Exhibit 10.1

 

LOGO [g90703img001.jpg]    Commitment Letter    WACHOVIA SECURITIES

 

June 27, 2005

 

Lionbridge Technologies, Inc.

1050 Winter Street

Waltham, Massachusetts 02451

 

Attention:  Mr. Steve J. Lifshatz, Senior Vice President and Chief Financial
Officer

 

Ladies and Gentlemen:

 

We understand that Lionbridge Technologies, Inc., a Delaware corporation (the
“Borrower”), proposes to enter into senior credit facilities with certain
financial institutions (the “Lenders”) having substantially the terms set forth
on the summary of terms and conditions attached hereto (the “Term Sheet”) for an
aggregate principal amount of up to $125,000,000, consisting of a revolving
credit facility of up to $25,000,000 and a term loan B facility of up to
$100,000,000 (the “Facilities”). We understand that the proceeds of the
Facilities will be used to (i) to finance, in part, the acquisition (the
“Acquisition”) by the Borrower of all of the capital stock of the Bowne Global
Solutions division of Bowne & Co., Inc., a Delaware corporation (the “Acquired
Company”), (ii) to refinance certain existing debt of the Borrower, (iii) to pay
fees and expenses in connection with the Facilities and the Acquisition, and
(iv) for general corporate purposes, including providing for working capital,
capital expenditures and permitted acquisitions.

 

Based upon and subject to the foregoing and to the terms and conditions set
forth below and in the Term Sheet, Wachovia Bank, National Association
(“Wachovia”) is pleased to confirm its commitment (the “Commitment”) to provide
the entire amount of the Facilities to the Borrower. Wachovia through its
affiliate, Wachovia Capital Markets, LLC (“WCM” or the “Arranger”), is also
pleased to advise you of its willingness to serve as sole lead arranger, book
runner and manager for the Facilities. Wachovia’s obligation to provide the
Facilities pursuant to the Commitment is subject to the following: (i) the
Borrower’s written acceptance of a letter from Wachovia to the Borrower of even
date herewith (the “Fee Letter”) pursuant to which the Borrower agrees to pay,
or cause to be paid, to Wachovia certain fees in connection with the Facilities
as more particularly set forth therein, (ii) completion of a definitive credit
agreement and related documentation for the Facilities in form and substance
satisfactory to Wachovia, (iii) compliance with all applicable laws and
regulations (including compliance of this letter agreement (this “Commitment
Letter”) and the transactions described herein with all applicable

 

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June 27, 2005

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federal banking laws, rules and regulations), (iv) the determination of Wachovia
and WCM that, prior to and during the primary syndication of the Facilities,
there shall have been no competing issuance of debt, debt or equity securities
(other than the issuance by the Borrower of seller notes in an aggregate
principal amount up to $20,000,000 and capital stock to Bowne & Co., Inc. as
consideration for the Acquisition on terms and conditions satisfactory to
Wachovia and WCM) or commercial bank facilities of the Borrower or any of its
subsidiaries being offered, placed or arranged, without the prior written
consent of Wachovia and WCM and (v) the satisfaction of all other conditions
described (a) in this Commitment Letter, (b) in the documentation relating to
the Acquisition (the “Acquisition Documents”), except to the extent waived by
the Borrower or the Acquired Company, (c) in the Term Sheet and (d) in such
definitive credit documentation. Further, Wachovia’s Commitment is subject to
there not having occurred any event that has, or could be reasonably expected to
have, a material adverse effect on the business, properties, operations or
condition (financial or otherwise) of the Borrower and its subsidiaries taken as
a whole or the Acquired Company and its subsidiaries taken as a whole.

 

It is agreed that Wachovia will act as the Administrative Agent (the
“Administrative Agent”) for the Lenders under the Facilities. Wachovia, through
its affiliate WCM, will also serve as sole lead arranger, book runner and
manager of the syndication effort. In connection with such syndication effort,
Wachovia will manage in consultation with the Borrower all aspects of the
syndication, including, without limitation, making decisions as to the selection
and number of institutions to be approached and when such institutions will be
approached, when commitments will be accepted, which institutions will
participate, the allocations of commitments among syndicate Lenders and the
amount and distribution of fees payable to syndicate Lenders; provided, however,
it is acknowledged and agreed that Wachovia’s Commitment is not conditioned upon
the completion of such syndication or the achievement of a particular debt
rating so long as a rating shall have been obtained.

 

Wachovia reserves the right, after consultation with the Borrower, prior to or
after the execution of definitive documentation with respect to the Facilities,
and as part of any syndication thereof or otherwise, to arrange for the
assignment of a portion of the Commitment to one or more financial institutions
that will become Lenders and be party to such definitive documentation. In
addition, in connection with any such syndication, the Borrower acknowledges
that Wachovia may allocate a portion of the fees payable under the Fee Letter to
such other Lenders. It is agreed, however, that no Lender will receive
compensation from or on behalf of the Borrower outside the terms contained
herein and in the Fee Letter in order to provide its commitment to participate
in the Facilities.

