Exhibit 10.6
SENIOR DISCOUNT NOTEHOLDER PLAN SUPPORT AGREEMENT
This Senior Discount Noteholder Plan Support Agreement (together with
exhibits, annexes and attachments hereto, this "Agreement") is made and entered
into as of August 19, 2003 by and among (i) DDi Corp. ("DDi"), DDi Intermediate
Holdings Corp. ("DDi Intermediate"), DDi Capital Corp. ("DDi Capital"), Dynamic
Details, Incorporated ("Details"), Dynamic Details, Incorporated, Silicon Valley
("DDISV") and their respective subsidiaries and affiliates (collectively, the
"Company Group") and (ii) the Senior Discount Noteholders (as defined below)
signatory hereto (the "Consenting Senior Discount Noteholders"). DDi, DDi
Intermediate, DDi Capital, Details, DDISV, and each of their respective
subsidiaries and affiliates, each Consenting Senior Discount Noteholder and any
subsequent person that becomes a party hereto are referred herein as the
"Parties" and individually, as a "Party."
PRELIMINARY STATEMENTS
A. The holders of (the "Senior Discount Noteholders") of 12 1/2% Senior
Discount Notes due 2007 (the "Senior Discount Notes") issued by DDi Capital
under that certain indenture dated as of November 18, 1997 between DDi Capital,
as issuer, and The State Street Bank and Trust Company (n/k/a U.S. Bank, N.A.),
as trustee, as supplemented by the supplemental indenture dated as of February
10, 1998 between DDi Capital and the 12 1/2 Trustee (the "12 1/2 Indenture"),
hold senior debt in face amount of $16,090,000 (the "Senior Discount
Indebtedness"). As of the date hereof, the Consenting Senior Discount
Noteholders hold, in aggregate, [ ] of the principal amount of the Senior
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Discount Indebtedness.
B. Pursuant to that certain Restructuring Support Agreement, dated as of
August 1, 2003 (the "RSA"), the Consenting Lenders (as defined in the Term
Sheet) have consented to, inter alia, the Restructuring Terms (as defined below)
subject to certain terms and conditions outlined in the RSA.
C. The Consenting 5 1/4% Subordinated Noteholders (as defined in the PSA as
defined below) and the Consenting 6 1/4% Noteholders (as defined in the PSA as
defined below) have until August 8, 2003 to execute the Plan Support Agreement
(the "PSA"), the form of which is annexed hereto as Exhibit B to the RSA, which
shall provide for, inter alia, their consent to the Restructuring Terms subject
to certain terms and conditions outlined in the PSA
D. The Company Group, the Consenting Lenders, the Consenting 5 1/4%
Subordinated Noteholders, the Consenting 6 1/4% Subordinated Noteholders and the
Consenting Senior Discount Noteholders have engaged in good faith negotiations
with the objective of reaching an agreement with regard to certain aspects of
the restructuring and reorganization of the Company Group.
E. The Company Group, the Consenting Lenders, the Consenting 5 1/4%
Subordinated Noteholders, the Consenting 6 1/4% Subordinated Noteholders and the
Consenting Senior Discount Noteholders now desire to implement a restructuring
and reorganization of the Company Group such that the Consenting Lenders, the
Consenting 5 1/4% Subordinated Noteholders and the Consenting 6 1/4%
Subordinated Noteholders and the other holders of claims against and/or equity
interests in the Company Group shall receive the consideration to be paid,
distributed or provided by the Company Group pursuant to such restructuring and
reorganization
(the "Restructuring Terms") as set forth on the term sheet (the "Term Sheet")
attached hereto as Exhibit A (the "SDN Term Sheet").
F. In order to expedite the contemplated restructuring and reorganization
of the Company Group, each Party, subject to the terms of this Agreement,
desires to pursue and support a restructuring transaction (i) by way of a plan
of reorganization under Chapter 11 of Title 11, United States Code (the
"Bankruptcy Code") relating to DDi and DDi Capital, and (ii) by way of an
out-of-court restructuring transaction relating to Details, DDISV and their
respective subsidiaries that achieves and implements the Restructuring Terms
(any such restructuring transaction that achieves and implements the
Restructuring Terms, the "Restructuring Transaction") and during the pendency of
this Agreement desires not to support any restructuring or reorganization of any
of the members of the Company Group (or any plan or proposal in respect of the
same) that does not achieve or implement the Restructuring Terms.
G. In order to implement the Restructuring Transaction, the Company Group
has agreed, subject to the terms and conditions of this Agreement, (i) to
prepare and file (a) a disclosure statement that is consistent in all material
respects with the Restructuring Terms and is in the form attached to the Term
Sheet (the "Conforming Disclosure Statement"), and (b) a plan of reorganization
for DDi and DDi Capital that is consistent in all material respects with the
Restructuring Terms and is in the form attached to the Term Sheet (the
"Conforming Plan") in cases filed under Chapter 11 of the Bankruptcy Code (the
"Chapter 11 Cases") in the United States Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court") and to negotiate and prepare the
definitive Restructuring Transaction documents that are consistent in all
respects with the Restructuring Terms and are in form and substance satisfactory
to the Consenting Lenders (the "Conforming Restructuring Loan Documents"), and
(ii) to use reasonable commercial efforts to have the Conforming Disclosure
Statement approved and the Conforming Plan confirmed by the Bankruptcy Court, in
each case, as expeditiously as practicable under the Bankruptcy Code and the
Federal Rules of Bankruptcy Procedure.
H. The Company Group and the Consenting Senior Discount Noteholders
acknowledge and agree that the best way to effectuate the Conforming Plan and
the Conforming Restructuring Loan Documents is to do so in a way that would:
1. maximize the value of the Company Group for the benefit of all
interested persons;
2. minimize the disruption to the Company Group resulting from the
commencement of the Chapter 11 Cases as quickly as possible;
3. minimize the loss of business continuity and opportunity of
Details and DDISV;
4. provide all parties to the Restructuring Transaction with Global
Releases (as defined in the Term Sheet) and a Plan Injunction (as
defined in the Term Sheet); and
5. provide assurances and stability to certain key employees of the
Company Group.
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I. In expressing such support and commitment, the Parties do not desire and
do not intend in any way to derogate from or diminish the solicitation
requirements of applicable securities and bankruptcy law, the fiduciary duties
of DDi and DDi Capital as debtors in possession, the fiduciary duties of any
Consenting Senior Discount Noteholder who is appointed to the official committee
of unsecured creditors (the "Creditors' Committee") in the Chapter 11 Cases or
the role of any state or federal agencies with regulatory authority concerning
any member of the Company Group.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties,
intending to be legally bound, agree as follows:
1. Defined Terms. All capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Term Sheet.
2. Term Sheet Conditions. Without limiting the conditions set forth herein,
each Party's agreement to this Agreement and support for the Conforming Plan,
the Conforming Restructuring Loan Documents and the Term Sheet is expressly
conditioned on satisfaction of each of the terms and conditions set forth in the
Term Sheet and this Agreement. To the extent that any such conditions involve a
time period or an outside date for satisfaction, the Parties acknowledge and
agree that time is of the essence with respect to each such condition.
3. Agreements of the Consenting Senior Discount Noteholders
(i) Ownership. Each Consenting Senior Discount Noteholder represents
and warrants, on a several but not joint basis, that, as of the date hereof, (i)
such Consenting Senior Discount Noteholder either (A) is the sole legal and
beneficial owner of, or holder of investment authority over, the debt set forth
below its name on the signature page hereof and all related claims, rights and
causes of action arising out of or in connection with or otherwise relating to
such debt (the "Consenting Senior Discount Noteholder Claims"), in each case
free and clear of all claims, liens and encumbrances, or (B) has or will have
investment or voting discretion with respect to the debt and Consenting Senior
Discount Noteholder Claims and has or will have the power and authority to bind
the beneficial owner(s) of such debt and Consenting Senior Discount Noteholder
Claims to the terms of this Agreement, and (ii) such Consenting Senior Discount
Noteholder has or will have full power and authority to vote on and consent to
such matters concerning such debt and Consenting Senior Discount Noteholder
Claims and to exchange, assign and transfer such debt and Consenting Senior
Discount Noteholder Claims.
(ii) Voting. Each Consenting Senior Discount Noteholder agrees that
for so long as this Agreement remains in effect, it (i) shall vote its debt and
Consenting Senior Discount Noteholder Claims to accept any Conforming Plan as
soon as practicable following receipt of any Conforming Disclosure Statement in
any solicitation of votes for any such Conforming Plan (but in no case later
than any voting deadline stated therein), (ii) shall vote against and shall in
no way otherwise, directly or indirectly, support any restructuring or
reorganization of the Company (or any plan or proposal in respect of the same)
that is not consistent with, or does not implement or achieve, the Restructuring
Terms, (iii) shall not (A) directly or indirectly seek, solicit, pursue,
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support or encourage any other plan or the termination of the exclusive period
for the filing of any plan, proposal or offer of dissolution, winding up,
liquidation, reorganization, merger or restructuring of the Company that could
be expected to prevent, delay or impede the successful restructuring of the
Company as contemplated by the Restructuring Terms and any Conforming Plan, (B)
object to the Conforming Disclosure Statement or the solicitation of votes for
the Conforming Plan or support any such objection by a third party; provided,
however, that the Consenting Senior Discount Noteholder may object to the
Conforming Disclosure Statement solely on the basis that it does not contain
adequate information as required by Section 1125 of the Bankruptcy Code, or (C)
take any other action that is inconsistent with, or that would delay
confirmation of, the Conforming Plan; and (iv) shall not object to, or otherwise
oppose, directly or indirectly, any of the terms and conditions of the Budget
and Funding Agreement, dated as of August 1, 2003 (the "Budget and Funding
Mechanism") and the Funding Motion (as defined in the Budget and Funding
Mechanism). Nothing contained herein shall limit the ability of a Consenting
Senior Discount Noteholder to consult with the Company, or to appear and be
heard, concerning any matter arising in the Chapter 11 Cases so long as such
consultation or appearance is consistent with the Consenting Senior Discount
Noteholder's obligations hereunder and the terms of the Conforming Plan, the
Restructuring Terms and this Agreement.
(iii) Transfers. Each Consenting Senior Discount Noteholder agrees that for
so long as this Agreement remains in effect, it shall not sell, transfer,
assign, pledge or otherwise dispose, directly or indirectly, any of the debt or
Consenting Senior Discount Noteholder Claims or any option thereon or any right
or interest (voting or otherwise) therein, unless the transferee thereof agrees
in writing for the benefit of the Parties to be bound by all of the terms of
this Agreement by executing the Joinder attached hereto as Exhibit X-x, a copy
of which shall be provided to the Parties, in which event each Party shall be
deemed to have acknowledged that its obligations to the Consenting Senior
Discount Noteholders hereunder shall be deemed to constitute obligations in
favor of such transferee.
(iv) Further Agreement. Each Consenting Senior Discount Noteholder believes
that the consummation of the Conforming Plan consistent with the Term Sheet is
in its best interests and is in the best interests of the Company's creditors
generally. Accordingly, for so long as this Agreement remains in effect, each
Consenting Senior Discount Noteholder will support the Conforming Plan
consistent with the terms and conditions of the Term Sheet. Without limiting the
foregoing, each Consenting Senior Discount Noteholder commits, for so long as
the Agreement remains in effect, to support the Budget and Funding Mechanism,
the Conforming Disclosure Statement, the Conforming Plan and the Conforming
Restructuring Loan Documents and use its commercially reasonable efforts to
facilitate the filing and confirmation of the Conforming Plan at the earliest
practicable date; provided, however, that notwithstanding anything contained
herein to the contrary, if any Consenting Senior Discount Noteholder is
appointed to and serves on the Creditors' Committee, the terms of this Agreement
shall not be construed to limit such Consenting Senior Discount Noteholder's
exercise of its fiduciary duties in its role as a member of a Creditors'
Committee, and any exercise of such fiduciary duties shall not be deemed to
constitute a breach of the terms of this Agreement.
4. Agreements of the Company Group. Each member of the Company Group
believes that the confirmation of the Conforming Plan and the consummation of
the Conforming Restructuring Loan Documents will best facilitate its business
and financial restructuring and that consummation of the terms described in the
Term Sheet is in the best interests of each member of the Company Group and in
the best interests of their respective creditors and other parties in
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interest. Accordingly, the Company Group hereby agrees, for so long as this
Agreement remains in effect: (a) to prepare or cause the preparation, as soon as
practicable after the date hereof, of each of the Definitive Documents (as
defined below), each containing terms and conditions consistent in all material
respects with the Restructuring Terms, and to distribute such documents and
afford reasonable opportunity of comment and review to (i) the legal and
financial advisors for the Consenting Senior Discount Noteholders; (b) to (i) to
file the Chapter 11 Cases with respect to the Restructuring Transaction in the
Bankruptcy Court on or prior to Xxxxxx 00, 0000, (xx) to file the Conforming
Disclosure Statement and the Conforming Plan with the Bankruptcy Court on or
prior to Xxxxxx 00, 0000, (xxx) to cause the solicitation pursuant to the
Conforming Disclosure Statement and the Conforming Plan to commence on or before
October 10, 2003, and (iv) to solicit the requisite votes in favor of, and to
obtain confirmation by the Bankruptcy Court at the earliest practicable date of,
the Conforming Plan and approval of the Bankruptcy Court; (c) to not pursue,
propose, support, encourage the pursuit of, or seek to implement any transaction
or series of transactions that would effect a restructuring on terms other than
the Restructuring Terms unless or until this Agreement has been terminated in
accordance with Section 5; and (d) to otherwise use its reasonable best efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, all
things, necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by the Term Sheet,
the Conforming Plan and the Conforming Restructuring Loan Documents at the
earliest practicable date (including opposing any appeal of the Confirmation
Order).
5. Termination of Agreement. The obligations of the Consenting Senior
Discount Noteholders under this Agreement shall terminate and be of no further
force and effect upon the occurrence of any of the following events (any such
event, a "Termination Event"), and such Termination Event is not waived in
accordance with Section 10 of this Agreement: (i) the Company Group fails (A) to
file the Chapter 11 Cases with respect to the Restructuring Transaction in the
Bankruptcy Court on or prior to Xxxxxx 00, 0000, (X) to file the Conforming
Disclosure Statement and the Conforming Plan with the Bankruptcy Court on or
prior to August 30, 2003, or (C) to cause the solicitation pursuant to the
Conforming Disclosure Statement and the Conforming Plan to commence on or before
October 10, 2003; (ii) any member of the Company Group files, proposes or
otherwise supports, either directly or indirectly, any plan of reorganization
other than the Conforming Plan, or other creditors of any member of the Company
Group file any plan of reorganization other than the Conforming Plan in
accordance with Section 1121(c) of the Bankruptcy Code; (iii) the Conforming
Plan is modified or replaced such that it (or any such replacement) at any time
is not consistent in any material respect with the Restructuring Terms; (iv) any
breach of any member of the Company Group of any of their respective
obligations, or failure to satisfy in any material respect any of the terms or
conditions under this Agreement or the Pre-Restructuring Loan Documents (as
defined in the Term Sheet), or any member of the Company Group or any of their
respective professionals or representatives shall take any action to challenge
(including, without limitation, to assert in writing any challenge to) the
validity or enforceability of this Agreement; (v) the final Definitive Documents
(as defined below) are modified to provide for any terms that are not consistent
in any material respect with the Restructuring Terms or that are otherwise not
satisfactory in form and substance to the Parties signatory thereto; (vi) any
member of the Company Group or any of their respective professionals or
representatives shall withdraw or revoke the Conforming Plan; (vii) an examiner
with expanded powers or a trustee shall have been appointed in the Chapter 11
Cases, the Chapter 11 Cases shall have been converted to a case under chapter 7
of the Bankruptcy Code, or the Chapter 11 Cases shall have been dismissed by
order of the Bankruptcy Court; (viii) the occurrence of a Termination Event (as
defined in the RSA), which shall not have been waived by the Required
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Lenders (as defined in the RSA); (ix) the occurrence of a Termination Event (as
defined in the PSA), which shall not have been waived by the Consenting
Subordinated Noteholders (as defined in the PSA) holding at least one-half (1/2)
in aggregate principal amount of the debt held by the Consenting Subordinated
Noteholders; (x) any foreclosure proceeding is commenced against, or bankruptcy
case is commenced by or against Details or DDISV; (xi) any failure to obtain, by
November 15, 2003, (a) more than one-half (1/2) in number and two-thirds (2/3)
in amount of the holders (the "Required 5 1/4% Subordinated Noteholders") of 5
1/4% Subordinated Notes (as defined in the Term Sheet) voting on the Conforming
Plan to accept the terms of the Conforming Plan, (b) more than one-half (1/2) in
number and two-thirds (2/3) in amount of the holders (the "Required 6 1/4%
Subordinated Noteholders") of 6 1/4% Subordinated Notes (as defined in the Term
Sheet) voting on the Conforming Plan to accept the terms of the Conforming Plan
and (c) more than one-half (1/2) in number and two-thirds (2/3) in amount of the
holders (the "Required Senior Discount Noteholders") of Senior Discount Notes
(as defined in the Term Sheet) voting on the Conforming Plan to accept the terms
of the Conforming Plan; (xii) any Court (including the Bankruptcy Court) shall
declare, in a Final Order, this Agreement to be unenforceable; (xiii) orders
approving the Conforming Disclosure Statement shall not have been entered by the
Clerk of the Bankruptcy Court on or before October 7, 2003; (xiv) orders
confirming the Conforming Plan shall not have been entered by the Clerk of the
Bankruptcy Court on or before December 15, 2003; (xv) the Confirmation Order
shall not be in form and substance acceptable to the Required Senior Discount
Noteholders; (xvi) the Bankruptcy Court shall enter an order denying
confirmation of the Conforming Plan; (xvii) the Effective Date (as defined in
the Term Sheet) of the Conforming Plan shall not have occurred on or before
January 8, 2004; or (xviii) January 30, 2004.
