified Persons.
If any action, suit, proceeding or investigation is commenced, as to
which any of the Indemnified Persons proposes to demand indemnification, it
shall notify the Indemnifying Party with reasonable promptness, provided,
however, that any failure by any of the Indemnified Persons to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from its obligations
hereunder. Each Commitment Party, on behalf of the Indemnified Persons, shall
have the right to retain counsel of its choice to represent the Indemnified
Persons, and the Indemnifying Party shall pay the fees, expenses and
disbursement of such counsel, and such counsel shall, to the extent consistent
with its professional responsibilities, cooperate with the Indemnifying Party
and any counsel designated by the Indemnifying Party. The Indemnifying Party
shall be liable for any settlement of any claim against any of the Indemnified
Persons made with its written consent, which consent shall not be unreasonably
withheld. Without the prior written consent of the relevant Indemnified Person,
the Indemnifying Party shall not settle or compromise any claim, permit a
default or consent to the entry of any judgment in respect thereof.
In order to provide for just and equitable contribution, if a claim
for indemnification pursuant to these Indemnification Provisions is made but is
found by a judgment of a court of competent jurisdiction (not subject to further
appeal) that such indemnification may not be enforced in such case, even though
the express provisions hereof provided for indemnification in such case, then
the Indemnifying Party, on the one hand, and the Indemnified Persons, on the
other hand, shall contribute to the losses, claims, damages, obligations,
penalties, judgments, awards, liabilities, costs, expenses and
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disbursements to which the Indemnified Persons may be subject in accordance with
the relative benefits received by the Indemnifying Party, on the one hand, and
the Indemnified Persons, on the other hand, and also the relative fault of the
Indemnifying Party, on the one hand, and the Indemnified Persons, on the other
hand, in connection with the statements, acts or omissions which resulted in
such losses, claims, damages, obligations, penalties, judgments, awards,
liabilities, costs, expenses and disbursements and the relevant equitable
considerations shall also be considered. No person found liable for a fraudulent
misrepresentation shall be entitled to contribution from any other person who is
not also found liable for such fraudulent misrepresentation. Notwithstanding the
foregoing, none of the Indemnified Persons shall be obligated to contribute any
amount hereunder that exceeds the amount of fees previously received by such
Indemnified Person pursuant to the Commitment Letter and the Fee Letter.
Neither expiration or termination of the JPMCB's commitment under the
Commitment Letter or funding or repayment of the loans under the Facilities
shall affect these Indemnification Provisions which shall remain operative and
in full force and effect.
Schedule I
Outstanding Bonds of Delta and Its Subsidiaries
"Delta East Bonds":
Delta Media East 9.875% Senior Notes due 2009 ($450,000,000)
Delta Media East 12.125% Senior Subordinated Notes due 2012 ($341,250,000)
"Delta West Bonds":
Delta Media West 8.5% Senior Notes due 2010 ($385,000,000)
Delta Media West 9.875% Senior Subordinated Notes due 2013 ($761,800,000)
Delta Media West 5.875% Senior Notes due 2011($300,000,000)
"Delta Inc. Bonds":
Delta Media Inc. 9.0% Senior Discount Notes due 2013 ($389,000,000 and
$361,000,000)
Delta Media Inc. 8.0% Senior Notes due 2013 ($500,000,000)
Schedule II
1. Amend change of control.
2. Amend to permit repurchase of bonds tendered in Change of Control Offers and
to permit backstop facilities (to the extent refinancing or basket provisions
not available).
3. Amend to include Incremental Tranche B Delta West Facility.
4. Amend to permit new Target bonds (to the extent baskets not available).
5. Amend Delta West Credit Agreement to permit upstreaming of proceeds of
incremental debt (to the extent baskets not available). (Section 6.08).
6. Waiver of cross-defaults resulting from Change of Control Offers will be
required. (Section 9.02).
7. Amend financial covenants to the extent necessary or appropriate to reflect
the capital structure contemplated hereby.
8. The amendments/waiver mentioned above require approval of Required Lenders
(i.e., more than 50% approval).
Schedule III
1. Amend passive holding company provisions to allow for acquisition of Target.
(Sections 8.8, 8.16 and 9(l)).
2. Amend to permit new Company bonds. (Sections 8.2 and 9(l)).
3. Amend to permit negative pledge in new Company bonds. (Section 8.14).
4. Amend financial covenants. (Section 8.1).
5. The amendments mentioned above require approval of Required Lenders (i.e.,
more than 50% approval). (Section 11.1).
EXHIBIT A
DELTA WEST
INCREMENTAL TRANCHE B FACILITY
Summary of Principal Terms and Conditions
----------
R.H. Donnelley Corporation (the "Company") has indicated that it
intends to enter into a merger agreement (the "Merger Agreement") pursuant to
which the Company will acquire (the "Transaction") the outstanding capital stock
of the company separately identified to us as "Delta" (the "Target") from the
existing holders of such capital stock (the "Sellers"). Unless otherwise defined
herein, terms which are defined in the Commitment Letter to which this Term
Sheet is attached are used herein as so defined. Set forth below is a statement
of the terms and conditions for the Incremental Tranche B Delta West Facility to
be used to finance a portion of the Transaction:
Borrower: Delta West.
Acquisition and Other R.H. Donnelly Corporation (the "Company")
Transactions: intends to acquire (the "Acquisition") all of
the outstanding stock of the company separately
identified as "Delta" (the "Target") from the
existing holders of such capital stock (the
"Sellers"). The Acquisition will be effected in
accordance with a definitive merger agreement
(the "Merger Agreement") to be entered into by
the Company, the Target and/or one or more of
their respective affiliates. The Company
intends to finance the Acquisition and related
transactions from the following sources: (a)
the issuance of new common stock of the Company
to the Sellers with an agreed valuation of
$2,359,500,000 (the "New Equity"); (b)
$1,842,000,000 in cash proceeds (the "Company
Holdco Financing") from either (i) the issuance
by the Company of senior notes (the "Company
Holdco Notes") in a public offering or Rule
144A private placement or (ii) in the event the
Company is unable to issue the full amount of
the Company Holdco Notes at or prior to the
time the Acquisition is consummated, borrowings
under a senior bridge facility of the Company
(the "Company Holdco Facility"); (c)
$250,000,000 in cash proceeds (the "Target
Holdco Financing") from either (i) the issuance
by the Target of senior notes (the "Target
Holdco Notes" and, together with the Company
Holdco Notes, the "Holdco Notes") in a public
offering or Rule 144A private placement or (ii)
in the event the Target is unable to issue the
full amount of the Target Holdco Notes at or
prior to the time the Acquisition is
consummated, borrowings under a senior bridge
facility of the Target (the "Target Holdco
Facility"); and (d) the Target will obtain the
Incremental Tranche B Delta West Facility (as
defined below).
2
The proceeds of the Incremental Tranche B Delta
West Facility (as defined below), together with
the proceeds of the New Equity, the Company
Holdco Financing and the Target Holdco
Financing, with be used to finance the
Transaction and to pay the related fees and
expenses. References herein to the
"Transaction" shall include the financings
described herein and all other transactions
related to the Transaction.
Administrative Agent: JPMorgan Chase Bank, N.A. ("JPMCB", in such
capacity, the "Administrative Agent") will
continue to act as sole Administrative Agent
for the Lenders under the Delta West Credit
Agreement.
Sole Arranger and Sole J.P. Morgan Securities, Inc. ("JPMorgan", in
Bookrunner: such capacity, the "Arranger")
Amendment and Restatement of In connection with the Transactions, the Delta
Delta West Credit Agreement: West Credit Agreement will be amended and
restated (the "Delta West Amendments") as
described below in order to, among other
things, permit the Acquisition and to provide
the Incremental Tranche B Delta West Facility,
subject to the terms and conditions
contemplated hereby. The existing senior
secured Tranche A term loan facility (the
"Existing Senior Secured Tranche A Term Loan
Facility"), the existing senior secured Tranche
B term loan facility (the "Existing Senior
Secured Tranche B Term Loan Facility" and,
together with the Existing Senior Secured
Tranche A Term Loan Facility, the "Existing
Term Loan Facilities") and the existing senior
revolving credit facility (the "Existing Senior
Revolving Credit Facility" and, together with
the Existing Senior Secured Tranche A Term Loan
Facility and the Existing Senior Secured
Tranche B Term Loan Facility, the "Existing
Facilities") under the Delta West Credit
Agreement will remain in place.
Amendments to Terms of As described on Schedule II to the Commitment
Existing Facilities: Letter.
Incremental Tranche B Delta In addition to the Existing Facilities, the
West Facility: Delta West Amendments will provide for an
additional senior secured Tranche B term loan
in an aggregate principal amount of up to
$503,000,000 (the "Incremental Tranche B Delta
West Facility").
Purpose: The proceeds of the loans made under the
Incremental Tranche B Delta West Facility,
together with the proceeds of the New Equity,
the Company Holdco Financing and the Target
Holdco Financing, will be used by the Company
to finance the Transaction and to pay fees and
expenses incurred in connection with the
Transactions.
3
Availability: The full amount of the Incremental Tranche B
Delta West Facility must be drawn in a single
drawing on the date (the "Delta West Amendments
Closing Date") on which the Delta West
Amendments become effective and the Acquisition
is consummated. Amounts borrowed under the
Incremental Tranche B Delta West Facility that
are repaid or prepaid may not be reborrowed.
Interest Rates and Fees: (A) The commitment fees in respect of the
Existing Senior Revolving Credit Facility
and the interest rates in respect of the
Existing Facilities will not be changed.
(B) Loans under the Incremental Tranche B
Delta West Facility will bear interest at
the same rates as the Existing Senior
Secured Tranche B Term Loan Facility,
which are (i) Adjusted LIBOR plus 1.75%
per annum (determined according to a
pricing grid by reference to the Leverage
Ratio) or (ii) Alternate Base Rate plus
0.75% per annum (determined according to
such pricing grid).
"Adjusted LIBOR" means the rate (adjusted for
statutory reserve requirements for eurocurrency
liabilities) for eurodollar deposits for a
three-month period appearing on Page 3750 of
the Telerate screen, provided that in the event
that Adjusted LIBOR cannot be determined on the
Closing Date, the Alternate Base Rate (as
defined below) on the Closing Date shall be
substituted in lieu thereof.
"Alternate Base Rate" means the greater of (i)
the rate of interest publicly announced by
JPMCB as its prime rate in effect at its
principal office in New York City and (ii) the
federal funds effective rate from time to time
plus 0.50%.
Final Maturity and (A) The maturity of the Existing Facilities
Amortization: and the amortization of the Existing Term
Loan Facilities will not be changed.