 

The Borrower understands that Wachovia intends to commence the syndication
efforts immediately and intends to complete the syndication prior to the closing
date of the Facilities (the “Closing Date”). The Borrower agrees to actively
assist Wachovia in completing a timely and orderly syndication mutually
satisfactory to Wachovia and the Borrower. Such assistance shall include, but
not be limited to, (a) direct contact during the syndication between senior
management, representatives and advisors of the Borrower, on the one hand, and
the proposed Lenders, on the other hand, (b) assistance, in the preparation of
Confidential Information

 

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June 27, 2005

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Memoranda for the Facilities and other marketing materials to be used in
connection with the syndication, (c) the hosting, with Wachovia and WCM, of one
or more meetings of prospective Lenders, and (d) obtaining, at the Borrower’s
expense, monitored ratings for the term loan facility from Moody’s Investors
Service (“Moody’s”) and Standard & Poor’s Ratings Group (“S&P”) and
participating actively in the process of securing such ratings, including having
senior management of the Borrower meet with such rating agencies. Wachovia
reserves the right to engage the services of WCM and other of its affiliates in
furnishing the services to be performed by Wachovia as contemplated herein and
to allocate (in whole or in part) to any such affiliates any fees payable to it
in such manner as it and its affiliates may agree in their sole discretion. The
Borrower agrees that Wachovia may share with any of its affiliates and advisors
any information related to the Facilities or any other matter contemplated
hereby, on a confidential basis.

 

The Borrower hereby represents and warrants that (i) all information, other than
the Projections (as defined below), which has been or is hereafter made
available to Wachovia or the Lenders by the Borrower or any of its
representatives in connection with the transactions contemplated hereby
(“Information”) is and will be complete and correct in all material respects and
does not and will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements contained therein not
misleading and (ii) all financial projections concerning the Borrower and its
subsidiaries and the Acquired Company that have been or are hereafter made
available to Wachovia or the Lenders by the Borrower or any of its
representatives (the “Projections”) have been or will be prepared in good faith
based upon reasonable assumptions. The Borrower agrees to furnish Wachovia with
such Information and Projections as Wachovia may reasonably request and to
supplement the Information and the Projections from time to time until the
Closing Date so that the representation and warranty in the preceding sentence
is correct on such date (including, without limitation, updating the Projections
to the extent the Borrower becomes aware that such Projections have become
materially inaccurate or have been prepared based upon assumptions that the
Borrower believes are no longer reasonable). In arranging and syndicating the
Facilities, Wachovia will be using and relying on the Information and the
Projections without independent verification thereof.

 

The Borrower agrees to reimburse Wachovia, WCM and their affiliates at closing
for all of their reasonable fees and out-of-pocket expenses (including
reasonable attorneys’ fees and expenses) incurred in connection with the
transactions described herein whether or not the Facilities close or any credit
is extended thereunder. The Borrower also agrees to indemnify and hold harmless
Wachovia, WCM and their affiliates and their respective affiliates, directors,
officers, employees and agents (collectively, the “Indemnified Parties”) from
and against any and all actions, suits, losses, claims, damages and liabilities
of any kind or nature, joint or several, to which such Indemnified Parties may
become subject, related to or arising out of any of the transactions
contemplated herein, including without limitation the execution of definitive
credit documentation and the syndication and closing of the Facilities, and will
reimburse the Indemnified Parties for all reasonable out-of-pocket expenses
(including reasonable attorneys’ fees and expenses) on demand as they are
incurred in connection with the investigation of, preparation for, or defense of
any pending or threatened claim or any action or proceeding

 

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arising therefrom; provided, however, that no Indemnified Party shall have any
right to indemnification for any of the foregoing to the extent determined by a
final and nonappealable judgment of a court of competent jurisdiction to have
resulted from its own gross negligence, bad faith or willful misconduct. This
Commitment Letter is addressed solely to the Borrower, and neither Wachovia and
WCM, on the one hand, nor the Borrower, on the other hand, shall be liable to
the other or any other person for any consequential damages that may be alleged
as a result of this Commitment Letter or any of the transactions referred to
herein. This Commitment Letter is not intended to confer any obligations to or
benefits upon any third party. The provisions of this paragraph shall survive
closing of the Facilities and any termination of this Commitment Letter.

 

Prior to the execution and delivery of the Commitment Letter and the Fee Letter,
the Borrower is not authorized to show or circulate this Commitment Letter, the
Term Sheet or the Fee Letter, or disclose the contents thereof, to any other
person or entity (other than to its affiliates, directors, officers, advisors
and legal and financial counsel, whether in connection with the Facilities or
otherwise and to the sellers of the Acquired Company; provided that (i) each of
such persons shall agree to be bound by the confidentiality provisions hereof,
(ii) the Borrower shall be liable for any breach of such confidentiality
provisions by any such person and (iii) the Borrower may only show the Fee
Letter (and may not otherwise disclose the contents of the Fee Letter) to the
sellers of the Acquired Company in a redacted form that is satisfactory to
Wachovia), except as may be required by law or applicable judicial process. If
the Borrower does show or circulate this Commitment Letter, the Fee Letter or
the Term Sheet, or disclose the contents thereof, in breach of the foregoing
sentence, then the Borrower shall be deemed to have accepted this Commitment
Letter and the Fee Letter.