6. Good Faith Cooperation; Further Assurances; Acknowledgment; Definitive
Documents. The Parties shall cooperate with each other in good faith and shall
coordinate their activities (to the extent practicable) in respect of (a) all
matters relating to their rights in respect any member of the Company Group or
otherwise in connection with their relationship with the members of the Company
Group, (b) all matters concerning the implementation of the Restructuring Terms,
and (c) the pursuit and support of the Restructuring Transaction. Furthermore,
subject to the terms hereof, each of the Parties shall take such action as may
be necessary to carry out the purposes and intent of this Agreement, including
making and filing any required regulatory filings and voting any other debt or
equity securities of the Company Group in favor of the Restructuring Transaction
(provided that no Consenting Senior Discount Noteholder shall be required to
incur any expense, liability or other obligation), and shall refrain from taking
any action that would frustrate the purposes and intent of this Agreement,
including proposing a plan that is not the Conforming Plan. While the Consenting
Senior Discount Noteholders commit herein to support the Restructuring
Transaction and Conforming Plan and it is their intention to vote in favor of
the Conforming Plan, this Agreement is not and shall not be deemed a
solicitation for consent to the Conforming Plan or a solicitation to tender or
exchange any Debt. The acceptance of the Consenting Senior Discount Noteholders
will not be solicited until they have received the Conforming Disclosure
Statement and the related ballots in forms approved by the Bankruptcy Court.
Notwithstanding anything to the contrary contained in this Agreement, the
obligations of the Parties hereunder shall be expressly subject to the
preparation of definitive documents (the "Definitive Documents") implementing,
achieving and relating to the Restructuring Terms and this Agreement, including,
without limitation: (i) (a) the Conforming Plan, the Disclosure Statement, the
order of the Bankruptcy Court confirming the Conforming Plan (the "Confirmation
Order"), the Conforming Disclosure Statement, and any related ballots, releases
and settlement documents, (b) definitive documentation relating to the
management
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incentive plan, the common stock of Reorganized DDi, the preferred stock of DDi
Europe (as defined in the Term Sheet) and other related documents, each of which
are more specifically described in the Restructuring Terms, shall contain terms
and conditions consistent in all material respects with the Restructuring Terms,
and shall be satisfactory in form and substance to the Parties signatory
thereto, (c) the Conforming Restructuring Loan Documents and (d) all other
agreements, instruments, orders or other documents necessary or appropriate to
consummate the transactions contemplated by this Agreement, the Term Sheet, the
Conforming Restructuring Loan Documents or the Conforming Plan, and (ii) any
"first day" orders and motions. Each Party hereby covenants and agrees (i) to
negotiate in good faith the Definitive Documents and (ii) to execute (to the
extent they are a party thereto) and otherwise support the Definitive Documents.
7. Further Acquisitions. This Agreement shall in no way be construed to
preclude any Consenting Senior Discount Noteholder from acquiring additional 5
1/4% Subordinated Notes, 6 1/4% Subordinated Notes and/or Senior Discount Notes.
However, any such 5 l/4% Subordinated Notes, 6 1/4% Subordinated Notes or Senior
Discount Notes so acquired shall automatically be deemed to be subject to all of
the terms of (i) in the case of the 5 1/4% Subordinated Notes and the 6 1/4%
Subordinated Notes, the PSA and (ii) in the case of the Senior Discount Notes,
this Agreement.
8. Additional Claims or Equity Interests. To the extent any Consenting
Senior Discount Noteholder (a) acquires additional debt or claims, or (b) holds
or acquires other claims or equity interests in the Company entitled to vote on
the Conforming Plan, each such Consenting 5 1/4% Subordinated Noteholder and
Consenting 6 1/4% Subordinated Noteholder agrees that such debt, Claims, claims
or equity interests shall be subject to this Agreement and that it shall vote
(or cause to be voted) any such additional debt, claims, claims or equity
interests (in each case, to the extent still held by it or on its behalf at the
time of such vote) in a manner consistent with this Agreement.
9. Representations and Warranties. Each Party, severally (and not jointly),
represents and warrants to the other Parties that the following statements are
true, correct and complete as of the date hereof:
(a) it is duly organized, validly existing, and in good standing under
the laws of the state of its organization, and has all requisite corporate,
partnership, limited liability company or similar authority to enter into this
Agreement and carry out the transactions contemplated hereby and perform its
obligations contemplated hereunder; and the execution and delivery of this
Agreement and the performance of such Party's obligations hereunder have been
duly authorized by all necessary corporate, limited liability, partnership or
other similar action on its part;
(b) the execution, delivery, and performance by such Party of this
Agreement does not and shall not (i) violate any provision of law, rule or
regulation applicable to it or any of its subsidiaries or its certificate of
incorporation or bylaws or other organizational documents or those of any of its
subsidiaries, or (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any material contractual
obligation to which it or any of its subsidiaries is a party;
(c) the execution, delivery, and performance by such Party of this
Agreement does not and shall not require any registration or filing with,
consent or approval of,
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or notice to, or other action to, with or by, any federal, state or governmental
authority or regulatory body, except such filings as may be necessary and/or
required for disclosure by the Securities and Exchange Commission and in
connection with the Chapter 11 Cases, the Conforming Disclosure Statement and
the Conforming Plan. Although none of the Parties intend that this Agreement
should constitute, and they each believe that it does not constitute, a
solicitation and acceptance of the Conforming Plan, they each acknowledge and
agree that, regardless of whether its Relevant Claims or the Conforming
Restructuring Loan Documents constitutes "securities" within the meaning of the
Securities Act of 1933, (i) each of the Consenting Senior Discount Noteholders
is an "accredited investor" as such term is defined in Rule 501(a) of the
Securities Act of 1933 and a "qualified institutional buyer" as such term is
defined in Rule 144A of the Securities Act of 1933 and (ii) adequate information
was provided by the Company Group to each such Consenting Senior Discount
Noteholder in order to enable it to make an informed decision such that, were
this Agreement to be construed as or deemed to constitute such a solicitation
and acceptance, such solicitation was (i) in compliance with any applicable
nonbankruptcy law, rule, or regulation governing the adequacy of disclosure in
connection with such solicitation, or (ii) if there is not any such law, rule,
or regulation, solicited after disclosure to such holder of "adequate
information" as such term is defined in Section 1125(a) of the Bankruptcy Code;
(d) if such Party is a Consenting Senior Discount Noteholder, such
Consenting Senior Discount Noteholder has reviewed this Agreement and all
exhibits hereto and has received all such other information as it deems
necessary and appropriate to enable it to evaluate the financial risks inherent
in the Restructuring Transaction; and
(e) this Agreement is the legally valid and binding obligation of it,
enforceable in accordance with the terms hereof, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability or a ruling of the Bankruptcy Court.
10. Amendments and Waivers. This Agreement may not be modified, amended or
supplemented except in a writing signed by each member of the Company Group and
(i) the Consenting Senior Discount Noteholders holding at least one-half (1/2)
in aggregate principal amount of the debt held by Consenting Senior Discount
Noteholders; provided, that, that any modification or amendment to this Section
10 shall require the written consent of all of the Parties; provided, further,
that any modification of, or amendment or supplement to, this Agreement
(including the Restructuring Terms) that materially and adversely affects any
Party shall require the written consent of the Party so affected. A Termination
Event may not be waived except in a writing by the Consenting Senior Discount
Noteholders holding at least one-half (1/2) in aggregate principal amount of the
debt held by Consenting Senior Discount Noteholders no later than three (3)
business days following the occurrence of a Termination Event.
11. Other Existing Support Agreements. Each Consenting Senior Discount
Noteholder acknowledges that other parties are being requested to sign the RSA
and that a condition of the Term Sheet is that the RSA shall have been executed
and delivered, no later than August 1,2003, by (a) each member of the Company
Group and (b) one hundred percent of the (100%) of the holders of Lender
Indebtedness (as defined in the RSA). Each Consenting Senior Discount Noteholder
further acknowledges that other parties are being requested to sign the PSA
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and that a condition of the RSA is that the PSA shall have been executed and
delivered, no later than August 8, 2003, by (a) each member of the Company Group
and (b) the Consenting Subordinated Noteholders holding at least forty-two and a
half percent (42.5%) in aggregate principal amount of the Subordinated Notes.
12. Conditions to Effectiveness. This Agreement shall not become effective
and binding on the Parties unless and until (i) counterpart signature pages and
Joinders, as applicable, shall have been executed and delivered, no later than
August ,2003, by (a) each member of the Company Group, (b) the Consenting
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Senior Discount Noteholders holding in aggregate principal amount of
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the Subordinated Notes, to the Debtors, with a copy to the Administrative Agent;
(ii) the RSA shall have been executed and delivered, no later than August 1,
2003, by (a) each member of the Company Group and (b) one hundred percent of the
(100%) of the holders of Lender Indebtedness (as defined in the RSA); and the
PSA shall have been executed and delivered, no later than August 8, 2003, by (a)
each member of the Company Group and (b) the Consenting Subordinated Noteholders
holding at least forty-two and a half percent (42.5%) in aggregate principal
amount of the Subordinated Notes.
13. GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. BY ITS
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HEREBY IRREVOCABLY
AND UNCONDITIONALLY AGREES THAT ANY LEGAL ACTION, SUIT OR PROCEEDING AGAINST IT
WITH RESPECT TO ANY MATTER UNDER OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT RENDERED IN ANY
SUCH ACTION, SUIT OR PROCEEDING, MAY BE BROUGHT IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, EACH OF THE PARTIES HEREBY IRREVOCABLY ACCEPTS AND SUBMITS
ITSELF TO THE NONEXCLUSIVE JURISDICTION OF EACH SUCH COURT, GENERALLY AND
UNCONDITIONALLY, WITH RESPECT TO ANY SUCH ACTION, SUIT OR PROCEEDING, AND WAIVES
ANY OBJECTION IT MAY HAVE TO VENUE OR THE CONVENIENCE OF THE FORUM.
NOTWITHSTANDING THE FOREGOING CONSENT TO JURISDICTION, UPON THE COMMENCEMENT OF
THE CHAPTER 11 CASES, EACH OF THE PARTIES AGREES THAT THE BANKRUPTCY COURT SHALL
HAVE EXCLUSIVE JURISDICTION WITH RESPECT TO ANY MATTER UNDER OR ARISING OUT OF
OR IN CONNECTION WITH THIS AGREEMENT.
14. Specific Performance. This Agreement, including without limitation the
Parties' agreement herein to support the Restructuring Transaction and
Conforming Plan and to facilitate its confirmation, is intended as a binding
commitment enforceable in accordance with its terms. It is understood and agreed
by each of the Parties that money damages would not be a sufficient remedy for
any breach of this Agreement by any Party and each non-breaching Party shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy of any such breach, including an order of the Bankruptcy Court requiring
any Party to comply promptly with any of its obligations hereunder.
15. Survival. Notwithstanding (a) any sale of the debt or Claims in
accordance with Sections 3(iii), or (b) the termination of this Agreement
pursuant to Section 5, the agreements and obligations of the Parties in Sections
13, 15, 17, 19, 20, 24, and 25 shall survive such sale and/or
9
termination and shall continue in full force and effect for the benefit of the
Consenting Senior Discount Noteholders in accordance with the terms hereof.
16. Headings. The headings of the Sections, paragraphs and subsections of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.
17. Successors and Assigns; Severability; Several Obligations. This
Agreement is intended to bind and inure to the benefit of the Parties and their
respective successors, assigns, heirs, executors, administrators and
representatives. The invalidity or unenforceability at any time of any provision
hereof shall not affect or diminish in any way the continuing validity and
enforceability of the remaining provisions hereof. The agreements,
representations and obligations of the Consenting Senior Discount Noteholders
under this Agreement are, in all respects, several and not joint.
18. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties hereto and, to the
extent contemplated by the Term Sheet, the Consenting Lenders under the RSA and
the Consenting Subordinated Noteholders under the PSA, and no other person or
entity shall be a third party beneficiary hereof.
19. Prior Negotiations; Entire Agreement. This Agreement constitutes the
entire agreement of the Parties, and supersedes all other prior and
contemporaneous negotiations, agreements, representations, warranties and
understandings of the parties, whether oral, written or implied, with respect to
the subject matter hereof, except that the Parties acknowledge that, except as
provided in Section 20 below, any confidentiality agreements heretofore executed
between any member of the Company Group and each Consenting Senior Discount
Noteholder shall continue in full force and effect.
20. Confidentiality. Each member of the Company Group and each Consenting
Senior Discount Noteholder agrees to use commercially reasonable efforts to
maintain the confidentiality of (a) the individual identities and individual
holdings of each Consenting 5 1/4% Subordinated Noteholder, Consenting 6 1/4%
Subordinated Noteholder, Consenting Senior Discount Noteholders and Consenting
Lender; provided, however, that such information may be disclosed (i) to the
Parties' respective directors, trustees, executives, officers, auditors, and
employees and financial and legal advisors or other agents (collectively
referred to herein as "Representatives"), (ii) to person in response to, and to
the extent required by, (x) any subpoena, or other legal process or (y) any bank
regulatory agency or any other regulatory agency or authority. If any Party or
its Representative receives a subpoena or other legal process as referred to in
clause (ii)(x) above in connection with the Agreement, such Party shall provide
the other Parties with prompt written notice of any such request or requirement,
to the fullest extent permissible and practicable under the circumstances, so
that the other Parties may seek a protective order or other appropriate remedy
or waiver of compliance with the provisions of this Agreement. Notwithstanding
the provisions in this Section 20, (i) the Company Group may disclose (a) the
existence of and nature of support evidenced by this Agreement in one or more
public releases that have first been sent to the counsel for the Administrative
Agent and to the Consenting Senior Discount Noteholders for review and comment,
and (b) in the context of any such releases, the aggregate holdings of the
Consenting Lenders, the Consenting 5 1/4% Subordinated Noteholder, the
Consenting 6 1/4% Subordinated Noteholder and the Consenting Senior Discount
Noteholders (but, as indicated above, not their identities or their individual
holdings), (ii) any Party hereto may disclose the identities to the Parties
hereto and their
10
individual holdings in any action to enforce this Agreement or in an action for
damages as a result of any breaches hereof, and (iii) to the extent required by
the Bankruptcy Code, Bankruptcy Rules, Local Rules of the Bankruptcy Court or
other applicable rules, regulations or procedures of the Bankruptcy Court or the
Office of the United States Trustee, the Company Group may disclose the
individual identities of the Consenting Senior Discount Noteholders in a writing
that has first been sent to each Consenting Senior Discount Noteholder for
review and comment on five (5) business days' notice.
21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement. Delivery of an executed signature page of
this Agreement by facsimile shall be effective as delivery of a manually
executed signature page of this Agreement.
22. Notices. Any notice required or desired to be served, given or
delivered under this Agreement shall be in writing, and shall be deemed to have
been validly served, given or delivered if provided by personal delivery, or
upon receipt of fax delivery, during standard business hours (from 8:00 a.m. to
6:00 p.m.) as follows:
a. if to the Consenting Senior Discount Noteholders, to each such Party at
its address set forth on the signature pages to each Joinder Agreement; and
b. if to any member of the Company, to Xxxxxxx Xxxxx, Xxxxxxxx & Xxxxx LLP,
000 Xxxxx Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Facsimile No. (213)
680-8500.