(B) The Incremental Tranche B Delta West
Facility will mature on the same date as
the Existing Senior Secured Tranche B Term
Loan Facility and will amortize in
quarterly installments in amounts
proportional to the amortization of the
Existing Senior Secured Tranche B Term
Loan Facility.
Guarantees and Security: All obligations of Delta West in respect of the
Incremental Tranche B Delta West Facility will
be guaranteed and secured on the same basis as,
and ratably with, the Existing Facilities.
4
Prepayments: Loans under the Incremental Tranche B Delta
West Facility will be subject to mandatory and
optional prepayment on the same terms as are
applicable to loans under the Existing Senior
Secured Tranche B Term Loan Facility, as
amended by the contemplated Delta Credit
Agreement Amendments.
Documentation: Substantially consistent with the Delta West
Credit Agreement, as amended by the
contemplated Delta Credit Agreement Amendments
(such documentation, the "Incremental Tranche B
Delta West Facility Documentation").
Conditions Precedent to Delta The availability of the Incremental Tranche B
West Amendments and Borrowing Delta West Facility shall be conditioned upon
under the Incremental Tranche the satisfaction of the conditions set forth in
B Delta West Facility: Exhibit F.
Representations, Covenants, Substantially the same as the representations,
Events of Default and Other covenants, events of default and other
Provisions: provisions included in the Delta West Credit
Agreement and related documentation, modified
as appropriate to permit the Acquisition and
the Incremental Tranche B Delta West Facility
and as otherwise described herein.
Governing Law and Forum: New York.
Counsel to the Administrative Simpson Thacher & Bartlett LLP.
Agent and the Arranger:
EXHIBIT B
R.H. DONNELLEY CORPORATION
SENIOR FACILITY
Summary of Terms and Conditions
----------
R.H. Donnelley Corporation (the "Company") has indicated that it
intends to enter into a merger agreement (the "Merger Agreement") pursuant to
which the Company will acquire (the "Transaction") the outstanding capital stock
of the company separately identified to us as "Delta" (the "Target") from the
existing holders of such capital stock (the "Sellers"). Unless otherwise defined
herein, terms which are defined in the Commitment Letter to which this Term
Sheet is attached are used herein as so defined. Set forth below is a statement
of the terms and conditions for the Company Holdco Facility to be used to
finance a portion of the Transaction, including without limitation to fund a
tender for the Existing Company Bonds, in the event that the Company is unable
to issue the full amount of Company Holdco Notes at or prior to the time that
the Acquisition is consummated:
Initial Loans: The Lenders (as defined below) will make
unsecured loans (the "Initial Loans") to the
Company on the Closing Date (as defined below)
in an aggregate principal amount not to exceed
$1,842,000,000 (the "Company Holdco Facility").
Borrower: The Company.
Guarantors: None.
Administrative Agent: JPMorgan Chase Bank, N.A. ("JPMCB"; in such
capacity, the "Administrative Agent") will act
as Administrative Agent for the Lenders holding
the Initial Loans from time to time.
Sole Lead Arranger and Sole J.P. Morgan Securities Inc. ("JPMorgan"; in
Bookrunner: such capacity, the "Arranger").
Lenders: JPMCB and any other holder of any portion of
the Initial Loans or of any commitment to make
the Initial Loans are collectively referred to
as the "Lenders."
Use of Proceeds: The proceeds of the Initial Loans will be used
to provide funds to finance the Transaction and
the other transactions related thereto and
contemplated thereby, and to pay related fees
and expenses.
Funding: The Lenders will make the Initial Loans
simultaneously with the consummation of the
Transaction. The date on which such Initial
Loans are made and the Transaction is
consummated is herein called the "Closing
Date."
2
Maturity/Exchange: The Initial Loans will initially mature on the
date that is 12 months following the Closing
Date (the "Initial Loan Maturity Date"). The
maturity of the Initial Loans shall be extended
as provided below. If any Initial Loan has not
been previously repaid in full on or prior to
the Initial Loan Maturity Date, the Lender in
respect of such Initial Loan will have the
option at any time or from time to time to
receive Exchange Notes (the "Exchange Notes")
in exchange for such Initial Loan having the
terms set forth in the term sheet attached
hereto as Annex I; provided, that a Lender may
not elect to exchange only a portion of its
outstanding Initial Loans for Exchange Notes
unless such Lender intends at the time of such
partial exchange of Initial Loans promptly to
sell the Exchange Notes received in such
exchange. The maturity of any Initial Loans
that are not exchanged for Exchange Notes on
the Initial Loan Maturity Date shall
automatically be extended to the tenth
anniversary of the Closing Date.
The Initial Loans and the Exchange Notes shall
be pari passu for all purposes.
Interest: Prior to the Initial Loan Maturity Date, the
Initial Loans will accrue interest at a rate
per annum equal to 7.875% (or, in the event the
Company Holdco Facility is not rated at least
Caa1 or better by Moody's and at least B or
better by S&P, in each case with a stable or
better outlook, 8.375%).
Such interest rate will increase by an
additional 100 basis points at the end of the
first six months following the Closing Date and
by 50 basis points at the end of each
three-month period thereafter until the Initial
Loan Maturity Date.
Notwithstanding the foregoing, the interest
rate in effect at any time prior to the Initial
Loan Maturity Date shall not exceed the greater
of (i) 10.25% per annum and (ii) the J.P.
Morgan Securities Inc. High Yield Index Rate on
the Closing Date plus 2.50%, but in no event
shall the interest rate in effect at any time
prior to the Initial Loan Maturity Date exceed
11.0%. In the event the Company Holdco Facility
is not rated at least Caa1 or better by Moody's
and at least B or better by S&P, in each case
with a stable or better outlook, each of the
foregoing percentages shall be increased by
0.50%. During the period an event of default
occurs and is continuing, the interest rate
will increase by 200 basis points with respect
to any amounts overdue.
Following the Initial Loan Maturity Date, all
outstanding Initial Loans will accrue interest
at the rate provided for Exchange Notes in
Annex I hereto, subject to the absolute caps
applicable to Exchange Notes.
3
Calculation of interest shall be on the basis
of actual days elapsed in a year of 360 days.
Interest will be payable in arrears (a) at the
end of each fiscal quarter of the Company
following the Closing Date and on the Initial
Loan Maturity Date and (b) for Initial Loans
outstanding after the Initial Loan Maturity
Date, at the end of each fiscal quarter of the
Company following the Initial Loan Maturity
Date and on the final maturity date.
Mandatory Redemption: On or prior to the Initial Loan Maturity Date,
the Company will be required to prepay Initial
Loans on a pro rata basis, at par plus accrued
and unpaid interest from the net proceeds
(after deduction of, among other things,
amounts required, if any, to repay any senior
secured credit facilities or outstanding senior
bonds) of the sale of any assets outside the
ordinary course of business, the incurrence of
any debt (other than debt permitted under any
senior secured credit facilities, with the
exception of any outstanding senior bonds) and
the issuance of any equity not applied to the
payment of loans under any senior secured
credit facility, in each case subject to
exceptions and baskets to be agreed. In
addition, the Company will be required to offer
to redeem the Initial Loans upon the occurrence
of a change of control (which offer shall be at
par plus accrued and unpaid interest).
Optional Prepayment: The Initial Loans may be prepaid, in whole or
in part, at the option of the Company, at any
time upon three days' prior notice, at par plus
accrued and unpaid interest, if any, without
premium or penalty. If the Company elects to
optionally prepay all or any portion of the
Initial Loans, then the Company shall be
required to optionally redeem on a pro rata
basis outstanding Exchange Notes, if any,
subject to certain circumstances, to the
non-call provisions of any Exchange Notes, at
par plus accrued and unpaid interest, if any.
Documentation: Substantially consistent with the RHD Credit
Agreement, with usual and customary changes for
a bridge facility to be agreed (such
documentation, the "Company Holdco Facility
Documentation").
Conditions Precedent: The availability of the Company Holdco Facility
shall be conditioned upon the satisfaction of
the conditions set forth in Exhibit F.
Representations and Substantially consistent with the RHD Credit
Warranties: Agreement, with usual and customary changes for
a bridge facility to be agreed.
4
Covenants: Restrictions on the incurrence of indebtedness,
the payment of dividends, redemption of capital
stock and making certain investments, the
incurrence of liens, the sale of assets and the
sale of subsidiary stock, entering into
agreements that restrict the payment of
dividends by subsidiaries or the repayment of
intercompany loans and advances, entering into
affiliate transactions, entering into mergers,
consolidations and sales of substantially all
the assets of the Company and its subsidiaries
and requirements as to future subsidiary
guarantors that guaranty other indebtedness of
the Company (other than the guaranty by the
Company of the RHD Credit Agreement). Prior to
the Initial Loan Maturity Date, the covenants
will be more restrictive than those in the
Exchange Notes. Following the Initial Loan
Maturity Date, the covenants relevant to the
Initial Loans will automatically be modified so
as to be consistent with the Exchange Notes.
Events of Default: Substantially consistent with the RHD Credit
Agreement, with usual and customary changes for
a bridge facility to be agreed. Following the
Initial Loan Maturity Date, the events of
default relevant to the Initial Loans will
automatically be modified so as to be
consistent with the Exchange Notes.
Cost and Yield Protection: Usual for facilities and transactions of this
type.
Assignment and Participation: Subject to the prior approval of the
Administrative Agent (such approval not to be
unreasonably withheld), the Lenders will have
the right to assign Initial Loans and
commitments without the consent of the Company.
The Administrative Agent will receive a
processing and recordation fee of $3,500,
payable by the assignor and/or the assignee,
with each assignment. Assignments will be by
novation that will release the obligation of
the assigning Lender.
Subject to the prior approval of the
Administrative Agent (such approval not to be
unreasonably withheld), the Lenders will have
the right to participate their Initial Loans to
other financial institutions without
restriction, other than customary voting
limitations. Participants will have the same
benefits as the selling Lenders would have (and
will be limited to the amount of such benefits)
with regard to yield protection and increased
costs, subject to customary limitations and
restrictions.
5
Voting: Amendments and waivers of the Company Holdco
Facility Documentation will require the
approval of Lenders holding more than 50% of
the outstanding Initial Loans, except that (i)
the consent of each affected Lender will be
required for (a) reductions of principal or
interest rates, (b) except as provided under
"Maturity/Exchange" above, extensions of the
Initial Loan Maturity Date, (c) additional
restrictions on the right to exchange Initial
Loans for Exchange Notes or any amendment of
the rate of such exchange and (d) any amendment
to the Exchange Notes that requires (or would,
if any Exchange Notes were outstanding,
require) the approval of all holders of
Exchange Notes and (ii) the consent of 100% of
the Lenders shall be required with respect to
(a) modifications to any of the voting
percentages and (b) modifications to the
redemption provisions. A replacement of Lenders
provision will apply in a manner to be agreed.
