Exhibit (b)(i)
FIRST UNION NATIONAL BANK FLEET NATIONAL BANK
FIRST UNION SECURITIES, INC. FLEETBOSTON ROBERTSON STEPHENS INC.
One First Union Center 100 Federal Street
301 South College Street Boston, Massachusetts 02110
Charlotte, North Carolina 28288
July 12, 2000
Chartwell Investments II LLC
717 Fifth Avenue
New York, New York 10022
Attention: Todd R. Berman, President
Ladies and Gentlemen:
Chartwell Investments II LLC (the "Sponsor") has informed First Union
National Bank ("First Union"), Fleet National Bank ("Fleet," and together with
First Union, the "Agents"), First Union Securities, Inc. ("FUSI") and
FleetBoston Robertson Stephens Inc. ("FRS," and together with FUSI, the
"Co-Arrangers") that it intends to engage in a series of transactions whereby
(a) the Sponsor or one or more of its affiliates will form, together with Ford
Motor Company or one or more of its affiliates (collectively, "FMC"), a holding
company ("Parent"), which will in turn form a wholly owned subsidiary
("MergerCo"), and Parent and MergerCo will enter into an Agreement and Plan of
Merger (the "Merger Agreement") with Carey International, Inc., a Delaware
corporation (the "Borrower"), pursuant to which MergerCo and the Borrower will
commence a joint tender offer (the "Tender Offer") to acquire, for cash, all of
the issued and outstanding shares of common stock of the Borrower. Pursuant to
the Merger Agreement, upon completion of the Tender Offer, either MergerCo or a
wholly owned subsidiary of MergerCo created for such purpose will merge (the
"Merger") with and into the Borrower. The Tender Offer and Merger will be
completed either in a Short-Form Merger Structure or a Long-Form Merger
Structure, as described in the Term Sheet referred to below, depending on the
number of shares of common stock of the Borrower that are tendered in the Tender
Offer. Capitalized terms used in this Commitment Letter without definition shall
have the meanings given to them in the Term Sheet referred to below.
You have advised us that, in order to finance the Merger, (a) Parent will
capitalize MergerCo and the Borrower with not less than $97 million in cash
equity contributed to Parent by the Sponsor and FMC (and thereafter to MergerCo
by Parent) and (at the effective time of the Merger) approximately $9.0 million
(and in any event not less than $6.0 million) in equity of the
Chartwell Investments II LLC
July 12, 2000
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Borrower retained by members of the Borrower's management, (b) the Borrower will
obtain senior secured credit facilities in the aggregate principal amount of
$160 million, with such principal amount subject to increase by an amount of up
to $10 million as provided in the Term Sheet (the "Facilities"), and (c) the
Borrower will issue $40 million in aggregate principal amount of its unsecured
subordinated notes in a private placement (the "Subordinated Notes") You have
further advised us that the proceeds of the Facilities will be used to finance a
portion of the consideration to be paid to stockholders of the Borrower in
connection with the Tender Offer and the Merger, to refinance certain existing
indebtedness of the Borrower, to pay fees and expenses in connection with the
Facilities and the other transactions described herein, and to provide for the
working capital and general corporate requirements (including the funding of
acquisitions) of the Borrower and its subsidiaries (the Facilities, together
with the Tender Offer, the Merger, the Subordinated Notes and the other
transactions described herein and in the Term Sheet, collectively, the
"Transactions"), and that no external debt financing will be required to
effectuate the Transactions other than the financing described herein and the
Subordinated Notes. The Sponsor has requested that First Union and Fleet commit
to provide the entire principal amount of the Facilities and that FUSI and FRS
agree to structure, arrange and syndicate the Facilities.
First Union and Fleet are pleased to confirm their several commitments to
provide the entire principal amount of the Facilities to the Borrower, and the
Co-Arrangers are pleased to confirm their agreement to serve as co-arrangers for
the Facilities and to arrange a syndicate of financial institutions (the
"Lenders") mutually acceptable to the Co-Arrangers, the Agents and the Sponsor,
in each case based upon and subject to the foregoing and subject to the terms
and conditions set forth below and in the summary of terms and conditions (the
"Term Sheet") attached hereto. The commitments of the Agents hereunder are
several and not joint. Under the terms and conditions set forth hereinbelow and
in the Term Sheet, First Union will provide 50% of the aggregate principal
amount of the Facilities, and Fleet will provide 50% of the aggregate principal
amount of the Facilities. It is a condition to each Agent's commitment hereunder
that the portion of the Facilities not being committed to hereunder by such
Agent shall be committed to by the other Agent and/or other Lenders (on the
terms and subject to the conditions set forth herein and in the Term Sheet) at
the initial closing of the Facilities. The Sponsor understands that the pricing
of the Facilities has been determined independently, and neither the pricing nor
the availability of the Facilities is conditioned upon the Sponsor, the Borrower
or any of their respective subsidiaries or affiliates purchasing any additional
product or services from either Agent or any of its affiliates, including the
Co-Arrangers.
Each Agent's commitment hereunder and each Co-Arranger's agreement to
provide the services described herein are subject to (i) the Sponsor's written
acceptance of a letter from the Agents and the Co-Arrangers to the Sponsor of
even date herewith (the "Fee Letter") pursuant to which the Sponsor agrees to
pay to the Agents and the Co-Arrangers certain fees in connection with the
Facilities as more particularly set forth therein, (ii) the completion of a
definitive credit agreement and related documentation for the Facilities and
definitive documentation for the other Transactions in form and substance
satisfactory to the Agents, (iii) compliance with all
Chartwell Investments II LLC
July 12, 2000
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applicable laws and regulations, (iv) the absence of any condition in the
financial or capital markets prior to the execution of such definitive credit
documentation that could reasonably be expected to have a material adverse
effect on the primary syndication of the Facilities, (v) the Agents'
satisfaction that, prior to and during the syndication of the Facilities, there
shall be no competing issues of debt securities or commercial bank or other
credit facilities of Holdings, the Borrower or any of their respective
subsidiaries being offered, placed or arranged (other than the Subordinated
Notes), and (vi) the satisfaction of all other conditions described herein, in
the Term Sheet, and in such definitive credit documentation. The terms and
conditions of the Agents' commitments hereunder and of the Facilities are not
limited to those set forth herein and in the Term Sheet, and any matters that
are not covered by the provisions hereof and thereof shall be subject to the
mutual agreement of the Agents, the Sponsor and the Borrower.
In addition, it is understood and agreed that First Union, Fleet, FUSI and
FRS shall be entitled, after consultation with the Sponsor and the Borrower, to
change the pricing (including interest and upfront fees), terms and structure of
the Facilities, and the timing of syndication and closing thereof, at any time
if the syndication of the Facilities has not been completed and First Union,
Fleet, FUSI and FRS determine in good faith that such changes are advisable to
ensure a successful syndication of the Facilities, provided that (i) the total
principal amount of the Facilities remains unchanged and (ii) once each of the
Agents has reached a hold level of $45 million in commitments, (A) any increase
in the Applicable Margins shall not exceed 75 basis points and (B) the
commitments may be reallocated only between the Term A Facility and the Term B
Facility and the amounts of the Revolving Credit Facility and the Acquisition
Facility shall not be changed. The commitments of the Agents hereunder are
subject to the agreements of the Sponsor set forth in this paragraph. The
provisions of this paragraph shall survive the execution of definitive credit
documentation for the Facilities and the closing thereof.
It is agreed that First Union will act as the administrative agent for the
Facilities, Fleet will act as the syndication agent for the Facilities, and the
Co-Arrangers will act as the co-arrangers for the Facilities. It is further
agreed that no additional agents, co-agents or arrangers will be appointed and
no Lender will receive compensation outside the terms contained herein
(including the Term Sheet) and in the Fee Letter in order to obtain its
commitment to participate in the Facilities, in each case unless the Sponsor and
the Co-Arrangers so agree. Notwithstanding the foregoing, each of the Agents and
the Co-Arrangers reserves the right to allocate (in whole or in part) to any of
its affiliates any fees payable to it in such manner as it and its affiliates
may agree in their sole discretion.