With a copy to: Xxxxxxx X. Xxxxxxxx
Xxxx & Hessen LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
and
Xxxxxxxx X. XxXxxxxx
Xxxxxxx Xxxxxxx & Xxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 000-000-0000
Counsel for the Consenting Lenders
and
Xxxxxx X. Xxxxxxx
Xxxxxxx, Xxxxxxxx & Xxxxx Professional Corporation
1901 Avenue of the Stars, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000)000-0000
Attorneys to the Ad Hoc Committee of Subordinated
Noteholders
11
23. Rule of Interpretation. Notwithstanding anything contained herein to
the contrary, it is the intent of the Parties that all references to votes or
voting in this Agreement be interpreted to include (i) votes or voting on a plan
of reorganization under the Bankruptcy Code, and (ii) all means of expressing
agreement with, or rejection of, as the case may be, a restructuring or
reorganization transaction that is not implemented under the Bankruptcy Code.
24. Reservation of Rights. Except as expressly provided in this Agreement
and in any amendment among the Parties, nothing herein is intended to, or does,
in any manner waive, limit, impair or restrict the ability of each of the
Parties to protect and preserve its rights, remedies and interests, including
without limitation, its claims against the Company or its full participation in
any bankruptcy case filed by any member of the Company or any of its affiliates
and subsidiaries. Nothing herein shall be deemed an admission of any kind. If
the transactions contemplated herein, in the Conforming Plan or the Conforming
Restructuring Loan Documents are not consummated, or this Agreement is
terminated for any reason, the Parties hereto fully reserve any and all of their
rights. As provided in the Term Sheet, this Agreement may be filed with the
Bankruptcy Court, provided, however, that Schedule B to the Term Sheet shall be
attached with any redactions as may be required by the Required Lenders.
25. Disclosure of Holdings. Unless required by applicable law or regulation
or otherwise provided for in this Agreement, no Party shall disclose the amount
of any Consenting Lender's, Consenting 5 1/4% Subordinated Noteholder's,
Consenting 6 1/4% Subordinated Noteholder's or Consenting Senior Discount
Noteholders's holdings of debt to any third party without the prior written
consent of such Consenting Lender, Consenting 5 1/4% Subordinated Noteholder,
Consenting 6 1/4% Subordinated Noteholder or Consenting Senior Discount
Noteholder; provided, however, that (a) if such disclosure is required by law or
regulation, the disclosing Party shall afford the relevant Consenting Lender,
Consenting 5 1/4% Subordinated Noteholder, Consenting 6 1/4% Subordinated
Noteholder or Consenting Senior Discount Noteholder a reasonable opportunity to
review and comment in advance of such disclosure and shall take all reasonable
measures to limit such disclosure, and (b) the foregoing shall not prohibit the
disclosure of approximate aggregate group holdings by class of debt.
26. Independent Due Diligence and Decision-Making. Each of the undersigned
hereby confirms that its decision to execute this Agreement has been based upon
its independent investigation of the operations, businesses, financial and other
conditions and prospects of the Company Group, without reliance upon the Ad Hoc
Committee, any of their respective affiliates or any of their respective
advisors or representatives. To the extent any materials or information have
been furnished to it by such persons, the undersigned hereby acknowledges that
they have been provided for informational purposes only, without any
representation or warranty.
27. Prevailing Party. If any Party brings an action or proceeding against
any other Party based upon a breach by such Party of its obligations hereunder,
the prevailing Party shall be entitled to all reasonable expenses incurred,
including reasonable attorneys', accountants' and financial advisors fees in
connection with such action or proceeding.
28. Fiduciary Duties. Notwithstanding anything to the contrary herein,
nothing in this Agreement shall limit the ability of (a) any member of the
Company Group or any of their respective directors or officers (in such person's
capacity as a director or officer of any member of the Company Group) to take
any action, or to refrain from taking any action, to the extent required to
comply with its or their fiduciary obligations under applicable law and (b) any
12
Consenting Senior Discount Noteholder or representative of a Consenting Senior
Discount Noteholder that is a member of a statutory committee established in the
Chapter 11 Cases to take any action, or to refrain from taking any action, in
such person's capacity as a statutory committee member to the extent required to
comply with fiduciary obligations applicable under the Bankruptcy Code. Nothing
herein will limit or affect, or give rise to any liability, to the extent
required for the discharge of the fiduciary obligations described in this
Section 28.
29. Several not Joint. The agreements, representations and obligations of
the Parties under this Agreement are, in all respects, several and not joint.
30. No Admissions. This Agreement shall in no way be construed as or be
deemed to be evidence of an admission or concession on the part of any Party of
any claim or fault or liability or damages whatsoever. Each of the Parties
denies any and all wrongdoing or liability of any kind and does not concede any
infirmity in the claims of defenses which it has asserted or could assert.
31. Lender Claims and Liens. The Consenting Senior Discount Noteholders
agree that until this Agreement is terminated, they shall not dispute that (a)
the Borrowers are indebted to the Administrative Agent and the Lenders for
$72,892,916.17 in outstanding principal amount and face amount of undrawn
letters of credit, plus interest and fees, as provided under the Credit
Agreement (as defined in the Term Sheet) and the other Pre-Restructuring Loan
Documents (as defined in the Term Sheet) and applicable law and (b) as security
for payment of the foregoing indebtedness, the Lenders have valid, perfected and
unavoidable first-priority liens and charges on, and security interests in, all
or substantially all of the assets of the Borrowers, as more particularly
described in, and evidenced by, the Credit Agreement and the Pre-Restructuring
Loan Documents. Until this Agreement is terminated, no Consenting Senior
Discount Noteholder shall (i) challenge or contest, the validity, binding
nature, due authorization or enforceability of any document or instrument
evidencing the Credit Agreement, the other Pre-Restructuring Loan Documents or
any term or condition thereof or (ii) seek to alter, amend or supplement the
Credit Agreement or any of the other Pre-Restructuring Loan Documents without
the prior written consent of the Consenting Lenders or (iii) challenge or
contest the validity, enforceability, perfection or priority of (or shall seek
to alter the priority of) any existing lien, charge, security interest, or other
interest in favor of the Lenders or any lien, charge, security interest, or
other interest granted to the Lenders pursuant to the Pre-Restructuring Loan
Documents.
[Remainder of page intentionally left blank; remaining pages are signature
pages.]
13
IN WITNESS WHEREOF, the undersigned have each caused this Agreement to be duly
executed and delivered by their respective, duly authorized officers as of the
date first written above.
DDi CAPITAL CORP.
By: /s/ XXXX XXXXXX
------------------------------------
Title: CFO
DYNAMIC DETAILS, INCORPORATED
By: /s/ XXXX XXXXXX
------------------------------------
Title: CFO
DYNAMIC DETAILS, INCORPORATED, SILICON
VALLEY
By: /s/ XXXX XXXXXX
------------------------------------
Title: CFO
DDi Corp.
By: /s/ XXXX XXXXXX
------------------------------------
Title: CFO
DYNAMIC DETAILS, INCORPORATED, VIRGINIA
By: /s/ XXXX XXXXXX
------------------------------------
Title: CFO
DYNAMIC DETAILS TEXAS, L.P.
By: Dynamic Details Texas Holdings Corp.
By: /s/ XXXX XXXXXX
---------------------------------
Title: CFO
14
By: DDi-TEXAS INTERMEDIATE HOLDINGS,
L.L.C.
By: /s/ XXXX XXXXXX
------------------------------------
Title: CFO
By: DYNAMIC DETAILS TEXAS HOLDINGS
CORP.
By: /s/ XXXX XXXXXX
------------------------------------
Title: CFO
By: DYNAMIC DETAILS INCORPORATED,
COLORADO SPRINGS
By: /s/ XXXX XXXXXX
------------------------------------
Title: CFO
By: DYNAMIC DETAILS INCORPORATED,
TEXAS
By: /s/ XXXX XXXXXX
------------------------------------
Title: CFO
15
EXHIBIT A
Term Sheet
SUMMARY OF TERMS AND CONDITIONS OF FINANCIAL
RESTRUCTURING OF DDi CORP. AND AFFILIATES
The following (this "Summary of Terms and Conditions") is an outline of (i)
the key terms and provisions of a plan of reorganization attached hereto as
Schedule A (the "Chapter 11 Plan") for DDi Corp. ("DDi") and DDi Capital Corp.
("DDi Capital") to be proposed by those entities, the Ad Hoc Committee (the "Ad
Hoc Committee") for the Subordinated Noteholders (as defined below), DDi
Intermediate Holdings Corp. ("DDi Intermediate"), DDi Europe Limited ("DDi
Europe"), Dynamic Details, Incorporated ("Details") and Dynamic Details,
Incorporated, Silicon Valley ("DDISV") and (ii) in connection therewith, the key
terms for the proposed out-of-court restructuring and exchange of the
outstanding indebtedness of Details and DDISV.
This Summary of Terms and Conditions is subject to finalization and
execution of a Plan Support Agreement (the "PSA") to be signed by certain of the
Subordinated Noteholders and a Restructuring Support Agreement (the "RSA") to be
signed by the Lenders, to each of which this Summary of Terms and Conditions
shall be attached as Exhibit A, and to the completion of appropriate tax due
diligence, acceptable treatment of tax issues (including agreement on tax
treatment of restructured Pre-Restructuring Bank Indebtedness (as defined
below)) and the execution of definitive documentation. Upon execution of the PSA
and the RSA, this Summary of Terms and Conditions is intended to be binding on
the signatories to (i) the PSA in accordance with the terms of the PSA and (ii)
the RSA in accordance with the terms of the RSA. However, this Summary of Terms
and Conditions remains subject to, among a variety of other things, finalizing
any incomplete Schedules hereto, resolving any terms that are bracketed or
indicated as being "open" or subject to further review, and acceptable
definitive documentation of all matters contemplated herein, including any
court-approved disclosure statement (in the form annexed to the Chapter 11 Plan
in Schedule A, the "Disclosure Statement") related to the Chapter 11 Plan of DDi
and DDi Capital, any agreements related thereto and the terms and conditions of
such plan. Any vote in favor of any plan, or any support thereof, whether or not
it includes the terms and conditions set forth herein, is not being solicited by
or agreed to by this Summary of Terms and Conditions and is subject to, among
other conditions, the completion of appropriate tax due diligence, acceptable
treatment of tax issues (including agreement on tax treatment of restructured
Pre-Restructuring Bank Indebtedness) and the execution of definitive
documentation. Notwithstanding anything to the contrary in the foregoing, this
Summary of Terms and Conditions is being provided as part of settlement
discussions and, as a result, shall be treated as such pursuant to Federal Rule
of Evidence 408 and all bankruptcy and state law equivalents subject to the
following exceptions:
1. The PSA may be attached as an exhibit to the Disclosure Statement
along with the attachments, except that Schedule B of the Term Sheet
shall be attached with any redactions as may be required by the
Required Lenders (as defined below).
2. The RSA will not be filed with the Bankruptcy Court (as defined
below), but a description of the RSA may be included in the Disclosure
Statement in form and substance satisfactory to the Administrative
Agent (as defined below) and counsel to the Administrative Agent.
This Summary of Terms and Conditions is not an offer with respect to any
securities. Such a solicitation will only be made in compliance with applicable
provisions of securities laws. In addition, notwithstanding the terms of any
agreement to which any of the parties to this Summary of Terms and Conditions is
a party, the contents or the existence of this Summary of Terms and Conditions
may not be disclosed by any party hereto to any other person or entity, either
orally or in writing, except (i) to the
2
parties' respective directors, trustees, officers, employees, legal counsel,
financial advisors, accountants and regulatory authorities on a confidential
basis and (ii) in accordance with the PSA and the RSA. Any person or entity to
whom all or any portion of this Summary of Terms and Conditions is disclosed as
permitted above shall be advised of the terms of the confidentiality provisions
set forth above and the intent of the parties that such recipients keep such
information confidential.
--------------------------------------------------------------------------------
Debt To Be Restructured The indebtedness of DDi and its affiliates
(collectively, the "DDi Entities") to be
restructured shall be:
(i) senior debt of approximately $72,892,916.17 in
principal amount under the Amended and Restated
Credit Agreement, dated as of July 23,1998 and as
amended and restated as of August 28,1998, and as
amended by the First Amendment, dated as of March
10, 1999, the Second Amendment, dated as of March
22, 2000, the Third Amendment, dated as of October
10, 2000, the Fourth Amendment, dated as of
February 13,2001, the Fifth Amendment, dated as of
December 31, 2001, the Sixth Amendment, dated as
of June 28, 2002 and the Seventh Amendment, dated
as of June 27, 2003 (as amended, supplemented or
otherwise modified from time to time, the "Credit
Agreement"), among Details, DDi Capital, DDISV,
the several banks and other financial institutions
from time to time parties thereto (the "Lenders"),
JPMorgan Chase Bank (formerly known as The Chase
Manhattan Bank), in its capacity as the arranger
of the Commitments, and as collateral,
co-syndication and administrative agent for the
Lenders (in such capacity, the "Administrative
Agent") and Bankers' Trust Company as
documentation and co-syndication agent (the
"Co-Syndication Agent" and together with the
Lenders and the Administrative Agent, the "Senior
Debt Parties"), and all collateral and ancillary
documentation executed in connection therewith,
including, without limitation, the terminated
interest rate exchange agreement and transactions
thereunder entered into by Details (the "Hedge
Agreement") (collectively, the "Pre-Restructuring
Loan Documents");
(ii) subordinated debt of $100,000,000 in
principal amount of 5 1/4% Convertible
Subordinated Notes due 2008 (the "5 1/4
Convertible Subordinated Notes"), underwritten by
Credit Suisse First Boston Corp. and Xxxxxxxxx
Xxxxxxxx, Inc., as underwriters (collectively, the
"5 1/4 Underwriters") and issued by DDi under that
certain Indenture, dated as of February 20,2001
(as supplemented, the "5 1/4 Indenture") between
DDi, as issuer, and The State Street Bank and
Trust Company (n/k/a U.S. Bank, N.A.), as trustee
(the "5 1/4 Trustee" and together with the 5 1/4
Underwriters and the 5 1/4 Noteholders (as defined
below), the "5 1/4 Subordinated Debt Parties");
(iii) subordinated debt of $100,000,000 in
principal amount of 6 1/4% Convertible
Subordinated Notes due 2007 (the "6 1/4
Convertible Subordinated Notes"), underwritten by
Xxxxxxxxx Xxxxxxxx, Inc. and JPMorgan Securities,
Inc., as underwriters (collectively, the "6 1/4
Underwriters") and issued by DDi under that
certain Indenture, dated as
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
of April 2, 2002 (as supplemented, the "6 1/4
Indenture") between DDi, as issuer, and The State
Street Bank and Trust Company (n/k/a U.S. Bank,
N.A.), as trustee (the "6 1/4 Trustee" and
together with the 6 1/4 Underwriters and the 6 1/4
Noteholders (as defined below), the "6 1/4
Subordinated Debt Parties"); and
(iv) senior debt in face amount of $16,090,000 at
June 30, 2003 of 12 l/2% Senior Discount Notes due
2007 (the "Senior Discount Notes") issued by DDi
Capital under that certain indenture dated as of
November 18, 1997 between DDi Capital, as issuer,
and The State Street Bank and Trust Companv (n/k/a
U.S. Bank, N.A.), as trustee (the "12 1/2 Trustee"
and together with the 12 1/2 Noteholders (as
defined below), the "12 1/2 Senior Discount
Parties"), as supplemented bv the supplemental
indenture dated as of February 10, 1998 between
DDi Capital and the 12 1/2 Trustee (the "12 1/2
Indenture").
--------------------------------------------------------------------------------
The Restructuring. Such indebtedness will be restructured (the
"Restructuring") pursuant to (i) the
pre-negotiated Chapter 11 Plan to be filed jointly
by DDi and DDi Capital (collectively, the
"Debtors") in proceedings (the "Chapter 11 Cases")
to be commenced under Chapter 11 of Title 11,
United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court"),
with respect to the 5 1/4 Convertible Subordinated
Notes, the 6 1/4 Convertible Subordinated Notes
and the Senior Discount Notes, and (ii) the RSA,
with respect to the Pre-Restructuring Bank
Indebtedness (as defined below), and the
Restructuring Loan Documents (as defined below).