Expenses and Indemnification: The Company Holdco Facility Documentation shall
provide that the Company shall pay (a) all
reasonable out-of-pocket expenses of the
Administrative Agent and the Arranger
associated with the syndication of the Company
Holdco Facility (excluding fees paid to Lenders
to participate in the Company Holdco Facility)
and the preparation, execution, delivery and
administration of the Company Holdco Facility
Documentation and any amendment, waiver or
modification with respect thereto (including
the reasonable fees, disbursements and other
charges of counsel) and (b) all out-of-pocket
expenses of the Administrative Agent, the
Arranger and the Lenders (including the fees,
disbursements and other charges of counsel) in
connection with the enforcement of the Company
Holdco Facility Documentation.
The Administrative Agent, the Arranger and the
Lenders (and their respective affiliates,
controlling persons, officers, directors,
employees, advisors and agents) will have no
liability for, and will be indemnified and held
harmless against, any loss, liability, cost or
expense incurred in respect of the proposed
transactions, including, but not limited to,
the financing contemplated hereby or the use or
the proposed use of proceeds thereof, except to
the extent they are found by a final,
non-appealable judgment of a court to arise
from the gross negligence or willful misconduct
of the relevant indemnified person.
Governing Law and Forum: New York.
Counsel to the Administrative Simpson Thacher & Bartlett LLP.
Agent and the Arranger:
Annex I to Exhibit B
Summary of Terms and Conditions
of Exchange Notes
Capitalized terms used but not defined herein have the meanings given
in the Summary of Terms and Conditions of the Company Holdco Facility to which
this Annex I is attached.
Issuer: The Company will issue Exchange Notes under an
indenture that complies with the Trust
Indenture Act (the "Indenture"). The Company in
its capacity as issuer of the Exchange Notes is
referred to as the "Issuer."
Guarantors: None.
Principal Amount: The Exchange Notes will be available only in
exchange for the Initial Loans on or after the
Initial Loan Maturity Date. The principal
amount of any Exchange Note will equal 100% of
the aggregate principal amount of the Initial
Loan for which it is exchanged. In the case of
the initial exchange by Lenders, the minimum
amount of Initial Loans to be exchanged for
Exchange Notes shall equal 10% of the
outstanding principal amount of the Initial
Loans on the date of such exchange.
Maturity: The Exchange Notes will mature on the tenth
anniversary of the Closing Date.
Interest Rate: The Exchange Notes will bear interest at a rate
equal to the Initial Rate (as defined below)
plus the Exchange Spread (as defined below).
Notwithstanding the foregoing, the interest
rate in effect at any time shall not exceed the
greater of (i) 10.25% per annum and (ii) the
J.P. Morgan Securities Inc. High Yield Index
Rate on the Closing Date plus 2.50%, but in no
event shall the interest rate in effect at any
time exceed 11.0%. In the event the Company
Holdco Facility is not rated at least Caa1 or
better by Moody's and at least B or better by
S&P, in each case with a stable or better
outlook, each of the foregoing percentages
shall be increased by 0.50%.
"Exchange Spread" shall equal zero basis points
during the three month period commencing on the
Initial Loan Maturity Date and shall increase
by 50 basis points at the beginning of each
subsequent three month period.
"Initial Rate" shall be determined on the
Initial Loan Maturity Date and shall equal the
interest rate borne by the Initial Loans on the
day immediately preceding the Initial Loan
Maturity Date plus 50 basis points.
Interest will be payable in arrears at the end
of each semi-annual fiscal period.
2
Mandatory Redemption: The Issuer will be required to make an offer to
redeem the Exchange Notes (and, if outstanding,
prepay the Initial Loans) on a pro rata basis,
at par plus accrued and unpaid interest (or, in
the case of Fixed Rate Exchange Notes, at par
plus accrued and unpaid interest plus any
applicable premiums), from the net proceeds
(after deduction of, among other things,
amounts required to pay any senior secured
credit facilities or outstanding senior bonds)
of the sale of any assets outside the ordinary
course of business, subject to exceptions and
baskets to be agreed. In addition, the Issuer
will be required to offer to redeem the
Exchange Notes upon the occurrence of a change
of control (which offer shall be at 101% of the
principal amount of such Exchange Notes, plus
accrued and unpaid interest).
Optional Redemption: Subject to the following sentence, the Exchange
Notes will be redeemable at the option of the
Issuer, in whole or in part, at any time at par
plus accrued and unpaid interest to the
redemption date. If any Exchange Note is sold
by a Lender to a third party purchaser, such
Lender shall have the right to fix the interest
rate on such Exchange Note (a "Fixed Rate
Exchange Note") at a rate equal to the greater
of (a) the then applicable rate of interest or
(b) upon the representation of such
transferring Lender that a higher rate (such
higher rate, the "Transfer Rate") is necessary
in order to permit such Lender to transfer such
Exchange Note to a third party and receive
consideration equal to the principal amount
thereof plus all accrued and unpaid interest to
the date of such transfer, the Transfer Rate;
provided, that such Transfer Rate shall not
exceed the absolute and cash maximum interest
rates applicable to the Exchange Notes. If such
Lender exercises such right, such Exchange Note
will be (a) non-callable for the first five
years from the Initial Loan Maturity Date and
(b) thereafter, callable at par plus accrued
interest plus a premium equal to (i) 50% of the
coupon in effect on the date of sale of such
Exchange Note to a third party purchaser or
(ii) if the Transfer Rate was used, 50% of the
Transfer Rate, which premium in either case
shall decline ratably on each yearly
anniversary of the date of such sale to zero
two years prior to the maturity of the Exchange
Notes, provided that, such call protection
shall not apply to any call for redemption
issued prior to the sale to such third party
purchaser.
If the Issuer elects to optionally redeem all
or any portion of the Exchange Notes, then the
Issuer shall be required to optionally prepay
on a pro rata basis outstanding Initial Loans,
at par plus accrued and unpaid interest.
Registration Rights: The Issuer will file within 120 days after the
Initial Loan Maturity Date, and will use its
commercially reasonable efforts to cause to
become effective as soon thereafter as
practicable, a shelf registration statement
with respect to the Exchange Notes (a "Shelf
Registration Statement") or a registration
statement relating
3
to a Registered Exchange Offer (as described
below). If a Shelf Registration Statement is
filed, the Issuer will keep such registration
statement effective and available (subject to
customary exceptions including various blackout
and suspension periods) until the applicable of
Exchange Notes are resold thereunder but in no
event longer than two years from the Closing
Date. If within 180 days from the Initial Loan
Maturity Date, a Shelf Registration Statement
for the Exchange Notes has not been declared
effective or the Issuer has not effected an
exchange offer (a "Registered Exchange Offer")
whereby the Issuer has offered registered notes
having terms identical to the Exchange Notes
(the "Substitute Notes") in exchange for all
outstanding Exchange Notes and Initial Loans
(it being understood that a Shelf Registration
Statement is required to be made available in
respect of Exchange Notes the holders of which
could not receive Substitute Notes through the
Registered Exchange Offer that, in the opinion
of counsel, would be freely saleable by such
holders without registration or requirement for
delivery of a current prospectus under the
Securities Act of 1933, as amended (other than
a prospectus delivery requirement imposed on a
broker-dealer who is exchanging Exchange Notes
acquired for its own account as a result of a
market making or other trading activities)),
then the Issuer will pay liquidated damages of
0.25% per annum (which rate shall increase by
an additional 0.25% per annum at the end of
each 90-day period, up to a maximum of 1.00%
per annum) on the principal amount of Exchange
Notes and Initial Loans outstanding to holders
thereof who are, or would be, unable freely to
transfer Exchange Notes from and including the
181st day after the date of the first issuance
of Exchange Notes to but excluding the earlier
of the effective date of such Shelf
Registration Statement or the date of
consummation of such Registered Exchange Offer
(such damages may be payable, at the option of
the Company, in the form of additional Initial
Loans or Exchange Notes, as applicable, if the
then interest rate thereon exceeds the
applicable cash interest rate cap). The Issuer
will also pay such liquidated damages for any
period of time (subject to customary
exceptions) following the effectiveness of a
Shelf Registration Statement that such Shelf
Registration Statement is not available for
resales thereunder.
Right to Transfer Exchange The holders of the Exchange Notes shall have
Notes: the absolute and unconditional right to
transfer such Exchange Notes in compliance with
applicable law to any third parties.
Covenants: Substantially consistent with the indentures
governing the Company's existing senior notes,
except as otherwise agreed.
Events of Default: Substantially consistent with the indentures
governing the Company's existing senior notes,
except as otherwise agreed.
Governing Law and Forum: New York.
EXHIBIT C
DELTA
SENIOR FACILITY
Summary of Terms and Conditions
----------
R.H. Donnelley Corporation (the "Company") has indicated that it
intends to enter into a merger agreement (the "Merger Agreement") pursuant to
which the Company will acquire (the "Transaction") the outstanding capital stock
of the company separately identified to us as "Delta" (the "Target") from the
existing holders of such capital stock (the "Sellers"). Unless otherwise defined
herein, terms which are defined in the Commitment Letter to which this Term
Sheet is attached are used herein as so defined. Set forth below is a statement
of the terms and conditions for the Target Holdco Facility to be used to finance
a portion of the Transaction in the event the Target is unable to issue the full
amount of the Target Holdco Notes at or prior to the time the Acquisition is
consummated:
Initial Loans: The Lenders (as defined below) will make
unsecured loans (the "Initial Loans") to the
Target on the Closing Date (as defined below)
in an aggregate principal amount not to exceed
$250,000,000 (the "Target Holdco Facility").
Borrower: The Target.
Guarantors: None.
Administrative Agent: JPMorgan Chase Bank, N.A. ("JPMCB"; in such
capacity, the "Administrative Agent") will act
as Administrative Agent for the Lenders holding
the Initial Loans from time to time.
Sole Lead Arranger and Sole J.P. Morgan Securities Inc. ("JPMorgan"; in
Bookrunner: such capacity, the "Arranger").
Lenders: JPMCB and any other holder of any portion of
the Initial Loans or of any commitment to make
the Initial Loans are collectively referred to
as the "Lenders."
Use of Proceeds: The proceeds of the Initial Loans will be used
to provide funds to finance the Transaction and
the other transactions related thereto and
contemplated hereby, and to pay related fees
and expenses.