The Sponsor understands that the Co-Arrangers intend to commence their
syndication efforts promptly and agree actively to assist, and to use
commercially reasonable efforts to cause the Borrower to assist, the Agents and
the Co-Arrangers in achieving a timely syndication (which is expected to be
completed after the closing of the Facilities) that is mutually satisfactory to
the Agents, the Co-Arrangers and the Sponsor. The syndication will be
accomplished by a variety of means, including direct contact during the
syndication between senior management of the Borrower, the Sponsor, the Agents,
the Co-Arrangers and their respective affiliates and advisors.
Chartwell Investments II LLC
July 12, 2000
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The Sponsor agrees that the Agents and the Co-Arrangers may share with any of
their respective affiliates and advisors any information related to the Borrower
and the Sponsor, their respective subsidiaries and affiliates, and the
Transactions or any other matter contemplated hereby, on a confidential basis.
It is understood and agreed that the Co-Arrangers will manage, in
consultation with the Sponsor, all aspects of the syndication, including but not
limited to decisions as to the selection of institutions to be approached, when
they will be approached, when their commitments 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 the
Co-Arrangers in their syndication efforts, the Sponsor agrees (i) promptly to
prepare and provide, and to use commercially reasonable efforts to cause the
Borrower to prepare and provide, to the Co-Arrangers and the Agents all
information reasonably requested by them with respect to the Sponsor, the
Borrower and its subsidiaries, and the Transactions, including all financial
information and projections (the "Projections"), as the Co-Arrangers and the
Agents may reasonably request in connection with the arrangement and syndication
of the Facilities, (ii) to assist, to cause its affiliates and advisors to
assist, and to use commercially reasonable efforts to cause the Borrower to
assist, the Co-Arrangers in the preparation of a Confidential Information
Memorandum and other marketing materials to be used in connection with the
syndication, and (iii) to make appropriate officers and representatives of the
Sponsor and, to the extent reasonably practicable, the Borrower available to
participate in information meetings for the potential Lenders at such times and
places as the Co-Arrangers may reasonably request.
The Agents' commitments as set forth herein and the Co-Arrangers'
agreements to provide the services described herein are subject to the condition
that (a) all written information (other than the Projections) concerning the
Sponsor, the Borrower and its subsidiaries and the Transactions (the
"Information") that has been or will be made available to the Co-Arrangers or
the Agents by the Sponsor or the Borrower or any of their respective
representatives is, or will be when furnished, taken as a whole, complete 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 the
Co-Arrangers or the Agents by the Sponsor or the Borrower or any of their
respective representatives have been or will be prepared in good faith based
upon reasonable assumptions.
The Sponsor agrees to reimburse the Agents and the Co-Arrangers for all of
their reasonable fees and out-of-pocket expenses (including reasonable
attorneys' fees and expenses) incurred in connection with the preparation,
execution and delivery of this Commitment Letter, the Term Sheet, the Fee
Letter, the definitive credit documentation for the Facilities, the syndication
of the Facilities, and all of the other transactions described herein, whether
or not the Facilities are closed or any credit is extended thereunder, unless
and except to the extent a court of competent jurisdiction has determined by a
final and nonappealable judgment that the Agents
Chartwell Investments II LLC
July 12, 2000
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are in breach of their commitments hereunder to provide the Facilities. The
Sponsor also agrees to indemnify and hold harmless each Agent, each Co-Arranger
and their respective affiliates, directors, officers, employees and agents
(collectively, the "Indemnified Parties") from and against any and all actions,
suits, losses, claims, damages and liabilities of any kind or nature, joint or
several, to which such Indemnified Parties may become subject, related to or
arising out of any of the transactions contemplated herein, including, without
limitation, the execution and delivery of this Commitment Letter, the execution
and delivery of definitive credit documentation for the Facilities, the
syndication and closing of the Facilities and the use of proceeds thereunder,
and the closing of the other Transactions, and to reimburse the Indemnified
Parties for all out-of-pocket expenses (including reasonable attorneys' fees and
expenses of counsel to First Union and FUSI and counsel to Fleet and FRS) on
demand as they are incurred in connection with the investigation of, preparation
for, or defense of any pending or threatened claim or any action or proceeding
arising therefrom; provided, however, that no Indemnified Party shall have any
right to indemnification for any of the foregoing to the extent determined by a
final and nonappealable judgment of a court of competent jurisdiction to have
resulted from its own gross negligence or willful misconduct. This Commitment
Letter is addressed solely to the Sponsor, and neither the Agents or the
Co-Arrangers, on the one hand, nor the Sponsors or the Company, on the other
hand, shall be liable to the other or any other person for any indirect or
consequential damages that may be alleged as a result of this Commitment Letter
or any of the transactions referred to herein. The provisions of this paragraph
shall survive any termination of this Commitment Letter or the commitments of
the Agents set forth herein; provided that the Sponsor shall be released from
all of its obligations under this Commitment Letter so long as the Borrower, by
execution of the definitive credit documentation for the Facilities, shall have
assumed all of the Sponsor's obligations hereunder that are intended to survive
the termination of this Commitment Letter; and provided further that the
obligations of the Sponsor arising under the fifth, sixth, seventh and eighth
paragraphs hereof shall remain in full force and effect until the primary
syndication of the Facilities has been completed.
Until acceptance of this Commitment Letter in writing, the Sponsor is not
authorized to show or circulate this Commitment Letter or the Term Sheet to any
other person or entity (other than to (i) its attorneys, financial advisors and
accountants and (ii) Ford Motor Company, the Borrower and the lenders under the
proposed Subordinated Notes and their respective attorneys, financial advisors
and accountants, in each case in connection with their evaluation of the
Transactions, provided that each of such persons shall also be bound by the
confidentiality provisions hereof), except as may be required by law or
applicable judicial process or except as otherwise agreed by the Agents and the
Co-Arrangers.
The Co-Arrangers shall have the right to review and approve any public
announcement or public filing made after the date hereof relating to the
Facilities or to the Co-Arrangers or their affiliates before any such
announcement or filing is made (such approval not to be unreasonably withheld or
delayed). The Sponsor shall have the right to review and approve the Agents'
disclosure of information relating to this transaction to Gold Sheets and other
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similar bank trade publications before any such disclosure is made (such
approval not to be unreasonably withheld
Chartwell Investments II LLC
July 12, 2000
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or delayed). Such information will consist of deal terms and other information
customarily found in such publications.
This Commitment Letter, the commitments of the Agents set forth herein and
the agreements of the Co-Arrangers to provide the services set forth herein
shall, in the event this Commitment Letter is accepted by the Sponsor as
provided in the last paragraph hereof, automatically expire at the earliest to
occur of the following: (i) the occurrence of any event that has, or could
reasonably be expected to have, a material adverse change in the business,
properties, operations, condition (financial or otherwise) or prospects of the
Borrower and its subsidiaries, taken as a whole, (ii) the termination of the
definitive Agreement and Plan of Merger with regard to the Merger or the
termination or expiration of the Tender Offer without acceptance by MergerCo of
at least a majority of shares of the Borrower's common stock entitled to vote in
the Merger (after giving effect to the exercise of the Topping Option or the
Self-Tender, if applicable), and (iii) 5:00 p.m., Charlotte time, on September
15, 2000, if the initial borrowing under the Facilities shall not have occurred
by such time.
This Commitment Letter and the Fee Letter shall be governed by and
construed in accordance with the internal laws of the State of North Carolina,
and together constitute the entire agreement between the parties relating to the
subject matter hereof and thereof and supersede any previous agreement, written
or oral, between the parties with respect to the subject matter hereof and
thereof. This Commitment Letter shall be binding upon and shall inure to the
benefit of the respective successors and assigns of the parties hereto, but
shall not be assigned in whole or in part by the Sponsor without the prior
written consent of the Agents and the Co-Arrangers. This Commitment Letter may
not be amended or any provision hereof waived or modified except by an
instrument in writing signed by each of the parties hereto. This Commitment
Letter is intended to be solely for the benefit of the parties hereto and is not
intended to confer any benefits on, or create any rights in favor of, any other
person or entity. 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.