The Restructuring and the Chapter 11 Plan on the
terms and conditions set forth herein shall be
effectuated in the event that (a) (i) one-hundred
percent (100%) of the holders (the "Consenting
Lenders") of Pre-Restructuring Bank Indebtedness
(as defined below) execute the Restructuring Loan
Documents, (ii) the Chapter 11 Plan and the
Disclosure Statement filed with the Bankruptcy
Court and the Confirmation Order (as defined
below) entered by the Bankruptcy Court are in form
and substance acceptable to the holders of more
than one-half (1/2) in number and two-thirds (2/3)
in amount of the holders of Pre-Restructuring Bank
Indebtedness (the "Required Lenders"), (b) more
than one-half (1/2) in number and two-thirds (2/3)
in amount of the holders (the "5 1/4 Noteholders")
of 5 1/4 Convertible Subordinated Notes (the
"Required 5 1/4 Noteholders") voting on the
Chapter 11 Plan vote to accept the terms of the
Chapter 11 Plan by November 15, 2003, (c) more
than one-half (1/2) in number and two-thirds (2/3)
in amount of the holders (the "6 1/4 Noteholders"
and together with the 5 1/4 Noteholders, the
"Subordinated Noteholders") of 6 1/4 Convertible
Subordinated Notes (the "Required 6 1/4
Noteholders") voting on the Chapter 11 Plan vote
to accept the terms of the Chapter 11 Plan by
November 15,2003 and (d) the Bankruptcy Court
enters an order (the "Confirmation Order")
confirming the Chapter 11 Plan in accordance with
Section 1129 of the Bankruptcy Code no later than
December 15, 2003.
--------------------------------------------------------------------------------
Treatment of Existing On the date the Chapter 11 Plan becomes effective
(the "Effective Date") the aggregate outstanding
principal amount of indebtedness and the face
amount
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
Bank Debt. of letters of credit under the Pre-Restructuring
Loan Documents in the amount of $72,892,916.17
(the "Pre-Restructuring Loans") and the fees and
interest accrued and unpaid on the
Pre-Restructuring Loans (collectively, the
"Accrued Fees and Interest" and together with the
Pre-Restructuring Loans, the "Pre-Restructuring
Bank Indebtedness") will be restructured,
exchanged and repaid pursuant to restructuring
credit documentation (the "Restructuring Loan
Documents"). The principal terms and conditions
for the Restructuring Loan Documents are set forth
in Schedule B attached hereto.
--------------------------------------------------------------------------------
Treatment of Existing 5 1/4 On the Effective Date, the aggregate outstanding
Convertible Subordinated principal amount of subordinated indebtedness of
Notes And Existing 6 1/4 $100,000,000 under the 5 1/4 Convertible
Convertible Subordinated Subordinated Notes (the "5 1/4 Principal Amount")
Notes. and the fees and interest accrued and unpaid on
the 5 1/4 Convertible Subordinated Notes
(collectively, the "5 1/4 Accrued Fees and
Interest" and together with the 5 1/4 Principal
Amount, the "Pre-Restructuring 5 1/4 Subordinated
Debt") and the aggregate outstanding principal
amount of subordinated indebtedness of
$100,000,000 under the 6 1/4 Convertible
Subordinated Notes (the "6 1/4 Principal Amount")
and the fees and interest accrued and unpaid on
the 6 1/4 Convertible Subordinated Notes
(collectively, the "6 1/4 Accrued Fees and
Interest" and together with the 6 1/4 Principal
Amount, the "Pre-Restructuring 6 1/4 Subordinated
Debt", and the Pre-Restructuring 6 1/4
Subordinated Debt and the Pre-Restructuring 5 1/4
Subordinated Debt, together, the "Subordinated
Note Debt") will be restructured and converted
into common stock of Reorganized DDi (as defined
in Schedule C below) and preferred stock of DDi
Europe.
On the Effective Date, subject to the Budget and
Funding Mechanism (as defined below), any unpaid
fees and expenses of the Subordinated Noteholders,
including the unpaid fees and expenses of the
members of the Ad Hoc Committee, the retained
professionals of the Ad Hoc Committee, the 5 1/4
Trustee and the 6 1/4 Trustee, will be paid in
cash.
The principal terms and conditions for the
conversion of the Subordinated Note Debt into
common stock of Reorganized DDi and preferred
stock of DDi Europe are set forth in Schedules C
and D, respectively, attached hereto.
--------------------------------------------------------------------------------
Treatment of Existing On the Effective Date, the aggregate outstanding
Senior Discount Notes. principal amount of senior debt of face amount of
$16,090,000 under the Senior Discount Notes and
the fees and interest accrued and unpaid thereon
(collectively, the "Senior Discount Note Debt")
are intended to be restructured on the terms set
forth in Schedule E attached hereto; provided
that any modification to such terms shall be
subject to the consent of the Required Lenders,
the Required 5 1/4 Noteholders and the Required 6
1/4 Noteholders.
--------------------------------------------------------------------------------
Treatment of Existing Except as otherwise provided in Schedule C, all
Equity Interests. existing common and preferred equity interests in
DDi and other existing securities consisting of
(or convertible into) equity interests in DDi,
including any warrants or vested or unvested
options to purchase equity interests in DDi, shall
be
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
extinguished as of the Effective Date. All
existing equity interests in direct and indirect
subsidiaries of DDi shall continue to be held by
the same parties who held such equity interests,
subject to any liens and pledges in favor of the
Lenders, prior to the commencement of the Cases
(it being understood that as part of the
Restructuring, new preferred stock of DDi Europe
will be issued to the Subordinated Noteholders).
--------------------------------------------------------------------------------
Management Equity The Chapter 11 Plan shall provide for the
Incentive Plan. establishment of a management equity incentive
plan, having the principal terms set forth on
Schedule F attached hereto for five percent (5%)
of the Reorganized DDi common stock on the
Effective Date, options for up to an additional
ten percent (10%) of the Reorganized DDi common
stock for members of the Reorganized DDi's
management and discretionary options for an
additional four percent (4%) of the Reorganized
DDi common stock.
--------------------------------------------------------------------------------
Release; Plan Injunction. The Confirmation Order shall approve, among other
things, the global releases (the "Global
Releases") as set forth in the Chapter 11 Plan and
shall provide for an injunction (the "Plan
Injunction") as set forth in the Chapter 11 Plan.
The Global Releases and the Plan Injunction shall
be in the form set forth in the Chapter 11 Plan
attached hereto, provided, however, that to the
extent any subsequent material modifications are
necessary to confirm the Chapter 11 Plan, they
must be approved in writing by the Required
Lenders.
--------------------------------------------------------------------------------
Board of Directors. See Schedule C.
--------------------------------------------------------------------------------
Tax Attributes. The terms of the Chapter 11 Plan and the
restructuring contemplated by this Summary of
Terms and Conditions shall be subject to (i)
satisfactory due diligence by the Administrative
Agent, the Required Lenders, the Required 5 1/4
Noteholders and the Required 6 1/4 Noteholders
with respect to any related intercompany
transactions, (ii) satisfactory due diligence by
the Administrative Agent, the Required Lenders,
the Required 5 1/4 Noteholders and the Required 6
1/4 Noteholders with respect to tax consequences
of the Restructuring and agreement satisfactory to
the Required Lenders with respect to the tax
treatment of the restructured Pre-Restructuring
Bank Indebtedness, and (iii) the preservation of
favorable tax attributes of the Debtors in a
manner satisfactory to the Administrative Agent,
the Required Lenders, the Required 5 1/4
Noteholders and the Required 6 1/4 Noteholders.
--------------------------------------------------------------------------------
6
--------------------------------------------------------------------------------
Certain Conditions. Conditions to the agreement of the Required
Lenders, the Required 5 1/4 Noteholders and the
Required 6 1/4 Noteholders to the Restructuring,
the Chapter 11 Plan and the Effective Date will
include, without limitation, the following: (i)
definitive documentation in form and substance
satisfactory to the Administrative Agent, Required
Lenders, the Required 5 1/4 Noteholders and the
Required 6 1/4 Noteholders, which shall include
the new indenture governing the Senior Discount
Notes, the new agreement governing the Lender
Warrants (as defined below), the plan for issuing
options to the management of Reorganized DDi, the
amended and restated certificate of incorporation
of Reorganized DDi, the amended and restated
bylaws of Reorganized DDi and the amended and
restated articles of association of DDi Europe
(including the terms of the Preferred Stock (as
defined below) of DDi Europe to be issued to the
Subordinated Noteholders); (ii) the Restructuring
Loan Documents shall be consistent in all respects
with the Restructuring Terms and in form and
substance satisfactory to the Consenting Lenders;
(iii) arrangements with respect to the treatment
of any other claims not specifically addressed in
this Summary of Terms and Conditions satisfactory
to the Administrative Agent, Required Lenders, the
Required 5 1/4 Noteholders and the Required 6 1/4
Noteholders; (iv) satisfaction of the
Administrative Agent, Required Lenders, the
Required 5 1/4 Noteholders and the Required 6 1/4
Noteholders with the form and substance of the
Disclosure Statement and the Confirmation Order
and with any proposed changes thereto, and to the
Chapter 11 Plan attached hereto, to be accepted by
the Required Lenders in writing; provided,
however, that, the Administrative Agent may
approve any change that does not affect the
treatment of the Lenders in the judgment of the
Administrative Agent; (v) approval of the Chapter
11 Plan by the Required 5 1/4 Noteholders and the
Required 6 1/4 Noteholders in numbers and amount
necessary for class acceptance of the Chapter 11
Plan under Section 1126(c) of the Bankruptcy Code;
(vi) satisfaction of the Required Lenders, the
Required 5 1/4 Noteholders and the Required 6 1/4
Noteholders with the form and substance of the
Global Releases and the Plan Injunction; (vii)
satisfaction of the Administrative Agent, the
Required Lenders, the Required 5 l/4 Noteholders
and the Required 6 1/4 Noteholders with any
management retention plan, management option plan,
severance plan, senior management employment
contracts or post-restructuring senior management
employment arrangements, except upon terms and
conditions previously agreed to by the Required
Lenders in writing; provided that no modifications
shall be made to the foregoing without the prior
written consent of the Required Lenders; (viii)
the Effective Date of the Chapter 11 Plan shall
have occurred on January 8, 2004 and substantial
consummation of the Chapter 11 Plan shall occur on
or before January 30, 2004; (ix) the granting on
the Effective Date of a perfected first priority
security interest (subject to certain carve-outs
which shall be approved by the Administrative
Agent and the Required Lenders in writing) in all
personal, mixed and real property of the
reorganized Debtors and their non-debtor
subsidiaries (other than DDi Europe and its
European subsidiaries) to secure the Restructuring
Loan Documents and pledges of 100% of the common
stock of DDi Intermediate, 100% of the common
stock of DDi Capital and 100% of the common stock
of each of Reorganized DDi's direct and indirect
subsidiaries (other than DDi
--------------------------------------------------------------------------------
7
--------------------------------------------------------------------------------
Europe and its European subsidiaries) not
previously pledged to the Lenders; (x) there being
no material adverse effect on (a) the
Restructuring, (b) the business, operations,
property or condition (financial or otherwise) of
Details and its subsidiaries taken as a whole or
(c) the validity or enforceability of this Summary
of Terms and Conditions, the PSA, the RSA or any
of the Pre-Restructuring Loan Documents, the 5 1/4
Indenture and the 6 1/4 Indenture, or the
respective rights or remedies of the
Administrative Agent, the Lenders, the 5 1/4
Noteholders and the 6 1/4 Noteholders, hereunder
or thereunder; (xi) Xxxxx XxXxxxxx continuing to
serve as Chief Executive Officer of DDi, DDi
Intermediate, DDi Capital, Details, DDISV and
their respective subsidiaries and affiliates
(excluding DDi Europe and its European
subsidiaries) through the Effective Date, (xii)
satisfaction of all conditions to the
effectiveness of the RSA and PSA, (xiii) no
termination event shall have occurred under the
Funding Mechanism (as defined below) and (xiv)
satisfaction of the Administrative Agent, the
Required Lenders, the Required 5 1/4 Noteholders
and the Required 6 1/4 Noteholders with any
projected financial statements submitted by the
Debtors in connection with confirmation of the
Chapter 11 Plan.
--------------------------------------------------------------------------------
Consent and The RSA shall provide that, by execution thereof,
Modifications To each Consenting Lender consents and authorizes
Restructuring. JPMorgan Chase Bank, in its capacity as
Administrative Agent under the Credit Agreement,
to enter into and execute, on behalf of such
Consenting Lender, the Restructuring Loan
Documents. The RSA shall further provide that each
Consenting Lender agrees that modifications to the
terms of the Restructuring may be approved by the
Required Lenders except that the following changes
shall require the consent of 100% of the Lenders:
(1) any extension of scheduled date of any
amortization payment; (2) reduction of principal;
(3) extension of final maturity date of any loan;
(4) reduction in stated rate of interest or fees
or any extension of the payment thereof; (5)
changes to voting percentage requirements; (6)
release or modification of collateral or
guarantees, except as otherwise provided in the
Restructuring Loan Documents; and (7) any change
in the Budget and Funding Mechanism not
contemplated by the terms thereof.
--------------------------------------------------------------------------------
Governing Law and Forum. This Summary of Terms and Conditions shall be
governed by, and construed in accordance with, the
laws of the State of New York.
--------------------------------------------------------------------------------
SCHEDULE A
Chapter 11 Plan
SCHEDULE B
Terms and Conditions for the Restructuring of the
Pre-Restructuring Bank Indebtedness
----------
RESTRUCTURING CREDIT FACILITIES
Summary of Terms and Conditions
----------
PARTIES
Borrower: Dynamic Details, Incorporated and Dynamic Details,
Incorporated Silicon Valley (the "Borrower").
Guarantors: DDi and each intermediate domestic holding company and
each domestic direct and indirect subsidiary of the
Borrower (the "Guarantors"; the Borrower and the
Guarantors, collectively, the "Loan Parties").
Administrative JPMorgan Chase Bank ("JPMorgan Chase Bank" and, in such
Agent: capacity, the "Administrative Agent").
Lenders: The Lenders under the existing Credit Agreement.
TYPES AND AMOUNTS OF CREDIT FACILITIES
Term and Revolving The Pre-Restructuring Bank Indebtedness will be
Facilities: restructured and exchanged as follows into two tranches:
(i) Tranche A Revolving and Term Loan Facility in an
aggregate amount of $15 million (including the
$1.2 million in undrawn face amount of
outstanding letters of credit, plus accrued and
unpaid interest and fees under the
Pre-Restructuring Loan Documents, the "Tranche A
Indebtedness"); and
(ii) Tranche B Term Loan Facility in an aggregate
amount of $57.9 million (plus accrued and unpaid
interest and fees under the Pre-Restructuring
Loan Documents, the "Tranche B Indebtedness" and
together with the Tranche A Indebtedness, the
"Indebtedness")
Type:
Tranche A Revolving Tranche A Revolving and Term Loan Facility: Tranche A will
and Term Loan initially be a revolving credit facility through June 30,
Facility 2005 (the "Tranche A Revolving Facility" and the loans
thereunder, the "Tranche A Revolving Loans"). The
commitments under the Tranche A Revolving Facility in an
aggregate principal amount of $15 million shall be
available on a revolving basis during the period
commencing on the Effective Date and ending on June 30,
2005 (the "Revolving Termination Date"). As of the
Effective Date, the Tranche A
2
Revolving Facility will be fully funded with $13.8 million
in outstanding loans and $1.2 million in face amount of
outstanding letters of credit. Availability under the
Tranche A Revolving Facility shall at any time be equal to
the sum of (i) 100% of the principal amount of Tranche A
Revolving Loans optionally prepaid plus (ii) 100% of the
Net Cash Proceeds (to be defined in the Restructuring Loan
Documents in a manner satisfactory to the Administrative
Agent and the Required Lenders) of the first $1.25 million
in the aggregate of Net Cash Proceeds from the sales of
assets, including, but not limited to, any sales of real
or personal property currently located at the facilities
in Sterling, Virginia and Garland, Texas, applied to
prepay Tranche A Revolving Loans, in each case, to the
extent that such prepayments do not constitute permanent
commitment reductions.
On June 30, 2005, any principal amount of Tranche A
Revolving Loans outstanding under the Revolving Credit
Facility shall be converted to Tranche A Term Loans (the
"Tranche A Term Loans")(the facility, the "Tranche A Term
Loan Facility" and together with the Tranche A Revolving
Facility, the "Tranche A Revolving and Term Loan
Facility").
Letters of Credit A portion of the Tranche A Revolving Facility not in
excess of $5.0 million shall be available for the issuance
of letters of credit (the "Tranche A Letters of Credit")
by JPMorgan Chase Bank (in such capacity, the "Issuing
Lender"). No Letter of Credit shall have an expiration
date after the earlier of (a) one year after the date of
issuance and (b) five business days prior to the Revolving
Termination Date, provided that any Tranche A Letter of
Credit with a one-year tenor may provide for the renewal
thereof for additional one-year periods (which shall in no
event extend beyond the date referred to in clause (b)
above). Drawings under any Tranche A Letter of Credit
shall be reimbursed by the Borrower (whether with its own
funds or with the proceeds of Tranche A Revolving Loans)
on the same business day. To the extent that the Borrower
does not so reimburse the Issuing Lender, the Lenders
under the Tranche A Revolving Facility shall be
irrevocably and unconditionally obligated to reimburse the
Issuing Lender on a pro rata basis.