 

The Borrower acknowledges that Wachovia and WCM or their affiliates may be
providing financing or other services to parties whose interests may conflict
with the Borrower’s. Wachovia and WCM agree that they will not furnish
confidential information obtained from the Borrower to any of their other
customers and that they will treat confidential information relating to the
Borrower and its affiliates with the same degree of care as they treat their own
confidential information. Wachovia and WCM further advise the Borrower that they
will not make available to the Borrower confidential information that they have
obtained or may obtain from any other customer.

 

The Borrower acknowledges and agrees that Wachovia and WCM may disclose (i) to
their respective affiliates any information relating to the Facilities, the
Borrower and its subsidiaries or the Acquired Company and (ii) information
relating to the Facilities to Gold Sheets and other similar bank trade
publications, with such information to consist of deal terms and other
information customarily found in such publications. Each of the Borrower and
Wachovia shall have the right to review and approve any public announcement or
public filing made by the Borrower or Wachovia or their representatives after
the date hereof relating to the Facilities or to Wachovia, WCM or the Borrower,
as applicable, in connection therewith, before any such announcement or filing
is made.

 

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June 27, 2005

Page 5

 

This Commitment Letter (i) shall be governed by and construed in accordance with
the internal laws of the State of North Carolina, (ii) constitute the entire
agreement between the parties relating to the subject matter hereof and
supersede any previous agreement, written or oral, between the parties with
respect to the subject matter hereof, (iii) shall be binding upon and shall
inure to the benefit of the respective successors and assigns of the parties
hereto, but shall not be assigned in whole or in part by the Borrower without
the prior written consent of Wachovia, (iv) may not be amended, assigned or any
provision hereof waived or modified except by an instrument in writing signed by
each of the parties hereto, (v) is intended to be solely for the benefit of the
parties hereto and is not intended to confer any benefits on, or create any
rights in favor of, any other person or entity and (vi) may be executed in any
number of counterparts, each of which shall be an original and all of which,
when taken together, shall constitute one agreement.

 

The Administrative Agent hereby notifies you that pursuant to the requirements
of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law on October
26, 2001) (the “Patriot Act”), the Administrative Agent and each Lender are
required to obtain, verify and record information that identifies the Borrower,
which information includes the name, address, tax identification number and
other information regarding the Borrower that will allow the Administrative
Agent or such Lender to identify the Borrower in accordance with the Patriot
Act. This notice is given in accordance with the requirements of the Patriot Act
and is effective as to the Administrative Agent and each Lender.

 

The Commitment shall terminate at 5:00 p.m. on June 29, 2005, unless this
Commitment Letter is accepted by the Borrower in writing prior to such time and,
if accepted prior to such time, shall expire at the earlier of (i) Wachovia
discovering or becoming aware of any information not previously disclosed to it
that it believes, in the exercise of its reasonable judgment, to be materially
inconsistent with its understanding of the credit quality or finance ability of
the Borrower or the Acquired Company, based on the information provided to it by
or on behalf of the Borrower prior to the date hereof, of the business,
properties, operations or condition (financial or otherwise) of the Borrower and
its subsidiaries or the Acquired Company, (ii) consummation of the Acquisition
or another transaction or series of transactions in which the Borrower (or any
group of which the Borrower or any of its affiliates is a party) acquires all or
a substantial portion of the Acquired Company, together with the contemporaneous
execution of the Credit Agreement and (iii) 5:00 p.m. on September 1, 2005, if
the Closing Date shall not have occurred by such time; provided that such
expiration date shall be automatically extended to October 1, 2005 if the
Borrower and the Acquired Company have not received Hart-Scott-Rodino approval
and clearance (or all required waiting periods with respect thereto have not
expired) with respect to the Acquisition by September 1, 2005.

 

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June 27, 2005

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If you are in agreement with the foregoing, please sign the enclosed copy of
this Commitment Letter and return it to Wachovia and WCM, together with an
executed copy of the Fee Letter by no later than 5:00 p.m. on June 29, 2005.

 

Sincerely,

 

WACHOVIA BANK, NATIONAL ASSOCIATION

By:

  /s/    DAVID S. SOZIO        

Name:

  David S. Sozio

Title:

  Managing Director WACHOVIA CAPITAL MARKETS, LLC

By:

  /s/    DAVID S. SOZIO        

Name:

  David S. Sozio

Title:

  Managing Director

 

Agreed to and accepted as of

the date first above written:

 

LIONBRIDGE TECHNOLOGIES, INC.