Chartwell Investments II LLC
July 12, 2000
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If the Sponsor is in agreement with the foregoing, please indicate
acceptance of the terms hereof by signing the enclosed counterpart of this
Commitment Letter and returning it to the Agents, together with an executed
counterpart of the Fee Letter, by no later than 5:00 p.m., Charlotte time, on
July 13, 2000. This Commitment Letter, the commitment of the Agents set forth
herein and the agreements of the Co-Arrangers to provide the services set forth
herein shall automatically terminate at such time unless signed counterparts of
this letter and the Fee Letter shall have been delivered to the Agents in
accordance with the terms of the immediately preceding sentence.
Sincerely,
FIRST UNION NATIONAL BANK
By: ____________________________
Title: ____________________________
FLEET NATIONAL BANK
By: ____________________________
Title: ____________________________
FIRST UNION SECURITIES, INC.
By: ____________________________
Title: ____________________________
FLEETBOSTON ROBERTSON STEPHENS INC.
By: ____________________________
Title: ____________________________
(signatures continued)
Chartwell Investments II LLC
July 12, 2000
Page 8
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Agreed to and accepted as of the date first above written:
CHARTWELL INVESTMENTS II LLC
By: __________________________________
Title: __________________________________
CAREY INTERNATIONAL, INC. CONFIDENTIAL
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SUMMARY OF TERMS AND CONDITIONS
Senior Secured Credit Facilities
Carey International, Inc.
Transactions: Chartwell Investments II LLC or one or more of its
affiliates (collectively, "Chartwell") will form, together
with Ford Motor Company or one or more of its affiliates
(collectively, "FMC"), a holding company ("Parent"), which
will in turn form a wholly owned subsidiary ("MergerCo"),
and Parent and MergerCo will enter into an Agreement and
Plan of Merger (the "Merger Agreement") with Carey
International, Inc., a Delaware corporation (the
"Borrower"), pursuant to which MergerCo and the Borrower
will commence a joint tender offer (the "Tender Offer") to
acquire, for cash, all of the issued and outstanding shares
of common stock of the Borrower. Pursuant to the Merger
Agreement, upon completion of the Tender Offer, either
MergerCo or a wholly owned subsidiary of MergerCo created
for such purpose will merge (the "Merger") with and into the
Borrower. The Tender Offer and Merger will be completed
either in a Short-Form Merger Structure or a Long-Form
Merger Structure, as hereinafter described, depending on the
number of shares of common stock of the Borrower that are
tendered in the Tender Offer.
Short-Form Merger Structure: The Merger Agreement will
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provide that the Tender Offer will be made jointly by
MergerCo and the Borrower. In addition, the Merger Agreement
will provide for the grant by the Borrower to MergerCo of an
option (the "Topping Option") to acquire up to a specified
number of shares of newly issued common stock of the
Borrower, for cash, at a price of not more than $18.25 per
share. In the event that holders of outstanding common stock
of the Borrower tender shares representing less than 90% of
the outstanding common stock of the Borrower, MergerCo may
exercise the Topping Option to acquire such number of shares
of common stock as will be necessary so that, upon
completion of the Tender Offer and exercise of the Topping
Option, MergerCo will own at least that percentage of the
then outstanding shares of common stock of the Borrower
entitled to vote in connection with the approval of the
Merger which is necessary to effect a "short-form" merger
under applicable law, giving effect to the issuance of such
shares. The exercise of the Topping Option and the issuance
of shares of common stock to MergerCo thereunder will be
completed simultaneously with acceptance of shares in the
Tender Offer. Upon completion of the Tender Offer and
acquisition of shares pursuant to the Topping
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FIRST UNION SECURITIES, INC. PAGE 1
CAREY INTERNATIONAL, INC. CONFIDENTIAL
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Option, and prior to or simultaneously with the initial funding of the
Facilities as described hereinafter, MergerCo will merge with and into
the Borrower, with the Borrower being the surviving corporation (the
"Short-Form Merger"). In the Short-Form Merger, outstanding shares of
common stock of the Borrower (other than shares held by MergerCo,
management rollover shares and dissenting shares) will be converted
into the right to receive cash in the amount of not more than $18.25
per share, and the Borrower will utilize draws under the Facilities to
fund the payment of cash to the holders of such shares as further
described under "Use of Proceeds" set forth below.
In order to finance the Tender Offer and the Short-Form Merger, (a)
Parent will capitalize MergerCo and the Borrower (the "Equity
Capitalization") with approximately (and in any event not less than)
$97 million in cash equity contributed to Parent by Chartwell and FMC
(and thereafter by Parent to MergerCo) and approximately $9.0 million
(and in any event not less than $6.0 million) (based on the Tender
Offer Price) in rollover equity retained by members of the Borrower's
management (the "Management Investors"), (b) the Borrower will obtain
the Facilities (as hereinafter defined), and (c) the Borrower will
issue $40 million in aggregate principal amount of its unsecured
subordinated notes in a private placement (the "Subordinated Notes").
Long-Form Merger Structure: In the event that holders of outstanding
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common stock of the Borrower tender shares representing more than
50.1% of the outstanding common stock of the Borrower but the
Short-Form Merger Structure cannot be utilized, then upon completion
of the Tender Offer, (a) MergerCo will acquire shares tendered in the
Tender Offer representing at least 50.1% of the outstanding common
stock of the Borrower entitled to vote in connection with the approval
of the Merger, after giving effect to completion of the Self-Tender
(as hereinafter defined), utilizing only the proceeds of the Equity
Capitalization to effect such purchase, and (b) the Borrower will
acquire and immediately cancel the remainder of the shares tendered in
the Tender Offer (the "Self-Tender") and will repay in full its
existing senior bank credit facilities, utilizing (i) first, the
proceeds of the issuance of the Subordinated Notes, and (ii) second,
to the extent necessary, draws under the Facilities on the terms and
conditions set forth herein to pay for any remaining tendered shares
as further described under "Use of Proceeds" set forth below. As soon
as possible after completion of the Tender Offer in accordance with
applicable law, MergerCo or a wholly owned subsidiary thereof created
solely for such purpose will merge with and into the Borrower, with
the Borrower being the surviving corporation (the "Long-Form
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FIRST UNION SECURITIES, INC. PAGE 2
CAREY INTERNATIONAL, INC. CONFIDENTIAL
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Merger"). In the Long-Form Merger, outstanding shares of
common stock of the Borrower (other than shares held by
MergerCo, management rollover shares and dissenting shares)
will be converted into the right to receive cash in the
amount of not more than $18.25 per share, and the Borrower
will utilize draws under the Facilities (and, to the extent
not required to fund the Self-Tender or refinance the
Borrower's existing senior bank credit facilities, the
proceeds of the Subordinated Notes) to fund the payment of
cash to the holders of such shares.
In order to finance the Tender Offer and the Long-Form
Merger, (a) Parent will effect the Equity Capitalization and
(b) the Borrower will obtain the Facilities and issue the
Subordinated Notes.
The Tender Offer, the Short-Form Merger, the Long-Form
Merger (the Short-Form Merger and the Long-Form Merger each
sometimes being referred to as the "Merger"), the Topping
Option and the exercise thereof, the Equity Capitalization,
the Facilities, the Subordinated Notes, the Self-Tender and
the other transactions described herein are referred to
collectively as the "Transactions." The direct parent
company of the Borrower after giving effect to the
transactions described above, whether Parent or MergerCo, is
referred to herein as "Holdings."
Borrower: Carey International, Inc., a Delaware corporation.
Administrative
Agent: First Union National Bank ("First Union" or the
"Administrative Agent").
Syndication Agent: Fleet National Bank ("Fleet" or the "Syndication Agent,"
and together with the Administrative Agent, the "Agents").
Co-Arrangers: First Union Securities, Inc. ("FUSI") and FleetBoston
Robertson Stephens Inc. ("FRS," and together with FUSI,
the "Co-Arrangers").
Lenders: First Union, Fleet and a syndicate of financial
institutions (the "Lenders") reasonably acceptable to the
Agents, the Co-Arrangers and the Borrower.
Facilities: (1) $40 million 5 1/2- year Term Loans (the "Term A
Facility").
(2) $60 million 6 1/2-year Term Loans (the "Term B
Facility").
(3) $25 million 5 1/2-year Revolving Credit Facility
(the "Revolving Credit Facility").
(4) $35 million 5 1/2-year Acquisition Facility (the
"Acquisition Facility").