Tranche B Term Loan
Facility Tranche B Term Loan Facility: Tranche B to be a term loan
facility (the "Tranche B Term Loan Facility" and the loans
thereunder, the "Tranche B Term Loans"; the Tranche B Term
Loan Facility together with the Tranche A Revolving and
Term Loan Facility, the "Restructuring Credit Facilities")
in an aggregate principal amount equal to (i) $57.9
million plus (ii) any accrued and unpaid interest under
the Pre-Restructuring Loan Documents.
Maturity:
Tranche A Term and April 15, 2008 (the "Tranche A Maturity Date")
Revolving Loans
Tranche B Term Loans April 15, 2008 (the "Tranche B Maturity Date")
3
Amortization: The Tranche A Term Loans and the Tranche B Term Loans
shall be repayable in quarterly installments during the
years and in the amounts set forth below, on a pro rata
basis, with the first payment on the Tranche A Term Loans
due June 30, 2005 and on the Tranche B Term Loans due
January 30, 2003:
Tranche A Term Loans:
--------------------------------------------------------------
TRANCHE A
--------------------------------------------------------------
YEAR Ql Q2 Q3 Q4
--------------------------------------------------------------
2003 $ -- $ -- $ -- $ --
--------------------------------------------------------------
2004 $ -- $ -- $ -- $ --
--------------------------------------------------------------
2005 $ -- $ 514,403.29 $514,403.29 $514,403.29
--------------------------------------------------------------
2006 $514,403.29 $ 514,403.29 $514,403.29 $514,403.29
--------------------------------------------------------------
2007 $514,403.29 $ 514,403.29 $514,403.29 $514,403.29
--------------------------------------------------------------
2008 $514,403.29 $8,827,160.52
--------------------------------------------------------------
Tranche B Term Loans:
---------------------------------------------------------------------
TRANCHE B
---------------------------------------------------------------------
YEAR Ql Q2 Q3 Q4
---------------------------------------------------------------------
2003 $ -- $ -- $ -- $ --
---------------------------------------------------------------------
2004 $ 25,000 $ 25,000 $ 25,000 $ 25,000
---------------------------------------------------------------------
2005 $ 25,000 $ 1,985,596.71 $1,985,596.71 $1,985,596.71
---------------------------------------------------------------------
2006 $1,985,596.71 $ 1,985,596.71 $1,985,596.71 $1,985,596.71
---------------------------------------------------------------------
2007 $1,985,596.71 $ 1,985,596.71 $1,985,596.71 $1,985,596.71
---------------------------------------------------------------------
2008 $1,985,596.71 $33,940,755.65
---------------------------------------------------------------------
4
True-Up: The Restructuring Credit Facilities will contain a
true-up mechanism which shall provide that, if, on
the Revolver Termination Date or on the date (the
"SED Date") of the occurrence of a Significant
Event of Default (to be defined in the
Restructuring Loan Documents), as applicable, (i)
the ratio of (x) the Tranche A Commitments
outstanding on the Revolver Termination Date or on
the SED Date, as applicable, to (y) the aggregate
Commitments outstanding on the Revolver
Termination Date or on the SED Date, as
applicable, is less than (ii) the ratio of the (x)
Tranche A Commitments outstanding on the Effective
Date to (y) the aggregate Commitments outstanding
on the Effective Date (the "True-Up Trigger"),
then, pursuant to the participations required in
the next succeeding paragraph, the Tranche B
Lenders shall be entitled to an additional amount
(in the aggregate, the "True-Up Amount"), which
is equal to (x)(i) the sum of the Commitments
outstanding on the Revolver Termination Date or on
the SED Date, as applicable, multiplied by the
Tranche A Commitments outstanding on the Effective
Date less (ii) the sum of the Commitments
outstanding on the Effective Date multiplied by
the Tranche A Commitments outstanding on the
Revolver Termination Date, or on the SED Date, as
applicable, divided by (y) the sum of the
Commitments outstanding on the Effective Date.
Restated:
If:
A//RT/SED Date Total// * A//Effective Date Total//
---------------------- -------------------------
(A //RT/SED Date (A//Effective Date Total//
Total// + B //RT/SED + B//Effective
Date Total//) Date Total//)
then:
B //Aggregate True Up Amount// =
{(A //RT/SED Date Total// + B//RT/SED Date
Total//) (A //Effective Date Total//) -
(A//Effective Date Total// + B//Effective Date
Total//)(A//RT/SEC Date Total//)} / (A//Effective
Date Total// + B//Effective Date Total//)
In the event a True-Up Trigger exists on the
Revolver Termination Date, or, if earlier, on the
SED Date, then each Tranche A Lender shall
purchase in cash from the Tranche B Lenders,
participations in Tranche B Term Loans in an
amount (the "Participating Share") equal to (x)(i)
the aggregate Commitments outstanding on the
Revolver Termination Date or on the SED Date, as
applicable, multiplied by such Tranche A Lender's
Tranche A Commitments outstanding on the Effective
Date less (ii) the aggregate Commitments
outstanding on the Effective Date multiplied by
such Tranche A Lender's Tranche A Commitments
outstanding on the Revolver Termination Date or on
the SED Date, as applicable, divided by (y) the
sum of the Commitments outstanding on the
Effective Date. Restated:
B //participation amount for each Tranche A
Lender// =
{(A //RT/SEC Date Total// + B//RT/SEC Date
Total//)(A //Tranche A Lender on Effective Date//)
- (A//Effective Date Total// + B//Effective Date
Total//)(A//Tranche A Lender on RT/SEC Date//)}
/(A//Effective Date Total// + B//Effective//
*denotes "less than"
5
//Date Total//)
The Lenders acknowledge and agree that the
aggregate of the Participating Shares shall equal
the True-Up Amount. It is not intended that this
True-Up Mechanism create any additional cost,
liability or exposure to any Loan Party.
CERTAIN PAYMENT PROVISIONS
Expenses, Fees and As set forth on Annex I to this Schedule B.
Interest Rates:
Optional Prepayments Loans may be prepaid and commitments may be
and Commitment Reductions: reduced by the Borrower in whole or in part at par
plus accrued interest and LIBOR breakage costs, if
any, at any time at the Borrower's option. If
prior to June 30, 2005, the Borrower elects to
create a permanent reduction of commitments, each
such reduction of commitments shall be made
ratably among the Lenders in accordance with their
respective commitments. If prior to June 30, 2005,
the Borrower elects to make optional prepayments
under the Tranche A Revolving Facility that do not
constitute permanent reductions of commitment
thereunder, then the Borrower may elect to prepay
the Tranche A Revolving Loans only. After June 30,
2005, Term Loans are prepayable in whole or in
part at par, plus accrued interest and LIBOR
breakage costs, if any, at any time at the
Borrower's option, on a pro rata basis. Any
prepayment of Tranche A Term Loans and Tranche B
Term Loans shall be applied to the installments
thereof in inverse order of maturity and may not
be reborrowed.
Mandatory Prepayments and The following amounts shall be applied to prepay
Commitment Reductions: the Loans:
(i) 100 % of the Net Cash Proceeds of any sale or
other disposition (including as a result of
casualty or condemnation; provided, however, that,
in the case of casualty, reinvestment of up to
$1,000,000 per fiscal year pursuant to a
reinvestment notice shall be permitted subject to
certain conditions) by Reorganized DDi, the
Borrower, any of its subsidiaries (other than DDi
Europe and its European subsidiaries) or any of
the other Loan Parties of any assets (except for
the sale of inventory in the ordinary course of
business and certain other dispositions to be
agreed on consistent with the Pre-Restructuring
Loan Documents); provided, however, that 100% of
the Net Cash Proceeds of the first $1.25 million
in the aggregate amount of Net Cash Proceeds from
the sales of assets, which shall include, but are
not limited to, any sale of real or personal
property located at the facilities in Garland,
Texas and Sterling, Virginia, shall be applied to
prepay Tranche A Revolving Loans only to create
availability under the Tranche A Revolving
Facility.
(ii) Excess Cash (to be defined in the
Restructuring Loan Documents in a manner mutually
satisfactory to the Administrative Agent, the
Required Lenders and the Debtors) on the balance
sheet in excess of $15 million for
6
each fiscal year of the Borrower (commencing with
the 2004 fiscal year) to be applied as follows:
(1) on July 15, 2005, 100% of Excess Cash for the
2004 fiscal year (measured as of December 31,
2004) shall be applied to or prepay Tranche A Term
Loans and Tranche B Loans, on a pro rata basis and
(2) after July 15, 2005, for each fiscal year,
commencing with the 2005 fiscal year, 100% of
Excess Cash (measured as of December 31 for each
fiscal year) shall be applied on March 31 of the
subsequent fiscal year to prepay Tranche A Term
Loans and Tranche B Term Loans on a pro rata basis
(it being understood that Borrower may, at its
option, use any of its cash to prepay in whole or
in part the Tranche A Term Loans on or prior to
July 15, 2005 without making a pro rata payment on
the Tranche B Term Loans, thereby creating
availability under the Tranche A Revolving
Facility).
(iii) 100% of the Net Cash Proceeds of any sale or
issuance of equity (excluding the first $3 million
in the aggregate of Net Cash Proceeds of issuances
of equity of Reorganized DDi which any Loan Party
may use for general corporate purposes) and 100%
of the Net Cash Proceeds of any incurrence of
indebtedness after the Effective Date by
Reorganized DDi, the Borrower or any of their
subsidiaries (excluding DDi Europe and its
European subsidiaries) or any of the other Loan
Parties (subject to customary exceptions,
including purchase money debt and equipment
financing debt).
Except as set forth in clauses (i) and (ii) above,
each such prepayment of the Term Loans shall be
applied to the Tranche A Term Loans and the
Tranche B Term Loans ratably and to the
installments thereof in inverse order of maturity
and may not be reborrowed.
LENDER Warrants, representing 10.0% of the common stock
WARRANTS (the "Common Stock") of Reorganized DDi on a fully
diluted basis on the Effective Date (the "Lender
Warrants"), will be issued to the Lenders ratably
in accordance with their respective commitments
(as of the Effective Date) and held in an escrow
account, on terms reasonably acceptable to the
Required Lenders. The calculation of "Common Stock
of Reorganized DDi on a fully diluted basis on the
Effective Date" shall give effect to the exercise
of such Lender Warrants, all other outstanding
warrants and the exercise, conversion or exchange,
as applicable, of all other outstanding securities
of Reorganized DDi, including but not limited to
issuances to old equity, the Subordinated
Noteholders, the Senior Discount Noteholders (if
any), all share grants and Tranche A option grants
to management made on the Effective Date pursuant
to the Management Equity Incentive Plan (it being
understood and agreed that anti-dilution
adjustments shall thereafter be made in respect of
any shares or options granted after the Effective
Date pursuant to Tranche A and Tranche B of the
Management Equity Incentive Plan). (See
Anti-Dilution Adjustments below).
The Lender Warrants will have an exercise price
initially equal to $.01 per share and shall be
subject to customary anti-dilution adjustments.
Each Lender Warrant will be exercisable for the
period commencing on the first business day after
the twenty-four (24) month anniversary (the
"Second Anniversary Date") of the Effective Date
through and including July 31, 2008. The Lender
Warrants and the underlying shares of common stock
will
7
have registration rights, pursuant to a
registration rights agreement, customary for
transactions of this type and as set forth below
(as described below, the "Registration Rights
Agreement").
The number of Lender Warrants that may be
exercised shall be determined based on the
aggregate amount of the commitments under the
Restructuring Credit Facilities outstanding on the
Second Anniversary Date as follows:
(i) If on the Second Anniversary Date, the
commitments (and accrued and unpaid interest with
respect thereto) have been permanently reduced and
terminated (and are not subject to reborrowing) by
at least fifty percent (50%) of the aggregate
amount of such commitments outstanding on the
Effective Date, then:
(a) Lender Warrants issued to and held in
escrow for the Lenders representing 50% of
the original issuance of Lender Warrants
(after giving effect to anti-dilution
adjustments) shall be returned to Reorganized
DDi for cancellation and all remaining Lender
Warrants shall be released from the escrow
account and delivered to the Lenders;
(b) all Success Fees (as defined below)
accrued and unpaid as of the Second
Anniversary Date shall be immediately due and
payable in cash; and
(c) the Success Fees shall be converted to a
cash pay interest obligation.
(ii) If on the Second Anniversary Date, all
outstanding loans and other extensions of credit
under the commitments, plus all accrued and unpaid
interest and accrued and unpaid Success Fees, have
been repaid in full (and are not subject to
reborrowing), and such commitments have been
terminated, then all Lender Warrants issued to and
held in escrow for the Lenders shall be returned
to DDi for cancellation.
(iii) If on the Second Anniversary Date, more than
50% of the commitments outstanding on the
Effective Date remains outstanding, all Lender
Warrants shall be released from the escrow account
and delivered to the Lenders on such date.
Net Exercise: The Lender Warrants shall be exercisable on a net
basis, permitting the surrender of Lender Warrants
with no cash exercise price and the receipt of the
number of shares of Common Stock equal to that
otherwise deliverable upon exercise less the
number of shares of Common Stock having a current
market price at the time equal to the aggregate
exercise price that would otherwise have been
paid.
Anti-Dilution Adjustments: Adjustments to exercise price and shares
deliverable upon exercise applicable to all
issuances and potentially dilutive events,
including without limitation:
8
(1) stock dividends and distributions,
subdivisions, combinations and reclassifications;
(2) cash dividends and other distributions (if
same distributions are not made to holders of
Lender Warrants);
(3) issuances of additional shares of Common
Stock, or any securities convertible into or
exchangeable for Common Stock, if issued or sold
for less than Fair Market Value (as defined in
Schedule F below) at time of issuance; provided,
that, no antidilution adjustment will be made in
respect of an issuance or series of issuances of
additional shares of Common Stock or any
securities convertible into or exchangeable for
Common Stock withan aggregate value of up to $3
million (based upon an implied total enterprise
value of $110 million); and provided, further
that, should the Required Lenders not approve any
determination of Fair Market Value, any dispute
with regard to such valuation determination shall
be resolved by a neutral valuation firm of
national standing approved by the Required
Lenders;
(4) Common Stock issued upon the exercise of
Tranche B Options under the Management Equity
Incentive Plan.
(5) distributions of any rights to acquire shares
of Common Stock;
(6) tender offers or exchange offers by DDi or any
subsidiary or affiliate (excluding DDi Europe and
its European subsidiaries); and
(7) any other distributions, offers and similar
dilutive events.
Subject to the provisions in the "Release Upon
Change of Control", in the case of a merger or
consolidation in which Common Stock is changed or
exchanged, all Lender Warrants become exercisable
for consideration that a holder of Common Stock
would have received had such holder exercised
immediately prior to the consummation of the
transactions.
Representations and Standard (for issuers and purchasers)
Warranties:
Transfer of Lender Lender Warrants to be transferable in compliance
Warrants: with applicable securities laws, subject to the
transfer and escrow restrictions specified herein.
Registration Rights In addition to any registration rights that the
Agreement: Subordinated Noteholders have as set forth in
Schedule C hereto, which rights shall also be
afforded to the Lenders in a Registration Rights
Agreement, the holders of Lender Warrants and the
Common Stock underlying the Lender Warrants shall
receive, pursuant to such Registration Rights
Agreement, indemnification from Reorganized DDi,
one demand registration, unlimited as to the
amount of shares to be registered, at any time
within the eighteen (18) month period following
the term of the escrow and an unlimited number of
exercises of piggyback rights prior to July 31,
2008. Any registration statement for the Common
Stock pursuant to the Registration Rights
Agreement shall be in the form of a shelf
registration and shall be made available
commencing no later
9
than the Second Anniversary Date and shall remain
available until the earlier of (x) July 31, 2008
and (y) the date on which all Lender Warrants have
been exercised.
Transferability: Prior to the release of the Lender Warrants from
escrow, no Lender shall have the right to sell,
transfer or assign the right to receive Lender
Warrants other than in connection with an
assignment of its loans. After the release of the
Lender Warrants from escrow, each Lender shall
have the absolute right, subject to applicable
laws, to sell, transfer or assign the Lender
Warrants independent of any assignment of its
loans. Reorganized DDi's transfer agent shall be
responsible for keeping a record of all issuances
of Lender Warrants to the Lenders.