Funding: The Lenders will make the Initial Loans
simultaneously with the consummation of the
Transaction. The date on which such Initial
Loans are made and the Transaction is
consummated is herein called the "Closing
Date."
2
Maturity/Exchange: The Initial Loans will initially mature on the
date that is 12 months following the Closing
Date (the "Initial Loan Maturity Date"). The
maturity of the Initial Loans shall be extended
as provided below. If any Initial Loan has not
been previously repaid in full on or prior to
the Initial Loan Maturity Date, the Lender in
respect of such Initial Loan will have the
option at any time or from time to time to
receive Exchange Notes (the "Exchange Notes")
in exchange for such Initial Loan having the
terms set forth in the term sheet attached
hereto as Annex I; provided, that a Lender may
not elect to exchange only a portion of its
outstanding Initial Loans for Exchange Notes
unless such Lender intends at the time of such
partial exchange of Initial Loans promptly to
sell the Exchange Notes received in such
exchange. The maturity of any Initial Loans
that are not exchanged for Exchange Notes on
the Initial Loan Maturity Date shall
automatically be extended to the tenth
anniversary of the Closing Date.
The Initial Loans and the Exchange Notes shall
be pari passu for all purposes.
Interest: Prior to the Initial Loan Maturity Date, the
Initial Loans will accrue interest at a rate
per annum equal to 7.125% (or, in the event the
Target Holdco Facility is not rated at least B3
or better by Moody's and at least B or better
by S&P, in each case with a stable or better
outlook, 7.625%).
Such interest rate will increase by an
additional 100 basis points at the end of the
first six months following the Closing Date and
by 50 basis points at the end of each
three-month period thereafter until the Initial
Loan Maturity Date.
Notwithstanding the foregoing, the interest
rate in effect at any time prior to the Initial
Loan Maturity Date shall not exceed the greater
of (i) 9.5% per annum and (ii) the J.P. Morgan
Securities Inc. High Yield Index Rate on the
Closing Date plus 1.75%, but in no event shall
the interest rate in effect at any time prior
to the Initial Loan Maturity Date exceed
10.25%. In the event the Target Holdco Facility
is not rated at least B3 or better by Moody's
and at least B or better by S&P, in each case
with a stable or better outlook, each of the
foregoing percentages shall be increased by
0.50%. During the period an event of default
occurs and is continuing, the interest rate
will increase by 200 basis points with respect
to any amounts overdue.
Following the Initial Loan Maturity Date, all
outstanding Initial Loans will accrue interest
at the rate provided for Exchange Notes in
Annex I hereto, subject to the absolute caps
applicable to Exchange Notes.
3
To the extent the proceeds of any Initial Loan
are used to fund purchases of the Target's 9.0%
Senior Discount Notes due 2013 required to be
made pursuant to the Change of Control Offers,
the interest rate for such Initial Loan shall
equal 1.0% more than the rate otherwise
applicable thereto.
Calculation of interest shall be on the basis
of actual days elapsed in a year of 360 days.
Interest will be payable in arrears (a) at the
end of each fiscal quarter of the Target
following the Closing Date and on the Initial
Loan Maturity Date and (b) for Initial Loans
outstanding after the Initial Loan Maturity
Date, at the end of each fiscal quarter of the
Target following the Initial Loan Maturity Date
and on the final maturity date.
Mandatory Redemption: On or prior to the Initial Loan Maturity Date,
the Target will be required to prepay Initial
Loans on a pro rata basis, at par plus accrued
and unpaid interest from the net proceeds
(after deduction of, among other things,
amounts required, if any, to repay any senior
secured credit facilities or outstanding senior
bonds) of the sale of any assets outside the
ordinary course of business, the incurrence of
any debt (other than debt permitted under any
senior secured credit facilities, with the
exception of any outstanding senior bonds) and
the issuance of any equity not applied to the
payment of loans under any senior secured
credit facility, in each case subject to
exceptions and baskets to be agreed. In
addition, the Target will be required to offer
to redeem the Initial Loans upon the occurrence
of a change of control (which offer shall be at
par plus accrued and unpaid interest).
Optional Prepayment: The Initial Loans may be prepaid, in whole or
in part, at the option of the Target, at any
time upon three days' prior notice, at par plus
accrued and unpaid interest, if any, without
premium or penalty. If the Target elects to
optionally prepay all or any portion of the
Initial Loans, then the Target shall be
required to optionally redeem on a pro rata
basis outstanding Exchange Notes, if any,
subject to certain circumstances, to the
non-call provisions of any Exchange Notes, at
par plus accrued and unpaid interest, if any.
Documentation: Substantially consistent with the Delta Credit
Agreements, with usual and customary changes
for a bridge facility to be agreed (such
documentation, the "Target Holdco Facility
Documentation").
Conditions Precedent: The availability of the Target Holdco Facility
shall be conditioned upon the satisfaction of
the conditions set forth in Exhibit F.
Representations and Substantially consistent with the Delta Credit
Warranties: Agreements, with usual and customary changes
for a bridge facility to be agreed.
4
Covenants: Restrictions on the incurrence of indebtedness,
the payment of dividends, redemption of capital
stock and making certain investments, the
incurrence of liens, the sale of assets and the
sale of subsidiary stock, entering into
agreements that restrict the payment of
dividends by subsidiaries or the repayment of
intercompany loans and advances, entering into
affiliate transactions, entering into mergers,
consolidations and sales of substantially all
the assets of the Target and its subsidiaries
and requirements as to future subsidiary
guarantors that guaranty other indebtedness of
the Target. Prior to the Initial Loan Maturity
Date, the covenants will be more restrictive
than those in the Exchange Notes. Following the
Initial Loan Maturity Date, the covenants
relevant to the Initial Loans will
automatically be modified so as to be
consistent with the Exchange Notes.
Events of Default: Substantially consistent with the Delta Credit
Agreements, with usual and customary changes
for a bridge facility to be agreed. Following
the Initial Loan Maturity Date, the events of
default relevant to the Initial Loans will
automatically be modified so as to be
consistent with the Exchange Notes.
Cost and Yield Protection: Usual for facilities and transactions of this
type.
Assignment and Participation: Subject to the prior approval of the
Administrative Agent (such approval not to be
unreasonably withheld), the Lenders will have
the right to assign Initial Loans and
commitments without the consent of the Target.
The Administrative Agent will receive a
processing and recordation fee of $3,500,
payable by the assignor and/or the assignee,
with each assignment. Assignments will be by
novation that will release the obligation of
the assigning Lender.
Subject to the prior approval of the
Administrative Agent (such approval not to be
unreasonably withheld), the Lenders will have
the right to participate their Initial Loans to
other financial institutions without
restriction, other than customary voting
limitations. Participants will have the same
benefits as the selling Lenders would have (and
will be limited to the amount of such benefits)
with regard to yield protection and increased
costs, subject to customary limitations and
restrictions.
5
Voting: Amendments and waivers of the Target Holdco
Facility Documentation will require the
approval of Lenders holding more than 50% of
the outstanding Initial Loans, except that (i)
the consent of each affected Lender will be
required for (a) reductions of principal or
interest rates, (b) except as provided under
"Maturity/Exchange" above, extensions of the
Initial Loan Maturity Date, (c) additional
restrictions on the right to exchange Initial
Loans for Exchange Notes or any amendment of
the rate of such exchange and (d) any amendment
to the Exchange Notes that requires (or would,
if any Exchange Notes were outstanding,
require) the approval of all holders of
Exchange Notes and (ii) the consent of 100% of
the Lenders shall be required with respect to
(a) modifications to any of the voting
percentages and (b) modifications to the
redemption provisions. A replacement of Lenders
provision will apply in a manner to be agreed.
Expenses and Indemnification: The Target Holdco Facility Documentation shall
provide that the Target shall pay (a) all
reasonable out-of-pocket expenses of the
Administrative Agent and the Arranger
associated with the syndication of the Target
Holdco Facility (excluding fees paid to Lenders
to participate in the Target Holdco Facility)
and the preparation, execution, delivery and
administration of the Target Holdco Facility
Documentation and any amendment, waiver or
modification with respect thereto (including
the reasonable fees, disbursements and other
charges of counsel) and (b) all out-of-pocket
expenses of the Administrative Agent, the
Arranger and the Lenders (including the fees,
disbursements and other charges of counsel) in
connection with the enforcement of the Target
Holdco Facility Documentation.
The Administrative Agent, the Arranger and the
Lenders (and their respective affiliates,
controlling persons, officers, directors,
employees, advisors and agents) will have no
liability for, and will be indemnified and held
harmless against, any loss, liability, cost or
expense incurred in respect of the proposed
transactions, including, but not limited to,
the financing contemplated hereby or the use or
the proposed use of proceeds thereof, except to
the extent they are found by a final,
non-appealable judgment of a court to arise
from the gross negligence or willful misconduct
of the relevant indemnified person.
Governing Law and Forum: New York.
Counsel to the Administrative Simpson Thacher & Bartlett LLP.
Agent and the Arranger:
Annex I to Exhibit C
Summary of Terms and Conditions
of Exchange Notes
Capitalized terms used but not defined herein have the meanings given
in the Summary of Terms and Conditions of the Target Holdco Facility to which
this Annex I is attached.
Issuer: The Target will issue Exchange Notes under an
indenture that complies with the Trust
Indenture Act (the "Indenture"). The Target in
its capacity as issuer of the Exchange Notes is
referred to as the "Issuer."
Guarantors: None.
Principal Amount: The Exchange Notes will be available only in
exchange for the Initial Loans on or after the
Initial Loan Maturity Date. The principal
amount of any Exchange Note will equal 100% of
the aggregate principal amount of the Initial
Loan for which it is exchanged. In the case of
the initial exchange by Lenders, the minimum
amount of Initial Loans to be exchanged for
Exchange Notes shall equal 10% of the
outstanding principal amount of the Initial
Loans on the date of such exchange.
Maturity: The Exchange Notes will mature on the tenth
anniversary of the Closing Date.
Interest Rate: The Exchange Notes will bear interest at a rate
equal to the Initial Rate (as defined below)
plus the Exchange Spread (as defined below).
Notwithstanding the foregoing, the interest
rate in effect at any time shall not exceed the
greater of (i) 9.5% per annum and (ii) the J.P.
Morgan Securities Inc. High Yield Index Rate on
the Closing Date plus 1.75%, but in no event
shall the interest rate in effect at any time
exceed 10.25%. In the event the Target Holdco
Facility is not rated at least B3 or better by
Moody's and at least B or better by S&P, in
each case with a stable or better outlook, each
of the foregoing percentages shall be increased
by 0.50%.
"Exchange Spread" shall equal zero basis points
during the three month period commencing on the
Initial Loan Maturity Date and shall increase
by 50 basis points at the beginning of each
subsequent three month period.