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FIRST UNION SECURITIES, INC. PAGE 3
CAREY INTERNATIONAL, INC. CONFIDENTIAL
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A portion of the Revolving Credit Facility, in an amount to
be determined, will be available for use by the Borrower for
the issuance of letters of credit. Letters of credit may be
issued with maturities of up to one year, renewable annually
thereafter, and in any event shall not extend beyond the
Revolving Credit Facility maturity date. First Union will be
the issuing bank for all letters of credit. The Revolving
Credit Facility will also contain a sublimit for swingline
loans to be made available by First Union, in an amount to
be determined.
The aggregate principal amount of the Term A Facility and
the Term B Facility (collectively, the "Term Facilities")
may, at the option of the Lenders, exercised prior to
closing in their sole discretion, be increased by an amount
of up to $10 million (to be allocated between the Term A
Facility and the Term B Facility in a manner to be agreed
upon) in order to provide additional funding to refinance
indebtedness incurred under the Borrower's existing credit
facility for acquisitions (the "Term Facilities Increase").
Availability: The Term Facilities (together with the Revolving Credit
Facility and the Acquisition Facility, the "Facilities")
must be drawn in full in a single draw on the date of the
initial funding of the Facilities (the "Closing Date"),
subject (in the case of the Long-Form Merger Structure) to
funding of the remaining portion of the Term Facilities on a
subsequent date as provided hereinbelow. Amounts repaid
under the Term Facilities may not be reborrowed.
Loans under the Revolving Credit Facility will be available
on a revolving basis at any time after the Closing Date and
prior to maturity, subject to reduction by the aggregate
amount of outstanding or unreimbursed letters of credit and
outstanding swingline loans.
Loans under the Acquisition Facility will be available on a
delayed-draw basis (i) if the Short-Form Merger Structure is
utilized, for a period from the Closing Date to and
including the date 18 months after the Closing Date (the
"Acquisition Facility Amortization Date"), and (ii) if the
Long-Form Merger Structure is utilized, for a period from
the Subsequent Closing Date (as hereinafter defined) to and
including the Acquisition Facility Amortization Date,
provided that the Borrower may extend availability for an
additional six-month period if, on a pro forma basis as of
the time of extension, the Total Leverage Ratio (as
hereinafter defined) is less than 4.25 to 1.0 and the Senior
Leverage Ratio (as hereinafter defined) is less than 3.25 to
1.0, and provided further that, notwithstanding anything
contained elsewhere in this Term Sheet, no borrowings under
the Acquisition Facility shall be available to the Borrower
until each of the Agents has reached a hold
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FIRST UNION SECURITIES, INC. PAGE 4
CAREY INTERNATIONAL, INC. CONFIDENTIAL
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level of $35 million in commitments (excluding the
Acquisition Facility commitments) in the syndication of the
Facilities; and thereafter, the commitments under the
Acquisition Facility shall become available to the Borrower
as the Facilities are further syndicated and commitments
assigned (whether by the Agents or any other Lenders), on a
dollar-for-dollar basis with such assignments up to the
maximum availability of $35 million. Amounts repaid under
the Acquisition Facility may not be reborrowed.
If the Long-Form Merger Structure is utilized, the Closing
Date shall be the date of completion of the Tender Offer and
Self-Tender, and the Borrower will draw under the Facilities
on the Closing Date (after using the proceeds from the
Equity Capitalization and the Subordinated Notes) in an
amount (the "Interim Funding") necessary to fund the
Self-Tender, refinance its existing indebtedness, and pay
fees and expenses in connection with the Transactions
incurred through such date. The Interim Funding shall be
made first under the Term A Facility, then (if the Term A
Facility has been fully drawn) under the Term B Facility,
and then (if the Term Facilities have been fully drawn)
under the Revolving Credit Facility. The remaining amount of
the Term Facilities must be drawn in full on the date of
consummation of the Long-Form Merger and satisfaction of the
other conditions set forth herein and applicable thereto
(the "Subsequent Closing Date"). The Borrower shall escrow
with the Administrative Agent proceeds from the Term
Facilities (and, to the extent necessary, from the Revolving
Credit Facility) funded on the Subsequent Closing Date in an
amount equal to the product of (i) $18.25 times (ii) the
number of shares held by dissenting stockholders, if any.
Notwithstanding the foregoing or anything else herein, in
the event the Long-Form Merger Structure is utilized and the
Long-Form Merger has not been completed on or before
November 30, 2000, then the remaining undrawn commitments
under the Term Facilities and under the Acquisition
Facility, if any, will be terminated, no acquisitions will
be permitted after such date without bank approval, and the
Agents and the Borrower will discuss in good faith amending
the financial covenants in the definitive credit agreement
in light of the revised terms of the Facilities.
Maturity Date: Term A Facility, Revolving Credit Facility and Acquisition
Facility: 5 1/2years after the Closing Date.
Term B Facility: 6 1/2years after the Closing Date.
Use of Proceeds: The proceeds of the Facilities shall be used (i) to finance
a portion of the consideration to be paid in connection with
the Tender Offer and
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the Merger, (ii) to refinance existing indebtedness of the
Borrower, (iii) to pay fees and expenses in connection with the
Transactions, and (iv) as to the Acquisition Facility, to fund
acquisitions by the Borrower and its subsidiaries, and as to the
Revolving Credit Facility, to provide for the working capital and
general corporate requirements (including the funding of
acquisitions) of the Borrower and its subsidiaries.
If the Long-Form Merger Structure is utilized, the proceeds of
the Interim Funding shall be used as described under
"Availability" above, and the remaining proceeds of the
Facilities shall be used (i) to finance the remaining
consideration to be paid in connection with the Long-Form Merger,
(ii) to pay remaining fees and expenses in connection with the
Transactions, and (iii) as to the Acquisition Facility, to fund
acquisitions by the Borrower and its subsidiaries, and as to the
Revolving Credit Facility, to provide for the working capital and
general corporate requirements (including the funding of
acquisitions) of the Borrower and its subsidiaries, in each case
subject to the terms and conditions set forth herein; provided
that proceeds from the Term Facilities funded on the Subsequent
Closing Date (regardless of whether such proceeds are funded into
escrow) may only be used to finance the consideration to be paid
in connection with the Long-Form Merger in an amount not
exceeding $18.25 for any share.
In addition to the proceeds of the Facilities funded into escrow
as described above under "Availability," borrowings under the
Revolving Credit Facility may be used to fund payments to
dissenting stockholders in the Merger, so long as (i) on a pro
forma basis after giving effect to any such borrowing, the Total
Leverage Ratio would be at least 25 basis points below the
maximum level then applicable (as set forth in a certificate of
the Borrower to the Agents) and (ii) after giving effect to any
such borrowing, the Borrower would have undrawn and available
commitments under the Revolving Credit Facility in an amount
sufficient to fund the payments of interest then next due on the
Facilities and the Subordinated Notes.
Amortization: Outstanding principal of the Term A Facility, the Term B Facility
and the Acquisition Facility will be payable in quarterly
installments, with annual principal reductions as set forth in
the following schedule:
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- ------------------------ --------------- --------------- ----------------
Term A Term B Acquisition
Year Facility Facility Facility
---- -------- -------- --------
- ------------------------ --------------- --------------- ----------------
Year 1 5% 1%
- ------------------------ --------------- --------------- ----------------
Year 2 10% 1%
- ------------------------ --------------- --------------- ----------------
Year 3 15% 1% 10%
- ------------------------ --------------- --------------- ----------------
Year 4 25% 1% 20%
- ------------------------ --------------- --------------- ----------------
Year 5 30% 1% 35%
- ------------------------ --------------- --------------- ----------------
First 1/2 of Year 6 15% 0.5% 35%
- ------------------------ --------------- --------------- ----------------
Second 1/2 of Year 6 47.25%
- ------------------------ --------------- --------------- ----------------
First 1/2 of Year 7 47.25%
Amortization of the Acquisition Facility will begin in Year 3.
All outstanding principal of the Revolving Credit Facility
will be due and payable on the maturity date for the Revolving
Credit Facility set forth above.
Guaranties: The Facilities and any interest rate protection agreements
entered into with any Lender (or any affiliate of any Lender)
will be unconditionally guaranteed by Holdings and by all
direct and indirect subsidiaries of the Borrower, whether
existing at closing or thereafter organized or acquired,
provided that no foreign subsidiary shall be required to
provide a guarantee to the extent doing so would cause any
materially adverse tax consequences to the Borrower.
Collateral: The Facilities and any interest rate protection agreements
entered into with any Lender (or any affiliate of any Lender)
will be secured by a first priority perfected lien on and
security interest in (a) 100% of the capital stock of the
Borrower owned by Holdings (except to the extent the pledge
thereof would cause the Lenders to be in violation of
Regulation U of the Federal Reserve Board) (b) 100% of the
capital stock of, or other equity ownership interests in, each
direct and indirect subsidiary of the Borrower, whether
existing at closing or thereafter organized or acquired (which
pledge, in the case of foreign subsidiaries, shall be limited
to 65% of the capital stock of the foreign subsidiaries whose
direct parents are U.S. entities, to the extent the pledge of
any greater amount would cause any materially adverse tax
consequences to the Borrower), and (c) all of the assets
(including, without limitation, accounts receivable,
inventory, equipment (including motor vehicles), intellectual
property, contracts, license rights, and other general
intangibles, cash, and material real property interests) of
Holdings, the Borrower and its direct and indirect U.S.
subsidiaries, whether existing at closing or thereafter
organized or acquired, except for assets as to which the
Administrative Agent shall
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have determined in its reasonable discretion that the costs
of obtaining such a lien and security interest are excessive
in relation to the value of the security to be afforded
thereby; provided that the Administrative Agent may, in its
reasonable discretion, elect to require liens upon such
assets (including assets of foreign subsidiaries) and
provided further that the scope of real property collateral
and real estate-related agreements, including landlord
consents, will be discussed by the parties in good faith.
Borrowing Options: At the Borrower's option, loans under the Facilities shall
bear interest at (i) the Administrative Agent's Base Rate
("Base Rate") from time to time in effect plus the
applicable Base Rate Margin in effect at such time with
respect to the relevant Facility or (ii) the applicable
LIBOR plus the applicable LIBOR Margin in effect at such
time with respect to the relevant Facility, each such Margin
to be determined from time to time in accordance with the
pricing grids set forth in Exhibit A. Swingline loans shall
be Base Rate loans.
The Base Rate is the higher of (i) the Administrative
Agent's prime commercial lending rate as announced from time
to time or (ii) the federal funds rate plus 0.5% per annum.
LIBOR is the London Interbank Offered Rate (as quoted on
Telerate Page 3750) for corresponding deposits of U.S.
Dollars for interest periods of one, two, three or six
months, subject to availability, as selected by the Borrower
and as quoted to the Administrative Agent.
Interest on Base Rate loans shall be payable quarterly in
arrears. Interest on LIBOR loans shall be payable at the end
of each applicable interest period or at three-month
intervals, if earlier. Interest shall be calculated on an
actual/360-day basis for LIBOR loans and an
actual/365/366-day basis for Base Rate loans.
During an event of default under the Facilities, all
outstanding principal, accrued interest and other amounts
shall accrue interest at a rate per annum of 2% in excess of
the rate otherwise applicable, and such interest shall be
payable on demand. The definitive credit documents shall
include the Administrative Agent's standard protective
provisions for such matters as increased costs, funding
losses, illegality and withholding taxes.
Commitment Fees: Payable quarterly in arrears to the Administrative Agent for
the ratable benefit of the Lenders, calculated on an
actual/360-day basis, (i) with respect to the Revolving
Credit Facility, at a per annum rate as determined in
accordance with the pricing grids set forth in Exhibit A on
the aggregate unutilized portion of the Revolving Credit
Facility,
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from the execution date of the definitive credit agreement
for the Facilities until termination of the commitments
under the Revolving Credit Facility, (ii) with respect to
the Acquisition Facility, at a per annum rate as determined
in accordance with the pricing grids set forth in Exhibit A
on the average unutilized portion of the Acquisition
Facility, from the execution date of the definitive credit
agreement for the Facilities until termination of the
commitments under the Acquisition Facility, and (iii) in the
event the Long-Form Merger Structure is utilized, with
respect to the Term Facilities, (a) at a per annum rate of
0.50% on the average undrawn portion of the Term Facilities
from the Closing Date until the earliest to occur of (1) the
Subsequent Closing Date, (2) September 30, 2000, and (3)
termination of the Term Facilities, and (b) if the Term
Facilities remain undrawn in whole or in part after
September 30, 2000, at a per annum rate of 1.0% on the
aggregate undrawn portion of the Term Facilities from
September 30, 2000 until November 30, 2000 or any earlier
termination of the Term Facilities.
Letter of Credit
Fee: Payable quarterly in arrears to the Administrative Agent for
the ratable benefit of the Lenders and calculated on an
actual/360-day basis, at a per annum rate equal to the
applicable LIBOR Margin in effect from time to time for the
Revolving Credit Facility (as determined in accordance with
the pricing grids set forth in Exhibit A) on the average
daily stated amount of all letters of credit. In addition,
the Borrower will pay a facing fee with respect to each
letter of credit in an amount equal to 0.25% of the average
daily stated amount thereof, payable quarterly in arrears to
First Union for its own account as issuer of letters of
credit and calculated on an actual/360-day basis.
Mandatory Prepay-
ments/Commitment
Reductions: The Borrower will be required to prepay amounts outstanding
under the Facilities, without premium or penalty (subject to
payment of any funding losses resulting from prepayment of
LIBOR loans other than on the last day of the applicable
interest period) as follows: (i) 100% of the net cash
proceeds from the sale or disposition by Holdings, the
Borrower or any subsidiary of assets outside the ordinary
course of business (including insurance proceeds), subject
to reinvestment provisions and limited exceptions to be
agreed upon, (ii) 100% of the net cash proceeds of any
issuance or sale by Holdings, the Borrower or any subsidiary
of debt securities (excluding debt issued in connection with
the Transactions), subject to limited exceptions to be
agreed upon, (iii) 100% of the net cash proceeds of any
issuance or sale by Holdings, the Borrower or any subsidiary
of equity securities (excluding equity issued in connection
with the Transactions), subject
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to limited exceptions to be agreed upon, and (iv) 75% of
Excess Cash Flow (to be defined), with such percentage
to be reduced to 50% in the event the Total Leverage
Ratio is reduced to or below a level to be agreed upon.
Such proceeds shall be applied first to the Term
Facilities, pro rata among the Term A Facility, the Term
B Facility and, if the Acquisition Facility commitments
have terminated, the Acquisition Facility (subject to a
right of refusal in favor of holders of the Term B
Facility so long as Term A Facility loans or Acquisition
loans are outstanding) and, within each such Facility,
to the remaining amortization payments on a pro rata
basis, then (if the Acquisition Facility commitments are
in effect) to the Acquisition Facility (with a
corresponding permanent pro rata reduction of the
Acquisition Facility commitments), and then to the
Revolving Credit Facility (with a corresponding
permanent pro rata reduction of the Revolving Credit
Facility commitments).
Voluntary Prepay-
ments/Commitment
Reductions: The Borrower may prepay amounts outstanding under the
Facilities at any time, without premium or penalty
(subject to advance notice provisions and minimum
repayment amounts to be agreed upon, and subject to
payment of any funding losses resulting from prepayment
of LIBOR loans other than on the last day of the
applicable interest period). Each voluntary prepayment
of the Term Facilities shall be applied pro rata between
the Term A Facility and the Term B Facility and, within
each such Facility, to the remaining amortization
payments on a pro rata basis. Each voluntary prepayment
of the Acquisition Facility after termination of the
Acquisition Facility commitments shall be applied to the
remaining amortization payments on a pro rata basis.
Additionally, the Borrower may, at its option upon five
business days' notice to the Administrative Agent,
reduce the aggregate unutilized commitments under the
Revolving Credit Facility or the Acquisition Facility in
part (in minimum amounts to be agreed upon) or in whole.
Any such reductions shall be applied to the commitments
under the applicable Facility pro rata.
Conditions Precedent
to Borrowing: The initial funding of the Facilities will be subject
to the satisfaction of conditions precedent consistent
with those customarily found in similar financings and
such additional conditions deemed appropriate by the
Agents in the context of the Facilities, including
without limitation the conditions set forth in the
Commitment Letter to which this Summary of Terms and
Conditions is attached, and the following:
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(1) The definitive credit agreement and all other documentation for
the Facilities shall be satisfactory in form and substance to the
Agents and the Lenders;
(2) Parent, MergerCo and the Borrower shall have entered into the
Merger Agreement, and the Merger Agreement, the Tender Offer and
the Merger shall have been approved by the Borrower's board of
directors and such approval shall not have been withdrawn or
modified in a manner adverse to the Lenders;
(3) The Agents shall be satisfied with the corporate and capital
structure of Holdings, the Borrower and their respective
subsidiaries and the management of the Borrower and its
subsidiaries after giving effect to the Transactions, with all
legal, tax and accounting matters relating to the Transactions or
to Holdings, the Borrower and their respective subsidiaries after
giving effect thereto, and with all documentation relating to the
Tender Offer, the Merger, the Equity Capitalization and the other
Transactions (including the Merger Agreement and all schedules
and exhibits thereto, the offer to purchase (the "Offer to
Purchase") and related documentation in connection with the
Tender Offer, all employment contracts and securityholder
agreements, and the terms and conditions of all earnouts or other
deferred purchase price payments in connection with acquisitions
by the Borrower and its subsidiaries); and without limitation of
the foregoing, the Agents shall be satisfied that (i) the
aggregate purchase price for all of the issued and outstanding
shares of the Borrower acquired pursuant to the Tender Offer and
the Merger will not exceed $220 million (before giving effect to
proceeds to the Borrower from the exercise of options and
warrants), and the purchase price for any share shall not exceed
$18.25, (ii) aggregate fees and expenses of Parent and MergerCo
payable in connection with the Transactions will not exceed an
amount reasonably acceptable to the Agents, and (iii) in the
event the Long-Form Merger Structure is utilized, the Borrower
will be prepared to file its preliminary proxy or information
statement relating to the Merger with the Securities and Exchange
Commission promptly after completion of the Tender Offer;
(4) In the event the Short-Form Merger Structure is utilized, the
Agents shall be satisfied that the exercise of the Topping Option
shall permit the utilization of the Short-Form Merger Structure
and that, prior to or substantially concurrently with the initial
funding of the Facilities, (i) the Tender Offer, the exercise of
the Topping Option (if exercised) and the Short-Form Merger shall
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have been consummated in accordance with the terms of the Merger
Agreement, the Offer to Purchase and all other applicable
documentation and in compliance with all applicable law and
regulatory approvals, without any amendment or waiver of any
material condition or other provision thereof except as approved
by the Agents, and (ii) MergerCo shall have accepted for payment
and acquired tendered shares which, together with other shares
then owned by MergerCo (including shares acquired directly from
the Borrower pursuant to exercise of the Topping Option),
represent not less than that percentage of the aggregate voting
power (after giving effect to exercise of the Topping Option) of
all outstanding shares of the Borrower entitled to vote in
connection with the approval of the Merger which is necessary to
effect a "short-form" merger under applicable law;
(5) In the event the Long-Form Merger Structure is utilized, the
Agents shall be satisfied that, prior to or substantially
concurrently with the Interim Funding, (i) the Tender Offer and
the Self-Tender shall have been consummated in accordance with
the terms of the Merger Agreement, the Offer to Purchase and all
other applicable documentation and in compliance with all
applicable law and regulatory approvals, without any amendment or
waiver of any material condition or other provision thereof
except as approved by the Agents, and (ii) MergerCo shall have
accepted for payment and acquired tendered shares representing
not less than 50.1% of the aggregate voting power (determined
after giving pro forma effect to the consummation of the
Self-Tender and the cancellation of shares acquired by the
Borrower in the Self-Tender) of all outstanding shares of the
Borrower entitled to vote in connection with the approval of the
Merger;
(6) The Agents shall be satisfied that, prior to or substantially
concurrently with the initial funding of the Facilities, the
existing senior indebtedness of the Borrower (other than
miscellaneous items of senior indebtedness in amounts reasonably
acceptable to the Agents) shall have been terminated and
satisfied in full and all liens and guarantees in connection
therewith shall have been released, and Parent, the Borrower and
their respective subsidiaries shall have no funded debt other
than the Facilities, the Subordinated Notes and such
miscellaneous indebtedness;
(7) All governmental and third-party consents and approvals necessary
in connection with the consummation of the Facilities, the Tender
Offer and (unless the Long-Form Merger Structure is utilized) the
Merger, and the other Transactions (including Hart-
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Scott-Rodino clearance), shall have been obtained and remain in
effect and shall be satisfactory to the Agents (including,
without limitation, any necessary consents to the collateral
assignment of franchise and license agreements); all applicable
waiting periods shall have expired without any action being taken
or threatened by any competent authority; and no law or
regulation shall be applicable, or event shall have occurred,
that seeks to enjoin, restrain, restrict, set aside or prohibit,
or impose materially adverse conditions upon, the consummation of
the Tender Offer, the Merger, the Facilities or any of the other
Transactions;
(8) All filings, recordations and other actions necessary or, in the
Administrative Agent's reasonable judgment, desirable to perfect
the Administrative Agent's liens and security interests in the
collateral securing the Facilities shall have been made or taken,
or arrangements satisfactory to the Administrative Agent for the
completion thereof shall have been made; in connection with any
real estate collateral, the Administrative Agent shall have
received such items (including landlord waivers) as it shall have
reasonably requested; and the Administrative Agent shall have
received the results of lien, judgment and pending litigation
searches with respect to Parent, the Borrower and their
respective subsidiaries in jurisdictions selected by it and shall
be satisfied with the results thereof;
(9) The Agents shall be satisfied that the initial funding under the
Facilities will not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System;
(10) The Equity Capitalization shall have been consummated on terms
and conditions satisfactory to the Agents; and in connection
therewith the Agents shall be satisfied that after giving effect
thereto (i) Parent shall have received from Ford Motor Company
net cash proceeds of not less than $43 million, and from
Chartwell net cash proceeds of not less than $54 million (and in
each case Parent shall have contributed such proceeds to
MergerCo), from the issuance of equity on terms and conditions
(including, in the case of any preferred equity, dividend and
redemption terms and all other terms) satisfactory to the Agents
(and the aggregate amount of net proceeds from the Equity
Capitalization, including any management rollover equity, shall
not be less than $105.5 million), and (ii) the Management
Investors shall have contributed not less than $6.0 million to
the equity of the Borrower pursuant to the retention or rollover
of existing common stock; and in addition, the Agents shall be
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satisfied that the $1.5 million earnout payment due from the
Borrower on August 31, 2000 in connection with the "Allied"
acquisition shall have been paid (or if payable after the Closing
Date, shall be paid) entirely with the proceeds of additional
cash equity contributed to the Borrower (directly or indirectly)
by Chartwell and FMC on the Closing Date;
(11) The Borrower shall have received net cash proceeds of not less
than $40 million from the issuance of the Subordinated Notes on
terms and conditions (including, without limitation, interest,
maturity, covenants, default and acceleration, and terms of
subordination), and pursuant to documentation, satisfactory to
the Agents;
(12) The Agents shall have received an opening pro forma balance sheet
and income statement of the Borrower and its subsidiaries, as of
the last day of the month most recently ended prior to the
Closing Date (or, if the Closing Date occurs on or prior to the
20th day of a month, as of the last day of the next prior month)
and for the twelve-month period then ended (provided that such
balance sheet shall be as of the most recent date as of which a
balance sheet of the Borrower has been prepared and is available,
if prior to the date required above, except that debt balances
shall be as of the date required above), giving effect to the
consummation of the Tender Offer, the Merger, the initial funding