Release Upon Change If the outstanding Indebtedness (including accrued
of Control: and unpaid interest and accrued and unpaid Success
Fees with respect thereto) of the Lenders has not
been repaid in full and the commitments have not
been terminated and a Change of Control (as
defined in Schedule F) event occurs and the
transaction is a cash-for-stock transaction, all
Lender Warrants shall be released from the escrow
account, delivered to the Lenders and be deemed
immediately exercisable.
If a Change of Control event occurs and the
transaction is a stock-for-stock transaction, the
Lender Warrants shall be released from the escrow
account and shall be replaced by or converted into
Lender Warrants with substantially similar terms
for the common stock of the merged enterprise.
If a Change of Control event occurs and the
transaction is a combination of stock and cash
transaction, then, on a pro rata basis (based on
amount stock and cash portions of consideration),
Lender Warrants shall (1) with respect to the cash
portion of the transaction, be released from the
escrow account, delivered to the Lenders and be
deemed immediately exercisable; and (2) with
respect to the stock portion of the transaction,
be released from the escrow account and be
replaced by or converted into Lender Warrants with
substantially similar terms for the common stock
of the merged enterprise.
ADDITIONAL COLLATERAL
Additional Guaranties In addition to all existing collateral and
and Pledges: guarantees of the Lenders, the obligations of each
Borrower in respect of the Restructuring Credit
Facilities shall be further secured by:
1) a guarantee from DDi and DDi Intermediate; and
2) a pledge of 100% of the common stock of DDi
Intermediate, 100% of the common stock of DDi
Capital and 100% of the common stock of each of
Reorganized DDi's direct and indirect subsidiaries
(other than DDi Europe and its European
subsidiaries) not previously pledged to the
Lenders.
Treatment of Additional The guarantees and pledges provided to the Lenders
will not be structurally senior or pari passu with
respect to the direct claims against DDi Europe of
10
Guarantees and Pledges: the Subordinated Noteholders under the New
Preferred Stock (as defined in Schedule D below).
CERTAIN CONDITIONS
Initial Conditions: In addition to the conditions set forth in the
Summary of Terms and Conditions, the availability
of the Restructuring Credit Facilities shall be
conditioned upon satisfaction of, among other
things, the following:
(i) subject to the RSA, each Loan Party (or
the Administrative Agent on its behalf)
shall have executed and delivered the
Restructuring Loan Documents which shall
be in form and substance satisfactory to
the Administrative Agent and the Required
Lenders;
(ii) the Lenders, the Administrative Agent and
their respective professionals shall have
received all fees required to be paid and
all expenses for which invoices have been
presented on or before the Effective Date;
(iii) all governmental and third party
approvals necessary or, in the reasonable
discretion of the Administrative Agent,
advisable in connection with the
Restructuring contemplated hereby and the
continuing operations of the Loan Parties
and their respective affiliates and
subsidiaries (excluding DDi Europe and its
European subsidiaries) shall have been
obtained and be in full force and effect,
and all applicable waiting periods shall
have expired without any action being
taken or threatened by any competent
authority that would restrain, prevent or
otherwise impose adverse conditions on the
Restructuring; and
FURTHER CONDITIONS Other customary conditions as provided in the
Restructuring Loan Documents.
Terminated Hedge Agreement: Amounts owing to JPMorgan Chase Bank under the
Hedge Agreement by and between JPMorgan Chase Bank
and Details, terminated as of April 25, 2003 (the
"Terminated Hedge Agreement") shall be included as
Indebtedness.
Budget and Funding Debtors and Lenders shall enter into an agreement
Mechanism For Chapter 11 in form and substance satisfactory to the
Cases: Administrative Agent, the Ad Hoc Committee and the
Required Lenders for the funding of the Chapter 11
Cases (the "Budget and Funding Mechanism").
Reserved Cash Account On or before August 1, 2003, the Borrower shall
cause to be established a cash account (the
"Reserved Cash Account") at JPMorgan Chase Bank
and shall fund the Reserved Cash Account with an
initial deposit of $7,500,000,
11
which account shall be subject to a control
agreement (the "Reserved Cash Account Control
Agreement"); provided, that, at all times the
balance in the Reserved Cash Account shall be at
least $7,500,000; provided, further, that, the
Required Lenders may issue a Notice of Sole
Control (to be defined in the Reserved Cash
Account Control Agreement) at any time in their
sole and absolute discretion, but shall not be
permitted to seize, set-off or otherwise direct
the use of the funds in the Reserved Cash Account
until after a Termination Event (as defined in the
RSA) occurs under the RSA or, on or after the
Effective Date, a default or Event of Default (as
defined in the Restructuring Loan Documents)
occurs under the Restructuring Loan Documents;
provided, however, that until such time as a
Notice of Sole Control has been issued by the
Administrative Agent, any and all interest that
accrues on such initial deposit shall be available
to the Borrower.
OTHER TERMS AND CONDITIONS Substantially similar to those set forth in the
Credit Agreement
CERTAIN DOCUMENTATION The Restructuring Loan Documents shall contain
MATTERS representations, warranties, covenants and events
of default (including all of those contained in
the Credit Agreement except to the extent modified
herein) applicable to the reorganized Debtors, the
Loan Parties and all of their respective
subsidiaries (excluding DDi Europe and its
European subsidiaries), including, without
limitation, those described below and others to be
mutually agreed upon (subject, in each case, to
exceptions and baskets to be mutually agreed
upon), all of which shall be in form and substance
satisfactory to the Required Lenders.
Representations and The Restructuring Loan Documents will include
Warranties: representations and warranties customary for a
credit facility of this nature (including all of
those contained in the Credit Agreement except to
the extent modified herein) and including, without
limitation, representations and warranties as to
financial statements (including pro forma
financial statements); absence of undisclosed
liabilities; no material adverse change; corporate
existence; compliance with law; corporate power
and authority; enforceability of Restructuring
Loan Documents; no conflict with law or
contractual obligations; no material litigation;
no default; location and ownership of material
assets (including property); liens; intellectual
property; no burdensome restrictions; taxes;
Federal Reserve regulations; ERISA; Investment
Company Act; subsidiaries; current subsidiary
organization and structure; environmental matters;
solvency; labor matters; accuracy of disclosure;
status of subsidiary guarantors and creation and
perfection of security interests.
Affirmative Covenants: The Restructuring Loan Documents will include,
without limitation, the following affirmative
covenants: delivery of financial statements,
reports, financial models, accountants' letters,
projections, officers' certificates and other
information and reports reasonably requested by
the Administrative Agent or the Lenders; payment
of other obligations; continuation of business and
maintenance of existence and material rights and
privileges; compliance with laws and material
contractual obligations; maintenance of property
and insurance; maintenance of books and records;
maintenance of independent
12
corporate identity; right of the Lenders to
inspect property and books and records; notices of
defaults, litigation and other material events;
compliance with environmental laws; further
assurances (including, without limitation, with
respect to security interests in after-acquired
property, subject to existing constraints which do
not impair the ability to grant security interests
in material collateral and existing permitted
liens, and the inclusion of any new affiliates as
guarantors and grantors under the collateral
documents); and others to be mutually agreed upon.
Financial Covenants: The Restructuring Loan Documents will include,
without limitation, the following financial
covenants, which are set forth more fully on Annex
II to this Schedule B:
(a) minimum EBITDA,
(b) three-month minimum rolling revenue test,
(c) minimum liquidity test, which shall
provide, inter alia, that, until the
termination of all commitments and Letters
of Credit and thereafter until payment in
full of the Indebtedness of the Borrower
under any of the Restructuring Loan
Documents, each Borrower agrees that,
unless the Required Lenders shall
otherwise consent in writing, it shall
not, have less than $7,500,000 in the
aggregate at all times in the Reserved
Cash Account commencing on August 1, 2003
up to, and including, April 15, 2008 (the
"Liquidity Financial Covenant").
Commencing on the Wednesday following
August 1, 2003 and on every Wednesday
thereafter up to, and including April 9,
2008, the Borrower shall prepare and
deliver to the Administrative Agent (which
may be further transmitted to the then
advisors and other Lenders), for the week
ending as of the preceding Friday, a
report of the daily Minimum Liquidity for
that week.
(d) maximum leverage ratio,
(e) minimum fixed charge coverage ratio, and
(f) others to be discussed in connection with
preparation of Restructuring Loan
Documents.
The Restructuring Loan Documents will also include
a covenant providing that capital expenditures may
not exceed during any quarter an amount to be
agreed upon with an ability to carry forward any
amount that is not used for capital expenditures
in any given quarter to the next two succeeding
quarters.
Negative Covenants: The Restructuring Loan Documents will include,
without limitation, the following negative
covenants: limitations on indebtedness (including
guarantee obligations), liens, mergers,
consolidations, liquidations and dissolutions,
sales and transfers of assets, leases, dividends
and other restricted payments, capital
expenditures, investments, loans and advances,
payments and modifications of subordinated and
other debt instruments, transactions with
affiliates, sale and leasebacks, accounting
changes, negative
13
pledge clauses and clauses restricting subsidiary
distributions, interest rate swaps, currency
swaps, and other debt equivalents, changes in
lines of business, and others to be mutually
agreed upon.
Events of Default: Nonpayment of principal when due; nonpayment of
interest, fees or other amounts after a grace
period to be agreed upon; material inaccuracy of
representations and warranties; violation of
covenants (subject, in the case of certain
affirmative covenants, to a grace period to be
agreed upon; provided, that, the Liquidity
Financial Covenant shall be subject to a fifteen
(15) day grace period); cross-default; bankruptcy
events; certain ERISA events; material judgments;
actual or asserted invalidity of any guarantee or
security document or security interest; a change
of control (the definition of which is to be
agreed); breach of any term or condition of the
Non-Solicitation Agreement (as defined below); and
others to be mutually agreed upon.
Non-Solicitation On or before the Effective Date of the Chapter 11
Agreement: Plan, Xxxxx XxXxxxxx shall execute a
non-solicitation agreement in form and substance
acceptable to the Required Lenders (the
"Non-Solicitation Agreement").
Canadian Tax Restructuring: Restructuring Loan Documents will permit for tax
restructuring of Dynamic Details Canada, Inc.
("DDIC") in form and substance acceptable to the
Required Lenders
Indemnification: The Debtors and the reorganized Debtors shall
indemnify, pay and hold harmless the
Administrative Agent and the Lenders and each of
their respective predecessors, affiliates,
subsidiaries, successors and assigns, together
with their past, present and future officers,
directors, agents, attorneys, financial advisors,
representatives, partners, joint venturers,
affiliates and the successors and assigns of any
and all of them against any loss, claim, damage,
liability, cost or expense incurred in respect of
the restructuring of the Pre-Restructuring
Indebtedness contemplated hereby, the financing
contemplated hereby or the use or the proposed use
of proceeds thereof by the reorganized Debtors and
their subsidiaries (subject to customary
limitations), 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 indemnified party; provided,
however, that the indemnification obligations with
respect to the Lender Warrants shall be as
provided in the Registration Rights Agreement.
Governing Law and Forum: This Summary of Terms and Conditions and the
Restructuring Loans Documents shall be governed
by, and construed in accordance with, the laws of
the State of New York.
Counsel to the Xxxxxxx Xxxxxxx & Xxxxxxxx LLP.
Administrative Agent:
Documentation: To be drafted by Xxxxxxx Xxxxxxx & Xxxxxxxx LLP.
Annex I to Schedule B
Interest; Certain Fees; and Expenses
Interest Rate Options: The Borrower may elect that the Loans comprising
each borrowing bear interest at a rate per annum
equal to:
(a) the ABR plus the Applicable Margin; or
(b) the Eurodollar Rate plus the Applicable
Margin.
As used herein:
"ABR" means the highest of (i) the rate of
interest publicly announced by JPMorgan Chase Bank
as its prime rate in effect at its principal
office in New York City (the "Prime Rate"), (ii)
the secondary market rate for three-month
certificates of deposit (adjusted for statutory
reserve requirements) plus 1% and (iii) the
federal funds effective rate from time to time
plus 0.5%.
"Applicable Margin" means:
(a) with respect to the Tranche A Revolving Loans
and the Tranche A Term Loans, (i) 350 bps, in the
case of ABR Loans (as defined below) and (ii) 450
bps component in the case of Eurodollar Loans (as
defined below), plus, in each case, a 462.5 bps
success fee which shall accrue on a quarterly
basis and be payable in cash (x) on and after the
date that the Borrower achieves EBITDA of $50
million and (y) at the election of each Lender
(which election shall be made on or prior to the
execution of the Restructuring Loan Documents) (i)
on the Maturity Date or (ii) on the Maturity Date,
if and to the extent that on such date the fair
market value of the Borrowers and their
subsidiaries, which shall be determined by an
independent valuation firm approved by the
Administrative Agent, is greater than the
outstanding amount of Obligations (other than the
Success Fee) due under the Restructuring Loan
Documents (the "Success Fee").
(b) with respect to the Tranche B Term Loans, (i)
350 bps in the case of ABR Loans and (ii) 450 bps
in the case of Eurodollar Loans, plus, in each
case, a 462.5 Success Fee.
"Eurodollar Rate" means the rate (adjusted for
statutory reserve requirements for eurocurrency
liabilities) for eurodollar deposits for a period
equal to one, two, three or six months (as
selected by the Borrower) appearing on Page 3750
of the Telerate screen.
2
Interest Payment Dates: In the case of Loans bearing interest based upon
the ABR ("ABR Loans"), monthly in arrears through
the first full quarter after the Effective Date
and then quarterly in arrears thereafter.
In the case of Loans bearing interest based upon
the Eurodollar Rate ("Eurodollar Loans"), on the
last day of each relevant interest period and, in
the case of any interest period longer than three
months, on each successive date three months after
the first day of such interest period.
Commitment Fees: The Borrower shall pay a commitment fee calculated
at the rate of 75 bps per annum on the average
daily unused portion of the Tranche A Revolving
Facility, payable quarterly in arrears.
Letter of Credit Fees: The Borrower shall pay a fee on all outstanding
Letters of Credit at a per annum rate equal to the
Applicable Margin then in effect with respect to
Eurodollar Loans that are Revolving Loans on the
face amount of each such Letter of Credit. Such
fee shall be shared ratably among the Lenders
participating in the Revolving Facility and shall
be payable quarterly in arrears.
A fronting fee equal to 25 bps per annum on the
face amount of each Letter of Credit shall be
payable quarterly in arrears to the Issuing Lender
for its own account. In addition, customary
administrative, issuance, amendment, payment and
negotiation charges shall be payable to the
Issuing Lender for its own account.
Lenders' Consent Fee On or before the effective date of the RSA, the
Debtors shall pay a consent fee of 137.5 bps to
the Lenders.
Work Fee: The Debtors shall pay a work fee to the
Administrative Agent (the "Work Fee") pursuant to
a Work Fee Letter on the Effective Date. The Work
Fee shall be payable as follows: (i) fifty percent
(50%) payable on the effective date of the RSA;
and (ii) fifty percent (50%) payable on the date
that is six (6) months following the Effective
Date of the Chapter 11 Plan.
Default Rate: At any time when the Borrower is in default in the
payment of any amount of principal due under the
Restructuring Credit Facilities, all outstanding
Loans shall bear interest at 2% above the rate
otherwise applicable thereto. Overdue interest,
fees and other amounts shall bear interest at 2%
above the rate applicable to the relevant ABR
Loans.
Rate and Fee Basis: All per annum rates shall be calculated on the
basis of a year of 360 days (or 365/366 days, in
the case of ABR Loans the interest
3
rate payable on which is then based on the Prime
Rate) for actual days elapsed.
Interest, Fees and Expenses During the Chapter 11 Cases, the Debtors shall (i)
During Chapter 11 Cases: continue to pay post-petition interest on the
Pre-Restructuring Loans and all other fees
(including but not limited to the annual
administrative agency fee payable to the
Administrative Agent) provided for under the
Credit Agreement, and (ii) continue to pay any and
all reasonable fees, costs and expenses of Xxxxxxx
Xxxxxxx & Xxxxxxxx, counsel to the Administrative
Agent and FTI Consulting, financial advisors to
the Administrative Agent.
Expenses: On and for all periods after the Effective Date,
the Borrower shall: (a) pay all reasonable
out-of-pocket expenses of the Administrative Agent
associated with the Restructuring Credit
Facilities and the preparation, execution,
delivery and administration of the Restructuring
Loan Documents and any amendment or waiver with
respect thereto (including the reasonable fees,
disbursements and other charges of counsel,
in-house counsel and financial advisors, including
in connection with consultation during ongoing
administration), (b) pay all out-of-pocket
expenses of the Administrative Agent and the
Lenders (including the fees, disbursements and
other charges of counsel, in-house counsel and
financial advisors) in connection with the
enforcement of, and preservation of rights under,
the Restructuring Loan Documents, (c) pay the
annual administrative agency fee payable to the
Administrative Agent, and (d) replenish and
maintain the retainers provided to Xxxxxxx Xxxxxxx
& Xxxxxxxx and FTI Consulting in connection with
the Loan Documents, in the amounts of $125,000
(the "STB Retainer") and $75,000 (the "FTI
Retainer"), respectively.