"Initial Rate" shall be determined on the
Initial Loan Maturity Date and shall equal the
interest rate borne by the Initial Loans on the
day immediately preceding the Initial Loan
Maturity Date plus 50 basis points.
Interest will be payable in arrears at the end
of each semi-annual fiscal period.
Mandatory Redemption: The Issuer will be required to make an offer to
redeem the Exchange Notes (and, if outstanding,
prepay the Initial Loans) on
2
a pro rata basis, at par plus accrued and
unpaid interest (or, in the case of Fixed Rate
Exchange Notes, at par plus accrued and unpaid
interest plus any applicable premiums), from
the net proceeds (after deduction of, among
other things, amounts required to pay any
senior secured credit facilities or outstanding
senior bonds) of the sale of any assets outside
the ordinary course of business, subject to
exceptions and baskets to be agreed. In
addition, the Issuer will be required to offer
to redeem the Exchange Notes upon the
occurrence of a change of control (which offer
shall be at 101% of the principal amount of
such Exchange Notes, plus accrued and unpaid
interest).
Optional Redemption: Subject to the following sentence, the Exchange
Notes will be redeemable at the option of the
Issuer, in whole or in part, at any time at par
plus accrued and unpaid interest to the
redemption date. If any Exchange Note is sold
by a Lender to a third party purchaser, such
Lender shall have the right to fix the interest
rate on such Exchange Note (a "Fixed Rate
Exchange Note") at a rate equal to the greater
of (a) the then applicable rate of interest or
(b) upon the representation of such
transferring Lender that a higher rate (such
higher rate, the "Transfer Rate") is necessary
in order to permit such Lender to transfer such
Exchange Note to a third party and receive
consideration equal to the principal amount
thereof plus all accrued and unpaid interest to
the date of such transfer, the Transfer Rate;
provided, that such Transfer Rate shall not
exceed the absolute and cash maximum interest
rates applicable to the Exchange Notes. If such
Lender exercises such right, such Exchange Note
will be (a) non-callable for the first five
years from the Initial Loan Maturity Date and
(b) thereafter, callable at par plus accrued
interest plus a premium equal to (i) 50% of the
coupon in effect on the date of sale of such
Exchange Note to a third party purchaser or
(ii) if the Transfer Rate was used, 50% of the
Transfer Rate, which premium in either case
shall decline ratably on each yearly
anniversary of the date of such sale to zero
two years prior to the maturity of the Exchange
Notes, provided that, such call protection
shall not apply to any call for redemption
issued prior to the sale to such third party
purchaser.
If the Issuer elects to optionally redeem all
or any portion of the Exchange Notes, then the
Issuer shall be required to optionally prepay
on a pro rata basis outstanding Initial Loans,
at par plus accrued and unpaid interest.
Registration Rights: The Issuer will file within 120 days after the
Initial Loan Maturity Date, and will use its
commercially reasonable efforts to cause to
become effective as soon thereafter as
practicable, a shelf registration statement
with respect to the Exchange Notes (a "Shelf
Registration Statement") or a registration
statement relating to a Registered Exchange
Offer (as described below). If a Shelf
Registration Statement is filed, the Issuer
will keep such
3
registration statement effective and available
(subject to customary exceptions including
various blackout and suspension periods) until
the applicable of Exchange Notes are resold
thereunder but in no event longer than two
years from the Closing Date. If within 180 days
from the Initial Loan Maturity Date, a Shelf
Registration Statement for the Exchange Notes
has not been declared effective or the Issuer
has not effected an exchange offer (a
"Registered Exchange Offer") whereby the Issuer
has offered registered notes having terms
identical to the Exchange Notes (the
"Substitute Notes") in exchange for all
outstanding Exchange Notes and Initial Loans
(it being understood that a Shelf Registration
Statement is required to be made available in
respect of Exchange Notes the holders of which
could not receive Substitute Notes through the
Registered Exchange Offer that, in the opinion
of counsel, would be freely saleable by such
holders without registration or requirement for
delivery of a current prospectus under the
Securities Act of 1933, as amended (other than
a prospectus delivery requirement imposed on a
broker-dealer who is exchanging Exchange Notes
acquired for its own account as a result of a
market making or other trading activities)),
then the Issuer will pay liquidated damages of
0.25% per annum (which rate shall increase by
an additional 0.25% per annum at the end of
each 90-day period, up to a maximum of 1.00%
per annum) on the principal amount of Exchange
Notes and Initial Loans outstanding to holders
thereof who are, or would be, unable freely to
transfer Exchange Notes from and including the
181st day after the date of the first issuance
of Exchange Notes to but excluding the earlier
of the effective date of such Shelf
Registration Statement or the date of
consummation of such Registered Exchange Offer
(such damages may be payable, at the option of
the Target, in the form of additional Initial
Loans or Exchange Notes, as applicable, if the
then interest rate thereon exceeds the
applicable cash interest rate cap). The Issuer
will also pay such liquidated damages for any
period of time (subject to customary
exceptions) following the effectiveness of a
Shelf Registration Statement that such Shelf
Registration Statement is not available for
resales thereunder.
Right to Transfer Exchange The holders of the Exchange Notes shall
Notes: have the absolute and unconditional right to
transfer such Exchange Notes in compliance with
applicable law to any third parties.
Covenants: Substantially consistent with the indentures
governing the Delta Inc. Bonds (as defined in
Schedule I to the Commitment Letter), except as
otherwise agreed.
Events of Default: Substantially consistent with the indentures
governing the Delta Inc. Bonds, except as
otherwise agreed.
Governing Law and Forum: New York.
EXHIBIT D
DELTA EAST
DELTA EAST BRIDGE FACILITY
Summary of Terms and Conditions
----------
R.H. Donnelley Corporation (the "Company") has indicated that it
intends to enter into a merger agreement (the "Merger Agreement") pursuant to
which the Company will acquire (the "Transaction") the outstanding capital stock
of the company separately identified to us as "Delta" (the "Target") from the
existing holders of such capital stock (the "Sellers"). Unless otherwise defined
herein, terms which are defined in the Commitment Letter to which this Term
Sheet is attached are used herein as so defined. Set forth below is a statement
of the terms and conditions for the Delta East Bridge Facility to be used to
finance a portion of the Transaction, including without limitation to fund
Change of Control Offers for existing Delta East Bonds (as defined in Schedule I
to the Commitment Letter):
Initial Loans: The Lenders (as defined below) will make
unsecured loans (the "Initial Loans") to Delta
East on the Closing Date (as defined below) in
an aggregate principal amount not to exceed the
amount required to fund any purchases of Delta
East Bonds required to be made pursuant to the
Change of Control Offers (the "Delta East
Bridge Facility").
Borrower: Delta East.
Guarantors: Each of Delta East's subsidiaries that are
guarantors under the Delta East Credit
Agreement.
Administrative Agent: JPMorgan Chase Bank, N.A. ("JPMCB"; in such
capacity, the "Administrative Agent") will act
as Administrative Agent for the Lenders holding
the Initial Loans from time to time.
Sole Lead Arranger and Sole J.P. Morgan Securities Inc. ("JPMorgan"; in
Bookrunner: such capacity, the "Arranger").
Lenders: JPMCB and any other holder of any portion of
the Initial Loans or of any commitment to make
the Initial Loans are collectively referred to
as the "Lenders."
Use of Proceeds: The proceeds of the Initial Loans will be used
to fund any purchases of Delta East Bonds
required to be made pursuant to the Change of
Control Offers.
Funding: The Lenders will make the Initial Loans
simultaneously with the consummation of the
Transaction. The date on which such Initial
Loans are made and the Transaction is
consummated is herein called the "Closing
Date."
2
Maturity/Exchange: The Initial Loans will initially mature on the
date that is 12 months following the Closing
Date (the "Initial Loan Maturity Date"). The
maturity of the Initial Loans shall be extended
as provided below. If any Initial Loan has not
been previously repaid in full on or prior to
the Initial Loan Maturity Date, the Lender in
respect of such Initial Loan will have the
option at any time or from time to time to
receive Exchange Notes (the "Exchange Notes")
in exchange for such Initial Loan having the
terms set forth in the term sheet attached
hereto as Annex I; provided, that a Lender may
not elect to exchange only a portion of its
outstanding Initial Loans for Exchange Notes
unless such Lender intends at the time of such
partial exchange of Initial Loans promptly to
sell the Exchange Notes received in such
exchange. The maturity of any Initial Loans
that are not exchanged for Exchange Notes on
the Initial Loan Maturity Date shall
automatically be extended to the tenth
anniversary of the Closing Date.
The Initial Loans and the Exchange Notes shall
be pari passu for all purposes.
Interest: Prior to the Initial Loan Maturity Date, each
Initial Loan will accrue interest at a rate per
annum equal to the coupon of the Delta East
Bond being purchased with the proceeds of such
Initial Loan.
Such interest rate will increase by an
additional 100 basis points at the end of the
first six months following the Closing Date and
by 50 basis points at the end of the second
three months following the Closing Date.
The interest rate in effect at any time prior
to the Initial Loan Maturity Date for any
Initial Loan shall not exceed a rate per annum
equal to the coupon of the Delta East Bond
being purchased with the proceeds of such
Initial Loan plus 1.00%. During the period an
event of default occurs and is continuing, the
interest rate will increase by 200 basis points
with respect to any amounts overdue.
Following the Initial Loan Maturity Date, all
outstanding Initial Loans will accrue interest
at the rate provided for Exchange Notes in
Annex I hereto.
Calculation of interest shall be on the basis
of actual days elapsed in a year of 360 days.
3
Interest will be payable in arrears (a) at the
end of each fiscal quarter of Delta East
following the Closing Date and on the Initial
Loan Maturity Date and (b) for Initial Loans
outstanding after the Initial Loan Maturity
Date, at the end of each fiscal quarter of
Delta East following the Initial Loan Maturity
Date and on the final maturity date.
Subordination: If applicable, the Initial Loans will be
subordinated to any senior indebtedness of
Delta East on terms similar to those in an
indenture governing a high-yield senior
subordinated note issue. The subordination
provisions will not restrict prepayments of the
Initial Loans with proceeds of a permitted
refinancing thereof. Delta East will not be
permitted to incur any other indebtedness that
is subordinated to any senior indebtedness and
senior to any other indebtedness of Delta East.
Mandatory Redemption: On or prior to the Initial Loan Maturity Date,
Delta East will be required to prepay Initial
Loans on a pro rata basis, at par plus accrued
and unpaid interest from the net proceeds
(after deduction of, among other things,
amounts required, if any, to repay any senior
secured credit facilities or outstanding senior
bonds) of the sale of any assets outside the
ordinary course of business, the incurrence of
any debt (other than debt permitted under any
senior secured credit facilities, with the
exception of any outstanding senior bonds) and
the issuance of any equity not applied to the
payment of loans under any senior secured
credit facility, in each case subject to
exceptions and baskets to be agreed. In
addition, Delta East will be required to offer
to redeem the Initial Loans upon the occurrence
of a change of control (which offer shall be at
par plus accrued and unpaid interest).
Optional Prepayment: The Initial Loans may be prepaid, in whole or
in part, at the option of Delta East, at any
time upon three days' prior notice, at par plus
accrued and unpaid interest, if any, without
premium or penalty. If Delta East elects to
optionally prepay all or any portion of the
Initial Loans, then Delta East shall be
required to optionally redeem on a pro rata
basis outstanding Exchange Notes, if any,
subject to certain circumstances, to
the non-call provisions of any Exchange Notes,
at par plus accrued and unpaid interest, if
any.
Documentation: Substantially consistent with the Delta East
Credit Agreement, with usual and customary
changes for a bridge facility to be agreed
(such documentation, the "Delta East Bridge
Facility Documentation").
Conditions Precedent: The availability of the Delta East Bridge
Facility shall be conditioned upon the
satisfaction of the conditions set forth in
Exhibit F.
4
Representations and Substantially consistent with the Delta East
Warranties: Credit Agreement, with usual and customary
changes for a bridge facility to be agreed.
Covenants: Restrictions on the incurrence of indebtedness,
the payment of dividends, redemption of capital
stock and making certain investments, the
incurrence of liens, the sale of assets and the
sale of subsidiary stock, entering into
agreements that restrict the payment of
dividends by subsidiaries or the repayment of
intercompany loans and advances, entering into
affiliate transactions, entering into mergers,
consolidations and sales of substantially all
the assets of Delta East and its subsidiaries
and requirements as to future subsidiary
guarantors. Prior to the Initial Loan Maturity
Date, the covenants will be more restrictive
than those in the Exchange Notes. Following the
Initial Loan Maturity Date, the covenants
relevant to the Initial Loans will
automatically be modified so as to be
consistent with the Exchange Notes.
Events of Default: Substantially consistent with the Delta East
Credit Agreement, with usual and customary
changes for a bridge facility to be agreed.
Following the Initial Loan Maturity Date, the
events of default relevant to the Initial Loans
will automatically be modified so as to be
consistent with the Exchange Notes.
Cost and Yield Protection: Usual for facilities and transactions of this
type.
Assignment and Participation: Subject to the prior approval of the
Administrative Agent (such approval not to be
unreasonably withheld), the Lenders will have
the right to assign Initial Loans and
commitments without the consent of Delta East.
The Administrative Agent will receive a
processing and recordation fee of $3,500,
payable by the assignor and/or the assignee,
with each assignment. Assignments will be by
novation that will release the obligation of
the assigning Lender.
Subject to the prior approval of the
Administrative Agent (such approval not to be
unreasonably withheld), the Lenders will have
the right to participate their Initial Loans to
other financial institutions without
restriction, other than customary voting
limitations. Participants will have the same
benefits as the selling Lenders would have (and
will be limited to the amount of such benefits)
with regard to yield protection and increased
costs, subject to customary limitations and
restrictions.
5
Voting: Amendments and waivers of the Delta East Bridge
Facility Documentation will require the
approval of Lenders holding more than 50% of
the outstanding Initial Loans, except that (i)
the consent of each affected Lender will be
required for (a) reductions of principal or
interest rates, (b) except as provided under
"Maturity/Exchange" above, extensions of the
Initial Loan Maturity Date, (c) additional
restrictions on the right to exchange Initial
Loans for Exchange Notes or any amendment of
the rate of such exchange and (d) any amendment
to the Exchange Notes that requires (or would,
if any Exchange Notes were outstanding,
require) the approval of all holders of
Exchange Notes and (ii) the consent of 100% of
the Lenders shall be required with respect to
(a) modifications to any of the voting
percentages, (b) modifications to the
redemption provisions and (c) releases of any
significant guarantor. A replacement of Lenders
provision will apply in a manner to be agreed.
Expenses and Indemnification: The Delta East Bridge Facility Documentation
shall provide that Delta East shall pay (a) all
reasonable out-of-pocket expenses of the
Administrative Agent and the Arranger
associated with the syndication of the Delta
East Bridge Facility and the preparation,
execution, delivery and administration of the
Delta East Bridge Facility Documentation and
any amendment, waiver or modification with
respect thereto (including the reasonable fees,
disbursements and other charges of counsel) and
(b) all out-of-pocket expenses of the
Administrative Agent, the Arranger and the
Lenders (including the fees, disbursements and
other charges of counsel) in connection with
the enforcement of the Delta East Bridge
Facility Documentation.
The Administrative Agent, the Arranger and the
Lenders (and their respective affiliates,
controlling persons, officers, directors,
employees, advisors and agents) will have no
liability for, and will be indemnified and held
harmless against, any loss, liability, cost or
expense incurred in respect of the proposed
transactions, including, but not limited to,
the financing contemplated hereby or the use or
the proposed use of proceeds thereof, except to
the extent they are found by a final,
non-appealable judgment of a court to arise
from the gross negligence or willful misconduct
of the relevant indemnified person.
Governing Law and Forum: New York.
Counsel to the Administrative Simpson Thacher & Bartlett LLP.
Agent and the Arranger:
Annex I to Exhibit D
Summary of Terms and Conditions
of Exchange Notes
Capitalized terms used but not defined herein have the meanings given
in the Summary of Terms and Conditions of the Delta East Bridge Facility to
which this Annex I is attached.
Issuer: Delta East will issue Exchange Notes under an
indenture that complies with the Trust
Indenture Act (the "Indenture"). Delta East in
its capacity as issuer of the Exchange Notes is
referred to as the "Issuer."
Guarantors: Each of Delta East's subsidiaries that are
guarantors under the Delta East Credit
Agreement.
Principal Amount: The Exchange Notes will be available only in
exchange for the Initial Loans on or after the
Initial Loan Maturity Date. The principal
amount of any Exchange Note will equal 100% of
the aggregate principal amount of the Initial
Loan for which it is exchanged. In the case of
the initial exchange by Lenders, the minimum
amount of Initial Loans to be exchanged for
Exchange Notes shall equal 10% of the
outstanding principal amount of the Initial
Loans on the date of such exchange.
Maturity: The Exchange Notes will mature on the tenth
anniversary of the Closing Date.
Interest Rate: The Exchange Notes will bear interest at a rate
equal to the Initial Rate (as defined below).
"Initial Rate" shall be determined on the
Initial Loan Maturity Date and shall equal the
interest rate borne by the Initial Loans on the
day immediately preceding the Initial Loan
Maturity Date.
Interest will be payable in arrears at the end
of each semi-annual fiscal period.
Subordination: If applicable, terms similar to those in an
indenture governing a high-yield senior
subordinated note issue.
Mandatory Redemption: The Issuer will be required to make an offer to
redeem the Exchange Notes (and, if outstanding,
prepay the Initial Loans) on a pro rata basis,
at par plus accrued and unpaid interest (or, in
the case of Fixed Rate Exchange Notes, at par
plus accrued and unpaid interest plus any
applicable premiums), from the net proceeds
(after deduction of, among other things,
amounts required to pay any senior secured
credit facilities or outstanding senior bonds)
of the sale of any assets outside the ordinary
course of business, subject to exceptions and
baskets to be agreed. In addition, the Issuer
will be required to offer to redeem the
Exchange Notes upon the occurrence of a change
of control (which offer shall be at 101% of the
principal amount of such
2
Exchange Notes, plus accrued and unpaid
interest).
Optional Redemption: Subject to the following sentence, the Exchange
Notes will be redeemable at the option of the
Issuer, in whole or in part, at any time at par
plus accrued and unpaid interest to the
redemption date. If any Exchange Note is sold
by a Lender to a third party purchaser, such
Lender shall have the right to fix the interest
rate on such Exchange Note (a "Fixed Rate
Exchange Note") at a rate equal to the greater
of (a) the then applicable rate of interest or
(b) upon the representation of such
transferring Lender that a higher rate (such
higher rate, the "Transfer Rate") is necessary
in order to permit such Lender to transfer such
Exchange Note to a third party and receive
consideration equal to the principal amount
thereof plus all accrued and unpaid interest to
the date of such transfer, the Transfer Rate;
provided, that such Transfer Rate shall not
exceed the absolute and cash maximum interest
rates applicable to the Exchange Notes. If such
Lender exercises such right, such Exchange Note
will be (a) non-callable for the first 5 years
from the Initial Loan Maturity Date and (b)
thereafter, callable at par plus accrued
interest plus a premium equal to (i) 50% of the
coupon in effect on the date of sale of such
Exchange Note to a third party purchaser or
(ii) if the Transfer Rate was used, 50% of the
Transfer Rate, which premium in either case
shall decline ratably on each yearly
anniversary of the date of such sale to zero
two years prior to the maturity of the Exchange
Notes, provided that, such call protection
shall not apply to any call for redemption
issued prior to the sale to such third party
purchaser.
If the Issuer elects to optionally redeem all
or any portion of the Exchange Notes, then the
Issuer shall be required to optionally prepay
on a pro rata basis outstanding Initial Loans,
at par plus accrued and unpaid interest.
Registration Rights: The Issuer will file within 120 days after the
Initial Loan Maturity Date, and will use its
commercially reasonable efforts to cause to
become effective as soon thereafter as
practicable, a shelf registration statement
with respect to the Exchange Notes (a "Shelf
Registration Statement") or a registration
statement relating to a Registered Exchange
Offer (as described below). If a Shelf
Registration Statement is filed, the Issuer
will keep such registration statement effective
and available (subject to customary exceptions
including various blackout and suspension
periods) until the applicable Exchange Notes
are resold thereunder but in no event longer
than two years from the Closing Date. If within
180 days from the Initial Loan Maturity Date, a
Shelf Registration Statement for the Exchange
Notes has not been declared effective or the
Issuer has not effected an exchange offer (a
"Registered Exchange Offer") whereby the Issuer
has offered registered notes having terms
identical to the Exchange Notes (the
"Substitute Notes") in exchange for all
outstanding Exchange
3
Notes and Initial Loans (it being understood
that a Shelf Registration Statement is required
to be made available in respect of Exchange
Notes the holders of which could not receive
Substitute Notes through the Registered
Exchange Offer that, in the opinion of counsel,
would be freely saleable by such holders
without registration or requirement for
delivery of a current prospectus under the
Securities Act of 1933, as amended (other than
a prospectus delivery requirement imposed on a
broker-dealer who is exchanging Exchange Notes
acquired for its own account as a result of a
market making or other trading activities)),
then the Issuer will pay liquidated damages of
0.25% per annum (which rate shall increase by
an additional 0.25% per annum at the end of
each 90-day period, up to a maximum of 1.00%
per annum) on the principal amount of Exchange
Notes and Initial Loans outstanding to holders
thereof who are, or would be, unable freely to
transfer Exchange Notes from and including the
181st day after the date of the first issuance
of Exchange Notes to but excluding the earlier
of the effective date of such Shelf
Registration Statement or the date of
consummation of such Registered Exchange Offer
(such damages may be payable, at the option of
the Company, in the form of additional Initial
Loans or Exchange Notes, as applicable, if the
then interest rate thereon exceeds the
applicable cash interest rate cap). The Issuer
will also pay such liquidated damages for any
period of time (subject to customary
exceptions) following the effectiveness of a
Shelf Registration Statement that such Shelf
Registration Statement is not available for
resales thereunder.
Right to Transfer Exchange The holders of the Exchange Notes shall have
Notes: the absolute and unconditional right to
transfer such Exchange Notes in compliance with
applicable law to any third parties.
Covenants: Substantially consistent with the indentures
governing the Delta East Bonds, except as
otherwise agreed.
Events of Default: Substantially consistent with the indentures
governing the Delta East Bonds, except as
otherwise agreed.
Governing Law and Forum: New York.
EXHIBIT E
DELTA WEST
DELTA WEST BRIDGE FACILITY
Summary of Terms and Conditions
----------
R.H. Donnelley Corporation (the "Company") has indicated that it
intends to enter into a merger agreement (the "Merger Agreement") pursuant to
which the Company will acquire (the "Transaction") the outstanding capital stock
of the company separately identified to us as "Delta" (the "Target") from the
existing holders of such capital stock (the "Sellers"). Unless otherwise defined
herein, terms which are defined in the Commitment Letter to which this Term
Sheet is attached are used herein as so defined. Set forth below is a statement
of the terms and conditions for the Delta West Bridge Facility to be used to
finance a portion of the Transaction, including without limitation to fund
Change of Control Offers for existing Delta West Bonds (as defined in Schedule I
to the Commitment Letter):
Initial Loans: The Lenders (as defined below) will make
unsecured loans (the "Initial Loans") to Delta
West on the Closing Date (as defined below) in
an aggregate principal amount not to exceed the
amount required to fund any purchases of Delta
West Bonds required to be made pursuant to the
Change of Control Offers (the "Delta West
Bridge Facility").
Borrower: Delta West.
Guarantors: Each of Delta West's subsidiaries that are
guarantors under the Delta West Credit
Agreement.
Administrative Agent: JPMorgan Chase Bank, N.A. ("JPMCB"; in such
capacity, the "Administrative Agent") will act
as Administrative Agent for the Lenders holding
the Initial Loans from time to time.
Sole Lead Arranger and Sole J.P. Morgan Securities Inc. ("JPMorgan"; in
Bookrunner: such capacity, the "Arranger").
Lenders: JPMCB and any other holder of any portion of
the Initial Loans or of any commitment to make
the Initial Loans are collectively referred to
as the "Lenders."
Use of Proceeds: The proceeds of the Initial Loans will be used
to fund any purchases of Delta West Bonds
required to be made pursuant to the Change of
Control Offers.
Funding: The Lenders will make the Initial Loans
simultaneously with the consummation of the
Transaction. The date on which such Initial
Loans are made and the Transaction is
consummated is herein called the "Closing
Date."
2
Maturity/Exchange: The Initial Loans will initially mature on the
date that is 12 months following the Closing
Date (the "Initial Loan Maturity Date"). The
maturity of the Initial Loans shall be extended
as provided below. If any Initial Loan has not
been previously repaid in full on or prior to
the Initial Loan Maturity Date, the Lender in
respect of such Initial Loan will have the
option at any time or from time to time to
receive Exchange Notes (the "Exchange Notes")
in exchange for such Initial Loan having the
terms set forth in the term sheet attached
hereto as Annex I; provided, that a Lender may
not elect to exchange only a portion of its
outstanding Initial Loans for Exchange Notes
unless such Lender intends at the time of such
partial exchange of Initial Loans promptly to
sell the Exchange Notes received in such
exchange. The maturity of any Initial Loans
that are not exchanged for Exchange Notes on
the Initial Loan Maturity Date shall
automatically be extended to the tenth
anniversary of the Closing Date.
The Initial Loans and the Exchange Notes shall
be pari passu for all purposes.
Interest: Prior to the Initial Loan Maturity Date, each
Initial Loan will accrue interest at a rate per
annum equal to the coupon of the Delta West
Bond being purchased with the proceeds of such
Initial Loan.
Such interest rate will increase by an
additional 100 basis points at the end of the
first six months following the Closing Date and
by 50 basis points at the end of the second
three months following the Closing Date.
The interest rate in effect at any time prior
to the Initial Loan Maturity Date for any
Initial Loan shall not exceed a rate per annum
equal to the coupon of the Delta West Bond
being purchased with the proceeds of such
Initial Loan plus 1.00%. During the period an
event of default occurs and is continuing, the
interest rate will increase by 200 basis points
with respect to any amounts overdue.
Following the Initial Loan Maturity Date, all
outstanding Initial Loans will accrue interest
at the rate provided for Exchange Notes in
Annex I hereto.
Calculation of interest shall be on the basis
of actual days elapsed in a year of 360 days.
3
Interest will be payable in arrears (a) at the
end of each fiscal quarter of Delta West
following the Closing Date and on the Initial
Loan Maturity Date and (b) for Initial Loans
outstanding after the Initial Loan Maturity
Date, at the end of each fiscal quarter of
Delta West following the Initial Loan Maturity
Date and on the final maturity date.
Subordination: If applicable, the Initial Loans will be
subordinated to any senior indebtedness of
Delta West on terms similar to those in an
indenture governing a high-yield senior
subordinated note issue. The subordination
provisions will not restrict prepayments of the
Initial Loans with proceeds of a permitted
refinancing thereof. Delta West will not be
permitted to incur any other indebtedness that
is subordinated to any senior indebtedness and
senior to any other indebtedness of Delta West.
Mandatory Redemption: On or prior to the Initial Loan Maturity Date,
Delta West will be required to prepay Initial
Loans on a pro rata basis, at par plus accrued
and unpaid interest from the net proceeds
(after deduction of, among other things,
amounts required, if any, to repay any senior
secured credit facilities or outstanding senior
bonds) of the sale of any assets outside the
ordinary course of business, the incurrence of
any debt (other than debt permitted under any
senior secured credit facilities, with the
exception of any outstanding senior bonds) and
the issuance of any equity not applied to the
payment of loans under any senior secured
credit facility, in each case subject to
exceptions and baskets to be agreed. In
addition, Delta West will be required to offer
to redeem the Initial Loans upon the occurrence
of a change of control (which offer shall be at
par plus accrued and unpaid interest).
Optional Prepayment: The Initial Loans may be prepaid, in whole or
in part, at the option of Delta West, at any
time upon three days' prior notice, at par plus
accrued and unpaid interest, if any, without
premium or penalty. If Delta West elects to
optionally prepay all or any portion of the
Initial Loans, then Delta West shall be
required to optionally redeem on a pro rata
basis outstanding Exchange Notes, if any,
subject to certain circumstances, to the
non-call provisions of any Exchange Notes, at
par plus accrued and unpaid interest, if any.
Documentation: Substantially consistent with the Delta West
Credit Agreement, with usual and customary
changes for a bridge facility to be agreed
(such documentation, the "Delta West Bridge
Facility Documentation").
Conditions Precedent: The availability of the Delta West Bridge
Facility shall be conditioned upon the
satisfaction of the conditions set forth in
Exhibit F.
4
Representations and Substantially consistent with the Delta West
Warranties: Credit Agreement, with usual and customary
changes for a bridge facility to be agreed.
Covenants: Restrictions on the incurrence of indebtedness,
the payment of dividends, redemption of capital
stock and making certain investments, the
incurrence of liens, the sale of assets and the
sale of subsidiary stock, entering into
agreements that restrict the payment of
dividends by subsidiaries or the repayment of
intercompany loans and advances, entering into
affiliate transactions, entering into mergers,
consolidations and sales of substantially all
the assets of Delta West and its subsidiaries
and requirements as to future subsidiary
guarantors. Prior to the Initial Loan Maturity
Date, the covenants will be more restrictive
than those in the Exchange Notes. Following the
Initial Loan Maturity Date, the covenants
relevant to the Initial Loans will
automatically be modified so as to be
consistent with the Exchange Notes.
Events of Default: Substantially consistent with the Delta West
Credit Agreement, with usual and customary
changes for a bridge facility to be agreed.
Following the Initial Loan Maturity Date, the
events of default relevant to the Initial Loans
will automatically be modified so as to be
consistent with the Exchange Notes.
Cost and Yield Protection: Usual for facilities and transactions of this
type.
Assignment and Participation: Subject to the prior approval of the
Administrative Agent (such approval not to be
unreasonably withheld), the Lenders will have
the right to assign Initial Loans and
commitments without the consent of Delta West.
The Administrative Agent will receive a
processing and recordation fee of $3,500,
payable by the assignor and/or the assignee,
with each assignment. Assignments will be by
novation that will release the obligation of
the assigning Lender.
Subject to the prior approval of the
Administrative Agent (such approval not to be
unreasonably withheld), the Lenders will have
the right to participate their Initial Loans to
other financial institutions without
restriction, other than customary voting
limitations. Participants will have the same
benefits as the selling Lenders would have (and
will be limited to the amount of such benefits)
with regard to yield protection and increased
costs, subject to customary limitations and
restrictions.
5
Voting: Amendments and waivers of the Delta West Bridge
Facility Documentation will require the
approval of Lenders holding more than 50% of
the outstanding Initial Loans, except that (i)
the consent of each affected Lender will be
required for (a) reductions of principal or
interest rates, (b) except as provided under
"Maturity/Exchange" above, extensions of the
Initial Loan Maturity Date, (c) additional
restrictions on the right to exchange Initial
Loans for Exchange Notes or any amendment of
the rate of such exchange and (d) any amendment
to the Exchange Notes that requires (or would,
if any Exchange Notes were outstanding,
require) the approval of all holders of
Exchange Notes and (ii) the consent of 100% of
the Lenders shall be required with respect to
(a) modifications to any of the voting
percentages, (b) modifications to the
redemption provisions and (c) releases of any
significant guarantor. A replacement of Lenders
provision will apply in a manner to be agreed.
Expenses and Indemnification: The Delta West Bridge Facility Documentation
shall provide that Delta West shall pay (a) all
reasonable out-of-pocket expenses of the
Administrative Agent and the Arranger
associated with the syndication of the Delta
West Bridge Facility and the preparation,
execution, delivery and administration of the
Delta West Bridge Facility Documentation and
any amendment, waiver or modification with
respect thereto (including the reasonable fees,
disbursements and other charges of counsel) and
(b) all out-of-pocket expenses of the
Administrative Agent, the Arranger and the
Lenders (including the fees, disbursements and
other charges of counsel) in connection with
the enforcement of the Delta West Bridge
Facility Documentation.
The Administrative Agent, the Arranger and the
Lenders (and their respective affiliates,
controlling persons, officers, directors,
employees, advisors and agents) will have no
liability for, and will be indemnified and held
harmless against, any loss, liability, cost or
expense incurred in respect of the proposed
transactions, including, but not limited to,
the financing contemplated hereby or the use or
the proposed use of proceeds thereof, except to
the extent they are found by a final,
non-appealable judgment of a court to arise
from the gross negligence or willful misconduct
of the relevant indemnified person.
Governing Law and Forum: New York.
Counsel to the Administrative Simpson Thacher & Bartlett LLP.
Agent and the Arranger:
Annex I to Exhibit E
Summary of Terms and Conditions
of Exchange Notes
Capitalized terms used but not defined herein have the meanings given
in the Summary of Terms and Conditions of the Delta West Bridge Facility to
which this Annex I is attached.
Issuer: Delta West will issue Exchange Notes under an
indenture that complies with the Trust
Indenture Act (the "Indenture"). Delta West in
its capacity as issuer of the Exchange Notes is
referred to as the "Issuer."
Guarantors: Each of Delta West's subsidiaries that are
guarantors under the Delta West Credit
Agreement.
Principal Amount: The Exchange Notes will be available only in
exchange for the Initial Loans on or after the
Initial Loan Maturity Date. The principal
amount of any Exchange Note will equal 100% of
the aggregate principal amount of the Initial
Loan for which it is exchanged. In the case of
the initial exchange by Lenders, the minimum
amount of Initial Loans to be exchanged for
Exchange Notes shall equal 10% of the
outstanding principal amount of the Initial
Loans on the date of such exchange.
Maturity: The Exchange Notes will mature on the tenth
anniversary of the Closing Date.
Interest Rate: The Exchange Notes will bear interest at a rate
equal to the Initial Rate (as defined below).
"Initial Rate" shall be determined on the
Initial Loan Maturity Date and shall equal the
interest rate borne by the Initial Loans on the
day immediately preceding the Initial Loan
Maturity Date.
Interest will be payable in arrears at the end
of each semi-annual fiscal period.
Subordination: If applicable, terms similar to those in an
indenture governing a high-yield senior
subordinated note issue.
Mandatory Redemption: The Issuer will be required to make an offer to
redeem the Exchange Notes (and, if outstanding,
prepay the Initial Loans) on a pro rata basis,
at par plus accrued and unpaid interest (or, in
the case of Fixed Rate Exchange Notes, at par
plus accrued and unpaid interest plus any
applicable premiums), from the net proceeds
(after deduction of, among other things,
amounts required to pay any senior secured
credit facilities or outstanding senior bonds)
of the sale of any assets outside the ordinary
course of business, subject to exceptions and
baskets to be agreed. In addition, the Issuer
will be required to offer to redeem the
Exchange Notes upon the occurrence of a change
of control (which offer shall be at 101% of the
principal amount of such
2
Exchange Notes, plus accrued and unpaid
interest).
Optional Redemption: Subject to the following sentence, the Exchange
Notes will be redeemable at the option of the
Issuer, in whole or in part, at any time at par
plus accrued and unpaid interest to the
redemption date. If any Exchange Note is sold
by a Lender to a third party purchaser, such
Lender shall have the right to fix the interest
rate on such Exchange Note (a "Fixed Rate
Exchange Note") at a rate equal to the greater
of (a) the then applicable rate of interest or
(b) upon the representation of such
transferring Lender that a higher rate (such
higher rate, the "Transfer Rate") is necessary
in order to permit such Lender to transfer such
Exchange Note to a third party and receive
consideration equal to the principal amount
thereof plus all accrued and unpaid interest to
the date of such transfer, the Transfer Rate;
provided, that such Transfer Rate shall not
exceed the absolute and cash maximum interest
rates applicable to the Exchange Notes. If such
Lender exercises such right, such Exchange Note
will be (a) non-callable for the first five
years from the Initial Loan Maturity Date and
(b) thereafter, callable at par plus accrued
interest plus a premium equal to (i) 50% of the
coupon in effect on the date of sale of such
Exchange Note to a third party purchaser or
(ii) if the Transfer Rate was used, 50% of the
Transfer Rate, which premium in either case
shall decline ratably on each yearly
anniversary of the date of such sale to zero
two years prior to the maturity of the Exchange
Notes, provided that, such call protection
shall not apply to any call for redemption
issued prior to the sale to such third party
purchaser.
If the Issuer elects to optionally redeem all
or any portion of the Exchange Notes, then the
Issuer shall be required to optionally prepay
on a pro rata basis outstanding Initial Loans,
at par plus accrued and unpaid interest.
Registration Rights: The Issuer will file within 120 days after the
Initial Loan Maturity Date, and will use its
commercially reasonable efforts to cause to
become effective as soon thereafter as
practicable, a shelf registration statement
with respect to the Exchange Notes (a "Shelf
Registration Statement") or a registration
statement relating to a Registered Exchange
Offer (as described below). If a Shelf
Registration Statement is filed, the Issuer
will keep such registration statement effective
and available (subject to customary exceptions
including various blackout and suspension
periods) until the applicable Exchange Notes
are resold thereunder but in no event longer
than two years from the Closing Date. If within
180 days from the Initial Loan Maturity Date, a
Shelf Registration Statement for the Exchange
Notes has not been declared effective or the
Issuer has not effected an exchange offer (a
"Registered Exchange Offer") whereby the Issuer
has offered registered notes having terms
identical to the Exchange Notes (the
"Substitute Notes") in exchange for all
outstanding Exchange
3
Notes and Initial Loans (it being understood
that a Shelf Registration Statement is required
to be made available in respect of Exchange
Notes the holders of which could not receive
Substitute Notes through the Registered
Exchange Offer that, in the opinion of counsel,
would be freely saleable by such holders
without registration or requirement for
delivery of a current prospectus under the
Securities Act of 1933, as amended (other than
a prospectus delivery requirement imposed on a
broker-dealer who is exchanging Exchange Notes
acquired for its own account as a result of a
market making or other trading activities)),
then the Issuer will pay liquidated damages of
0.25% per annum (which rate shall increase by
an additional 0.25% per annum at the end of
each 90-day period, up to a maximum of 1.00%
per annum) on the principal amount of Exchange
Notes and Initial Loans outstanding to holders
thereof who are, or would be, unable freely to
transfer Exchange Notes from and including the
181st day after the date of the first issuance
of Exchange Notes to but excluding the earlier
of the effective date of such Shelf
Registration Statement or the date of
consummation of such Registered Exchange Offer
(such damages may be payable, at the option of
the Company, in the form of additional Initial
Loans or Exchange Notes, as applicable, if the
then interest rate thereon exceeds the
applicable cash interest rate cap). The Issuer
will also pay such liquidated damages for any
period of time (subject to customary
exceptions) following the effectiveness of a
Shelf Registration Statement that such Shelf
Registration Statement is not available for
resales thereunder.
Right to Transfer Exchange The holders of the Exchange Notes shall have
Notes: the absolute and unconditional right to
transfer such Exchange Notes in compliance with
applicable law to any third parties.
Covenants: Substantially consistent with the indentures
governing the Delta West Bonds, except as
otherwise agreed.
Events of Default: Substantially consistent with the indentures
governing the Delta West Bonds, except as
otherwise agreed.
Governing Law and Forum: New York.
EXHIBIT F
The availability of each of the Facilities shall be subject to the
satisfaction of the following conditions. Capitalized terms used but not defined
herein have the meanings given in the Term Sheets.
(a) Each applicable party shall have executed and delivered the Credit
Documentation.
(b) The Acquisition shall be or shall have been consummated in
accordance with the Merger Agreement (which consummation shall occur
substantially simultaneously with the Closing Date and the funding of
the Incremental Tranche B Delta West Facility and, if applicable, the
Holdco Facilities), and no material provision of the Merger Agreement
shall have been waived, amended, supplemented or otherwise modified in
a manner that is material and adverse to the Commitment Parties
without the consent of the Administrative Agent, the terms of which
consent shall not be unreasonably withheld or delayed.
(c) Representations and warranties in respect of due authorization,
execution and delivery of the Credit Documentation; legality,
validity, binding effect and enforceability of the Credit
Documentation; execution and delivery of the Credit Documentation and
consummation of the Transaction not violating material laws; and
validity and perfection of the security interests in the collateral
(subject to liens permitted by the Credit Documentation) shall be true
and correct in all material respects, subject in each case to
customary exceptions or qualifications.
(d) The Administrative Agent shall have received the results of a
recent lien search in each relevant jurisdiction with respect to the
Company and its subsidiaries (including the Target and its
subsidiaries), and such search shall reveal no liens on any of the
assets of the Company and its subsidiaries (including the Target and
its subsidiaries) except for liens permitted by the credit
documentation and existing bonds or credit agreements or liens to be
discharged on or prior to the Closing Date pursuant to documentation
satisfactory to the Administrative Agent.
(e) All documents and instruments required to perfect or continue the
Administrative Agent's security interest in the collateral under the
Facilities, to the extent applicable, (including delivery of stock
certificates and undated stock powers executed in blank) shall have
been executed and be in proper form for filing, subject only to
exceptions satisfactory to the Administrative Agent.
(f) The Administrative Agent shall have received such legal opinions
(including opinions (i) from counsel to the Company and its
subsidiaries and (ii) from such special and local counsel as may be
reasonably required by the Administrative Agent), corporate delivery
documents, certificates and instruments as are customary for
transactions of this type.
(g) As a condition to the funding of the Holdco Facilities, each of
the Company and the Target shall have delivered preliminary offering
memoranda or preliminary prospectuses relating to the Holdco Notes
usable in a customary high-yield road show and the investment bank
engaged to place the Holdco Notes shall have been afforded an
opportunity following the receipt of such documentation to attempt to
place the Holdco Notes with qualified purchasers thereof.