of the Facilities and the consummation of the other Transactions,
together with projected financial statements of the Borrower and
its subsidiaries (consisting of balance sheets and statements of
income and cash flows) prepared on an annual basis through
November 30, 2009, all of which shall be in form and substance
satisfactory to the Agents;
(13) The Agents shall be satisfied that, on a pro forma basis as of a
recent date after giving effect to the Tender Offer, the Merger,
the initial funding of the Facilities and the consummation of the
other Transactions, (i) the Borrower is in compliance with all
financial covenants in the definitive credit documentation, (ii)
pro forma adjusted EBITDA of the Borrower and its subsidiaries
(to be defined in a manner satisfactory to the Agents) for the
most recently completed twelve-month period is not less than
$33.3 million (or, in the event the Borrower utilizes the Term
Facilities Increase, an amount acceptable to the Agents), and
(iii) aggregate total funded debt of the Borrower and its
subsidiaries is not greater than $148.25 million and aggregate
total funded senior debt of the Borrower and its subsidiaries is
not greater than
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$108.25 million (in each case, plus (a) miscellaneous items of
indebtedness (excluding capital leases) reasonably acceptable to
the Agents and (b) the aggregate amount of the Term Facilities
Increase (if applicable)), it being understood that any increases
in funding under the Facilities that would result in greater pro
forma debt outstanding on the Closing Date than the amounts set
forth above shall require the prior approval of the Agents;
(14) There shall not have occurred, since November 30, 1999, (i) any
material adverse change in the condition (financial or
otherwise), operations, properties, prospects or business of the
Borrower and its subsidiaries, or (ii) any event, condition or
state of facts that could reasonably be expected to have such a
material adverse change;
(15) No action, suit, proceeding or investigation shall have been
instituted or threatened before, and no order, injunction or
decree shall have been entered by, any court, arbitrator or
governmental authority, in each case seeking to enjoin, restrain,
restrict, set aside or prohibit, to impose material conditions
upon, or to obtain substantial damages in respect of, the
consummation of the Tender Offer, the Merger, the Facilities or
any of the other Transactions or that, in the opinion of the
Agents, could reasonably be expected to have a material adverse
effect upon the condition (financial or otherwise), operations,
properties, prospects or business of the Borrower and its
subsidiaries or on the ability of Holdings, the Borrower and
their respective subsidiaries to perform their respective
obligations under the definitive documentation for the
Facilities;
(16) There shall not have occurred any material disruption or material
adverse change in, or other condition with respect to, the United
States financial and capital markets that could reasonably be
expected to have a material adverse effect on the syndication of
the Facilities;
(17) The Agents shall have received a solvency opinion with respect to
the Borrower and its subsidiaries after giving effect to the
Transactions, from an independent valuation firm acceptable to
the Agents and in form and substance satisfactory to the Agents;
(18) The Agents shall have received copies of (i) due diligence
reports on the Borrower and its subsidiaries from
PricewaterhouseCoopers and Bain, (ii) business and financial due
diligence reports for County Limousine, (iii) a review of the
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insurance coverages of the Borrower and its subsidiaries from
Marsh & McLennan, and (iv) environmental reports with respect to
selected properties of the Borrower and its subsidiaries, and, in
each case, shall be satisfied in their sole discretion with the
results thereof;
(19) The Agents shall have received a copy of the executed fairness
opinion of the Borrower's financial advisors in connection with
the Tender Offer and the Merger;
(20) The representations and warranties contained in the definitive
credit documentation shall be true and correct as of the Closing
Date as if made on such date, and no default or event of default
thereunder shall have occurred and be continuing;
(21) All fees and expenses of the Co-Arrangers, the Agents and the
Lenders required to have been paid as a condition to the initial
funding of the Facilities shall have been paid; and
(22) The Agents and the Lenders shall have received such other
documents, agreements and opinions in connection with the
Facilities (including but not limited to legal opinions of
counsel to Holdings, the Borrower and their respective
subsidiaries (including local counsel in such jurisdictions as
shall be requested by the Agents), and reliance letters with
respect to opinions delivered in connection with the Merger,
including an opinion of Delaware counsel to the Borrower as to
the validity of the Merger), all satisfactory in form and
substance, as the Agents or any Lender may reasonably request.
In addition, in the event the Long-Form Merger Structure is utilized,
the funding of the undrawn portion of the Term Facilities (and any
funding under the other Facilities) on the Subsequent Closing Date
will be subject to the satisfaction of the following conditions:
(1) The Agents shall be satisfied that, prior to or substantially
concurrently with the funding of the Facilities on the Subsequent
Closing Date, the Long-Form Merger shall have been consummated in
accordance with the terms of the Merger Agreement and all other
applicable documentation and in compliance with all applicable
law and regulatory approvals, without any amendment or waiver of
any material condition or other provision thereof except as
approved by the Agents;
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(2) All governmental and third-party consents and approvals
necessary or desirable in connection with the
consummation of the Long-Form Merger shall have been
obtained and remain in effect and shall be satisfactory
to the Agents; all applicable waiting periods shall
have expired without any action being taken or
threatened by any competent authority; and no law or
regulation shall be applicable that seeks to enjoin,
restrain, restrict, set aside or prohibit, or impose
materially adverse conditions upon, the consummation of
the Long-Form Merger;
(3) No action, suit, proceeding or investigation shall have
been instituted or threatened before, and no order,
injunction or decree shall have been entered by, any
court, arbitrator or governmental authority, in each
case that, in the opinion of the Agents, could
reasonably be expected (i) to enjoin, restrain,
restrict, set aside or prohibit or (ii) to impose
material conditions upon, or to obtain substantial
damages in respect of, the consummation of the
Long-Form Merger;
(4) The Agents shall be satisfied that, on a pro forma
basis as of a recent date after giving effect to the
Merger and the funding of the Facilities on the
Subsequent Closing Date, aggregate total funded debt of
the Borrower and its subsidiaries is not greater than
$148.25 million and aggregate total funded senior debt
of the Borrower and its subsidiaries is not greater
than $108.25 million (in each case, plus (a) the
amounts referred to in paragraph 13 of "Conditions
Precedent to Borrowing" above, and (b) without
duplication, borrowings under the Facilities since the
Closing Date);
(5) The material representations and warranties identified
in the definitive credit documentation shall be true
and correct in all material respects as of the
Subsequent Closing Date as if made on such date, and no
default or event of default thereunder shall have
occurred and be continuing.
Representations and
Warranties: The definitive credit documentation will contain
representations and warranties consistent with those
customarily found in similar financings and such additional
representations and warranties deemed appropriate by the
Agents in the context of the Facilities, including without
limitation representations and warranties regarding
corporate organization and power, absence of violation of
organizational documents, other agreements and applicable
laws, absence of material litigation, obtaining of
government approvals, subsidiaries, payment of
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taxes, authorization and enforceability of the credit
documents, full disclosure, margin securities, ERISA
matters, solvency, accuracy of financial statements, absence
of material adverse change, title to and sufficiency of
assets, real estate, intellectual property, governmental
permits and licenses, insurance, compliance with laws,
environmental matters, validity and perfection of security
interests, and material contracts.
Affirmative
Covenants: The definitive credit documentation will contain affirmative
covenants consistent with those customarily found in similar
financings and such additional covenants deemed appropriate
by the Agents in the context of the Facilities, including
without limitation (i) delivery of quarterly and annual
financial statements, together with financial covenant
compliance certificates, (ii) annual delivery of operating
budget and cash flow projections, prepared on a quarterly
basis, (iii) delivery of regulatory reports, management
letters, public filings and other specified business
information, (iv) delivery of notice of material litigation,
proceedings, events of default, ERISA events and other
significant matters, and (v) maintenance of corporate
existence, franchises and properties, compliance with laws,
payment of taxes and other obligations, inspection rights,
and maintenance of insurance, books and records.
Negative
Covenants: The definitive credit documentation will contain negative
covenants consistent with those customarily found in similar
financings and such additional covenants deemed appropriate
by the Agents in the context of the Facilities, including
without limitation (i) restrictions on consolidation,
merger, sale or disposition of assets and sale-leaseback
transactions, (ii) restrictions on indebtedness, including
guaranties, (iii) restrictions on liens (negative pledge),
(iv) restrictions on joint ventures, acquisitions and other
investments, (v) restrictions on dividends, redemptions and
distributions with respect to capital stock and redemptions
and prepayments of subordinated debt, (vi) restrictions on
transactions with affiliates (with the Chartwell management
fee not to exceed $650,000 during fiscal year 2000 and, for
any subsequent fiscal year, not to exceed the greater of (x)
$650,000 or (y) the lesser of (i) 2% of EBITDA for such
fiscal year or (ii) $1,625,000), (vii) restrictions on
changes in lines of business (including any change in the
passive status of Holdings), (viii) restrictions on
amendments to subordinated debt and equity documents, and
(ix) restrictions on other negative pledges, changes in
accounting policies and changes in fiscal year. Acquisitions
not exceeding $7.5 million individually or $25 million
during any fiscal
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year will be permitted without bank approval, subject to
delivery of specified business and financial information
relating to the acquisition, absence of default, and pro
forma financial covenant compliance (including, for any
acquisition during the period ending 18 months after
closing, pro forma Total Leverage Ratio of 4.5 to 1.0 and
pro forma Senior Leverage Ratio of 3.5 to 1.0 as of the date
of the acquisition). In addition, the Borrower shall deliver
to the Lenders a review prepared by PricewaterhouseCoopers,
or another independent certified public accounting firm of
recognized national standing reasonably acceptable to the
Administrative Agent, with respect to any acquisition
creating pro forma EBITDA of $1 million or more at least 10
days prior to closing such acquisition.
Financial
Covenants: The definitive credit documentation will contain financial
covenants (with definitions, levels and other terms as set
forth below or to be agreed upon by the Borrower and the
Agents) based on the financial information provided to the
Agents, determined for the Borrower and its subsidiaries on
a consolidated basis, reported quarterly on a rolling
four-quarter basis and to include without limitation the
following:
(a) Maximum Total Leverage Ratio (total funded debt,
including letters of credit and guaranties/EBITDA):
4.75 to 1.0, with stepdown 18 months after closing to
4.5 to 1.0 and stepdowns thereafter to be agreed upon;
(b) Maximum Senior Leverage Ratio (total funded senior
debt, including letters of credit and
guaranties/EBITDA): 3.75 to 1.0, with stepdown 18
months after closing to 3.5 to 1.0 and stepdowns
thereafter to be agreed upon;
(c) Minimum Fixed Charge Coverage Ratio (EBITDA less
maintenance capital expenditures less cash taxes/cash
interest plus scheduled principal payments on
indebtedness): levels to be agreed upon;
(d) Minimum Interest Coverage Ratio (EBITDA/cash interest
expense): levels to be agreed upon; and
(e) Maximum Annual Capital Expenditures (with sublimit for
expenditures related to the Enterprise System MIS
project): levels to be agreed upon.
Events of Default: The definitive credit documentation will contain events of
default consistent with those customarily found in similar
financings and such
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additional events of default deemed appropriate by the
Agents in the context of the Facilities, including without
limitation (i) failure to pay any principal, interest or
fees when due, (ii) breach of covenants (with customary
grace periods for certain affirmative covenants), (iii)
material incorrectness when made of any representation or
warranty, (iv) payment or other default under other material
indebtedness, (v) bankruptcy or insolvency, (vi) judgment
liens or ERISA events, (vii) actual or asserted invalidity
of guaranty or security documents, and (viii) change of
control.
Interest Rate
Protection: Within 45 days after the Term Facilities are fully drawn,
the Borrower will be required to have fixed or hedged at
least 50% of the Term Facilities on terms reasonably
acceptable to the Agents.
Assignments and
Participations: Customary participation rights will be provided, subject to
voting restrictions on significant matters. Assignments by
Lenders to banks and other financial institutions meeting
certain size thresholds will be permitted with the approval
(not to be unreasonably withheld) of the Administrative
Agent and the Borrower (provided that the Borrower's
approval shall not be required during an Event of Default
under the Facilities), subject to minimum amounts to be
agreed upon and payment by the assignor or assignee of a
$3,000 assignment fee to the Administrative Agent.
Amendments and
Waivers: Amendments and waivers of the provisions of the definitive
credit documentation will require the approval of Lenders
holding outstanding loans and commitments representing at
least a majority of the aggregate outstanding loans and
commitments under the Facilities (the "Required Lenders"),
except that the consent of all affected Lenders shall be
required with respect to reductions, or extension of time
for payment, of principal, interest or fees and the consent
of all Lenders shall be required with respect to increases
in commitment amounts, releases of all or substantially all
collateral, releases of guarantors, and changes to voting
requirements.
Expenses and
Indemnification: The Borrower will pay (a) all reasonable out-of-pocket costs
and expenses of the Agents and the Co-Arrangers (including
the reasonable fees and disbursements of counsel) in
connection with the preparation, execution and delivery of
the definitive documentation for the Facilities and any
amendment or waiver with respect thereto and the syndication
of the Facilities, and (b) all reasonable out-of-pocket
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costs and expenses of the Agents and the Lenders
(including the reasonable fees and disbursements of
counsel) in connection with the enforcement of the
Facilities.
The Borrower will indemnify the Co-Arrangers, the Agents
and the Lenders and hold them harmless against all
claims, losses, liabilities and expenses (including
reasonable fees and disbursements of counsel) arising
from or relating to the proposed financing contemplated
hereby and the other transactions connected therewith,
except to the extent finally determined to have resulted
from such indemnified party's gross negligence or
willful misconduct.
Governing Law: North Carolina.
Counsel to the
Administrative Agent: Robinson, Bradshaw & Hinson, P.A.
Miscellaneous: Customary provisions regarding consent to jurisdiction,
waiver of jury trial, service of process, and other
miscellaneous matters. All parties will agree to
mandatory arbitration of disputes.
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EXHIBIT A
Pricing Grids
The applicable LIBOR Margins, Base Rate Margins and commitment fee
percentages under the Revolving Credit Facility and the Acquisition Facility
will be determined according to the following grids by reference to the Total
Leverage Ratio, with each change in the applicable LIBOR Margins, Base Rate
Margins and commitment fee percentages to be effective 10 days after delivery to
the Agent of quarterly or annual financial statements and a compliance
certificate showing the Total Leverage Ratio as of the last day of the fiscal
quarter most recently ended.
Term A Facility, Revolving Credit Facility, Acquisition Facility and Commitment
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Fees
- ----
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Applicable Applicable Commitment Fee Commitment Fee
Tier Leverage Ratio LIBOR Base Percentage Percentage
---- -------------- Margin Rate Margin (Revolving Credit) (Acquisition)
------ ----------- ------------------ -------------
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I Greater than or equal to 4.5 3.75% 2.25% 0.50% 0.75%
to 1.0
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II Less than 4.5 to 1.0 but 3.50% 2.00% 0.50% 0.75%
greater than or equal to 4.0
to 1.0
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III Less than 4.0 to 1.0 but 3.25% 1.75% 0.50% 0.75%
greater than or equal to 3.5
to 1.0
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IV Less than 3.5 to 1.0 but 3.00% 1.50% 0.50% 0.75%
greater than or equal to 3.0
to 1.0
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V Less than 3.0 to 1.0 2.75% 1.25% 0.50% 0.75%
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Notwithstanding the foregoing, the initial applicable LIBOR Margin and
applicable Base Rate Margin for the Term A Facility, the Revolving Credit
Facility and the Acquisition Facility and the initial commitment fee percentages
(from the date of closing until 10 days after the first delivery of financial
statements and a compliance certificate) will be set at Tier II.
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Term B Facility
---------------
--------------------------------------------------------------------------------------------------
Applicable Applicable
LIBOR Base Rate
Tier Leverage Ratio Margin Margin
---- -------------- ------ ------
--------------------------------------------------------------------------------------------------
I Greater than or equal to 4.5 to 1.0 4.25% 2.75%
--------------------------------------------------------------------------------------------------
II Less than 4.5 to 1.0 but greater than or equal to 4.0 to 1.0 4.00% 2.50%
--------------------------------------------------------------------------------------------------
III Less than 4.0 to 1.0 but greater than or equal to 3.5 to 1.0 3.75% 2.25%
--------------------------------------------------------------------------------------------------
IV Less than 3.5 to 1.0 but greater than or equal to 3.0 to 1.0 3.75% 2.25%
--------------------------------------------------------------------------------------------------
V Less than 3.0 to 1.0 3.75% 2.25%
--------------------------------------------------------------------------------------------------
Notwithstanding the foregoing, the initial applicable LIBOR Margin and
applicable Base Rate Margin for the Term B Facility and (from the date of
closing until 10 days after the first delivery of financial statements and a
compliance certificate) will be set at Tier II.
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