Annex II Schedule B
-------------------
Principal Financial Covenants
-----------------------------
FOR SETTLEMENT PURPOSES ONLY
PURSUANT TO FRE 408
SCHEDULE C
Term Sheet for the Common Equity
REORGANIZED DDi (FOR COMMON EQUITY)
Structure: No change to existing structure.
Issuer: Reorganized DDi ("Reorganized DDi")
Common Equity (issued to Subordinated Noteholders to receive 94% of the
Noteholders): Common Stock on the Effective Date
of the Chapter 11 Plan, subject to dilution for
(i) all Common Stock issuable under the
Management Equity Incentive Plan (annexed hereto
as Schedule F) upon the exercise of management
options thereunder and (ii) Common Stock issuable
upon exercise of the Lender Warrants.
Common Equity (issued to Holders of old common stock in DDi to
old equity): receive 1.0% of the Common Stock of
Reorganized DDi on the Effective Date
of the Chapter 11 Plan, subject to
dilution for (i) all Common Stock
issuable under the Management Equity
Incentive Plan upon the exercise of all
management options thereunder and (ii)
Common Stock issuable upon exercise of
the Lender Warrants.
Common Equity (issued to See Schedule B.
Lenders):
Common Equity (issued to See Schedule F.
management):
Common Equity (issued to None. See Schedule E.
Senior Discount
Noteholders):
Board of Directors: Bylaws to provide that board of directors of
Reorganized DDi (the "Board") shall consist of
seven members. Immediately following the
Effective Date of the Chapter 11 Plan, the Board
shall consist of seven directors, comprised as
follows:
. CEO of Reorganized DDi
. CEO of DDi Europe
. Two Subordinated Noteholder designees
(designated by Ad Hoc Committee prior to
distribution of Chapter 11 Plan) which
designees will be included in Chapter 11
Plan as sent to Subordinated Noteholders
for approval
. Three Subordinated Noteholder designees
(selected by Ad Hoc Committee prior to
distribution of Chapter 11 Plan) which
designees will be included in Chapter 11
Plan as sent to Subordinated Noteholders
for approval (designees will be selected
from list to be developed in conjunction
with Reorganized DDi, the Subordinated
Noteholders and their
2
respective advisors)
. Reorganized DDi will use commercially
reasonable efforts to provide to the Ad
Hoc Committee the names of at least 3
directors who meet the "independence"
standards of the Securities and Exchange
Commission and the Nasdaq National
Market (whether or not Reorganized DDi
or any of Reorganized DDi's securities
are subject to such standards), prior to
or immediately following the Effective
Date of the Chapter 11 Plan.
. Directors shall serve one-year terms. No
staggered board terms.
. After the Effective Date of the Plan,
and not less than annually thereafter,
prior to any election by the
stockholders or appointments by the
Board (if there are not remaining at the
time of any such appointment by the
Board, two members of the Board who have
been previously recommended as nominees
by the Preferred Stock Representatives
(as defined below), two holders of
Preferred Stock (who initially will be
Providence Capital, LLC and Tablerock
Fund Management, LLC (the "Preferred
Stock Representatives")), together,
shall make reasonable recommendations in
good faith (the "Designation Right") to
the Board (or more frequently in the
event any such Preferred Stock
Representative transfers any of its
shares of Preferred Stock along with its
Designation Right to an unaffiliated
third party) with respect to two
nominees, who shall be qualified and
otherwise appropriate candidates for the
Board in the event of an election by the
stockholders and a number of nominees
necessary to result in there being two
acting members of the Board who have
been recommended by such Preferred Stock
Representatives in the event of an
appointment by the Board. Such
recommendation may be made by delivering
notice thereof to the Company within
sixty (60) days after the written
request by the Board of names for
consideration (or more frequently in the
event such holder of Preferred Stock and
any transferee thereof each certify that
such holder of Preferred Stock has
transferred its shares of Preferred
Stock to such transferee). If at any
time while the Preferred Stock remains
outstanding those nominees recommended
by such holders of the Preferred Stock
are not appointed by the Board to the
Board (if the appointments are
determined by the Board) or nominated by
the Board or management of the Company
for election by the Company's
stockholders to the Board, then as a
remedy to the holders of the Preferred
Stock, for breach of the Preferred Stock
Right, the Preferred Stock shall bear a
dividend rate equal to 17% effective
retroactively to the date of issuance
(until such time as two nominees
recommended to the Board pursuant to the
foregoing procedures are appointed or
nominated, whereupon the dividend rate
shall be decreased to 15% commencing on
3
the date of such complying appointments
or nominations.) Notwithstanding the
foregoing, if (x) any member of the
Board who holds Preferred Stock (or who
is a stockholder, director, member,
partner, employee or otherwise an
affiliate of a person or entity who
holds Preferred Stock)(each, a
"Preferred Stock Board Member") votes
against an appointment or nominee to
the Board recommended by such holders
of Preferred Stock (the "Recommended
Board Member") in accordance with the
foregoing provisions, (y) such
Recommended Board Member is not
appointed or nominated to the Board
because one or more Preferred Stock
Board Members votes against such
Recommended Board Member and (z) such
Recommended Board Member would have
been appointed or nominated to the
Board had such Preferred Stock Board
Member voted for such Recommended Board
Member, then there shall be no increase
in the dividend rate pursuant to the
provisions of this section.
Registration Rights: The Subordinated Noteholders will have
registration rights for U.S. public
offerings, the timing of which will be
at the discretion of the Board of
Directors. The Subordinated Noteholders
will have the same registration rights
provided to the Lenders in Schedule B.
FOR SETTLEMENT PURPOSES ONLY
PURSUANT TO FRE 408
SCHEDULE D
Term Sheet for the Preferred Equity
DDi Europe
PREFERRED STOCK TERM SHEET
Issuer of Preferred Stock: DDi Europe
Equity Investment: shares of preferred stock of DDi Europe
---------
(the "Preferred Stock") with a liquidation value
of $ per share (plus accrued and unpaid
-----
dividends thereon), for an aggregate liquidation
preference of $16.5 million. The final governing
documents will reflect a liquidation preference
of British pounds, based on a conversion rate of
the Bank of Scotland ("BOS") in effect on the
fifth business day preceding the Effective Date
of the Chapter 11 Plan.
Dividends: 15% per annum, payable quarterly in arrears.
Dividends will compound quarterly and accumulate
to the extent not paid in cash. DDi Europe shall
pay dividends in cash only (x) if not prohibited
by existing financing arrangements or applicable
law, and (y) if DDi Europe will have at least
(pound)2.0 million in cash, as reflected upon its
balance sheet prepared in accordance with U.K.
GAAP, immediately following such dividend
payment.
Priority: Senior with respect to dividends and redemptions
and upon liquidation to all other classes and
series of DDi Europe's capital stock.
Optional Redemption: None.
Mandatory Redemption: The Preferred Stock shall be redeemed by DDi
Europe upon the later of (i) January 31, 2009 or
(ii) repayment in full of all obligations under
the BOS credit facility, as amended from time to
time (but not as to any extensions of the
maturity date), to the extent permitted by law.
Voting Rights: On the Effective Date, the Board of Directors of
DDi Europe shall consist of seven (7) directors,
four (4) of whom (the "Preferred Stock Appointed
Directors") shall be elected by the holders of
Preferred Stock, voting as a class. The Preferred
Stock shall have no other voting rights except as
otherwise required by applicable law. The initial
term, commencing on the Effective Date, of the
Preferred Stock Appointed Directors shall be two
(2) years. For each subsequent board election
when the Preferred Stock is still outstanding,
the holders of the Preferred Stock will designate
the following number of board seats (which shall
provide for a one (1) year term) based on the
trailing twelve (12) month EBITDA at the time of
the election:
2
--------------------------------------
EBITDA < $15 million 4
--------------------------------------
$15 million < EBITDA < $25 million 3
--------------------------------------
$25 million < EBITDA < $35 million 2
--------------------------------------
EBITDA > $35 million 1
--------------------------------------
Preferred Stock Rights: The Preferred Stock will have certain covenant
rights (all of which shall be further subject to
any limitations in the BOS credit facility)
including: (1) restrictions on payment of
dividends or redemption of any shares (other than
dividends or redemptions of Preferred Stock); (2)
limitations on the incurrence of additional
indebtedness, except indebtedness in the ordinary
course of business (i.e. trade credit) and
purchase money indebtedness (i.e. capital lease
obligations) in the ordinary course of business;
(3) restrictions on DDi Europe's ability to amend
its articles of association or bylaws to the
extent that such amendments directly or
indirectly affect the rights of the Preferred
Stock or its holders, including without
limitation, any amendment which would directly or
indirectly authorize shares or the issuance of
shares or other securities convertible or
exercisable into shares ranking as regards
participation in the profits or the assets of DDi
Europe ahead of or pari passu with the Preferred
Stock; (4) restrictions on any asset disposition,
whether for value or not, without the prior
written consent of a majority of the holders of
the Preferred Stock except for an asset
disposition which is made in the ordinary course
of business and which involves only the sale of
property that is either: (i) inventory held for
sale or (ii) equipment, fixtures, supplies or
materials no longer required in the operation of
the business of reorganized DDi or is obsolete
unless the asset disposition is made solely in
exchange for cash consideration and the net cash
proceeds therefrom are used to pay cash
dividends, in accordance with applicable law, to
the holders of the Preferred Stock.
Remedies: Remedy for certain breaches of the New Preferred
Stock Rights described above (following
reasonable cure period) shall be an increase in
dividend rate to 17% (until remedied or cured, in
which case the rate returns to 15%). Remedy for
others shall be limited only by applicable law.
Remedy for failure to redeem or purchase the
Preferred Stock, whether or not permitted by law,
in the event of a mandatory redemption or change
of control based on the terms set forth below,
shall be that the redemption (or repurchase or
purchase) price, including all accrued and unpaid
dividends, as well as all costs and expenses to
collect the foregoing amounts shall become
subordinated indebtedness of DDi Europe, subject
to applicable law, payable on demand.
Registration Rights: DDi Europe shall file, at DDi Europe's expense, a
United States registration statement, which shall
become effective on or prior to the first
anniversary of issuance. In addition, at any time
DDi Europe files a United States registration
statement relating to equity, the holders of
Preferred Stock shall be permitted the
opportunity, on at least twenty
3
(20) days notice, to participate in such
registration, subject to reasonable pro rata
cutbacks based on advice of the lead underwriter
participating in the subject transaction. DDi
Europe may postpone for one hundred twenty (120)
days the filing or effectiveness of a
registration statement if the board of directors
determines that such registration would
reasonably be expected to have an adverse effect
on any proposal or plan of DDi Europe to engage
in any acquisition of assets (other than in the
ordinary course), merger, consolidation, public
issuance of stock or debt, tender offer or
similar transaction.
Put Rights: . Each holder of the Preferred Stock shall
have the right to require DDi Europe or its
successor in a change of control to purchase
or repurchase all of such holder's
investment in Preferred Stock at a price
equal to 107% (during first year), 104%
(during second year) and 101% (thereafter)
of $16.5 million plus all accrued and unpaid
dividends during a twenty (20) business day
period following notice of the consummation
of a change of control of DDi Europe.
"Change of Control" occurs if (i)
Reorganized DDi fails to control directly
more than 50% of the voting stock of DDi
Europe, (ii) all or substantially all of the
assets of DDi Europe are sold to another
person (other than reorganized DDi and/or
its subsidiaries), or (iii) the merger or
consolidation of DDi Europe with or into
another person (other than Reorganized DDi
and/or its subsidiaries) or the merger of
another person (other than Reorganized DDi
and/or its subsidiaries) with or into DDi
Europe, or if the securities of DDi Europe
that are outstanding immediately prior to
such transaction and which represent 100% of
the aggregate voting power of the voting
stock of DDi Europe are changed into or
exchanged for cash, securities or property,
unless pursuant to such transaction such
securities are changed into or exchanged
for, in addition to any other consideration,
securities of the surviving person or
transferee that represent, immediately after
such transaction, a majority of the
aggregate voting power of the voting stock
of the surviving person or transferee.
FOR SETTLEMENT PURPOSES ONLY
PURSUANT TO FRE 408
SCHEDULE E
Preliminary Discount Notes Term Sheet
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Indebtedness: Approximately $16.5 million the ("SDN Indebtedness")
--------------------------------------------------------------------------------
New Interest Rate: 16% PIK to go cash pay at 14% pursuant to terms
outlined below
--------------------------------------------------------------------------------
Maturity: 1/1/09
--------------------------------------------------------------------------------
Modification of Payment PIK interest through maturity; cash pay at the
Terms: election of the Issuer (and entities it owns on a
consolidated basis), provided that interest must be
paid in cash from and after the quarter in which the
Issuer achieves LTM leverage equal or less than
2.5X. In addition, in any period prior to the Issuer
(and entities it owns, on a consolidated basis)
achieving LTM leverage equal or less than 2.5X, cash
interest for the current period will be paid to
Senior Discount Noteholders out of excess cash prior
to any repayment of the Bank debt, with excess
amortization payments to the Bank debt paid with any
remaining excess cash. No partial PIK. Issue due and
payable on sale of Company, Issuer or Subsidiary.
Interest accrued/paid quarterly.
--------------------------------------------------------------------------------
Guarantee: Acceptable anti-layering protection.
--------------------------------------------------------------------------------
Warrants: Warrants of the Company will be issued to the
holders of the Senior Discount Noteholders but held
in escrow for 2.5% of the fully-diluted reorganized
equity (the "SDN Warrants"). Nominal strike,
December 2008 expiry, anti-dilution protection
consistent with Lender Warrants (but in no event
shall the SDN Warrants dilute the Lender Warrants),
registration rights consistent with Lender Warrants,
cashless exercise, and other rights level with
Lender Warrants, exercisable commencing on the first
business day after the Second Anniversary Date,
provided, however:
. if the Issuer elects to go to 100% cash pay
permanently and irrevocably on or prior to the
Second Anniversary Date then in such event all of
the SDN Warrants shall be cancelled or
. if the Issuer has satisfied all of the SDN
Indebtedness to the holders of the Senior Discount
Notes on or prior to the Second Anniversary Date,
then in such event all claims to the SDN Warrants
shall be cancelled.
--------------------------------------------------------------------------------
Covenants: Typical HY Covenants with exceptions for dividends
to reorganized DDi to cover corporate expenses
related to being a public company to be capped at an
amount acceptable to Senior Discount Noteholders. In
the event Company is no longer public, Senior
Discount Noteholders to receive annual audited
financial statements for the Company and summary
quarterly unaudited financial statements for the
Company. Senior Discount Noteholders to receive same
financial reporting information as Bank Group (i.e.,
monthly reports, etc).
--------------------------------------------------------------------------------
Treatment of Lenders and Final treatment to be acceptable to Senior Discount
Convertible Noteholders: Noteholders.
--------------------------------------------------------------------------------
Releases: Global Releases and Plan Injunction
--------------------------------------------------------------------------------
Fees: Company and/or Issuer to pay reasonable attorney
fees of Senior Discount Noteholders as well as any
fees to be incurred by indenture trustee of Senior
Discount Notes.
--------------------------------------------------------------------------------
Other Terms & Conditions: Callable at par plus accrued subject to Bank
Covenants; no partial calls permitted.
FOR SETTLEMENT PURPOSES ONLY
PURSUANT TO FRE 408
SCHEDULE F
Term Sheet for Management Equity Term Sheet
REORGANIZED DDi
MANAGEMENT EQUITY TERM SHEET
A. MANAGEMENT EQUITY
Issuer of Management Equity: Reorganized DDi
Percentage of Equity to 5% of the Common Stock on the Effective Date of
Management: the Chapter 11 Plan, plus grants of options (as
set forth below). The equity in the form of the
Common Stock ("Restricted Common Stock") or
options to acquire Common Stock ("Options") to
be issued to management shall be forfeitable
under certain circumstances as described below.