By:

  /s/    RORY J. COWAN        

Name:

  Rory J. Cowan

Title:

  Chairman, President and CEO

 

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CONFIDENTIAL

 

LIONBRIDGE TECHNOLOGIES, INC.

 

SENIOR SECURED DEBT FACILITY

 

SUMMARY OF INDICATIVE TERMS AND CONDITIONS

 

Borrower:

   Lionbridge Technologies. Inc. (the “Borrower”).

Guarantees:

   All obligations of the Borrower under the Facilities and any interest rate
protection agreements or other permitted hedging agreement entered into with any
Lender (or any affiliate of any Lender) (each a “Secured Hedging Agreement”)
will be irrevocably and unconditionally guaranteed on a joint and several basis
by each existing and subsequently acquired or organized material (with
materiality to be determined based on a percentage of consolidated revenues)
domestic, direct or indirect, subsidiary of the Borrower (the “Guarantors”).

Facilities:

   Up 10 $125,000,000 comprised of the following (collectively, the
“Facilities”):     

(1)    $25,000,000 5-Year Revolving Credit Facility (the “Revolver”); and

    

(ii)    $100,000,000 6-Year Term Loan B Facility (the “Term Loan”).

     The Revolver will contain a sublimit of $5,000,000 for the issuance of
letters of credit. Such letters of credit may be issued with maturities of up to
one year, renewable annually thereafter, and in any event shall not extend
beyond the fifteenth day prior to the maturity date for the Revolver. Wachovia
(defined below) will be the issuing lender for all letters of credit. The
Revolver will also contain a sublimit of $5,000,000 for swingline loans to be
made available by Wachovia.      The Revolver will include a $10,000,000
sublimit (the “Multi-Currency Sublimit”) for multi-currency loans to the
Borrower. Under the Multi-Currency Sublimit, the Borrower may borrow in Euros,
British Pounds Sterling, Japanese Yen and Canadian Dollars.      The Borrower
shall have the option at any time prior to the Term Loan Maturity Date (defined
below), and so long as no default shall exist and be continuing, to increase the
Term Loan by an

 

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CONFIDENTIAL

 

     aggregate amount of up to 550,000,000 (with minimum increments of
$25,000,000), provided that no default or event of default shall have occurred
and be continuing and the Borrower secures commitments from one or more existing
and/or new lenders to provide such increase (or increases).

Administrative Agent:

   Wachovia Bank, National Association (“Wachovia” or the “Agent”).

Sole Lead Arranger and

Book Runner:

   Wachovia Capital Markets, LLC (the “Arranger”).

Lenders:

   Wachovia and a syndicate of other financial institutions (the “Lenders”)
acceptable to the Agent and the Arranger. The Agent and the Arranger shall
consult with the Borrower regarding the selection of the Lenders.

Use of Proceeds:

   The proceeds of the Facilities shall be used solely (i) to finance, in part,
the acquisition (the “Acquisition”) by the Borrower of all of the capital stock
of the Bowne Global Solutions division of Bowne & Co. Inc. (the “Acquired
Company”), (ii) to refinance certain existing debt of the Borrower, if
applicable, (iii) to pay fees and expenses in connection with the Facilities and
the Acquisition, and (iv) for general corporate purposes, including providing
for working capital, capital expenditures and permitted acquisitions.

Availability:

   Loans under the Revolver will be available at any time prior to the Revolver
Maturity Date, subject to reduction by the aggregate amount of outstanding or
unreimbursed letters of credit and outstanding swingline loans.      The Term
Loan shall be drawn in full in a single draw on the closing date of the
Facilities (the “Closing Date”). Amounts repaid under the Term Loan may not be
reborrowed.

Maturity Date:

   Revolver: 5th anniversary of the Closing Date (the “Revolver Maturity Date”).
     Term Loan: 6th anniversary of the Closing Date (the “Term Loan Maturity
Date”).

 

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CONFIDENTIAL

 

Amortization:

   Revolver: None. All outstanding principal of the Revolver will be due and
payable on the Revolver Maturity Date.      Term Loan: Outstanding principal of
the Term Loan will be payable quarterly, based on the annual amounts and for the
periods as shown below:

 

     Term Loan Amortization Table

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       Year 1

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    Year 2

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    Year 3

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    Year 4

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    Year 5

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    Year 6

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Term Loan

   1 %   1 %   1 %   1 %   1 %   95 %

 

Collateral:

   The Facilities and each Secured Hedging Agreement will be secured by a first
priority perfected lien (subject to permitted liens to be determined) on and
security interest in the following (collectively, the “Collateral”): (i) 100% of
the capital stock or other equity interests of each existing and subsequently
acquired or organized direct or indirect material domestic subsidiary and
first-tier foreign subsidiary of the Borrower and the Guarantors (which pledge,
in the case of any first-tier foreign subsidiary, shall be limited to 65% of the
capital stock of such first-tier foreign subsidiary); and (ii) substantially all
tangible and intangible assets (with carve-outs and exceptions to be mutually
agreed upon) of the Borrower and the Guarantors.

Mandatory Prepayments/

Commitment Reductions:

   The Borrower and its subsidiaries shall make mandatory prepayments without
premium or penalty (subject to payment of any funding losses resulting from
prepayment of LIBOR loans other than on the last day of the applicable interest
period) in an amount equal to (i) 100% of insurance proceeds (excluding
directors and officers policies, errors and omissions policies and certain other
insurance coverage), subject to reinvestment provisions to be agreed upon, (ii)
100% of net cash proceeds from asset sales (or series of asset sales), subject
to exceptions and reinvestment provisions to be agreed upon, (iii) 100% of the
net cash proceeds from the issuance of any debt (other than permitted debt),
(iv) 50% of net cash proceeds from the issuance of any equity (excluding equity
contributions in amounts and types to be determined), and (v) 75% of annual
Excess Cash Flow (definition to be determined); provided, that if the Total
Leverage Ratio (as defined below in the “Financial Covenants” section) is less
than or equal to 2.00 to 1.0 at any fiscal year end, the Borrower shall make
mandatory prepayments in an amount equal to 50% of Excess Cash Flow earned
during such prior fiscal year. Such proceeds shall be applied first to repay the

 

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CONFIDENTIAL

 

     Term Loan pro rata to the remaining scheduled amortization payments
thereon, and second to outstanding under the Revolver (without any permanent
reduction of the Revolver commitments). Voluntary Prepayments/ Commitment
Reductions:    The Borrower may prepay amounts outstanding under the Facilities
at any time, without premium or penalty (subject to advance notice provisions
and minimum repayment amounts to be agreed upon, and subject to payment of any
funding losses resulting from prepayment of LIBOR loans other than on the last
day of the applicable interest period). Additionally, the Borrower may, at its
option upon five business days’ notice to the Agent, reduce the aggregate
unutilized commitments under the Revolver in part, subject to minimum reduction
amounts to be agreed upon, or in whole. Each voluntary prepayment of the Term
Loan shall be applied to the remaining amortization payments pro rata. Interest
Rate Options:    At the Borrower’s option, loans under the Facilities shall bear
interest at (i) the Agent’s Alternative Base Rate (“Base Rate”) from time to
time in effect plus the applicable Base Rate Margin in effect at such time with
respect to the relevant Facility or (ii) the applicable LIBOR plus the
applicable LIBOR Margin in effect at such time with respect to the relevant
Facility, each such Margin to be determined from time to time in accordance with
the Pricing Grid (defined below). The Base Rate Margin and the LIBOR Margin are
referred to collectively as the “Applicable Margin.”      The Base Rate is the
higher of (i) the Agent’s prime commercial lending rate as announced from time
to time or (ii) overnight federal funds rate plus 0.50% per annum. LIBOR is the
London Interbank Offered Rate for corresponding deposits of U.S. Dollars for
interest periods of one, two, three, six or twelve months, subject to
availability, as selected by the Borrower and as quoted to the Agent.     
Interest on Base Rate loans shall be payable quarterly in arrears. Interest on
LIBOR loans shall be payable at the end of each applicable interest period or at
three-month intervals, if earlier. Interest shall be calculated on an
actual/360-day basis for LIBOR loans and for Base Rate loans (other than Base
Rate loans based on the Agent’s prime commercial lending rate, which shall be
calculated on an actual/365-366-day basis).      During an event of default
under the Facilities, all outstanding principal, accrued interest and other
amounts shall, at the

 

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CONFIDENTIAL

 

     discretion of the Required Lenders (as hereinafter defined), accrue
interest at a rate per annum of 2% in excess of the rate otherwise applicable,
and such interest shall be payable on demand. The definitive credit documents
shall include the Agent’s standard protective provisions for such matters as
increased costs, funding losses, illegality and withholding taxes. Applicable
Margin and Commitment Fee:    The Applicable Margin for the Revolver shall be
determined quarterly on the basis of the Total Leverage Ratio (as defined below
in the “Financial Covenants” section), calculated on a rolling four quarter
basis, in accordance with a pricing grid to be determined (the “Pricing Grid”).
The initial Applicable Margin for the Revolver and the Applicable Margin for the
Term Loan (which shall be constant for the duration of the Facilities) shall be
determined on the basis of the Borrower’s initial rating for senior secured debt
as determined by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings
Group (the “Ratings”) as set forth below:

 

Tier

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Rating

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   Initial
Applicable
Margin for
LIBOR Loans
under the
Revolver

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   Applicable
Margin for
LIBOR Loans
under the
Term Loan

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I

   ³B+/B1    300 bps    300 bps

II

   B+/B2 or B/B1    325 bps    325 bps

III

   B/B2    350 bps    350 bps

IV

   <B/B2    400 bps    400 bps

 

     The Commitment Fee will be payable quarterly in arrears based on the
average daily-unused commitments for the Revolver and will initially be 0.50%
and will be subject to change based upon a pricing grid to be determined. Letter
of Credit Fee:    The Borrower will pay a letter of credit fee equal to the
applicable LIBOR Margin in effect from time to time for the Revolver (as
determined in accordance with the Pricing Grid) on the average daily stated
amount of all letters of credit, payable quarterly in arrears to the Agent for
the ratable benefit of the Lenders and calculated on an actual/360-day basis. In
addition, the Borrower will pay a facing fee with respect to each letter of
credit in an amount equal to 0.25% per annum of the average daily stated amount
thereof, payable quarterly in arrears to Wachovia for its own account as issuer
of letters of credit and calculated on an actual/360-day basis.

 

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CONFIDENTIAL

 

Conditions Precedent to Closing:    The closing and initial funding of the
Facilities will be subject to the negotiation, execution and delivery of a
definitive Credit Agreement and related documentation (including issuance of
appropriate guarantees, charter documents, good standing certificates,
collateral documents and legal opinions) reasonably satisfactory to the Agent,
the Arranger and the Lenders and to the following:     

1.      All consents and approvals of the boards of directors, shareholders,
governmental entities and other applicable third parties necessary in connection
with the Facilities, the Acquisition, and the transactions related thereto (the
“Transactions”) shall have been obtained; all applicable material waiting
periods shall have expired without any action being taken or threatened by any
competent authority; and no law or regulation shall be applicable, or event
shall have occurred, that has enjoined, restrained, restricted, set aside or
prohibited, or imposed materially adverse conditions upon, the consummation of
the Acquisition, the Facilities or any of the other Transactions;

    

2.      The Acquisition shall have been consummated in accordance with the terms
of the definitive documentation therefor, without any material amendment or
waiver thereof except as approved by the Agent;

    

3.      There shall not have occurred any event that has, or could be reasonably
expected to have a material adverse effect on the business, properties,
operations or conditions (financial or otherwise) of the Borrower or its
subsidiaries or the Acquired Company;

    

4.      There shall be no bankruptcy or insolvency proceeding with respect to
the Borrower or its subsidiaries or the Acquired Company, and there shall be no
material action, suit, proceeding or investigation before, and no order,
injunction or decree shall have been entered by, any court, arbitrator or
governmental authority, in each case seeking to enjoin, restrain, restrict, set
aside or prohibit, to impose material conditions upon, or to obtain substantial
damages in respect of, the consummation of the Facilities or any of the other
Transactions or that, in the opinion of the Agent, could reasonably be expected
to have a material adverse effect upon the business, properties, operations or
conditions (financial or otherwise) of the Borrower and its subsidiaries or the

 

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Acquired Company, or on the ability of Borrower and its subsidiaries to perform
their respective obligations under the definitive documentation for the
Facilities;

    

5.      The Agent shall have received satisfactory evidence that the Facilities
have been rated by Standard & Poor’s and Moody’s;

    

6.      The Agent shall have received (i) unaudited monthly financial statements
of the Borrower and its subsidiaries and of the Acquired Company through the
next-to-last month ending immediately prior to the Closing Date, (ii) an opening
pro forma balance sheet of the Borrower and its subsidiaries (subject to
reasonable purchase price adjustments) as of the last day of the next-to-last
month ending immediately prior to the Closing Date giving effect to the initial
funding of the Facilities and the consummation of the other Transactions in form
and substance satisfactory to the Arranger and Agent, (iii) audited financial
information for the twelve month period ended December 31, 2003 and December 31,
2004 for Bowne Global Solutions and (iv) projected financial statements of the
Borrower and its subsidiaries (consisting of balance sheets and statements of
income and cash flows) prepared on a quarterly basis for 2005 and on an annual
basis through 2010, all of which shall be in form and substance satisfactory to
the Agent;

    

7.      All of the existing indebtedness for borrowed money of the Borrower and
its subsidiaries and of the Acquired Company (excluding certain permitted
indebtedness) shall be repaid in full and all liens or guarantees relating
thereto extinguished on or prior to the Closing Date;

    

8.      The Borrower shall deliver opinions of counsel (including local counsel
opinions) in form and substance reasonably acceptable to the Agent and the
Lenders;

    

9.      All filings, recordations and other actions in order to perfect the
Agent’s liens and security interests in the Collateral shall have been made or
taken; in connection with any material domestic real estate Collateral, the
Agent shall have received such mortgages, surveys, appraisals, title insurance
policies, environmental assessments, flood certifications, landlord waivers and
other items, as it shall reasonably have requested, each in form and substance
satisfactory to the Agent; and the

 

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Agent shall have received the results of UCC, tax lien, judgment and pending
litigation searches with respect to Borrower and its subsidiaries in
jurisdictions selected by it and shall be satisfied with the results thereof;

    

10.    The Agent shall have received a certificate from the Borrower reasonably
satisfactory to it that (i) the Borrower and the Guarantors, taken as a whole,
are solvent, and (ii) the Borrower is in compliance with all financial covenants
on a pro forma basis, after giving effect to the initial borrowing under the
Facilities and the consummation of the Acquisition;

    

11.    The Agent shall be satisfied that, on a pro forma basis after giving
effect to the initial funding of the Facilities and the consummation of the
other Transactions, (i) the Borrower is in compliance with all financial
covenants in the definitive credit documentation, (ii) the aggregate total
senior funded debt of the Borrower and its subsidiaries as of the Closing Date
(including capital leases and the initial funding under the Facilities) does not
exceed $105,000,000 and (iii) EBITDA of the Borrower and its subsidiaries on an
adjusted consolidated basis (as determined by the Agent) for the twelve month
period through the next-to-last month ending immediately prior to the Closing
Date shall be no less than $32,000,000 (of which no less than $20,625,000 shall
be comprised of actual combined reported EBITDA of the Borrower and its
subsidiaries and the Acquired Company);

    

12.    The Sources and Uses for the Acquisition shall be as set forth on Annex I
hereto; and

    

13.    The Agent and the Lenders shall have received all fees and expenses of
the Arranger, the Agent and the Lenders required to have been paid as a
condition to the initial funding of the Facilities and such other documents,
agreements and opinions in connection with the Facilities, all satisfactory in
form and substance, as the Agent or any Lender may reasonably request.

Representations and

Warranties:

   The definitive credit documentation will contain representations and
warranties consistent with those customarily found in similar financings and
such additional representations and warranties as may be deemed appropriate by
the Agent and the Borrower including representations and warranties regarding

 

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     (i) corporate organization and power, (ii) absence of violation of
organizational documents, other agreements and applicable laws, (iii) absence of
material litigation, (iv) obtaining of government approvals, (v) subsidiaries,
(vi) payment of taxes, (vii) authorization and enforceability of the credit
documents, (viii) information provided is accurate in all material respects,
(ix) use of proceeds and compliance with margin regulations, (x) ERISA matters,
(xi) solvency, (xii) accuracy of financial statements, (xiii) accuracy of
representations and warranties of the Borrowers in the documentation with
respect to the Acquisition, (xiv) absence of material adverse change, (xv) title
to and sufficiency of assets, (xvi) real estate, (xvii) intellectual property,
(xviii) compliance with governmental permits and licenses, (xix) insurance, (xx)
compliance with laws (including the USA Patriot Act), (xxi) environmental
matters, (xxii) validity and perfection of security interests, (xxiii) status
under Investment Company Act and Public Utility Holding Company Act, and (xxiv)
material contracts.

Affirmative Covenants:

   The definitive credit documentation will contain affirmative covenants
consistent with those customarily found in similar financings and such
additional affirmative covenants as may be deemed appropriate by the Agent,
including without limitation: (i) delivery of quarterly unaudited consolidated
financial statements and annual audited consolidated financial statements,
together with financial covenant compliance certificates, (ii) annual delivery
of subsequent year operating budget and cash flow projections, prepared on a
quarterly basis, (iii) delivery of regulatory reports, management letters and
other specified business information, (iv) delivery of notice of material
litigation, proceedings, defaults and events of default, ERISA events,
environmental matters and other significant matters, (v) maintenance of
corporate existence and franchises and properties, (vi) compliance with laws,
(vii) intellectual property, ERISA and environmental matters, (viii) payment of
taxes and other obligations, (ix) inspection rights and (x) maintenance of
insurance, books and records.

Negative Covenants:

   The definitive credit documentation will contain negative covenants (with
certain baskets to be agreed upon) consistent with those customarily found in
similar financings and such additional negative covenants as may be deemed
appropriate by the Agent including without limitation: (i) restrictions on
consolidation, merger, sale or disposition of assets and sale-leaseback
transactions, (ii) restrictions on indebtedness, including guaranties (it being
understood that indebtedness of foreign subsidiaries will be permitted subject
to limitations to be

 

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     mutually agreed upon), (iii) restrictions on liens (negative pledge), (iv)
restrictions on joint ventures, acquisitions and other investments (other than
permitted acquisitions on terms to be determined), (v) restrictions on
dividends, redemptions and distributions with respect to capital stock and
redemptions and prepayments of other indebtedness, (vi) restrictions on
transactions with affiliates, (vii) restrictions on changes in lines of
business, (viii) restrictions on amendments to equity documents (to the extent
adverse to the interests of the Lenders) and organizational documents, and (ix)
restrictions on other negative pledges, material changes in accounting policies,
changes in state of organization and changes in fiscal year.

Financial Covenants:

   The definitive credit documentation will contain financial covenants
determined for the Borrower and its subsidiaries on a consolidated basis as
follows (with definitions, levels and step-ups/step-downs to be determined):  
  

(a)    Maximum Total Leverage Ratio (Funded Debt to LTM Adjusted EBITDA);

 

(b)    Maximum Senior Leverage Ratio;

 

(c)    Minimum Fixed Charge Coverage Ratio (Adjusted EBITDA less capital
expenditures/cash interest plus cash taxes plus scheduled payments of funded
debt); and

 

(d)    Maximum Capital Expenditures with a one-year carry forward of unused
amounts.

Events of Default:

   The definitive credit documentation will contain events of default consistent
with those customarily found in similar financings and such additional events of
default as may be deemed appropriate by the Agent, including without limitation:
(i) failure to pay any principal, interest or fees when due (with customary
grace periods), (ii) breach of covenants (with customary grace periods for
certain affirmative covenants), (ii) incorrectness when made of any
representation or warranty, (iv) payment or other default under other
indebtedness, (v) bankruptcy or insolvency, (vi) judgments or ERISA events,
(vii) invalidity of guaranty or security documents and (viii) change of control.

Assignments and

Participations:

   Customary participation rights will be provided, subject to voting
restrictions on significant matters. Assignments of Revolver commitments by
Lenders to banks and other financial institutions in minimum amounts of
$5,000,000 will be permitted with the approval of the Agent and, provided no
default or event of default exists, the Borrower (such approvals

 

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     not to be unreasonably withheld). Assignments of the Term Loan will be
permitted with the approval of the Agent (but without the Borrower’s approval)
in minimum amounts of $1,000,000. Each assignment shall be subject to a payment
of a $3,500 assignment fee by the assigning Lender or the purchasing Lender (as
agreed between them) to the Agent.

Amendments and Waivers:

   Amendments and waivers of the provisions of the loan agreement and other
definitive credit documentation will require the approval of Lenders holding
loans and commitments representing more than 50% of the aggregate amount of
loans and commitments under the Facilities (the “Required Lenders”), except that
the consent of all of the Lenders affected thereby shall be required with
respect to (i) increases in the commitment of such Lenders, (ii) reductions of
principal, interest, or fees, (iii) extensions of scheduled maturities or times
for payment, (iv) releases of all or substantially all of the collateral, (v)
releases of all or substantially all of the Guarantors and (vi) waivers or
amendments to pro rata voting provisions or the percentage of Lenders required
to approve an amendment or waiver. The consent of Lenders holding outstanding
loans and commitments representing at least 50% of the aggregate amount of loans
and commitments under the Revolver will be required for any amendment to or
waiver of (i) any funding condition or (ii) any other provision if the effect of
such amendment or waiver is to require such Lenders to fund revolving credit
loans when such Lenders would otherwise not be required to do so.

Expenses and

Indemnification:

   The Borrower will pay (a) all reasonable out-of-pocket costs and expenses of
the Agent and the Arranger (including the reasonable fees and disbursements of
counsel) in connection with the preparation, execution, delivery and
administration of the definitive documentation for the Facilities and any
amendment or waiver with respect thereto and the syndication of the Facilities,
and (b) all reasonable out-of-pocket costs and expenses of the Agent and the
Lenders (including the reasonable fees and disbursements of counsel) in
connection with the enforcement of the Facilities.      The Borrower will
indemnify the Arranger, the Agent and the Lenders and hold them harmless against
all claims, losses, liabilities and expenses (including reasonable fees and
disbursements of counsel) arising from or relating to the proposed financing
contemplated hereby and the other transactions connected therewith, except to
the extent of such indemnified party’s gross negligence, bad faith or willful
misconduct.

 

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Governing Law:

   New York.

Miscellaneous:

   Customary provisions regarding consent to forum and service of process,
waiver of jury trial, waiver of consequential and punitive damages and other
miscellaneous matters.

 

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Wachovia Securities is the trade name under which Wachovia Corporation conducts
its investment banking, capital markets and institutional securities business
through Wachovia Capital Markets, LLC, Member NYS, NASD, SIPC, and through other
bank and non-bank and broker-dealer subsidiaries of Wachovia Corporation.

 

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Important Information About Opening Your New Account And/Or Entering into a
Business Relationship with Wachovia; To help fight the funding of terrorism and
money laundering activities, Federal law requires all financial institutions to
obtain, verify and record information that identifies each person or corporation
who opens an account and/or enters into a business relationship.

 

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ANNEX I

 

Sources and Uses

 

($ in thousands)

 

Sources

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Uses

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Lionbridge Cash

   $ 31,100         Purchase Price    $ 180,000

Bowne Cash

     1,400         Fees and Expenses      5,000

Revolving Credit Facility(1)

     2,500         Assumption of BGS Debt      1,891

Term Loan B

     100,000                 

Seller Note Issued to Bowne(2)

     7,500                 

Equity Issued to Bowne(2)

     42,500                 

Assumption of BGS Debt

     1,891                      

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Total Sources

   $ 186,891         Total Uses    $ 186,891     

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(1) Revolver availability of $25 million.

 

(2) The Seller Note and Equity issued to Bowne will be adjusted based on the
trading value of the Lionbridge stock.

 

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