B. MANAGEMENT EQUITY INCENTIVE PLAN
Equity Grant Date: 100% of all Restricted Stock on the Effective
Date of the Chapter 11 Plan may be granted,
subject to Mandatory Forfeiture (as defined
below)
Option Grant Date: Tranche A (Series A1-A4): Tranche A of the
Management Equity Incentive Plan to provide for
options to purchase an aggregate of twelve and
a half percent (12.5%) of the Common Stock of
Reorganized DDi on the Effective Date
(collectively, the "Tranche A Options"). Fifty
percent (50%) of all Tranche A Options shall be
granted on the Effective Date of the Chapter 11
Plan and the remaining fifty percent (50%) of
Tranche A Options shall be granted on the
twelve (12) month anniversary of the Effective
Date of the Chapter 11 Plan, subject to
Mandatory Forfeiture (as defined below).
Tranche B: Tranche B of the Management Equity
Incentive Plan to provide for discretionary
options to purchase an aggregate of four
percent (4%) of the Common Stock of Reorganized
DDi on the Effective Date (the "Tranche B
Options"). The issuance of the Tranche B
Options shall be in the discretion of the
Compensation Committee of the Board of
Directors of Reorganized DDi, or CEO under CEO
Exemption.
Equity Vesting Schedule: 50% of the Restricted Stock will vest
immediately upon grant, 50% of the Restricted
Stock will vest 12 months after the grant.
Option Vesting Schedule: Tranche A (Series A1-A4): 1/3 of the Options
will vest immediately upon grant, 1/3 of the
Options will vest on the 18 month anniversary
of the grant, 1/3 of the Options will vest on
the 36 month anniversary of the grant.
Tranche B: 1/3 of the Options will vest
immediately upon grant, 1/3 of the Options will
vest on the 18 month anniversary of the grant,
1/3 of
2
the Options will vest on the 36 month
anniversary of the grant.
Series A1 Options: 10 year Options to purchase 3-1/3% of the
"Common Stock of Reorganized DDi on a fully
diluted basis on the Effective Date" at a
strike price of an implied total enterprise
value of $110 million.
Series A2 Options: 10 year options to purchase 3-1/3% of the
"Common Stock of Reorganized DDi on a fully
diluted basis on the Effective Date" at the
following strike prices:
(i) First grant date: the Fair Market Value of
the stock on the date of grant.
(ii) Second grant date: the greater of (a) the
Fair Market Value of the Common Stock on the
date of grant and (b) the strike price on the
first grant date.
Series A3 Options: 10 year options to purchase 3-1/3% of the
"Common Stock of Reorganized DDi on a fully
diluted basis on the Effective Date" at the
following strike prices:
(i) First date: 115% of the Fair Market Value
of the Common Stock on the date of grant.
(ii) Second grant date: the greater of (a) the
Fair Market Value of the Common Stock on the
date of grant and (b) the strike price on the
first grant date.
Series A4 Options: Five year Options to purchase 2.5% of the
"Common Stock of Reorganized DDi on a fully
diluted basis on the Effective Date" at nominal
strike price. Options may only be exercised on
and after the Second Anniversary Date as
follows:
. 0%, if the commitments (including accrued
and unpaid interest and accrued and unpaid
PIK interest with respect thereto) of the
Lenders have not been permanently repaid
by at least fifty percent (50%) of the
aggregate amount of such commitments
outstanding on the Effective Date;
. 50%, if the commitments (including accrued
and unpaid interest and accrued and unpaid
PIK interest with respect thereto) of the
Lenders have been permanently repaid by at
least fifty percent (50%) but less than
one hundred percent (100%) of the
aggregate amount of such commitments
outstanding on the Effective Date;
. 100%, if the commitments plus all accrued
and unpaid interest and accrued and unpaid
PIK Interest have been repaid in full to
the Lenders.
Tranche B Options: 10 year options to purchase four percent (4%)
of the Common Stock of Reorganized DDi on the
Effective Date at a strike price equal to the
Fair
3
Market Value of the Common Stock.
Mandatory Forfeiture: All unvested grants of Options and Restricted
Stock will be subject to mandatory forfeiture
by the holder, if the holder's employment is
terminated by Reorganized DDi for Cause, or the
holder voluntarily leaves Reorganized DDi
without Good Reason prior to the 36 month
anniversary of the grant. Any forfeited grants
shall be made available for redistribution at
the discretion of the Compensation Committee of
the reorganized Board of Directors of
Reorganized DDi.
Vesting upon Change of If the Change of Control is a cash-for-stock
Control: transaction, full acceleration of unvested
Options and unvested Restricted Stock.
If the Change of Control is a stock-for-stock
transaction, no acceleration of unvested
Options or unvested Restricted Stock and
unvested Options and unvested Restricted Stock
will be converted into unvested Options and
unvested Restricted Stock of the merged
enterprise.
If the Change of Control is a combination of
stock and cash transaction, then unvested
Options and unvested Restricted Stock will
accelerate pro rata (based on amount stock and
cash portions of consideration) and will be
converted into pro rata number of unvested
Options and unvested Restricted Stock of the
merged enterprise.
If, following a Change of Control, (i) a
holder's employment is terminated by
Reorganized DDi or the successor to Reorganized
DDi for Cause, or the holder voluntarily leaves
the successor to Reorganized DDi without Good
Reason within one year following the effective
date of the Change of Control, then all of such
holder's unvested Options and unvested
Restricted Stock shall be forfeited upon such
termination and/or leave or (ii) a holder's
employment is terminated by Reorganized DDi or
the successor to Reorganized DDi without Cause,
or the holder voluntarily leaves Reorganized
DDi or the successor to Reorganized DDi with
Good Reason within two years following the
effective date of the Change of Control, then
all of such holder's unvested Options and
unvested Restricted Stock shall immediately
vest upon such termination or leave.
Other Terms: . Cashless exercise features.
. Registration Rights: An S-8 registration
statement shall be filed on or subsequent
to the effectiveness of an equity
registration statement filed by
Reorganized DDi for the benefit of the
former Subordinated Noteholders and the
Lenders who are then holders of Common
Stock and/or Lender Warrants after the
Effective Date of the Chapter 11 Plan.
. Management Options and Restricted Stock
shall be entitled to antidilution
protection for stock dividends and stock
splits only.
Definitions (applicable for . "Cause" shall mean a Management Holder's
this (a) indictment or
4
Schedule F only; provided, conviction of any felony (it being
however, that the "Change of understood that if such Management Holder
Control" and "Fair Market is not convicted of a felony within two
Value" definitions shall apply (2) years of indictment (or later if any
to the entire Term Sheet): state or federal agency is actively
prosecuting such felony), such options
shall be reinstated), (b) fraud,
misappropriation, or embezzlement that
would warrant termination from Reorganized
DDi or its subsidiaries based upon the
existing policies of Reorganized DDi and
its subsidiaries then in effect, (c)
failure or refusal, after reasonable
notice, to perform the material duties of
such person's office, (d) drug or alcohol
abuse that would warrant termination from
Reorganized DDi or its subsidiaries based
upon the existing policies of Reorganized
DDi and its subsidiaries then in effect,
(e) any willful misconduct or willful acts
that materially impair the assets of
operations of Reorganized DDi and its
subsidiaries, taken as a whole, (f) acts
of discrimination or sexual harassment
that would warrant termination from
Reorganized DDi or its subsidiaries based
upon the existing policies of Reorganized
DDi and its subsidiaries then in effect,
(g) public statements disparaging
Reorganized DDi that are likely to cause
material damage to Reorganized DDi and its
subsidiaries, taken as a whole.
. "Fair Market Value" shall mean:
(a) if the Common Stock is listed on any
national securities exchange or quoted on
the Nasdaq National Market or Nasdaq Small
Cap Market, weighted average of the
closing sales price of the Common Stock on
such exchange or market on the five (5)
trading days immediately preceding the
date of grant; or
(b) otherwise, the fair market value as
determined by the Board of Directors of
Reorganized DDi, which determination shall
be subject to approval by the Required
Lenders;
provided, further, that should the
Required Lenders not approve the
determination of Fair Market Value, any
dispute with regard to such valuation
determinations shall be resolved by a
neutral valuation firm of national
standing approved by the Required Lenders
. "Good Reason" means termination of
employment by a Management Holder if (x)
(a) such Management Holder's annual base
salary is materially reduced without
Cause(unless there is a reduction in the
base salary of substantially all
comparably positioned employees or unless
such Management Holder consents) or (b)
the requirements of such person's job
materially and adversely are changed
without Cause and without such Management
Holder's consent (including, without
limitation, the relocation of the
Management Holder's place of employment to
a location beyond 75 miles of his or her
then current place of employment) and (y)
such Management Holder terminates his
5
position within 90 days of either (x)(a)
or (x)(b) and states that the purpose for
such termination is the events stated in
(x)(a) or (x)(b).
. "Change of Control" will be considered to
have occurred if:
. any "person" or "group" is or becomes
the beneficial owner, directly or
indirectly, of more than 50% of the
total voting power of the voting
stock of Reorganized DDi (for the
purposes of this clause, such person
shall be deemed to beneficially own
any voting stock of a person held by
any other person (the "parent
entity"), if such person is the
beneficial owner, directly or
indirectly, of more than 50% of the
voting power of the voting stock of
such parent entity) or such person or
group has the power, directly or
indirectly, to elect a majority of
the members of the board of directors
of Reorganized DDi;
. the sale of all or substantially all
the assets of Reorganized DDi to
another person, or, the merger or
consolidation of Reorganized DDi with
or into another person or the merger
of another person with or into
Reorganized DDi, or if the securities
of Reorganized DDi that are
outstanding immediately prior to such
transaction and which represent 100%
of the aggregate voting power of the
voting stock of Reorganized DDi are
changed into or exchanged for cash,
securities, or property, unless
pursuant to such transaction such
securities are changed into or
exchanged for, in addition to any
other consideration, securities of
the surviving person or transferee
that represent, immediately after
such transaction, a majority of the
aggregate voting power of the voting
stock of the surviving person or
transferee; or
. Reorganized DDi is dissolved or
liquidated.
6
SCHEDULE A
--------------------------------------------------------------------------------
% of Tranche A
Employee Title (Series A1-A4) Awards
--------------------------------------------------------------------------------
Xxxxx XxXxxxxx President and CEO 30%
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxx COO 9%
--------------------------------------------------------------------------------
Xxx Xxxxx SVP - Strategic Planning and BD 7%
--------------------------------------------------------------------------------
Xxx Xxxxxx VP - Sales & Marketing 7%
--------------------------------------------------------------------------------
Xxxxx Xxxxx President & CEO - European 7%
Operations
--------------------------------------------------------------------------------
Xxxx Xxxxx VP - North American Assembly Ops 5%
--------------------------------------------------------------------------------
Xxxx Xxxxxx CFO 5%
--------------------------------------------------------------------------------
Xxxxx Xxxxxx CTO 5%
--------------------------------------------------------------------------------
Xxx Xxxxxxxx General Counsel 5%
--------------------------------------------------------------------------------
Xxx Latin VP - Sales 5%
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx CIO 5%
--------------------------------------------------------------------------------
Xxx Xxxxxxxx Managing Director 2%
--------------------------------------------------------------------------------
Xxxx Xxxxxxx VP - Sales & Marketing Europe 2%
--------------------------------------------------------------------------------
Xxxx Xxxxxxxx VP - Operations 2%
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxxx VP - Operations 2%
--------------------------------------------------------------------------------
Xxx Xxxxxxx VP - Operations 2%
--------------------------------------------------------------------------------
EXHIBIT B
[Form of Joinder for Senior Discount Noteholders]
JOINDER
This Joinder to the Senior Discount Noteholder Plan Support Agreement,
dated as of August , 2003, by and among the Company and the Consenting
-----
Senior Discount Noteholders, all signatories thereto (the "Agreement"), is
executed and delivered by [ ] (the "Joining Party") as of
---------------------
[ ], 2003. Each capitalized term used herein but not otherwise defined
----------
shall have the meaning set forth in the Agreement.
1. Agreement to be Bound. The Joining Party hereby agrees to be bound by
all of the terms of the Agreement, attached to this Joinder as Annex I (as the
same may be hereafter amended, restated or otherwise modified from time to
time). The Joining Party shall hereafter be deemed to be a "Consenting Senior
Discount Noteholder" and a "Party" for all purposes under the Agreement.
2. Representations and Warranties. With respect to the Debt set forth below
its name on the signature page hereof and all related claims, rights and causes
of action arising out of or in connection with or otherwise relating to such
Debt, the Joining Party hereby makes the representations and warranties of the
Consenting Senior Discount Noteholders set forth in the Agreement to each other
Party to the Agreement.
3. Notices. All notices and other communications to be delivered to the
Joining Party shall be made to the addresses and facsimile numbers set forth
below.
4. Governing Law. This Joinder shall be governed by and construed in
accordance with the internal laws of the State of New York.
* * * * *
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as
of the date first written above.
[JOINING PARTY]
By:
---------------------------------
Name:
Title:
------------------------------------
Principal Amount of Debt Held
------------------------------------
Debt
------------------------------------
Notice Address:
With a Copy to:
Acknowledged:
By:
----------------------------
Name:
Title:
JOINDER
This Joinder to the Senior Discount Noteholder Plan Support Agreement,
dated as of August 19, 2003, by and among the Company and the Consenting Senior
Discount Noteholders, all signatories thereto (the "Agreement"), is executed and
delivered by AIG Global Investment Corp. (the "Joining Party") as of August 19,
2003. Each capitalized term used herein but not otherwise defined shall have the
meaning set forth in the Agreement.
1. Agreement to be Bound. The Joining Party hereby agrees to be bound by
all of the terms of the Agreement, attached to this Joinder as Annex I (as the
same may be hereafter amended, restated or otherwise modified from time to
time). The Joining Party shall hereafter be deemed to be a "Consenting Senior
Discount Noteholder" and a "Party" for all purposes under the Agreement.
2. Representations and Warranties. With respect to the Debt set forth below
its name on the signature page hereof and all related claims, rights and causes
of action arising out of or in connection with or otherwise relating to such
Debt, the Joining Party hereby makes the representations and warranties of the
Consenting Senior Discount Noteholders set forth in the Agreement to each other
Party to the Agreement.
3. Notices. All notices and other communications to be delivered to the
Joining Party shall be made to the addresses and facsimile numbers set forth
below.
4. Governing Law. This Joinder shall be governed by and construed in
accordance with the internal laws of the State of New York.
* * * * *
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as
of the date first written above.
SUNAMERICA LIFE INSURANCE COMPANY
By: AIG Global Investment Corp., investment adviser
By: /s/ Xxxxxxxxxxx X. Xxxx
---------------------------
Xxxxxxxxxxx X. Xxxx
Vice President
------------------------------------
Principal Amount of Debt Held
------------------------------------
Debt 2,000,000
------------------------------------
Notice Address: SunAmerica Life Insurance Company
C/O AIG Global Investment Corp.,
0000 Xxxxx Xxxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
With a Copy to:
Acknowledged:
By:
--------------------------
Name:
Title:
JOINDER
This Joinder to the Senior Discount Noteholder Plan Support Agreement,
dated as of August 19, 2003, by and among the Company and the Consenting Senior
Discount Noteholders, all signatories thereto (the "Agreement"), is executed and
delivered by X.X. XXXXXX PARTNERS (BHCA), L.P. (the "Joining Party") as of
August 19, 2003. Each capitalized term used herein but not otherwise defined
shall have the meaning set forth in the Agreement.
1. Agreement to be Bound. The Joining Party hereby agrees to be bound by
all of the terms of the Agreement, attached to this Joinder as Annex I (as the
same may be hereafter amended, restated or otherwise modified from time to
time). The Joining Party shall hereafter be deemed to be a "Consenting Senior
Discount Noteholder" and a "Party" for all purposes under the Agreement.
2. Representations and Warranties. With respect to the Debt set forth below
its name on the signature page hereof and all related claims, rights and causes
of action arising out of or in connection with or otherwise relating to such
Debt, the Joining Party hereby makes the representations and warranties of the
Consenting Senior Discount Noteholders set forth in the Agreement to each other
Party to the Agreement.
3. Notices. All notices and other communications to be delivered to the
Joining Party shall be made to the addresses and facsimile numbers set forth
below.
4. Governing Law. This Joinder shall be governed by and construed in
accordance with the internal laws of the State of New York.
* * * * *
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Joining Party has caused this Joinder to be executed as
of the date first written above.
/s/ Xxxxxxx Xxxxxx
-------------------------------------
By: X.X. XXXXXX PARTNERS (BHCA), L.P.
Name: Xxxxxxx Xxxxxx
Title: Partner
-------------------------------------
Principal Amount of Debt Held
-------------------------------------
Debt* $7,000,000
-------------------------------------
*Does not reflect accrued interest
Notice Address: X.X. XXXXXX PARTNERS (BHCA), L.P.
0000 Xxxxxx xx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X'Xxxxx
With a Copy to:
Acknowledged:
By:
----------------------------
Name:
Title:
