<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 28, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to _____________________
Commission file number 000-24387
NAVIGANT INTERNATIONAL, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 52-2080967
- ------------------------------------------- --------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
84 INVERNESS CIRCLE EAST
ENGLEWOOD, COLORADO 80112
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (303) 706-0800
--------------
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports, and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _________
-------
As of April 30, 1999, the Registrant had outstanding 12,911,000 shares
of its common stock, par value $0.001 per share.
<PAGE>
INDEX TO FORM 10-Q
------------------
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements
Consolidated Balance Sheet -
March 28, 1999 (Unaudited) and December 27, 1998...... 3
Consolidated Statement of Income (Unaudited) -
Three Months Ended March 28, 1999 and March 29, 1998.. 4
Consolidated Statement of Cash Flows (Unaudited) -
Three Months Ended March 28, 1999 and March 29, 1998.. 5
Notes to Consolidated Financial Statements.............. 6 - 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations................... 8 -14
Item 3. Quantitative and Qualitative Disclosures
about Market Risks.................................... 15
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings....................................... 16
Item 2. Changes in Securities................................... 16
Item 3. Defaults Upon Senior Securities......................... 16
Item 4. Submission of Matters to a Vote of Security Holders..... 16
Item 5. Other Information....................................... 17
Item 6. Exhibits and Reports on Form 8-K........................ 17
</TABLE>
SIGNATURES
2
<PAGE>
NAVIGANT INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
March 28, 1999 December 27, 1998
--------------------- ----------------------
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................................. $ 239 $ 315
Accounts receivable, less allowance for doubtful accounts of $400 and
$413, respectively...................................................... 29,068 27,744
Prepaid expenses and other current assets................................. 2,811 2,517
Deferred income taxes..................................................... 2,728 2,610
-------- --------
Total current assets.................................................. 34,846 33,186
Property and equipment, net.................................................. 22,251 21,569
Intangible assets, net....................................................... 150,796 150,554
Other assets................................................................. 1,870 1,539
-------- --------
Total assets.......................................................... $209,763 $206,848
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term portion of long-term debt...................................... $ 3,937 $ 4,437
Short-term portion of capital lease obligations........................... 564 564
Accounts payable.......................................................... 2,623 2,875
Accrued compensation...................................................... 5,804 5,907
Accrued income taxes...................................................... 1,580 1,334
Other accrued liabilities................................................. 14,739 16,861
-------- --------
Total current liabilities............................................. 29,247 31,978
Long-term debt, net of short-term portion.................................... 54,128 56,436
Capital lease obligations.................................................... 839 1,026
Deferred income taxes........................................................ 849 835
Other long-term liabilities.................................................. 7,242 2,448
-------- --------
Total liabilities..................................................... 92,305 92,723
Commitments and contingencies
Stockholders' equity:
Common stock; $.001 par value, 150,000,000 shares authorized;
12,911,000 issued and outstanding (12,929,000 at December 27, 1998)..... 13 13
Additional paid-in-capital................................................ 112,838 112,939
Accumulated other comprehensive income.................................... (124) (95)
Retained earnings......................................................... 4,731 1,268
-------- --------
Total stockholders' equity............................................ 117,458 114,125
-------- --------
Total liabilities and stockholders' equity............................ $209,763 $206,848
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
NAVIGANT INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For the Three Months Ended
March 28, 1999 March 29, 1998
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
Revenues....................................................... $ 54,603 $ 37,709
Operating expenses............................................. 30,472 21,620
-------------- --------------
Gross profit.............................................. 24,131 16,089
General and administrative expenses............................ 14,485 10,960
Depreciation and amortization expense.......................... 2,423 1,567
-------------- --------------
Operating income.......................................... 7,223 3,562
Other (income) expenses:
Interest expense............................................. 1,095 195
Interest income.............................................. (7) (82)
Other........................................................ 24 (67)
-------------- --------------
Income before provision for income taxes....................... 6,111 3,516
Provision for income taxes..................................... 2,648 1,753
-------------- --------------
Net income..................................................... $ 3,463 $ 1,763
============== ==============
Other comprehensive income:
Foreign currency translation adjustment (29) 65
-------------- --------------
Comprehensive income $ 3,434 $ 1,828
============== ==============
Weighted average number of common shares outstanding:
Basic........................................................ 12,916 13,364
Diluted...................................................... 12,923 13,582
Net income per share:..........................................
Basic........................................................ $ 0.27 $ 0.13
Diluted...................................................... $ 0.27 $ 0.13
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
NAVIGANT INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
For the Three Months Ended
March 28, 1999 March 29, 1998
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income................................................ $ 3,463 $ 1,763
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization expense.................... 2,423 1,567
Changes in current assets and liabilities (net of assets
acquired and liabilities assumed in combinations
accounted for under the purchase method):
Accounts receivable..................................... (1,324) (890)
Prepaid expenses and other assets....................... (625) 48
Accounts payable........................................ (252) (614)
Accrued liabilities..................................... (3,260) (1,326)
Other long-term liabilities............................. 4,794 (161)
-------------- --------------
Net cash provided by operating activities.............. 5,219 387
-------------- --------------
Cash flows from investing activities:
Additions to property and equipment, net of disposals..... (1,762) (1,639)
-------------- --------------
Net cash used in investing activities.................. (1,762) (1,639)
-------------- --------------
Cash flows from financing activities:
Payments of long-term debt................................ (3,277) (2,296)
Repurchase of common stock................................ (101)
Net advances from U.S. Office Products Company............ 5,343
-------------- --------------
Net cash provided by (used in) financing activities.... (3,378) 3,047
-------------- --------------
Effect of exchange rate changes on cash..................... (155) (30)
Net increase (decrease) in cash and cash equivalents........ (76) 1,765
Cash and cash equivalents at beginning of period............ 315 6,048
-------------- --------------
Cash and cash equivalents at end of period.................. $ 239 $ 7,813
============== ==============
Supplemental disclosures of cash flow information:
Interest paid............................................. $ 1,029 $ 175
Income taxes paid......................................... $ 2,806 $ 747
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
NAVIGANT INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
NOTE 1--BACKGROUND
Navigant International, Inc. (the "Company"), a Delaware corporation, is
one of the five largest corporate travel management companies in the United
States. The Company manages all aspects of its client's travel processes,
focusing on reducing their travel expenses.
The Company's operations are primarily concentrated in one market segment -
airline travel - and its customers are geographically diverse with no single
customer base concentrated in a single industry. Management considers a downturn
in this market segment to be unlikely. The Company's operations are seasonal,
with the November and December periods having the lowest airline bookings. The
majority of the leisure travel services the Company provides are directed to the
Company's corporate customers and the related financial information is not
separately stated in the Company's internal reports.
NOTE 2--BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosure normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures included herein
are adequate to make the information presented not misleading. A description of
the Company's accounting policies and other financial information is included in
the audited consolidated financial statements as filed with the Securities and
Exchange Commission in the Company's Annual Report on Form 10-K for the year
ended December 27, 1998.
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
financial position of the Company as of March 28, 1999, and the results of
operations and cash flows for the periods presented. All such adjustments are of
a normal recurring nature. The results of operations for the three months ended
March 28, 1999, are not necessarily indicative of the results that may be
achieved for the full fiscal year and cannot be used to indicate financial
performance for the entire year.
Effective for the December 27, 1998 reporting period, the Company changed
its fiscal year from a fiscal year ending on the last Saturday in April to a
fiscal year ending on the last Sunday in December. The financial statements have
been restated from the previously reported results to conform to this change.
NOTE 3--BUSINESS COMBINATIONS
In 1998, the Company made eight acquisitions accounted for under the
purchase method for an aggregate purchase price of $63,061 consisting of cash,
net of cash acquired, of $59,505 and notes payable of $3,556. The total assets
related to these eight acquisitions were $71,106, including intangible assets of
$61,926. The results of these acquisitions have been included in the Company's
results from their respective dates of acquisition. Several of these
acquisitions have earn-out provisions that could result in additional purchase
consideration payable in 1999 dependent upon the earnings of these acquisitions.
No accrual has been recorded on the balance sheet for these potential payments.
6
<PAGE>
The following presents the unaudited pro forma results of operations of the
Company for the three months ended March 29, 1998 and includes the results of
the companies acquired as if all such purchase acquisitions had been made at the
beginning of the period presented. The results presented below include certain
pro forma adjustments to reflect the amortization of intangible assets acquired
and adjustments in executive compensation of $385 and $(129) for the three
months ended March 29, 1998 and the inclusion of a federal income tax provision
on all earnings:
<TABLE>
<CAPTION>
For the Three
Months Ended
--------------
March 29, 1998
--------------
(Unaudited)
<S> <C>
Revenues............................ $ 53,200
Net income.......................... $ 3,062
Net income per share - basic........ $ 0.24
Net income per share - diluted...... $ 0.24
</TABLE>
The unaudited pro forma results of operation are prepared for comparative
purposes only and do not necessarily reflect the results that would have
occurred had the acquisitions occurred at the beginning of the fiscal period or
the results which may occur in the future.
NOTE 4--NON-RECURRING CHARGES
The Company implemented a cost reduction measure that commenced in November
1998 and resulted in the Company's recording a restructuring charge of $3.18
million in November and December 1998. Management anticipates that these
measures will be completed by September 1999. The 1998 charge includes the
closure of 20 facilities, the sale of one building and the severance associated
with the termination of approximately 130 employees. To date, 11 facilities have
been closed or consolidated and approximately 46 employees have been terminated.
The activity in the restructuring liability during the three months ended March
28, 1999 is as follows:
<TABLE>
<CAPTION>
Employee Facility
Severance and Closures and
Termination Costs Consolidation Total
<S> <C> <C> <C>
Balance at December 27, 1998.......... $ 659 $ 958 $ 1,617
Payments.............................. (42) (332) (374)
Non-cash usage........................ (53) (53)
--------- ---------- ----------
Balance at March 28, 1999............. $ 617 $ 573 $ 1,190
========= ========== ==========
</TABLE>
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
- -------------------------------------------------------------------------
RESULTS OF OPERATIONS.
- ----------------------
Statements contained in this Quarterly Report on Form 10-Q which are not
historical in nature are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements include, without limitation, statements in Item 2, "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
regarding intent, belief or current expectations of the Company or its officers
with respect to, among other things, trends in the travel industry, the
Company's business and growth strategies, the Company's use of technology, the
Company's distribution of services, the continued use of travel management
companies by corporate customers, the use of co-branding involving the Company's
subsidiaries, the Company's Year 2000 compliance, the Company's payment or non-
payment of dividends, implementation by the Company of management contracts and
service fees with corporate clients, planned cost reduction measures and
fluctuations in the Company's quarterly results of operations.
Forward-looking statements involve certain risks and uncertainties that
could cause actual results to differ materially from anticipated results. These
risks and uncertainties include changes or reductions in the commission
structure in the travel service industry, changes in laws or regulations
concerning the travel service industry, trends in the travel service industry
(including competition, consolidation and increased use of the Internet and
computer on-line services), the ability of the Company to successfully integrate
the operations of existing or acquired travel management companies, limitations
on the availability of funds or other capital resources to finance future
acquisitions, limitations on the Company's use of the pooling-of-interest
methods to account for future acquisitions, the Company's ability to negotiate
favorable travel management contracts with its current and future customers, any
loss or modification of material contracts the Company has with travel suppliers
or current customers, the Company's Year 2000 compliance, liabilities arising
under indemnification and contribution agreements entered into by the Company in
connection with its spin-off from U.S. Office Products Company ("U.S. Office
Products") in June 1998, changes in the Company's ability to amortize goodwill,
an impairment of goodwill due to downturn in the cash flows relating to past
acquisitions, and a variety of factors such as a recession or slower economic
growth, weather conditions and concerns for passenger safety that could cause a
decline in travel demand, as well as the risk factors set forth in Item 7.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Risk Factors," of the Company's Annual Report on Form 10-K for the
fiscal year ended December 27, 1998, the risk factor set forth in Item 2.
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Year 2000 Issues" of this Quarterly Report on Form 10-Q and other
factors as may be identified from time to time in the Company's filings with the
Securities and Exchange Commission or in the Company's press releases.
INTRODUCTION
The Company provides corporate travel management services and, to a more
limited extent, other travel services, throughout the United States, in Canada
and in the United Kingdom.
The Company's consolidated financial statements include the results of
operations for the eight companies acquired in business combinations in 1998
accounted for under the purchase method (the "1998 Purchased Companies") from
their respective dates of acquisition.
Sources of Revenue
Historically, arrangements between corporate travel management companies
and their clients generally did not provide for any direct compensation from
clients for travel bookings and services completed on their behalf.
Consequently, corporate travel management companies were largely dependent for
their revenues on the point of sale percentage commissions paid by the airlines
for each ticket issued and to a lesser extent on hotel and car rental
commissions. In 1995, the airlines instituted a
8
<PAGE>
commission cap of $50 on round-trip domestic tickets and $25 on one-way domestic
tickets. In October 1997, the airlines cut the base commission on domestic and
international tickets from 10% to 8% of the ticket price. The Company and other
travel management companies were significantly affected by these commission
reductions, particularly the October 1997 reduction, which resulted in a
decrease in gross revenue per transaction.
In response to the reduction in airline commissions and consistent with
growing industry practice, the Company has entered into management contracts and
service fee arrangements with a significant number of its clients. Although the
terms of the Company's management contracts vary depending on the type of
services provided and by client, the Company typically deducts a pre-negotiated
management fee, its direct operating expenses and its indirect overhead costs
from commissions collected for travel arrangements made on behalf of the client.
If the commissions do not exceed the amounts deducted, the client pays the
difference to the Company. If the commissions exceed the amounts deducted, the
Company typically pays the excess to the client. In addition, the Company
typically charges a service fee for each ticket and other transactions to
clients who do not have a management contract with the Company. The Company
charges between $10 and $35 for each air travel ticket issued to such clients
and retains all of the related commissions collected from the airlines.
In October 1998, the airlines instituted a commission cap of $100 on round-
trip international tickets and $50 on one-way international tickets. The Company
believes that its management contracts and service fee arrangements should
minimize the financial impact of this commission cap, as well as any future
changes in the airline commission rates. The Company believes that at least 65%
of its total transactions are currently generated from clients under management
contracts and service fee arrangements.
The Company has entered into agreements with major airlines for the payment
of "incentive override" commissions in addition to the base commissions
described above. Under these agreements, the airlines generally pay additional
commissions on domestic and international air travel if the volume of the
Company's ticket sales surpasses specified thresholds, which typically are based
on the airlines' share of the relevant markets.
Expenses
The Company's direct operating expenses include principally labor expense
(which comprised approximately 66.0% of total direct operating expenses in the
three months ended March 28, 1999), net commission payments to clients under
management contracts, communication costs and other costs associated with the
selling and processing of travel reservations.
The Company's general and administrative expenses include principally labor
expense (which comprised approximately 56.6% of total general and administrative
expenses in the three months ended March 28, 1999), occupancy costs and other
costs.
1998 Non-Recurring Charges
As part of the Company's increased focus on operational matters in 1998, it
undertook a formal plan approved by its Board of Directors for cost reduction
measures including the elimination of duplicative facilities, the consolidation
of certain operating functions and the deployment of common information systems.
The implementation of the cost reduction measures commenced in November 1998 and
resulted in the Company's recording an aggregate restructuring charge of $3.18
million in November and December 1998.
9
<PAGE>
Management anticipates that these measures will be completed by September 1999.
The 1998 charge includes the closure of 20 facilities, the sale of one building
and the severance associated with the termination of approximately 130
employees. To date, 11 facilities have been closed or consolidated and
approximately 46 employees have been terminated.
RESULTS OF OPERATIONS
The following table sets forth various items as a percentage of revenues
for the three months ended March 28, 1999 and March 29, 1998.
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
March 28, March 29,
1999 1998
------ ------
<S> <C> <C>
Revenues.............................................. 100.0% 100.0%
Operating Expenses.................................... 55.8 57.3
------ ------
Gross profit....................................... 44.2 42.7
General and administrative expenses................... 26.5 29.1
Depreciation and amortization expense................. 4.4 4.2
------ ------
Operating income................................... 13.3 9.4
Interest expense, net................................. 2.1 0.3
Other (income) expense................................ (0.2)
------
Income before provision for income taxes.............. 11.2 9.3
Provision for income taxes............................ 4.8 4.6
------ ------
Net income............................................ 6.4% 4.7%
====== ======
</TABLE>
REVENUES
Consolidated revenues increased 44.8%, from $37.7 million for the three
months ended March 29, 1998 to $54.6 million for the three months ended March
28, 1999. This increase was primarily due to the inclusion of the revenues from
the 1998 Purchased Companies from their respective dates of acquisition.
GROSS PROFIT
Gross profit increased 50.0%, from $16.1 million, or 42.7% of revenues, for
the three months ended March 29, 1998 to $24.1 million, or 44.2% of revenues,
for the three months ended March 28, 1999. The increase in gross profit as a
percentage of revenues was due primarily to an increase in revenue from certain
vendors associated with improved national contracts with these vendors.
Additionally, the Company experienced improved gross profit attributable to the
conversion of several customer arrangements in 1998 to management contracts and
service fee arrangements.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses increased 32.2%, from $11.0 million, or
29.1% of revenues, for the three months ended March 29, 1998 to $14.5 million,
or 26.5% of revenues, for the three months ended March 28, 1999. The decrease in
general and administrative expenses as a percentage of revenues was due
primarily to the 1998 Purchased Companies having lower general and
administrative expenses as a percentage of revenues than the Company and certain
fixed general and administrative expenses being spread over a larger revenue
base. Additionally, the Company has begun
10
<PAGE>
implementing integration efforts to reduce redundant facilities and functions
which has resulted in a decrease in general and administrative expenses during
the three months ended March 28, 1999.
DEPRECIATION AND AMORTIZATION EXPENSE
Depreciation and amortization expense increased from $1.6 million, or 4.2%
of revenues, for the three months ended March 29, 1998 to $2.4 million, or 4.4%
of revenues, for the three months ended March 28, 1999. This increase was due to
the increase in the number of purchase acquisitions included in the results for
1999 compared to 1998.
INTEREST EXPENSE, NET
Interest expense, net, increased from $113,000 or 0.3% of revenues, for the
three months ended March 29, 1998 to $1.1 million, or 2.1% of revenues, for the
three months ended March 28, 1999. The increase was attributable to the
acquisitions of the 1998 Purchased Companies which were financed with
borrowings.
PROVISION FOR INCOME TAXES
Provision for income taxes increased from $1.8 million for the three months
ended March 29, 1998 to $2.6 million for the three months ended March 28, 1999,
reflecting effective income tax rates of 49.9% and 43.3%, respectively. The high
effective income tax rate for the three months ended March 29, 1998 and March
28, 1999, compared to the federal statutory rate of 35%, was primarily due to an
increase in non-deductible goodwill amortization resulting from the acquisition
activity. The three months ended March 28, 1999 effective rate was lower than
the three months ended March 29, 1998 effective rate due to a lower ratio of
non-deductible goodwill amortization to pre-tax income in that period than in
the three months ended March 29, 1998.
LIQUIDITY AND CAPITAL RESOURCES
At March 28, 1999, the Company had cash of $239,000, working capital of
$5.6 million, borrowings of $50.9 million under the revolving credit facility
from NationsBank, N.A. and U.S. Bank National Association as lenders (the
"Credit Facility"), $8.6 million of other indebtedness, including capital lease
obligations, and available capacity under the Credit Facility of $9.1 million.
The Company's capitalization, defined as the sum of long-term debt and
stockholders' equity at March 28, 1999 was approximately $176.9 million.
Subsequent to its initial public offering, the Company has financed its
operational growth and acquisitions from internally generated cash flow from
operations and borrowings from commercial banks or other lenders. These
borrowings were generally secured by the accounts receivable and other assets of
the Company.
The Company anticipates that its cash flow from operations and borrowings
under the Credit Facility will provide sufficient cash to enable the Company to
meet its working capital needs, debt service requirements and planned capital
expenditures for property and equipment through fiscal 1999.
During the three months ended March 28, 1999, net cash provided by
operating activities was $5.2 million. Net cash used in investing activities was
$1.8 million, which was for additions to property and equipment, such as
computer equipment and office furniture. Net cash used in financing activities
was $3.4 million, consisting of $3.3 million for repayments by the Company of
indebtedness.
11
<PAGE>
During the three months ended March 29, 1998, net cash provided by
operating activities was $387,000. Net cash used in investing activities was
$1.6 million which was for additions to property and equipment, such as computer
equipment and office furniture offset. Net cash provided by financing activities
was $3.0 million, consisting of $2.3 million for repayments by the Company of
indebtedness offset by advances to the Company of $5.3 million from U.S. Office
Products.
In June 1998, the Company obtained the Credit Facility, a secured $60.0
million revolving credit facility, which is available for working capital,
capital expenditures, and acquisitions, subject to compliance with the
applicable covenants. The Credit Facility is scheduled to expire in June 2003.
Interest on borrowings under the Credit Facility accrues at a rate of, at the
Company's option, either (i) LIBOR plus a margin of between 1.00% and 2.00%,
depending on the Company's funded debt to EBITDA ratio, or (ii) the Alternative
Base Rate (defined as the higher of (x) the NationsBank, N.A. prime rate and (y)
the Federal Funds rate plus .50%) plus a margin of between 0% and .75%,
depending on the Company's funded debt to EBITDA ratio. Indebtedness under the
Credit Facility will be secured by substantially all of the assets of the
Company. The Credit Facility is subject to terms and conditions typical of
facilities of such size and includes certain financial covenants.
On April 26, 1999, the Company entered into a short term $15 million bridge
loan agreement, thereby expanding its Credit Facility. The expansion matures on
August 26, 1999 and includes certain financial and other covenants substantially
similar to the Credit Facility. Consequently, as of April 26, 1999, the
Company's available capacity under the Credit Facility, including the bridge
loan, is $24.1 million
The Company intends to continue to pursue acquisition opportunities and may
be in various stages of negotiation, due diligence and documentation of
potential acquisitions at any time. The timing, size or success of any
acquisition effort and the associated potential capital commitments cannot be
predicted. The Company expects to fund future acquisitions primarily with cash
flow from operations and borrowings, including borrowings under the Credit
Facility as well as issuances of additional equity or debt. To the extent the
Company funds a significant portion of the consideration for future acquisitions
with cash, it may have to increase the amount available for borrowing under the
Credit Facility or obtain other sources of financing through the public or
private sale of debt or equity securities. There can be no assurance that the
Company will be able to secure such financing if and when it is needed or on
terms the Company deems acceptable. If the Company is unable to secure
acceptable financing, its acquisition program could be negatively affected.
Capital expenditures for equipment and expansion of facilities are expected to
be funded from cash flow from operations and supplemented as necessary by
borrowings under the Credit Facility.
FLUCTUATIONS IN QUARTERLY RESULTS OF OPERATIONS
The business travel industry is seasonal and the Company's results have
fluctuated because of these seasonal variations. Net revenues and net income for
the Company are generally higher in the second and third calendar quarters. The
Company expects this seasonality to continue in the future. The Company's
quarterly results of operations may also be subject to fluctuations as a result
of changes in relationships with certain travel suppliers, changes in the mix of
services offered by the Company, extreme weather conditions or other factors
affecting travel. Unexpected variations in quarterly results could also
adversely affect the price of the Company's common stock, which in turn could
limit the ability of the Company to make acquisitions.
As the Company continues to complete acquisitions, it may become subject to
additional seasonal influences. Quarterly results also may be materially
affected by the timing of acquisitions, the timing and magnitude of costs
related to such acquisitions, variations in the prices paid by the Company for
the products it sells, the mix of products sold and general economic conditions.
Moreover, the operating margins of companies acquired may differ substantially
from those of the Company, which could contribute to the further fluctuation in
its quarterly operating results. Therefore, results for any
12
<PAGE>
quarter are not necessarily indicative of the results that the Company may
achieve for any subsequent fiscal quarter or for a full fiscal year.
INFLATION
The Company does not believe that inflation has had a material impact on
its results of operations.
NEW ACCOUNTING PRONOUNCEMENTS
On June 15, 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 133, Accounting for Derivative Instruments
and Hedging Activities ("FAS 133"). FAS 133 is effective for all fiscal
quarters of all fiscal years beginning after June 15, 1999 (January 1, 2000 for
the Company). FAS 133 requires that all derivative instruments be recorded on
the balance sheet at their fair value. Changes in the fair value of derivatives
are to be recorded each period in current earnings or other comprehensive
income, depending on whether a derivative is designated as part of a hedge
transaction and, if it is, the type of hedge transaction. The Company believes
that, due to its limited use of derivative instruments, the adoption of FAS 133
will not have a significant effect on the Company's results of operations or its
financial position.
YEAR 2000 ISSUES
The Company has implemented a program to attempt to assess, remediate, and
mitigate the potential impact of problems associated with the Year 2000
throughout the Company. A "Year 2000 Problem" is one where systems either fail
to operate as expected or cease to be operational because date dependent
functions improperly interpret dates after December 31, 1999.
As part of the Company's program, the Company has assigned staff, including
staff at each subsidiary, to identify hardware, software, and other systems
which may be affected by the Year 2000 Problem. The staff has also been
instructed to determine, and monitor, the progress made by the Company's
material vendors in remediating and mitigating their Year 2000 Problems. The
staff provides periodic reports to senior management, who advises the Board of
Directors.
The Company has reviewed its primary software systems, including its
various computer reservation systems, mid-office systems, and back-office
systems, and has determined which systems are and are not adversely affected by
the Year 2000 Problem. Software in these systems which are adversely impacted by
the Year 2000 Problem have been, or are scheduled to be, replaced with compliant
systems.
In some cases, such as with computer reservation systems, the Company must
rely on the efforts and ability of its vendors to replace non-compliant software
systems. The computer reservation system vendors, however, have repeatedly given
public assurances that their systems will be compliant. The Company has received
warranties from two of its major computer reservation system vendors assuring
that their software and hardware will not have a Year 2000 Problem. The Company
is attempting to obtain the same warranty from its other computer reservation
system vendors. On February 4, 1999, all computer reservation systems passed a
significant test as they began booking reservations in the year 2000.
The Company is also converting its subsidiaries to back-office accounting
software warranted as Year 2000 compliant. Conversion of subsidiaries whose
current back-office accounting software will be adversely affected by the Year
2000 Problem is expected to be complete by May 31, 1999. The Company has also
identified Year 2000 compliant mid-office software systems that can be used by
its subsidiaries to replace non-compliant systems.
13
<PAGE>
The Company has also reviewed its material computer hardware systems, and
has determined which systems are and are not adversely affected by the Year 2000
Problem. Systems associated with the Company's computer reservation systems and
back-office accounting systems which are adversely affected by the Year 2000
Problem have been, or will be, replaced in conjunction with the replacement of
the appropriate software systems.
The Company is in the process of identifying other non-information
technology systems, including telephone, HVAC, mechanical, and security systems,
which may be adversely affected by the Year 2000 Problem. The Company plans to
have this process complete by June 1999. Systems that are discovered to be
adversely impacted will be replaced or repaired as necessary.
In addition, the Company and its individual subsidiaries are in the process
of requesting information from their other major vendors concerning these
vendors' Year 2000 readiness. To date, the Company has received Year 2000
readiness disclosures from approximately 90% of its significant, national
vendors, and from approximately 60% of its significant, local vendors. None of
the vendors who have responded have disclosed material Year 2000 Problems which
will not be remediated before December 31, 1999. The Company continues to seek
information from its other major vendors. The Company, however, cannot assure
that it will receive satisfactory responses from these vendors. Consequently, as
part of the Company's contingency planning, it is evaluating whether to
discontinue relationships with vendors who have not provided satisfactory
disclosure by the end of September 1999.
To date, the Company has not incurred material costs of remediation, and it
does not expect to incur material costs in the future. The costs of replacing
some systems are being borne by the vendors, while other costs are within the
Company's normal and expected capital expenditure budget. Some elements of the
Company's Year 2000 plan, such as the consolidation of the back-office
accounting systems, are being undertaken for business reasons apart from the
Year 2000 concerns, and any Year 2000 benefit is an incidental bonus. The
Company believes its total incremental costs related to the Year 2000 Problem
remediation will be less than $250,000.
If the Company's efforts to remediate its Year 2000 Problems are not
successful, or if any of the Company's material vendors, such as its computer
reservation system vendors, are not Year 2000 compliant, the Company's ability
to make travel reservations for its customers could be jeopardized. If any such
Year 2000 problems persist, they could cause a material decrease in the
Company's revenues. The Company is in the process of developing contingency
plans to address these situations. The Company plans to finalize its contingency
plans by June 1999 but these plans may not adequately address any unforeseen
circumstances. In addition, the companies that the Company may acquire may have
Year 2000 Problems that require remediation.
This section contains historical information, as well as forward looking
statements withing the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, particularly in reference to
statements regarding the Company's expectations with respect to the Company's
plans and objectives for assessment and remediation of Year 2000 Problems. In
addition, one can generally identify forward looking statements by the use of
terms such as "may," "will," "expect," and "believe," as well as the negatives
thereof, variations thereon, or similar terminology. The Company bases such
statements upon management's current expectations. Forward looking statements
are subject to or may be impacted by a number of factors, risks and
uncertainties that could cause actual results to differ materially from those
described in forward looking statements. Moreover, the Company's Year 2000
readiness program is an ongoing process and the estimates of costs and
completion dates for various components of the program are subject to change.
14
<PAGE>
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.
- -------------------------------------------------------------------
Market risks relating to the Company's operations result primarily from
changes in interest rates. The Company's interest rate exposure relates
primarily to long-term debt obligations. A significant portion of the Company's
interest expense is based upon variable interest rates of its bank's prime rate
or the Eurodollar rate, as discussed in Footnote 9 of the Notes to Consolidated
Financial Statements in the Company's Annual Report on form 10-K for the year
ended December 27, 1998. Based upon the Company's average borrowings under the
Credit Facility for the three months ended March 28, 1999, a 25 basis point
movement in the base rate or the LIBOR rate would approximate $110,000
annualized increase or decrease in interest expense.
15
<PAGE>
PART II. OTHER INFORMATION.
- ----------------------------
ITEM 1. LEGAL PROCEEDINGS.
---------------------------
The Company has been named as a defendant in a lawsuit filed by the
previous stockholders of two of the Company's subsidiaries. The lawsuit
also names Jonathan J. Ledecky, a member of the Company's Board of
Directors, and certain other executive officers of U.S. Office Products as
defendants. The plaintiffs allege that Mr. Ledecky and the named U.S.
Office Products executive officers made fraudulent misrepresentations and
omissions about U.S. Office Products' accounting methods, the value of U.S.
Office Products' stock and U.S. Office Products' intent to spin-off its
travel business to its existing shareholders (the "Travel Distribution").
The plaintiffs contend that such alleged misrepresentations and omissions
induced the plaintiffs to sell their businesses to U.S. Office Products.
The Company has been named in the lawsuit as a successor to U.S. Office
Products' travel businesses. The plaintiffs contend that they may seek
rescission of the purchases of these two subsidiaries or damages for the
value of the assets of the two subsidiaries from the Company and have
requested that the Company be required to hold such assets in a
constructive trust for the plaintiffs. The Company's management intends to
vigorously defend against this lawsuit.
Mr. Ledecky and U.S. Office Products have also been named as
defendants in at least 10 lawsuits which allege that Mr. Ledecky and U.S.
Office Products violated various United States securities laws. The
plaintiffs generally claim that Mr. Ledecky, on behalf of U.S. Office
Products, made a series of materially false and misleading statements in
connection with the distributions of the shares of the Company and the
other companies that were spun off by U.S. Office Products (the "Spin-Off
Companies") and the related tender offer and restructuring. The validity
and the amount of the claims made in the lawsuits is uncertain.
In connection with the Travel Distribution, the Company (and the other
Spin-Off Companies) agreed to indemnify U.S. Office Products for certain
liabilities, which could include claims such as those made against U.S.
Office Products in these lawsuits. If U.S. Office Products were entitled to
indemnification under this agreement, the Company's indemnification
obligation, however, would be limited to 5.2% of U.S. Office Products'
indemnifiable loss, up to a maximum of $1.75 million.
The Company and its subsidiaries are also involved in various other
legal actions in the ordinary course of their business. The Company
believes that none of these actions will have a material adverse effect on
its business, financial condition and results of operations.
ITEM 2. CHANGES IN SECURITIES.
-------------------------------
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
-----------------------------------------
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
---------------------------------------------------------------
Not applicable.
16
<PAGE>
ITEM 5. OTHER INFORMATION.
---------------------------
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
------------------------------------------
(a) Exhibits
10.1 Amendment No. 1 dated April 26, 1999 to the Credit
Agreement among the Company, certain subsidiaries of the
Company as guarantors, NationsBank N.A. as administrative
agent and the other lenders named therein dated as of June
9, 1998 for a long-term revolving credit facility of up to
$75 million.
10.2 Bridge Credit Agreement dated as of April 26, 1999 among
the Company, certain subsidiaries of the Company as
guarantors, NationsBank N.A. as administrative agent and
the lenders named therein for a short-term revolving credit
agreement facility of up to $15 million.
27.1 Financial Data Schedules
(b) Reports on Form 8-K
The Company filed a report on Form 8-K dated January 21, 1999 for
the application of "Safe Harbor for Forward-Looking Statements"
with respect to speeches, interviews and meetings.
The Company filed a report on Form 8-K dated February 9, 1999 to
change its fiscal year end from the last Saturday in April, to
the last Sunday in December, effective for the fiscal year ended
December 27, 1998.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: May 11, 1999.
NAVIGANT INTERNATIONAL, INC.
a Delaware corporation
By: /s/ Robert C. Griffith
--------------------------------------------
Name: Robert C. Griffith
Title: Chief Financial Officer and Treasurer
(Principal Financial and Accounting
Officer)
18
<PAGE>
Exhibit 10.1
AMENDMENT NO. 1
THIS AMENDMENT NO. 1 (this "Amendment"), dated as of April 26, 1999, to the
---------
Credit Agreement referenced below, is by and among Navigant International, Inc.,
a Delaware corporation (the "Borrower"), the Subsidiaries of the Borrower
--------
identified on the signature pages hereto (the "Guarantors"), the lenders
----------
identified on the signature pages hereto (the "Lenders") and NationsBank, N.A.,
-------
as Administrative Agent. Terms used but not otherwise defined shall have the
meanings provided in the Credit Agreement.
W I T N E S S E T H
WHEREAS, a $60 million credit facility has been extended to the Borrower
pursuant to the terms of that Credit Agreement dated as of June 9, 1998 (as
amended and modified, the "Credit Agreement") among the Borrower, the
----------------
Guarantors, the Lenders and NationsBank, N.A., as Administrative Agent;
WHEREAS, the Borrower has requested certain modifications to the Credit
Agreement which require the consent of the Required Lenders;
WHEREAS, the Required Lenders have agreed to the requested modifications on
the terms and conditions set forth herein;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. The Credit Agreement is amended in the following respects:
1.1 The following definitions are added to Section 1.1 to read as follows:
"Bridge Credit Agreement" means that certain Credit Agreement
-----------------------
dated as of April __, 1999 by and among the Borrower, the Guarantors,
the lenders party thereto and NationsBank, N.A., as Administrative
Agent, as amended, modified, extended or renewed.
"Intercreditor Agreement" means that certain Intercreditor
-----------------------
Agreement dated as of the date hereof by and among NationsBank, N.A.,
as Administrative Agent under the Bridge Credit Agreement,
NationsBank, N.A., as Administrative Agent under this Credit
Agreement, and the Credit Parties, as amended or modified from time to
time, in substantially the form of Exhibit A attached hereto.
---------
"Required Lenders" means, at any time, two or more Lenders having
----------------
in the aggregate more than fifty percent (50%) of the Commitments, or
if the Commitments have been terminated, two or more Lenders having in
the aggregate more than fifty percent (50%) of the aggregate principal
amount of the Obligations outstanding (taking into account in each
case Participation Interests or obligation to participate therein);
provided that the Commitments of, and outstanding principal amount of
--------
Obligations (taking into account Participation Interests therein)
owing to, a Defaulting Lender shall be excluded for purposes hereof in
making a determination of Required Lenders.
1
<PAGE>
1.2 The definition of "Credit Documents" in Section 1.1 shall be amended
to include the "Intercreditor Agreement".
1.3 In the definition of "Permitted Liens" in Section 1.1, clauses (xv)
and (xvi) thereof are renumbered as clauses (xvi) and (xvii) thereof, and a new
clause (xv) is added thereto to read as follows:
(xv) Liens in favor of the administrative agent and lenders
under the Bridge Credit Agreement securing the loans and obligations
owing under the Bridge Credit Agreement on a pari passu basis with the
loans and obligations owing under this Credit Agreement, but only to
the extent (A) such Liens are on the same collateral as to which the
Lenders also have a lien and (B) such Liens are subject to the
Intercreditor Agreement.
1.4 Clause (f) of Section 8.1 is amended to read as follows:
(f) Subordinated Debt of the Borrower, provided that (i) the
Borrower shall demonstrate it will be in compliance with the financial
covenants in Section 7.9 after giving effect thereto on a Pro Forma
Basis, (ii) no Default or Event of Default shall exist after giving
effect thereto, and (iii) the net proceeds therefrom shall be applied
first to repay the loans and other obligations under the Bridge Credit
Agreement;
1.5 Clauses (g) and (h) of Section 8.1 are renumbered as clauses (h) and
(i), and new clauses (g) is added to read as follows:
(h) other senior secured Indebtedness of the Credit Parties in
an aggregate principal amount of up to $15 million incurred pursuant
to the Bridge Credit Agreement;
1.6 Section 8.9 is amended to read as follows:
8.9 Prepayments of Indebtedness, etc.
---------------------------------
(a) After the issuance thereof, amend or modify (or permit the
amendment or modification of) the terms of any other Indebtedness
(other than Indebtedness under the Bridge Credit Agreement) in a
manner adverse to the interests of the Lenders (including specifically
shortening any maturity or average life to maturity or requiring any
payment sooner than previously scheduled or increasing the interest
rate or fees applicable thereto);
(b) Make any prepayment, redemption, defeasance or acquisition
for value of (including without limitation, by way of depositing money
or securities with the trustee with respect thereto before due for the
purpose of paying when due), or refund, refinance or exchange, of any
Funded Debt (other than intercompany Indebtedness permitted hereunder
and Indebtedness under the Bridge Credit Agreement) other than
regularly scheduled payments of principal and interest on such Funded
Debt.
1.7 Section 8.12 is amended to read as follows:
8.12 No Further Negative Pledges.
---------------------------
Except with respect to (i) prohibitions against other
encumbrances on specific Property encumbered to secure payment of
particular Indebtedness (which Indebtedness
2
<PAGE>
relates solely to such specific Property, and improvements and
accretions thereto, and is otherwise permitted hereby) and (ii) the
Bridge Credit Agreement, no member of the Consolidated Group will
enter into, assume or become subject to any agreement prohibiting or
otherwise restricting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for such obligation if security is
given for some other obligation.
1.8 Clause (j) of Section 9.1 is renumbered as clause (k), and a new
clause (j) is added to read as follows:
(j) The occurrence of an Event of Default under the Bridge Credit
Agreement; or
2. By execution of this Amendment, the Required Lenders authorize and
direct the Administrative Agent, on behalf of the Lenders under the Credit
Agreement, to enter into the Intercreditor Agreement.
3. This Amendment shall be effective upon satisfaction of the following
conditions:
(a) execution of this Amendment by the Credit Parties and the Required
Lenders; and
(b) receipt by the Administrative Agent of legal opinions of counsel
to the Credit Parties relating to this Amendment.
4. The Credit Parties hereby affirm (i) the representations and
warranties set out in Section 6 of the Credit Agreement are true and correct as
of the date hereof (except those which expressly relate to an earlier period)
and (ii) no Default or Event of Default presently exists.
5. Except as modified hereby, all of the terms and provisions of the
Credit Agreement (including Schedules and Exhibits) shall remain in full force
and effect.
6. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, execution and delivery
of this Amendment, including without limitation the reasonable fees and expenses
of Moore & Van Allen, PLLC.
7. This Amendment may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original and it shall
not be necessary in making proof of this Amendment to produce or account for
more than one such counterpart.
8. This Amendment shall be deemed to be a contract made under, and for
all purposes shall be construed in accordance with the laws of the State of
North Carolina.
3
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: NAVIGANT INTERNATIONAL, INC.
- --------
a Delaware corporation
By: s/ Eugene A. Over
---------------------------
Name: Eugene A. Over, Jr.
Title: Vice President
GUARANTORS: PROFESSIONAL TRAVEL CORPORATION,
- ----------
a Colorado corporation
ASSOCIATED TRAVEL SERVICES, LLC,
a Delaware limited liability company
MCGREGOR TRAVEL MANAGEMENT, INC.,
a Connecticut corporation
MTA, INC.,
a Washington corporation
ENVISION VACATIONS, INC.,
a Michigan corporation
OMNI TRAVEL SERVICE, INC.,
a Massachusetts corporation
SIMMONS ASSOCIATES, INC.,
a Virginia corporation
TRAVEL CONSULTANTS, INC.,
a Michigan corporation
TRAVELCORP., INC.,
a Minnesota corporation
WAREHEIM TRAVEL SERVICES, INC.,
a Maryland corporation
WORLD EXPRESS TRAVEL, INC.,
an Alaska corporation
BOWERS WORLDWIDE TRAVEL SERVICE, INC.,
an Arizona corporation
ARRINGTON TRAVEL CENTER, INC.,
an Illinois corporation
By: s/ Eugene A. Over
---------------------------
Name: Eugene A. Over, Jr.
Title: Vice President of each of the foregoing Guarantors
[Signature Pages Follow]
<PAGE>
ATLAS TRAVEL SERVICES, LP,
a Texas limited partnership
By: ATLAS TRAVEL GP, INC.,
a Texas corporation
By: s/ Eugene A. Over
----------------------
Name: Eugene A. Over, Jr.
Title: Vice President
<PAGE>
LENDERS: NATIONSBANK, N.A.,
- -------
individually in its capacity as a
Lender and in its capacity as Administrative Agent
By: /s/ Chittaranjan D. Swamidasan
------------------------------------
Name: Chittaranjan D. Swamidasan
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ George E. Adams
-----------------------------------
Name: George E. Adams
Title: Vice President
<PAGE>
Exhibit 10.2
BRIDGE CREDIT AGREEMENT
Dated as of April 26, 1999
among
NAVIGANT INTERNATIONAL, INC.,
as Borrower,
Certain Subsidiaries and Affiliates,
as Guarantors,
THE LENDERS NAMED HEREIN
AND
NATIONSBANK, N.A.,
as Administrative Agent, Lead Arranger and Sole Book Runner
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 1 DEFINITIONS..................................................... 1
-----------
1.1 Definitions.......................................................... 1
-----------
1.2 Computation of Time Periods.......................................... 6
---------------------------
1.3 Accounting Terms..................................................... 7
----------------
SECTION 2 CREDIT FACILITIES............................................... 7
-----------------
2.1 Revolving Loans...................................................... 7
---------------
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES.................. 9
-----------------------------------------------
3.1 Default Rate......................................................... 9
------------
3.2 Extension and Conversion............................................. 9
------------------------
3.3 Prepayments......................................................... 10
-----------
3.4 Termination and Reduction of Commitments............................ 10
----------------------------------------
3.5 Fees................................................................ 10
----
3.6 Capital Adequacy.................................................... 11
----------------
3.7 Inability To Determine Interest Rate................................ 11
------------------------------------
3.8 Illegality.......................................................... 11
----------
3.9 Requirements of Law................................................. 12
-------------------
3.10 Taxes.............................................................. 13
-----
3.11 Indemnity.......................................................... 14
---------
3.12 Pro Rata Treatment................................................. 15
------------------
3.13 Sharing of Payments................................................ 15
-------------------
3.14 Payments, Computations, Etc........................................ 16
----------------------------
3.15 Evidence of Debt................................................... 17
----------------
SECTION 4 GUARANTY....................................................... 18
--------
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
4.1 The Guarantee....................................................... 18
-------------
4.2 Obligations Unconditional........................................... 18
-------------------------
4.3 Reinstatement....................................................... 20
-------------
4.4 Certain Additional Waivers.......................................... 20
--------------------------
4.5 Remedies............................................................ 20
--------
4.6 Rights of Contribution.............................................. 20
----------------------
4.7 Continuing Guarantee................................................ 21
--------------------
SECTION 5 CONDITIONS..................................................... 21
----------
5.1 Conditions to Closing............................................... 21
---------------------
5.2 Conditions to All Extensions of Credit.............................. 22
--------------------------------------
SECTION 6 REPRESENTATIONS AND WARRANTIES; COVENANTS...................... 23
-----------------------------------------
6.1 Incorporation....................................................... 23
-------------
6.2 Additional Covenants................................................ 24
--------------------
(b) Prepayments of Indebtedness, etc.................................... 24
---------------------------------
SECTION 7 EVENTS OF DEFAULT.............................................. 24
-----------------
7.1 Events of Default................................................... 25
-----------------
7.2 Acceleration; Remedies.............................................. 27
----------------------
SECTION 8 AGENCY PROVISIONS.............................................. 27
-----------------
8.1 Appointment......................................................... 27
-----------
8.2 Delegation of Duties................................................ 28
--------------------
8.3 Exculpatory Provisions.............................................. 28
----------------------
8.4 Reliance on Communications.......................................... 29
--------------------------
8.5 Notice of Default................................................... 29
-----------------
8.6 Non-Reliance on Administrative Agent and Other Lenders.............. 29
------------------------------------------------------
8.7 Indemnification..................................................... 30
---------------
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
8.8 Administrative Agent in its Individual Capacity..................... 30
-----------------------------------------------
8.9 Successor Administrative Agent...................................... 30
------------------------------
8.10 Intercreditor Agreement............................................ 31
-----------------------
SECTION 9 MISCELLANEOUS.................................................. 31
-------------
9.1 Notices............................................................. 31
-------
9.2 Right of Set-Off.................................................... 32
----------------
9.3 Benefit of Agreement................................................ 33
--------------------
9.4 No Waiver; Remedies Cumulative...................................... 35
------------------------------
9.5 Payment of Expenses, etc............................................ 35
------------------------
9.6 Amendments, Waivers and Consents.................................... 36
--------------------------------
9.7 Counterparts........................................................ 37
------------
9.8 Headings............................................................ 37
--------
9.9 Survival............................................................ 37
--------
9.10 Governing Law; Submission to Jurisdiction; Venue................... 37
------------------------------------------------
9.11 Severability....................................................... 38
------------
9.12 Entirety........................................................... 38
--------
9.13 Binding Effect; Termination........................................ 38
---------------------------
9.14 Confidentiality.................................................... 38
---------------
9.15 Source of Funds.................................................... 39
---------------
9.16 Conflict........................................................... 39
--------
</TABLE>
iii
<PAGE>
SCHEDULES
Schedule 2.1(a) Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1(f)(v) Form of Officer's Certificate
Schedule 8.10 Form of Intercreditor Agreement
Schedule 9.1 Lenders and Addresses
Schedule 9.3(b) Form of Assignment and Acceptance
iv
<PAGE>
BRIDGE CREDIT AGREEMENT
THIS BRIDGE CREDIT AGREEMENT, dated as of April 26, 1999 (the "Credit
------
Agreement"), is by and among NAVIGANT INTERNATIONAL, INC., a Delaware
- ---------
corporation (the "Borrower"), the subsidiaries and affiliates of the Borrower
--------
identified on the signature pages hereto and such other subsidiaries and
affiliates of the Borrower as may from time to time become Guarantors hereunder
in accordance with the provisions hereof (the "Guarantors"), the lenders named
----------
herein and such other lenders as may become a party hereto (the "Lenders"), and
-------
NATIONSBANK, N.A., as Administrative Agent (in such capacity, the
"Administrative Agent").
- ---------------------
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide up to a $15
million bridge credit facility for the purposes hereinafter set forth;
WHEREAS, the Lenders have agreed to make the requested bridge credit
facility available to the Borrower on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. SECTION 1
DEFINITIONS
- -----------
2.
A. 1.1 DEFINITIONS.
-----------
Terms used in this Credit Agreement (including the Incorporated
Representations and the Incorporated Covenants) but not otherwise defined in
this Credit Agreement shall have the definitions assigned to such terms in the
Revolving Credit Agreement as in effect on the Closing Date. As used in this
Credit Agreement (including the Incorporated Representations, the Incorporated
Covenants and any definitions incorporated herein from the Revolving Credit
Agreement pursuant to the foregoing sentence), the following terms shall have
the meanings specified below unless the context otherwise requires:
"Administrative Agent" shall have the meaning assigned to such term in
--------------------
the heading hereof, together with any successors or assigns.
"Aggregate Revolving Committed Amount" means the aggregate amount of
------------------------------------
Revolving Commitments in effect from time to time under the Credit
Agreement, being initially FIFTEEN MILLION DOLLARS ($15,000,000).
<PAGE>
"Applicable Percentage" means for any day, the rate per annum set
---------------------
forth below opposite the applicable Consolidated Leverage Ratio then in
effect, it being understood that the Applicable Percentage for (i) Base
Rate Loans shall be the percentage set forth under the column "Base Rate
Margin", (ii) Eurodollar Loans shall be the percentage set forth under the
column "Eurodollar Margin", and (iii) the Commitment Fee shall be the
percentage set forth under the column "Commitment Fee":
<TABLE>
<CAPTION>
Consolidated
Pricing Leverage Base Rate Eurodollar Commitment
Level Ratio Margin Margin Fee
----- ----- ------ ------ ---
<S> <C> <C> <C> <C>
I *1.5 0.25% 1.50% 0.300%
II **1.5 but *2.0 0.50% 1.75% 0.375%
III **2.0 but *2.5 0.75% 2.00% 0.425%
IV **2.5 1.25% 2.50% 0.500%
</TABLE>
* Less than
** Greater than or equal to
The Applicable Percentage shall be determined and adjusted quarterly on the
date (each a "Rate Determination Date") five (5) Business Days after the
-----------------------
date by which the annual and quarterly compliance certificates and related
financial statements and information are required in accordance with the
provisions of Sections 7.1(a) and (b) and Section 7.2(b), of the Incorporated
Covenants, as applicable; provided that in the event an annual or quarterly
--------
compliance certificate and related financial statements and information are not
delivered timely to the Agency Services Address by the date required by Sections
7.1(a) and (b) and Section 7.2(b) of the Incorporated Covenants, as applicable,
the Applicable Percentages shall be based on Pricing Level IV until such time as
an appropriate compliance certificate and related financial statements and
information are delivered, whereupon the applicable Pricing Level shall be
adjusted based on the information contained in such compliance certificate and
related financial statements and information.
Each Applicable Percentage shall be effective from a Rate Determination Date
until the next such Rate Determination Date. The Administrative Agent shall
determine the appropriate Applicable Percentages in the pricing matrix promptly
upon receipt of the quarterly or annual compliance certificate and related
financial information and shall promptly notify the Borrower and the Lenders of
any change thereof. Such determinations by the Administrative Agent shall be
conclusive absent manifest error. Adjustments in the Applicable Percentages
shall be effective as to existing Extensions of Credit as well as new Extensions
of Credit made thereafter.
"Borrower" means Navigant International, Inc., a Delaware corporation,
--------
as referenced in the opening paragraph, its successors and permitted assigns.
"Closing Date" means the date hereof.
------------
"Commitment" means the Revolving Commitment.
----------
"Commitment Fee" shall have the meaning given such term in Section 3.5
--------------
"Commitment Percentage" means the Revolving Commitment Percentage.
---------------------
2
<PAGE>
"Commitment Period" means the period from and including the Closing
-----------------
Date to but not including the earlier of (i) the Termination Date, or (ii)
the date on which the Commitments terminate in accordance with the
provisions of this Credit Agreement.
"Consolidated Group" means the Borrower and its consolidated
------------------
subsidiaries, as determined in accordance with GAAP.
"Credit Documents" means a collective reference to this Credit
----------------
Agreement, the Notes, the Pledge Agreement, the Security Agreement, the
Intercreditor Agreement, each Joinder Agreement, and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto.
"Credit Party" means any of the Borrower and the Guarantors.
------------
"Debt Transaction" means, with respect to any member of the
----------------
Consolidated Group, any sale, issuance or placement of Funded Debt, whether
or not evidenced by promissory note or other written evidence of
indebtedness, except for Funded Debt permitted to be incurred pursuant to
Section 8.1 of the Incorporated Covenants (other than Subordinated Debt
permitted to be incurred pursuant to Section 8.1(f) of the Incorporated
Covenants).
"Equity Transaction" means, with respect to any member of the
------------------
Consolidated Group, any issuance or sale of shares of its capital stock or
other equity interest, other than an issuance (i) to a member of the
Consolidated Group, (ii) in connection with a conversion of debt securities
to equity or (iii) in connection with exercise by a present or former
employee, officer or director under a stock incentive plan, stock option
plan or other equity-based compensation plan or arrangement.
"Event of Default" means such term as defined in Section 7.1.
----------------
"Excess Funding Guarantor" shall have the meaning given such term in
------------------------
Section 4.6.
"Excess Payment" shall have the meaning given such term in Section
--------------
4.6.
"Extension of Credit" means, as to any Lender, the making of, or
-------------------
participation in, a Loan by such Lender (including extensions and
conversions thereof).
"Fees" means all fees payable pursuant to Section 3.5.
----
"Funded Debt" means, with respect to any Person, without duplication,
-----------
(i) all Indebtedness of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (iii)
all purchase money Indebtedness (including for purposes hereof,
indebtedness and obligations described in clauses (iii) and (iv) of the
definition of "Indebtedness") of such Person, including without limitation
the principal portion of all obligations of such Person under Capital
Leases, (iv) all Support Obligations of such Person with respect to Funded
Indebtedness of another Person, (v) the maximum available amount of all
standby letters of credit or acceptances issued or created for the account
of such Person, (vi) all Funded Debt of another Person secured by a Lien on
any Property of such Person, whether or not such Funded Indebtedness has
been assumed, provided that for purposes hereof the amount of such Funded
--------
Debt shall be limited to the greater of (A) the
3
<PAGE>
amount of such Funded Debt as to which there is recourse to such Person and
(B) the fair market value of the property which is subject to the Lien,
(vii) the outstanding attributed principal amount under any Securitization
Transaction, and (viii) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product to which such Person is a
party, where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an operating lease in accordance with
GAAP. The Funded Debt of any Person shall include the Funded Debt of any
partnership or joint venture in which such Person is a general partner or
joint venturer, but only to the extent to which there is recourse to such
Person for the payment of such Funded Debt.
"Guarantor" means each of those Persons identified as a "Guarantor" on
---------
the signature pages hereto, and each other Person which may hereafter
become a Guarantor by execution of a Joinder Agreement, together with their
successors and permitted assigns.
"Guaranteed Obligations" means, as to each Guarantor, without
----------------------
duplication, (i) all obligations of the Borrower (including interest
accruing after a Bankruptcy Event, regardless of whether such interest is
allowed as a claim under the Bankruptcy Code) to the Lenders and the
Administrative Agent, whenever arising, under this Credit Agreement, the
Notes or the other Credit Documents, and (ii) all liabilities and
obligations, whenever arising, owing from the Borrower to any Lender, or
any Affiliate of a Lender, arising under any Hedging Agreement relating to
Obligations hereunder.
"Incorporated Covenants" shall have the meaning assigned to such terms
----------------------
in Section 6.1.
"Incorporated Representations" shall have the meaning assigned to such
----------------------------
terms in Section 6.1.
"Intercreditor Agreement" means that certain Intercreditor Agreement
-----------------------
dated as of the date hereof by and among NationsBank, N.A., as
Administrative Agent under the Revolving Credit Agreement, NationsBank,
N.A., as Administrative Agent under this Credit Agreement, and the Credit
Parties, as amended or modified from time to time, in substantially the
form of Schedule 8.10 hereto.
-------------
"Interest Payment Date" means (i) as to any Base Rate Loan, the last
---------------------
day of each March, June, September and December, the date of repayment of
principal of such Loan and the Termination Date and (ii) as to any
Eurodollar Loan, the last day of each Interest Period for such Loan, the
date of repayment of principal of such Loan and the Termination Date, and
in addition where the applicable Interest Period is more than three months,
then also on the date three months from the beginning of the Interest
Period, and each three months thereafter. If an Interest Payment Date
falls on a date which is not a Business Day, such Interest Payment Date
shall be deemed to be the next succeeding Business Day.
"Interest Period" means, as to any Eurodollar Loan, a period of one,
---------------
two, three or six month's duration, as the Borrower may elect, commencing
in each case, on the date of the borrowing (including conversions,
extensions and renewals); provided, however, (A) if any Interest Period
-------- -------
would end on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day (except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding
4
<PAGE>
Business Day), (B) no Interest Period shall extend beyond the Termination
Date, and (C) where an Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last day
of such calendar month.
"Joinder Agreement" means a Joinder Agreement substantially in the
-----------------
form of Schedule 7.11-1 to the Revolving Credit Agreement but relating to
---------------
this Credit Agreement, executed and delivered by an Additional Credit Party
in accordance with the provisions of Section 6.2 hereof.
"Lenders" means each of the Persons identified as a "Lender" on the
-------
signature pages hereto, and their successors and assigns.
"Loan" or "Loans" means the Revolving Loans (and any Base Rate Loans
---- -----
or Eurodollar Loans comprising such Revolving Loans).
"Net Proceeds" means gross cash proceeds (including any cash received
------------
by way of deferred payment pursuant to a promissory note, receivable or
otherwise, but only as and when received) received in connection with an
Equity Transaction or Debt Transaction, net of (i) reasonable transaction
costs, including underwriting discounts and commissions, (ii) estimated
taxes payable in connection therewith, and (iii) in the case of a Debt
Transaction, any amounts payable in respect of Funded Debt, including
without limitation principal, interest, premiums and penalties, which is
secured by, or otherwise related to, any property or asset which is the
subject thereof to the extent that such Funded Debt and any payments in
respect thereof are paid with a portion of the proceeds therefrom.
"Non-Excluded Taxes" means such term as is defined in Section 3.10(a).
------------------
"Note" or "Notes" means the promissory notes of the Borrower in favor
---- -----
of each of the Lenders evidencing the Revolving Loans in substantially the
form attached as Schedule 2.1(e), individually or collectively, as
---------------
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Notice of Borrowing" means a written notice of borrowing in
-------------------
substantially the form of Schedule 2.1(b)(i), as required by Section
------------------
2.1(b)(i).
"Notice of Extension/Conversion" means a written notice of extension
------------------------------
or conversion in substantially the form of Schedule 3.2, as required by
------------
Section 3.2.
"Obligations" means the Revolving Loans.
-----------
"Participation Interest" means the purchase by a Lender of a
----------------------
participation in Loans as provided in Section 3.13.
"Pledge Agreement" means the Pledge Agreement dated as of the Closing
----------------
Date given by the Borrower and the other pledgors identified therein to
NationsBank, N.A., as Administrative Agent, to secure the obligations
hereunder, as amended and modified.
"Pro Rata Share" shall have the meaning given such term in Section
--------------
4.6.
5
<PAGE>
"Rate Determination Date" shall have the meaning given such term in
-----------------------
the definition of "Applicable Percentage".
"Register" shall have the meaning given such term in Section 9.3(c).
--------
"Required Lenders" means, at any time, two or more Lenders having in
----------------
the aggregate more than fifty percent (50%) of the Commitments, or if the
Commitments have been terminated, two or more Lenders having in the
aggregate more than fifty percent (50%) of the aggregate principal amount
of the Obligations outstanding (taking into account in each case
Participation Interests or obligation to participate therein); provided
--------
that the Commitments of, and outstanding principal amount of Obligations
(taking into account Participation Interests therein) owing to, a
Defaulting Lender shall be excluded for purposes hereof in making a
determination of Required Lenders.
"Revolving Commitment" means, with respect to each Lender, the
--------------------
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding of up to such Lender's Revolving Committed
Amount.
"Revolving Commitment Percentage" means, for each Lender, a fraction
-------------------------------
(expressed as a percentage) the numerator of which is the Revolving
Commitment of such Lender and the denominator of which is the Aggregate
Revolving Committed Amount. The initial Revolving Commitment Percentage of
each Lender is set forth on Schedule 2.1(a).
---------------
"Revolving Committed Amount" means, with respect to each Lender, an
--------------------------
amount equal to such Lender's Revolving Commitment Percentage of the
Aggregate Revolving Committed Amount. The initial Revolving Committed
Amount of each Lender is set forth on Schedule 2.1(a).
"Revolving Credit Agreement" means that certain Credit Agreement dated
--------------------------
as of June 9, 1998 by and among the Borrower, certain subsidiaries of the
Borrower, as guarantors, the lenders identified therein and NationsBank,
N.A., as Administrative Agent, as amended and modified from time to time.
"Revolving Loans" shall have the meaning assigned to such term in
---------------
Section 2.1(a).
"Security Agreement" means the Security Agreement dated as of the
------------------
Closing Date given by the Borrower and the other grantors identified
therein to NationsBank, N.A., as Administrative Agent, to secure the
obligations hereunder, as amended and modified.
"Termination Date" means August __, 1999 (being the date 120 days from
----------------
the Closing Date).
B. 1.2 COMPUTATION OF TIME PERIODS.
---------------------------
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding."
6
<PAGE>
C. 1.3 ACCOUNTING TERMS.
----------------
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP. All calculations made for
the purposes of determining compliance with this Credit Agreement shall (except
as otherwise expressly provided herein) be made by application of GAAP applied
on a basis consistent with the most recent annual or quarterly financial
statements delivered pursuant to Section 7.1 of the Incorporated Covenants;
provided, however, if (a) the Borrower shall object to determining such
- -------- -------
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Administrative Agent or the Required Lenders shall so object in writing
within 30 days after delivery of such financial statements, then such
calculations shall be made on a basis consistent with the most recent financial
statements delivered by the Borrower to the Lenders as to which no such
objection shall have been made.
It is further acknowledged and agreed that, except as expressly provided
otherwise, for purposes of determining the Applicable Percentage and compliance
with the financial covenants in Section 7.9 of the Incorporated Covenants (and
compliance therewith on a Pro Forma Basis), in the case of acquisitions and
dispositions which have occurred during the applicable period to the extent
permitted hereunder, adjustments shall be made to take into account historical
performance (reflecting adjustments in income for elimination of salaries,
owners' perks and other items reasonably eliminated pursuant to contractual
provisions) relating thereto during such applicable period prior to the date of
such acquisition or disposition, and the effect of any Indebtedness paid with
proceeds from a disposition, provided that coverage items (relating to interest
--------
and rental expense and other such items, under Consolidated EBITDA, Consolidated
Fixed Charges or the like) shall be determined by annualization from the date of
acquisition of disposition rather than by reference to historical performance
relating prior the date of acquisition or disposition.
3. SECTION 2
CREDIT FACILITIES
- -----------------
A. 2.1 REVOLVING LOANS.
---------------
(a) Revolving Commitment. During the Commitment Period, subject to the
--------------------
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans (the "Revolving Loans") to the Borrower from time to time in the
---------------
amount of such Lender's Revolving Commitment Percentage of such Revolving Loans
for the purposes hereinafter set forth; provided that (i) with regard to the
--------
Lenders collectively, the aggregate principal amount of Obligations outstanding
at any time shall not exceed the Aggregate Revolving Committed Amount, and (ii)
with regard to each Lender individually, such Lender's Revolving Commitment
Percentage of Obligations outstanding at any time shall not exceed such Lender's
Revolving Committed Amount. Revolving Loans may consist of Base Rate Loans or
7
<PAGE>
Eurodollar Loans, or a combination thereof, as the Borrower may request, and may
be repaid and reborrowed in accordance with the provisions hereof.
(b) Revolving Loan Borrowings.
-------------------------
(i) Notice of Borrowing. The Borrower shall request a Revolving Loan
-------------------
borrowing by written notice (or telephone notice promptly confirmed in
writing) to the Administrative Agent not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day prior to the date of the requested
borrowing in the case of Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of Eurodollar
Loans. Each such request for borrowing shall be irrevocable and shall
specify (A) that a Revolving Loan is requested, (B) the date of the
requested borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing shall be
comprised of Base Rate Loans, Eurodollar Loans or a combination thereof,
and if Eurodollar Loans are requested, the Interest Period(s) therefor. If
the Borrower shall fail to specify in any such Notice of Borrowing (I) an
applicable Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period of one month,
or (II) the type of Revolving Loan requested, then such notice shall be
deemed to be a request for a Base Rate Loan hereunder. The Administrative
Agent shall give notice to each Lender promptly upon receipt of each Notice
of Borrowing pursuant to this Section 2.1(b)(i), the contents thereof and
each such Lender's share of any borrowing to be made pursuant thereto.
(ii) Minimum Amounts. Each Revolving Loan shall be in a minimum
---------------
aggregate principal amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof in the case of Eurodollar Loans, or $1,000,000
(or the remaining Aggregate Revolving Committed Amount, if less) and
integral multiples of $500,000 in excess thereof in the case of Base Rate
Loans.
(iii) Advances. Each Lender will make its Revolving Commitment
--------
Percentage of each Revolving Loan borrowing available to the Administrative
Agent for the account of the Borrower, or in such other manner as the
Administrative Agent may specify in writing, by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice of Borrowing
in Dollars and in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower with the
aggregate of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be due
---------
and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1,
--------
(i) Base Rate Loans. During such periods as Revolving Loans shall be
---------------
comprised in whole or in part of Base Rate Loans, such Base Rate Loans
shall bear interest at a per annum rate equal to the Base Rate plus the
----
Applicable Percentage;
(ii) Eurodollar Loans. During such periods as Revolving Loans shall
----------------
be comprised in whole or in part of Eurodollar Loans, such Eurodollar Loans
shall bear interest at a per annum rate equal to the Eurodollar Rate plus
----
the Applicable Percentage.
8
<PAGE>
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) Revolving Notes. The Revolving Loans shall be evidenced by a duly
---------------
executed Note in favor of each Lender.
(f) Maximum Number of Eurodollar Loans. The Borrower will be limited to a
----------------------------------
maximum number of five (5) Eurodollar Loans outstanding at any time. For
purposes hereof, Eurodollar Loans with separate or different Interest Periods
will be considered as separate Eurodollar Loans even if their Interest Periods
expire on the same date.
4. SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
- ----------------------------------------------
A. 3.1 DEFAULT RATE.
------------
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then 2% greater than the Base Rate).
B. 3.2 EXTENSION AND CONVERSION.
------------------------
Subject to the terms of Section 5.2, the Borrower shall have the option, on
any Business Day, to extend existing Loans into a subsequent permissible
Interest Period or to convert Loans into Loans of another interest rate type;
provided, however, that (i) except as provided in Section 3.8, Eurodollar Loans
- -------- -------
may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate
Loans may be converted into Eurodollar Loans, only if no Default or Event of
Default is in existence on the date of extension or conversion, (iii) Loans
extended as, or converted into, Eurodollar Loans shall be subject to the terms
of the definition of "Interest Period" set forth in Section 1.1 and shall be in
---------------
such minimum amounts as provided in Section 2.1(b)(ii), and (iv) any request for
extension or conversion of a Eurodollar Loan which shall fail to specify an
Interest Period shall be deemed to be a request for an Interest Period of one
month. Each such extension or conversion shall be effected by the Borrower by
giving a Notice of Extension/Conversion (or telephone notice promptly confirmed
in writing) to the Administrative Agent prior to 11:00 A.M. (Charlotte, North
Carolina time) on the Business Day of, in the case of the conversion of a
Eurodollar Loan into a Base Rate Loan, and on the third Business Day prior to,
in the case of the extension of a Eurodollar Loan as, or conversion of a Base
Rate Loan into, a Eurodollar Loan, the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Loans to be so extended or converted, the types of Loans into which such Loans
are to be converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall be irrevocable
and shall constitute a representation and warranty by the Borrower of the
matters specified in subsections (a) through (e) of Section 5.2. In the event
the Borrower fails to request extension or conversion of any Eurodollar Loan in
accordance with this
9
<PAGE>
Section, or any such conversion or extension is not permitted or required by
this Section, then such Eurodollar Loan shall be automatically converted into a
Base Rate Loan at the end of the Interest Period applicable thereto. The
Administrative Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.
C. 3.3 PREPAYMENTS.
-----------
(a) Voluntary Prepayments. Revolving Loans may be repaid in whole or in
---------------------
part without premium or penalty; provided that (i) Eurodollar Loans may be
--------
prepaid only upon three (3) Business Days' prior written notice to the
Administrative Agent and must be accompanied by payment of any amounts owing
under Section 3.11, and (ii) partial prepayments shall be minimum principal
amounts of $5,000,000, in the case of Eurodollar Loans, and $1,000,000, in the
case of Base Rate Loans, and in integral multiples of $1,000,000 in excess
thereof.
(b) Mandatory Prepayments. If at any time the aggregate principal amount
---------------------
of Obligations shall exceed the Aggregate Revolving Committed Amount, Borrower
shall immediately make payment on the Revolving Loans in an amount sufficient to
eliminate the excess.
(c) Application. Unless otherwise specified by the Borrower, prepayments
-----------
made hereunder shall be applied first to Base Rate Loans and then to Eurodollar
Loans in direct order of Interest Period maturities. Amounts prepaid hereunder
may be reborrowed in accordance with the provisions hereof.
D. 3.4 TERMINATION AND REDUCTION OF COMMITMENTS
----------------------------------------
(a) Voluntary Reductions. The Revolving Commitments may be terminated or
--------------------
permanently reduced in whole or in part upon three (3) Business Days' prior
written notice to the Administrative Agent, provided that (i) after giving
--------
effect to any voluntary reduction the aggregate amount of Obligations shall not
exceed the Aggregate Revolving Committed Amount, as reduced, and (ii) partial
reductions shall be minimum principal amount of $5,000,000, and in integral
multiples of $1,000,000 in excess thereof.
(b) Mandatory Reductions. The Revolving Commitments shall be permanently
--------------------
reduced in an amount equal to one hundred percent (100%) of the Net Proceeds
received from any Debt Transaction or Equity Transaction.
(c) Termination. The Commitments hereunder shall terminate on the
-----------
Termination Date.
E. 3.5 FEES.
----
In consideration of the Revolving Commitments hereunder, the Borrower
agrees to pay to the Administrative Agent for the ratable benefit of the Lenders
a commitment fee (the "Commitment Fee") equal to the Applicable Percentage per
--------------
annum on the average daily unused
10
<PAGE>
amount of the Aggregate Revolving Committed Amount for the applicable period.
The Commitment Fee shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the immediately preceding
quarter (or portion thereof) beginning with the first such date to occur after
the Closing Date.
F. 3.6 CAPITAL ADEQUACY.
----------------
If any Lender has determined, after the date hereof, that the adoption or
the becoming effective of, or any change in, or any change by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof in the interpretation or administration of, any
applicable law, rule or regulation regarding capital adequacy, or compliance by
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Lender could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy), then, upon notice from
such Lender to the Borrower, the Borrower shall be obligated to pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction. Each determination by any such Lender of amounts owing under this
Section shall, absent manifest error, be conclusive and binding on the parties
hereto.
G. 3.7 INABILITY TO DETERMINE INTEREST RATE.
------------------------------------
If prior to the first day of any Interest Period, the Administrative Agent
shall have determined (which determination shall be conclusive and binding upon
the Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Borrower and the Lenders as soon as practicable
thereafter. If such notice is given (a) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans
and (b) any Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans shall be converted to or
continued as Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Base Rate Loans to
Eurodollar Loans.
H. 3.8 ILLEGALITY.
----------
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans shall forthwith be canceled and, until such time as it
shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the
11
<PAGE>
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Lender such amounts, if any, as may be required pursuant to Section 3.11.
I. 3.9 REQUIREMENTS OF LAW.
-------------------
J.
If, after the date hereof, the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof applicable to any Lender,
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority, in each
case made subsequent to the Closing Date (or, if later, the date on which such
Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind whatsoever with
respect to any Eurodollar Loans made by it or its obligation to make Eurodollar
Loans, or change the basis of taxation of payments to such Lender in respect
thereof (except for (i) Non-Excluded Taxes covered by Section 3.10 (including
Non-Excluded Taxes imposed solely by reason of any failure of such Lender to
comply with its obligations under Section 3.10(b)) and (ii) changes in taxes
measured by or imposed upon the overall net income, or franchise tax (imposed in
lieu of such net income tax), of such Lender or its applicable lending office,
branch, or any affiliate thereof));
(b) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of the Eurodollar Rate hereunder;
or
(c) shall impose on such Lender any other condition (excluding any tax of
any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by a material amount, of making, converting into, continuing or maintaining
Eurodollar Loans or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Administrative Agent, in accordance herewith, the Borrower shall be
obligated to promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable, provided that, in any such case, the Borrower may elect to convert
--------
the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by giving
the Administrative Agent at least one Business Day's notice of such election, in
which case the Borrower shall promptly pay to such Lender, upon demand, without
duplication, such amounts, if any, as may be required pursuant to Section 3.11.
If any Lender becomes entitled to claim any additional amounts pursuant to this
subsection, it shall provide prompt notice thereof to the Borrower, through the
Administrative Agent, certifying (x) that one of the events described in this
paragraph (a) has occurred and describing in reasonable detail the nature of
such event, (y) as to the increased cost or reduced amount resulting from such
event and (z) as to the additional amount demanded by such Lender and a
reasonably detailed explanation of the calculation thereof. Such a certificate
as to any additional amounts payable pursuant to this subsection submitted by
such Lender, through the Administrative Agent, to the Borrower shall be
conclusive and binding on the parties hereto in the absence of manifest error.
This covenant shall survive the termination of this Credit Agreement and the
payment of the Loans and all other amounts payable hereunder.
12
<PAGE>
K. 3.10 TAXES.
-----
(a) Except as provided below in this subsection, all payments made by the
Borrower under this Credit Agreement and any Notes shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any court, or governmental body, agency or other
official, excluding taxes measured by or imposed upon the overall net income of
any Lender or its applicable lending office, or any branch or affiliate thereof,
and all franchise taxes, branch taxes, taxes on doing business or taxes on the
overall capital or net worth of any Lender or its applicable lending office, or
any branch or affiliate thereof, in each case imposed in lieu of net income
taxes, imposed: (i) by the jurisdiction under the laws of which such Lender,
applicable lending office, branch or affiliate is organized or is located, or in
which its principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii) by reason
of any connection between the jurisdiction imposing such tax and such Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Credit Agreement or any Notes. If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Non-Excluded Taxes") are required to be withheld from any
------------------
amounts payable to the Administrative Agent or any Lender hereunder or under any
Notes, (A) the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Credit Agreement and any Notes, provided, however, that the Borrower shall be
-------- -------
entitled to deduct and withhold any Non-Excluded Taxes and shall not be required
to increase any such amounts payable to any Lender that is not organized under
the laws of the United States of America or a state thereof if such Lender fails
to comply with the requirements of paragraph (b) of this subsection whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as possible
thereafter the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this subsection shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(X)(i) on or before the date of any payment by the Borrower under this
Credit Agreement or Notes to such Lender, deliver to the Borrower and the
Administrative Agent (A) two (2) duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable form,
as the case may be, certifying that it is entitled to receive payments
under this Credit Agreement and any Notes without deduction or withholding
of any United States federal income taxes and (B) an Internal Revenue
Service Form W-8 or W-9, or successor applicable form, as the case may be,
certifying that it is entitled to an exemption from United States backup
withholding tax;
13
<PAGE>
(ii) deliver to the Borrower and the Administrative Agent two (2)
further copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower or
the Administrative Agent; or
(Y) in the case of any such Lender that is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (i) represent
to the Borrower (for the benefit of the Borrower and the Administrative
Agent) that it is not a bank within the meaning of Section 881(c)(3)(A) of
the Internal Revenue Code, (ii) agree to furnish to the Borrower on or
before the date of any payment by the Borrower, with a copy to the
Administrative Agent two (2) accurate and complete original signed copies
of Internal Revenue Service Form W-8, or successor applicable form
certifying to such Lender's legal entitlement at the date of such
certificate to an exemption from U.S. withholding tax under the provisions
of Section 881(c) of the Internal Revenue Code with respect to payments to
be made under this Credit Agreement and any Notes (and to deliver to the
Borrower and the Administrative Agent two (2) further copies of such form
on or before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recently provided
form and, if necessary, obtain any extensions of time reasonably requested
by the Borrower or the Administrative Agent for filing and completing such
forms), and (iii) agree, to the extent legally entitled to do so, upon
reasonable request by the Borrower, to provide to the Borrower (for the
benefit of the Borrower and the Administrative Agent) such other forms as
may be reasonably required in order to establish the legal entitlement of
such Lender to an exemption from withholding with respect to payments under
this Credit Agreement and any Notes;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent. Each Person that shall become a Lender
or a participant of a Lender pursuant to Section 9.3 shall, upon the
effectiveness of the related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this subsection, provided
--------
that in the case of a participant of a Lender the obligations of such
participant of a Lender pursuant to this subsection (b) shall be determined as
if the participant of a Lender were a Lender except that such participant of a
Lender shall furnish all such required forms, certifications and statements to
the Lender from which the related participation shall have been purchased.
L. 3.11 INDEMNITY.
---------
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans on a
day which is not the last day of an Interest Period with respect thereto. With
respect to Eurodollar Loans, such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest which
14
<PAGE>
would have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (ii) the
amount of interest (as reasonably determined by such Lender) which would have
accrued to such Lender on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank Eurodollar market. The
covenants of the Borrower set forth in this Section 3.11 shall survive the
termination of this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
M. 3.12 PRO RATA TREATMENT.
------------------
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or prepayment of principal of any
-----
Loan, each payment of interest on the Loans, each payment of Commitment Fees,
each reduction of the Aggregate Revolving Committed Amount and each conversion
or extension of any Loan, shall be allocated pro rata among the Lenders in
accordance with the respective principal amounts of their outstanding Loans and
Participation Interests.
(b) Advances. No Lender shall be responsible for the failure or delay by
--------
any other Lender in its obligation to make its ratable share of a borrowing
hereunder; provided, however, that the failure of any Lender to fulfill its
-------- -------
obligations hereunder shall not relieve any other Lender of its obligations
hereunder. Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its ratable share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the
Administrative Agent by such Lender within the time period specified therefor
hereunder, such Lender shall pay to the Administrative Agent, on demand, such
amount with interest thereon at a rate equal to the Federal Funds Rate for a
period of two (2) Business Days, and thereafter at the Base Rate, for the period
until such Lender makes such amount immediately available to the Administrative
Agent. If such Lender does not pay such amounts to the Administrative Agent
forthwith upon demand, the Administrative Agent may notify the Borrower and
request the Borrower to immediately pay such amount to the Administrative Agent
with interest at the Base Rate. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this subsection
shall be conclusive in the absence of manifest error.
N. 3.13 SHARING OF PAYMENTS.
-------------------
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan any other obligation owing to such Lender
under this Credit Agreement through the exercise of a right of setoff, banker's
lien or counterclaim, or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other security or interest arising from, or in
lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
in excess of its pro rata share of such payment as provided for in this
15
<PAGE>
Credit Agreement, such Lender shall promptly purchase from the other Lenders a
participation in such Loans and other obligations in such amounts, and make such
other adjustments from time to time, as shall be equitable to the end that all
Lenders share such payment in accordance with their respective ratable shares as
provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by repurchase of a
participation theretofore sold, return its share of that benefit (together with
its share of any accrued interest payable with respect thereto) to each Lender
whose payment shall have been rescinded or otherwise restored. The Borrower
agrees that any Lender so purchasing such a participation may, to the fullest
extent permitted by law, exercise all rights of payment, including setoff,
banker's lien or counterclaim, with respect to such participation as fully as if
such Lender were a holder of such Loan or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Administrative Agent shall fail to remit to the
Administrative Agent or any other Lender an amount payable by such Lender or the
Administrative Agent to the Administrative Agent or such other Lender pursuant
to this Credit Agreement on the date when such amount is due, such payments
shall be made together with interest thereon for each date from the date such
amount is due until the date such amount is paid to the Administrative Agent or
such other Lender at a rate per annum equal to the Federal Funds Rate. If under
any applicable bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a setoff to which this Section 3.13 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.13 to share in the benefits of any recovery on such secured claim.
O. 3.14 PAYMENTS, COMPUTATIONS, ETC.
----------------------------
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Administrative Agent in Dollars in immediately
available funds, without setoff, deduction, counterclaim or withholding of any
kind, at the Administrative Agent's office specified in Section 9.1 not later
than 2:00 P.M. (Charlotte, North Carolina time) on the date when due. Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day. The Administrative Agent may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the Borrower maintained with the
Administrative Agent (with notice to the Borrower). The Borrower shall, at the
time it makes any payment under this Credit Agreement, specify to the
Administrative Agent the Loans, Fees, interest or other amounts payable by the
Borrower hereunder to which such payment is to be applied (and in the event that
it fails so to specify, or if such application would be inconsistent with the
terms hereof, the Administrative Agent shall distribute such payment to the
Lenders in such manner as the Administrative Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder, subject
to the terms of Section 3.12(a)). The Administrative Agent will distribute such
payments to such Lenders, if any such payment is received prior to 12:00 Noon
(Charlotte, North Carolina time) on a Business Day in like funds as received
prior to the end of such Business Day and otherwise the Administrative Agent
will distribute such payment to such Lenders on the next succeeding Business
Day. Whenever any payment hereunder shall be stated to be due on a day which is
not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and Fees for the period
of such extension), except that in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of actual number of days elapsed
over a year of 360 days, except with respect to computation of interest on Base
Rate Loans which (unless the Base Rate
16
<PAGE>
is determined by reference to the Federal Funds Rate) shall be calculated based
on a year of 365 or 366 days, as appropriate. Interest shall accrue from and
include the date of borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding any
---------------------------------------------
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received by the Administrative Agent or any Lender on account of the Obligations
or any other amounts outstanding under any of the Credit Documents shall be paid
over or delivered as follows:
FIRST, to the payment of all reasonable and documented out-of-pocket
costs and expenses (including without limitation reasonable attorneys'
fees) of the Administrative Agent in connection with enforcing the rights
of the Lenders under the Credit Documents, except to the extent any such
costs arise out of or relate to disputes solely between or among the
Administrative Lender and/or the Lenders;
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable and documented out-of-pocket
costs and expenses (including without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Obligations owing to
such Lender, except to the extent any such costs arise out of or relate to
disputes solely between or among the Administrative Lender and/or the
Lenders;
FOURTH, to the payment of all accrued interest and fees on or in
respect of the Obligations;
FIFTH, to the payment of the outstanding principal amount of the
Obligations;
SIXTH, to all other Obligations and other obligations which shall have
become due and payable under the Credit Documents or otherwise and not
repaid pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Obligations held by such Lender bears to the aggregate then outstanding
Obligations) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above.
P. 3.15 EVIDENCE OF DEBT.
----------------
(a) Each Lender shall maintain an account or accounts evidencing each Loan
made by such Lender to the Borrower from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Credit Agreement. Each Lender will make reasonable efforts to
17
<PAGE>
maintain the accuracy of its account or accounts and to promptly update its
account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 9.3(c) hereof, and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each such Loan hereunder, (ii) the amount of any principal or interest
due and payable or to become due and payable to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder from or for
the account of the Borrower and each Lender's share thereof. The Administrative
Agent will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to subsection (b) of this Section 3.15 (and, if consistent with the
entries of the Administrative Agent, subsection (a)) shall be prima facie
evidence of the existence and amounts of the obligations of the Borrower therein
recorded; provided, however, that the failure of any Lender or the
-------- -------
Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Borrower to repay the Loans made by such Lender in
accordance with the terms hereof.
5. SECTION 4
GUARANTY
- --------
A. 4.1 THE GUARANTEE.
-------------
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, to each Affiliate of a Lender that enters into a Hedging Agreement and
to the Administrative Agent as hereinafter provided the prompt payment of the
Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof. The Guarantors hereby
further agree that if any of the Guaranteed Obligations are not paid in full
when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as mandatory cash collateralization or otherwise), the Guarantors
will, jointly and severally, promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, as a mandatory prepayment, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of each Guarantor hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
B. 4.2 OBLIGATIONS UNCONDITIONAL.
-------------------------
18
<PAGE>
The obligations of the Guarantors under Section 4.1 hereof are joint and
several, absolute and unconditional, irrespective of the value, genuineness,
validity, regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 4.2 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Guaranteed Obligations for amounts paid under this
Guaranty until such time as the Lenders (and any Affiliates of Lenders entering
into Hedging Agreements) have been paid in full, all Commitments under the
Credit Agreement have been terminated and no Person or Governmental Authority
shall have any right to request any return or reimbursement of funds from the
Lenders in connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed
that, to the fullest extent permitted by law, the occurrence of any one or more
of the following shall not alter or impair the liability of any Guarantor
hereunder which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements shall
be waived or any other guarantee of any of the Guaranteed Obligations or
any security therefor shall be released or exchanged in whole or in part or
otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Administrative Agent or
any Lender or Lenders as security for any of the Guaranteed Obligations
shall fail to attach or be perfected; or
(v) any of the Guaranteed Obligations shall be determined to be void
or voidable (including, without limitation, for the benefit of any creditor
of any Guarantor) or shall be subordinated to the claims of any Person
(including, without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement or any other agreement or instrument
referred to in the Credit Documents or Hedging Agreements, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
Obligations.
19
<PAGE>
C. 4.3 REINSTATEMENT.
-------------
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
D. 4.4 CERTAIN ADDITIONAL WAIVERS.
--------------------------
Without limiting the generality of the provisions of this Section 4, each
Guarantor hereby specifically waives the benefits of N.C. Gen. Stat. (S)(S) 26-7
through 26-9, inclusive. Each Guarantor further agrees that such Guarantor
shall have no right of recourse to security for the Guaranteed Obligations,
except through the exercise of the rights of subrogation pursuant to Section
4.2.
E. 4.5 REMEDIES.
--------
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 7.2 hereof (and shall be deemed
to have become automatically due and payable in the circumstances provided in
said Section 7.2) for purposes of Section 4.1 hereof notwithstanding any stay,
injunction or other prohibition preventing such declaration (or preventing the
Guaranteed Obligations from becoming automatically due and payable) as against
any other Person and that, in the event of such declaration (or the Guaranteed
Obligations being deemed to have become automatically due and payable), the
Guaranteed Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors for purposes of said
Section 4.1.
F. 4.6 RIGHTS OF CONTRIBUTION.
----------------------
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor
an amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations. For purposes
hereof, (i) "Excess Funding Guarantor" shall mean, in respect of any obligations
------------------------
arising under the other provisions of this Section 4 (hereafter, the
20
<PAGE>
"Guarantied Obligations"), a Guarantor that has paid an amount in excess of its
----------------------
Pro Rata Share of the Guarantied Obligations; (ii) "Excess Payment" shall mean,
--------------
in respect of any Guarantied Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro Rata Share of such Guarantied Obligations; and
(iii) "Pro Rata Share", for the purposes of this Section 4.6, shall mean, for
--------------
any Guarantor, the ratio (expressed as a percentage) of (a) the amount by which
the aggregate present fair saleable value of all of its assets and properties
exceeds the amount of all debts and liabilities of such Guarantor (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Guarantor hereunder) to (b) the amount by which the
aggregate present fair saleable value of all assets and other properties of the
Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date
(if any Guarantor becomes a party hereto subsequent to the Closing Date, then
for the purposes of this Section 4.6 such subsequent Guarantor shall be deemed
to have been a Guarantor as of the Closing Date and the information pertaining
to, and only pertaining to, such Guarantor as of the date such Guarantor became
a Guarantor shall be deemed true as of the Closing Date).
G. 4.7 CONTINUING GUARANTEE.
--------------------
The guarantee in this Section 4 is a continuing guarantee, and shall apply
to all Guaranteed Obligations whenever arising.
6. SECTION 5
CONDITIONS
- ----------
A. 5.1 CONDITIONS TO CLOSING.
---------------------
This Credit Agreement shall become effective, and the initial Extensions of
Credit may be made, upon the satisfaction (or waiver) of the following
conditions precedent:
(a) Execution of Credit Agreement and Credit Documents. Receipt of (i)
--------------------------------------------------
multiple counterparts of this Credit Agreement, (ii) a Note for each Lender,
(iii) multiple counterparts of the Pledge Agreement, (iv) multiple counterparts
of the Security Agreement and (v) UCC financing statements relating to the
Security Agreement and the Pledge Agreement, in each case executed by a duly
authorized officer of each party thereto and in each case conforming to the
requirements of this Credit Agreement.
(b) Legal Opinions. Receipt of multiple counterparts of opinions of
--------------
counsel for the Credit Parties relating to the Credit Documents and the
transactions contemplated herein, in form and substance satisfactory to the
Administrative Agent and the Lenders.
(c) Stock Certificates. Acknowledgment from NationsBank, N.A., as
------------------
Administrative Agent under the Revolving Credit Agreement, (i) of its receipt of
original stock certificates evidencing the ownership interests of the Credit
Parties pledged pursuant to the Pledge Agreement, together in each case with
original undated stock powers executed in blank, (ii) of the interests of the
Administrative Agent and the Lenders hereunder therein pursuant to
21
<PAGE>
the Pledge Agreement and (iii) that it holds such stock certificates and stock
powers as bailee for the Administrative Agent hereunder.
(d) Financial Information. Receipt of financial information regarding the
---------------------
Borrower and its subsidiaries, as may be requested by, and in each case in form
and substance satisfactory to the Administrative Agent and the Lenders.
(e) Absence of Legal Proceedings. The absence of any action, suit,
----------------------------
investigation or proceeding pending in any court or before any arbitrator or
governmental instrumentality which could reasonably be expected to have a
Material Adverse Effect.
(f) Corporate Documents. Receipt of the following (or their equivalent)
-------------------
for each of the Credit Parties:
(i) Resolutions. Copies of resolutions of the Board of
-----------
Directors approving and adopting the respective Credit Documents, the
transactions contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary as of the Closing
Date to be true and correct and in force and effect as of such date.
(ii) Good Standing. Copies, where applicable, of (A)
-------------
certificates of good standing, existence or its equivalent certified as of
a recent date by the appropriate governmental authorities of the state of
incorporation and each other state in which the failure to so qualify and
be in good standing would in the aggregate have a Material Adverse Effect
and (B) certificates indicating payment of all corporate franchise taxes
certified as of a recent date by the appropriate governmental taxing
authorities.
(iii) Officer's Certificate. An officer's certificate for each
---------------------
of the Credit Parties dated as of the Closing Date substantially in the
form of Schedule 5.1(f)(v) with appropriate insertions and attachments.
------------------
(g) Fees. Receipt of all fees, if any, owing pursuant to Section 3.5 or
----
otherwise.
(h) Amendment No. 1 to Revolving Credit Agreement. Receipt by the
---------------------------------------------
Administrative Agent of an executed copy of Amendment No. 1 to the Revolving
Credit Agreement, in form and substance satisfactory to the Lenders hereunder.
(i) Subsection 5.2 Conditions. The conditions specified in Section 5.2
-------------------------
shall be satisfied.
(j) Additional Matters. All other documents and legal matters in
------------------
connection with the transactions contemplated by this Credit Agreement shall be
reasonably satisfactory in form and substance to the Agents and the Required
Lenders.
B. 5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
--------------------------------------
22
<PAGE>
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction (or waiver) of the following conditions precedent on the date
of making such Extension of Credit:
(a) Representations and Warranties. The representations and warranties
------------------------------
made by the Credit Parties herein or in any other Credit Documents or which are
contained in any certificate furnished at any time under or in connection
herewith shall be true and correct in all material respects on and as of the
date of such Extension of Credit as if made on and as of such date (except for
those which expressly relate to an earlier date).
(b) No Default or Event of Default. No Default or Event of Default shall
------------------------------
have occurred and be continuing on such date or after giving effect to the
Extension of Credit to be made on such date unless such Default or Event of
Default shall have been waived in accordance with this Credit Agreement.
(c) No Bankruptcy Event. No Bankruptcy Event shall have occurred and be
-------------------
continuing with respect to any of the Credit Parties.
(d) No Material Adverse Effect. No circumstances, events or conditions
--------------------------
shall have occurred since the date of the audited financial statements
referenced in Section 6.1 which would have a Material Adverse Effect.
(e) Additional Conditions to Revolving Loans. If a Revolving Loan is made
----------------------------------------
pursuant to Section 2.1, all conditions set forth therein shall have been
satisfied.
Each request for Extension of Credit (including extensions and conversions)
and each acceptance by the Borrower of an Extension of Credit (including
extensions and conversions) shall be deemed to constitute a representation and
warranty by the Borrower as of the date of such Extension of Credit that the
applicable conditions in paragraphs (a), (b), (c), (d) and (e) of this
subsection have been satisfied.
7. SECTION 6
REPRESENTATIONS AND WARRANTIES; COVENANTS
- -----------------------------------------
A. 6.1 INCORPORATION.
-------------
The representations and warranties contained in Section 6 of the Revolving
Credit Agreement as in effect on the Closing Date (the "Incorporated
------------
Representations") and the affirmative and negative covenants contained in
- ---------------
Section 7 and Section 8 (other than Sections 8.9 and 8.12), respectively, of the
Revolving Credit Agreement as in effect on the Closing Date (the "Incorporated
------------
Covenants"), are incorporated herein by reference with the same effect as if
- ---------
stated at length herein. The Credit Parties affirm and represent and warrant to
the Administrative Agent and the Lenders that the Incorporated Representations
are true and correct in all material respects as of the date hereof (except for
those which expressly relate to an earlier date) and covenant and agree that the
Incorporated Covenants shall be as binding on
23
<PAGE>
the Credit Parties as if set forth fully herein, provided that (i) any amendment
--------
or modification to the Incorporated Representations or to the Incorporated
Covenants under the Revolving Credit Agreement subsequent to the Closing Date
shall not be given effect to hereunder unless consented to in writing by the
Required Lenders hereunder and (ii) in the event that the Revolving Credit
Agreement shall be refinanced or replaced by another credit agreement, then the
Incorporated Representations and Incorporated Covenants shall be, subject to the
foregoing clause(i), as in effect immediately prior to such refinancing or
replacement.
B. 6.2 ADDITIONAL COVENANTS.
--------------------
(a) Additional Credit Party. The Borrower will provide to the
-----------------------
Administrative Agent, for the benefit of the Lenders, a Joinder Agreement and
the other items required by Section 7.11 of the Incorporated Covenants in the
same form and from the same Subsidiaries as required therein, except that such
Joinder Agreement and other items shall reflect that they are delivered to, and
run in favor of, the Administrative Agent and secure the obligations of the
Credit Parties under this Credit Agreement and the other Credit Documents.
(b) Prepayments of Indebtedness, etc. Each of the Credit Parties
---------------------------------
covenants and agrees that no member of the Consolidated Group shall:
(i) After the issuance thereof, amend or modify (or permit the
amendment or modification of), the terms of any other Indebtedness (other
than Indebtedness under the Revolving Credit Agreement) in a manner adverse
to the interests of the Lenders (including specifically shortening any
maturity or average life to maturity or requiring any payment sooner than
previously scheduled or increasing the interest rate or fees applicable
thereto); or
(ii) Make any prepayment, redemption, defeasance or acquisition for
value of (including without limitation, by way of depositing money or
securities with the trustee with respect thereto before due for the purpose
of paying when due), or refund, refinance or exchange of any Funded Debt
(other than intercompany Indebtedness permitted hereunder and Indebtedness
under the Revolving Credit Agreement) other than regularly scheduled
payments of principal and interest on such Funded Debt.
(c) No Further Negative Pledges. Each of the Credit Parties covenants and
---------------------------
agrees that, except with respect to (i) prohibitions against other encumbrances
on specific Property encumbered to secure payment of particular Indebtedness
(which Indebtedness relates solely to such specific Property, and improvements
and accretions thereto, and is otherwise permitted hereby) and (ii) the
Revolving Credit Agreement, no member of the Consolidated Group will enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation.
8. SECTION 7
EVENTS OF DEFAULT
- -----------------
24
<PAGE>
A. 7.1 EVENTS OF DEFAULT.
-----------------
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
----------------
(a) Payment. Any Credit Party shall
-------
(i) default in the payment when due of any principal of any of the
Loans, or
(ii) default, and such defaults shall continue for three (3) or more
Business Days, in the payment when due of any interest on the Loans or of
any Fees or other amounts owing hereunder, under any of the other Credit
Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement made or
---------------
deemed to be made herein, in any of the other Credit Documents, or in any
statement or certificate delivered or required to be delivered pursuant hereto
or thereto shall prove untrue in any material respect on the date as of which it
was deemed to have been made; or
(c) Covenants.
---------
(i) Default in the due performance or observance of any term,
covenant or agreement contained in Section 7.3(a), 7.9, 7.13 or 8.1 through
8.12, in each case of the Incorporated Covenants (except in the case of the
negative covenants contained in Sections 8.1 through 8.12, in each case of
the Incorporated Covenants, those Defaults which may occur or arise other
than on account of or by affirmative or intentional act of a Credit Party or
event or condition which a Credit Party shall with knowledge permit to
exist, all of which shall be subject to the provisions of clause (ii)
hereof), inclusive, or
(ii) Default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in subsections (a), (b)
or (c)(i) of this Section 7.1) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least 30 days after the
earlier of a responsible officer of a Credit Party becoming aware of such
default or notice thereof by the Administrative Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in the due
----------------------
performance or observance of any material term, covenant or agreement in any of
the other Credit Documents (subject to applicable grace or cure periods, if
any), or (ii) except as to the Credit Party which is dissolved, released or
merged or consolidated out of existence as the result of or in connection with a
dissolution, merger or disposition permitted by Section 8.4(a), Section 8.4(b)
or Section 8.4(c), in each case of the Incorporated Covenants, any Credit
Document shall fail to be in full force and effect or to give the Administrative
Agent and/or the Lenders any material part of the Liens, rights, powers and
privileges purported to be created thereby; or
25
<PAGE>
(e) Guaranties. Except as to the Credit Party which is dissolved,
----------
released or merged or consolidated out of existence as the result of or in
connection with a dissolution, merger or disposition permitted by Section
8.4(a), Section 8.4(b) or Section 8.4(c), in each case of the Incorporated
Covenants, the guaranty given by any Guarantor hereunder or any material
provision thereof shall cease to be in full force and effect, or any Guarantor
hereunder or any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such guaranty, or any Guarantor
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to any
---------------
Credit Party; or
(g) Defaults under Other Agreements. With respect to any Indebtedness
-------------------------------
(other than Indebtedness outstanding under this Credit Agreement) in excess of
$5,000,000 in the aggregate for the Consolidated Group taken as a whole, (A) (1)
any member of the Consolidated Group shall default in any payment (beyond the
applicable grace period with respect thereto, if any) with respect to any such
Indebtedness, or (2) the occurrence and continuance of a default in the
observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or holders of
such Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required),
any such Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof; or
(h) Judgments. Any member of the Consolidated Group shall fail within 30
---------
days of the date due and payable to pay, bond or otherwise discharge any
judgment, settlement or order for the payment of money which judgment,
settlement or order, when aggregated with all other such judgments, settlements
or orders due and unpaid at such time, exceeds $5,000,000, and which is not
stayed on appeal (or for which no motion for stay is pending) or is not
otherwise being executed; or
(i) ERISA. Any of the following events or conditions, if such event or
-----
condition could reasonably be expected to have a Material Adverse Effect and is
not subject to indemnification in favor of the Consolidated Group: (1) any
"accumulated funding deficiency," as such term is defined in Section 302 of
ERISA and Section 412 of the Code, whether or not waived, shall exist with
respect to any Plan, or any lien shall arise on the assets of a member of the
Consolidated Group or any ERISA Affiliate in favor of the PBGC or a Plan; (2) an
ERISA Event shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Administrative Agent, likely to result in the
termination of such Plan for purposes of Title IV of ERISA; (3) an ERISA Event
shall occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is, in the reasonable opinion of the Administrative Agent, likely to
result in (i) the termination of such Plan for purposes of Title IV of ERISA, or
(ii) a member of the Consolidated Group or any ERISA Affiliate incurring any
liability in connection with a withdrawal from, reorganization of (within the
meaning of Section 4241 of ERISA), or insolvency of (within the meaning of
Section 4245 of ERISA) such Plan; or (4) any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) or
26
<PAGE>
breach of fiduciary responsibility shall occur which may subject a member of the
Consolidated Group or any ERISA Affiliate to any liability under Sections 406,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which a member of the Consolidated
Group or any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability; or
(j) Ownership. There shall occur a Change of Control; or
---------
(k) Revolving Credit Agreement. There shall occur an Event of Default
--------------------------
under the Revolving Credit Agreement.
B. 7.2 ACCELERATION; REMEDIES.
----------------------
Upon the occurrence of an Event of Default, and at any time thereafter, the
Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(i) Termination of Commitments. Declare the Commitments terminated
--------------------------
whereupon the Commitments shall be immediately terminated.
(ii) Acceleration. Declare the unpaid principal of and any accrued
------------
interest in respect of all Loans and any and all other indebtedness or
obligations of any and every kind owing by the Credit Parties to the
Administrative Agent and/or any of the Lenders hereunder to be due whereupon
the same shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
of the Credit Parties.
(iii) Enforcement of Rights. Enforce any and all rights and interests
---------------------
created and existing under the Credit Documents and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
7.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Administrative Agent and/or any
of the Lenders hereunder automatically shall immediately become due and payable
without presentment, demand, protest or the giving of any notice or other action
by the Administrative Agent or the Lenders, all of which are hereby waived by
the Credit Parties.
9. SECTION 8
AGENCY PROVISIONS
- -----------------
A. 8.1 APPOINTMENT.
-----------
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent of such Lender to act as specified herein and the other
Credit Documents, and each such Lender hereby authorizes
27
<PAGE>
the Administrative Agent as the Administrative Agent for such Lender, to take
such action on its behalf under the provisions of this Credit Agreement and the
other Credit Documents and to exercise such powers and perform such duties as
are expressly delegated by the terms hereof and of the other Credit Documents,
together with such other powers as are reasonably incidental thereto. Each
Lenders further directs and authorizes the Administrative Agent to execute
releases (or similar agreements) to give effect to the provisions of this Credit
Agreement and the other Credit Documents, including specifically without
limitation the provisions of Section 8.4 hereof. Notwithstanding any provision
to the contrary elsewhere herein and in the other Credit Documents, the
Administrative Agent shall not have any duties or responsibilities to any
Lender, except those expressly set forth herein and therein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities to any Lender shall be read
into this Credit Agreement or any of the other Credit Documents, or shall
otherwise exist against the Administrative Agent. The provisions of this Section
are solely for the benefit of the Administrative Agent and the Lenders and none
of the Credit Parties shall (i) have any rights as a third party beneficiary of
the provisions hereof or (ii) have any other rights otherwise and elsewhere
given them limited by the provisions hereof. In performing its functions and
duties under this Credit Agreement and the other Credit Documents, the
Administrative Agent shall act solely as Administrative Agent of the Lenders and
does not assume and shall not be deemed to have assumed any obligation or
relationship of agency or trust with or for any Credit Party or any of their
respective Affiliates.
B. 8.2 DELEGATION OF DUTIES.
--------------------
The Administrative Agent may execute any of its duties hereunder or under
the other Credit Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
C. 8.3 EXCULPATORY PROVISIONS.
----------------------
The Administrative Agent and its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall not be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, document,
financial statement or other written or oral statement referred to or provided
for in, or received by the Administrative Agent under or in connection herewith
or in connection with the other Credit Documents, or enforceability or
sufficiency therefor of any of the other Credit Documents, or for any failure of
any Credit Party to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Credit Agreement, or any of the other Credit Documents or
for any representations, warranties, recitals or statements made herein or
therein or made by the Borrower or any Credit Party in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Administrative Agent to the Lenders or by or on behalf
of the Credit Parties to the Administrative Agent or any Lender or be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
28
<PAGE>
existence of any Default or Event of Default or to inspect the properties, books
or records of the Credit Parties or any of their respective Affiliates.
D. 8.4 RELIANCE ON COMMUNICATIONS.
--------------------------
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Administrative Agent with reasonable care). The
Administrative Agent may deem and treat the Lenders as the owners of their
respective interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent in accordance with Section 9.3(b) hereof. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Credit Documents
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or under any of the other Credit Documents in
accordance with a request of the Required Lenders (or to the extent specifically
provided in Section 9.6, all the Lenders) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
E. 8.5 NOTICE OF DEFAULT.
-----------------
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or a Credit Party
referring to the Credit Document, describing such Default or Event of Default
and stating that such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders.
F. 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
------------------------------------------------------
Each Lender expressly acknowledges that each of the Administrative Agent
and its officers, directors, employees, Administrative Agents, attorneys-in-fact
or affiliates has not made any representations or warranties to it and that no
act by the Administrative Agent or any affiliate thereof hereinafter taken,
including any review of the affairs of any Credit Party or any of their
respective Affiliates, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, assets, operations, property, financial and
other conditions, prospects and creditworthiness of the Borrower, the other
Credit Parties or their respective Affiliates and made its own decision to make
its Loans hereunder and enter into this Credit
29
<PAGE>
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Credit Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower,
the other Credit Parties and their respective Affiliates. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Borrower, the other
Credit Parties or any of their respective Affiliates which may come into the
possession of the Administrative Agent or any of its officers, directors,
employees, Administrative Agents, attorneys-in-fact or affiliates.
G. 8.7 INDEMNIFICATION.
---------------
The Lenders agree to indemnify the Administrative Agent in its capacity as
such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitments (or if the Commitments have expired or been terminated, in
accordance with the respective principal amounts of outstanding Loans and
Participation Interests of the Lenders), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the final payment of all of
the obligations of the Borrower hereunder and under the other Credit Documents)
be imposed on, incurred by or asserted against the Administrative Agent in its
capacity as such in any way relating to or arising out of this Credit Agreement
or the other Credit Documents or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; provided that no Lender shall be liable for the payment of
--------
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Administrative Agent. If any
indemnity furnished to the Administrative Agent for any purpose shall, in the
opinion of the Administrative Agent, be insufficient or become impaired, the
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished. The agreements in this Section shall survive the repayment of the
Loans and other obligations under the Credit Documents and the termination of
the Commitments hereunder.
H. 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
-----------------------------------------------
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower,
its Subsidiaries or their respective Affiliates as though the Administrative
Agent were not the Administrative Agent hereunder. With respect to the Loans
made by and all obligations of the Borrower hereunder and under the other Credit
Documents, the Administrative Agent shall have the same rights and powers under
this Credit Agreement as any Lender and may exercise the same as though it were
not the Administrative Agent, and the terms "Lender" and "Lenders" shall include
the Administrative Agent in its individual capacity.
I. 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
------------------------------
30
<PAGE>
The Administrative Agent may, at any time, resign upon 20 days' written
notice to the Lenders, and may be removed, upon show of cause, by the Required
Lenders upon 30 days' written notice to the Administrative Agent. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the notice of resignation or notice of
removal, as appropriate, then the retiring Administrative Agent shall select a
successor Administrative Agent provided such successor is a Lender hereunder or
a commercial bank organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Administrative Agent, and the retiring Administrative Agent
shall be discharged from its duties and obligations as Administrative Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 8.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Credit Agreement.
J. 8.10 INTERCREDITOR AGREEMENT.
-----------------------
Inasmuch as the obligations under the Revolving Credit Agreement are
secured by the same collateral as that securing the obligations under this
Credit Agreement, an intercreditor agreement is required in order that the
respective obligations share in such collateral on a pari passu basis. By
execution hereof, each Lender hereby acknowledges and agrees to be bound by the
terms of the Intercreditor Agreement and further authorizes and directs the
Administrative Agent to enter into the Intercreditor Agreement on its behalf.
10. SECTION 9
MISCELLANEOUS
- -------------
A. 9.1 NOTICES.
-------
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Borrower, Guarantors and the Administrative
Agent, set forth below, and, in the case of the Lenders, set forth on Schedule
--------
9.1, or at such other address as such party may specify by written notice to the
- ---
other parties hereto:
31
<PAGE>
if to the Borrower or the Guarantors:
Navigant International, Inc.
84 Inverness Circle East
Englewood, Colorado 80112-5314
Attn: General Counsel
Telephone: (303) 706-0800
Telecopy: (303) 706-0678
if to the Administrative Agent:
NationsBank, N.A.
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attn: Agency Services
Telephone: (704) 388-9436
Telecopy: (704) 388-1108
with a copy to:
NationsBank, N.A.
Corporate Finance Group
6610 Rockledge Drive, 6th Floor
MD2-600-06-13
Bethesda, Maryland 20817-1876
Attn: Michael R. Heredia
Telephone: (301) 571-0724
Telecopy: (301) 571-0719
B. 9.2 RIGHT OF SET-OFF.
----------------
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default, each Lender is authorized at any time and from time to
time, without presentment, demand, protest or other notice of any kind (all of
which rights being hereby expressly waived), to set-off and to appropriate and
apply any and all deposits (general or special) and any other indebtedness at
any time held or owing by such Lender (including, without limitation branches,
agencies or Affiliates of such Lender wherever located) to or for the credit or
the account of any Credit Party against obligations and liabilities of such
Person to such Lender hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether such Lender shall have made any demand
hereunder and although such obligations, liabilities or claims, or any of them,
may be contingent or unmatured, and any such set-off shall be deemed to have
been made immediately upon the occurrence of an Event of Default even though
such charge is made or entered on the books of such Lender subsequent thereto.
Any Person purchasing a participation in the Loans and Commitments hereunder
pursuant to Section 3.13 or Section 9.3(d) may exercise all rights of set-off
with respect to its participation interest as fully as if such Person were a
Lender hereunder.
32
<PAGE>
C. 9.3 BENEFIT OF AGREEMENT.
--------------------
(a) Generally. This Credit Agreement shall be binding upon and inure to
---------
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; provided that none of the Credit Parties may assign or
--------
transfer any of its interests without prior written consent of the Lenders;
provided further that the rights of each Lender to transfer, assign or grant
- -------- -------
participations in its rights and/or obligations hereunder shall be limited as
set forth in this Section 9.3, provided however that nothing herein shall
--------
prevent or prohibit any Lender from (i) pledging its Loans hereunder to a
Federal Reserve Bank in support of borrowings made by such Lender from such
Federal Reserve Bank, or (ii) granting assignments or selling participations in
such Lender's Loans and/or Commitments hereunder to its parent company and/or to
any Affiliate or Subsidiary of such Lender.
(b) Assignments. Each Lender may assign all or a portion of its rights
-----------
and obligations hereunder (including, without limitation, all or a portion of
its Commitments or its Loans), pursuant to an assignment agreement substantially
in the form of Schedule 9.3(b), to (i) a Lender, (ii) an affiliate of a Lender
---------------
or (iii) any other Person (other than the Borrower or an Affiliate of the
Borrower) reasonably acceptable to the Administrative Agent and, so long as no
Default or Event of Default has occurred and is continuing, the Borrower (the
consent of the Borrower shall not be unreasonably withheld or delayed and such
consent shall be deemed given if the Borrower does not notify the assigning
Lender and the Administrative Agent of any objection within two Business Days
after the Borrower has been provided notice of the proposed assignment by the
assigning Lender or the Administrative Agent); provided that (i) any such
--------
assignment (other than any assignment to an existing Lender) shall be in a
minimum aggregate amount of $5,000,000 (or, if less, the remaining amount of the
Commitment being assigned by such Lender) of the Commitments and in integral
multiples of $1,000,000 above such amount and (ii) each such assignment shall be
of a constant, not varying, percentage of all such Lender's rights and
obligations under this Credit Agreement. Any assignment hereunder shall be
effective upon delivery to the Administrative Agent of written notice of the
assignment together with a transfer fee of $3,500 payable to the Administrative
Agent for its own account from and after the later of (i) the effective date
specified in the applicable assignment agreement and (ii) the date of recording
of such assignment in the Register pursuant to the terms of subsection (c)
below. The assigning Lender will give prompt notice to the Administrative Agent
and the Borrower of any such assignment. Upon the effectiveness of any such
assignment (and after notice to, and (to the extent required pursuant to the
terms hereof), with the consent of, the Borrower as provided herein), the
assignee shall become a "Lender" for all purposes of this Credit Agreement and
the other Credit Documents and, to the extent of such assignment, the assigning
Lender shall be relieved of its obligations hereunder to the extent of the Loans
and Commitment components being assigned. Along such lines the Borrower agrees
that upon notice of any such assignment and surrender of the appropriate Note or
Notes, it will promptly provide to the assigning Lender and to the assignee
separate promissory notes in the amount of their respective interests
substantially in the form of the original Note (but with notation thereon that
it is given in substitution for and replacement of the original Note or any
replacement notes thereof). By executing and delivering an assignment agreement
in accordance with this Section 9.3(b), the assigning Lender thereunder and the
assignee thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Lender warrants that it
is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim; (ii) except as set forth in clause (i) above,
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, any of the other Credit Documents
or any other instrument or document furnished
33
<PAGE>
pursuant hereto or thereto or the financial condition of any Credit Party or any
of their respective Affiliates or the performance or observance by any Credit
Party of any of its obligations under this Credit Agreement, any of the other
Credit Documents or any other instrument or document furnished pursuant hereto
or thereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (iv) such assignee confirms
that it has received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such assignment agreement;
(v) such assignee will independently and without reliance upon the
Administrative Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Credit Agreement and the other Credit Documents; (vi) such assignee
appoints and authorizes the Administrative Agent to take such action on its
behalf and to exercise such powers under this Credit Agreement or any other
Credit Document as are delegated to the Administrative Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Credit Agreement and the other
Credit Documents are required to be performed by it as a Lender.
(c) Maintenance of Register. The Administrative Agent shall maintain at
-----------------------
one of its offices in Charlotte, North Carolina a copy of each Lender assignment
agreement delivered to it in accordance with the terms of subsection (b) above
and a register for the recordation of the identity of the principal amount, type
and Interest Period of each Loan outstanding hereunder, the names, addresses and
the Commitments of the Lenders pursuant to the terms hereof from time to time
(the "Register"). The Administrative Agent will make reasonable efforts to
--------
maintain the accuracy of the Register and to promptly update the Register from
time to time, as necessary. The entries in the Register shall be conclusive in
the absence of manifest error and the Borrower, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
each Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Participations. Each Lender may sell, transfer, grant or assign
--------------
participations in all or a portion of such Lender's rights, obligations or
rights and obligations hereunder (including all or a portion of its Commitments
or its Loans); provided that (i) such selling Lender shall remain a "Lender" for
--------
all purposes under this Credit Agreement (such selling Lender's obligations
under the Credit Documents remaining unchanged) and the participant shall not
constitute a Lender hereunder, (ii) no such participant shall have, or be
granted, rights to approve any amendment or waiver relating to this Credit
Agreement or the other Credit Documents except to the extent any such amendment
or waiver would (A) reduce the principal of or rate of interest on or Fees in
respect of any Loans in which the participant is participating, (B) postpone the
date fixed for any payment of principal (including extension of the Termination
Date), interest or Fees in which the participant is participating, (C) except as
expressly provided in the Credit Documents, release any Guarantor from its
guaranty obligations hereunder, or (D) except as the result of or in connection
with a disposition permitted under Section 8.4(b), release all or substantially
all of the collateral, and (iii) sub-participations by the participant (except
to an affiliate, parent company or affiliate of a parent company of the
participant) shall be prohibited. In the case of any such participation, the
participant shall not have any rights under this Credit Agreement or the other
Credit Documents (the participant's rights against the selling Lender in respect
of such participation to be those set forth in the participation agreement with
such Lender creating such participation) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such participation,
provided, however, that such participant shall be entitled to receive additional
- --------
amounts under Sections 3.6, 3.9, 3.10, 3.11 and 9.2 on the same basis as if it
were a Lender.
34
<PAGE>
D. 9.4 NO WAIVER; REMEDIES CUMULATIVE.
------------------------------
No failure or delay on the part of the Administrative Agent or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Administrative Agent or any Lender
and any of the Credit Parties shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights and remedies provided herein are cumulative and not exclusive of any
rights or remedies which the Administrative Agent or any Lender would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle the
Borrower or any other Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Administrative Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
E. 9.5 PAYMENT OF EXPENSES, ETC.
------------------------
The Borrower agrees to: (i) pay all reasonable out-of-pocket costs and
expenses (A) of the Administrative Agent in connection with the negotiation,
preparation, execution and delivery and administration of this Credit Agreement
and the other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable and documented fees and
expenses of Moore & Van Allen, PLLC, special counsel to the Administrative
Agent) and any amendment, waiver or consent relating hereto and thereto
including, but not limited to, any such amendments, waivers or consents
resulting from or related to any work-out, renegotiation or restructure relating
to the performance by the Credit Parties under this Credit Agreement and (B) of
the Administrative Agent and the Lenders in connection with enforcement of the
Credit Documents and the documents and instruments referred to therein
(including, without limitation, in connection with any such enforcement, the
reasonable and documented fees and disbursements of counsel for the
Administrative Agent and each of the Lenders and documented); (ii) pay and hold
each of the Lenders harmless from and against any and all present and future
stamp and other similar taxes with respect to the foregoing matters and save
each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and (iii) indemnify each Lender,
its officers, directors, employees, representatives and Administrative Agents
from and hold each of them harmless against any and all losses, liabilities,
claims, damages or expenses incurred by any of them as a result of, or arising
out of, or in any way related to, or by reason of (A) any investigation,
litigation or other proceeding (whether or not any Lender is a party thereto)
related to the entering into and/or performance of any Credit Document or the
use of proceeds of any Loans (including other extensions of credit) hereunder or
the consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable and documented fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding, except to the extent any such costs arise out of
or relate to disputes solely between or among the Administrative Agent and/or
the Lenders or (B) the presence or Release of any Materials of Environmental
Concern at, under or from any Property owned, operated or leased by the Borrower
or any of its Subsidiaries, or the failure by the Borrower or any of its
Subsidiaries to comply with any Environmental Law (but excluding, in the case of
either of clause (A) or (B) above, any such losses, liabilities, claims, damages
or expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified).
35
<PAGE>
F. 9.6 AMENDMENTS, WAIVERS AND CONSENTS.
--------------------------------
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
-------- -------
(a) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any of the other Credit Documents may be amended to
(i) extend the final maturity of any Loan or extend or waive
any principal amortization payment of any Loan, or any portion
thereof,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any increase
in interest rates after the occurrence of an Event of Default or on
account of a failure to deliver financial statements on a timely
basis) thereon or Fees hereunder,
(iii) reduce or waive the principal amount of any Loan,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of any
Default or Event of Default or mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender),
(v) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4 of the Incorporated Covenants, release the Borrower or
substantially all of the other Credit Parties from its or their
obligations under the Credit Documents,
(vi) except as the result of or in connection with a
disposition permitted under Section 8.4(b) of the Incorporated
Covenants, release all or substantially all of the collateral,
(vii) except as a result of or in connection with a dissolution,
merger or disposition of a Subsidiary permitted under Section 8.4 of
the Incorporated Covenants, release the Borrower or all or
substantially all of the Guarantors from their obligations under the
Credit Agreement,
(viii) amend, modify or waive any provision of this Section 9.6
or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 7.1(a),
9.2, 9.3, 9.5 or 9.9,
(ix) reduce any percentage specified in, or otherwise modify,
the definition of Required Lenders, or
(x) consent to the assignment or transfer by the Borrower (or
another Credit Party) of any of its rights and obligations under (or
in respect of) the Credit Documents except as permitted thereby;
36
<PAGE>
(b) without the consent of the Agent, no provision of Section 8 may be
amended.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
G. 9.7 COUNTERPARTS.
------------
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
H. 9.8 HEADINGS.
--------
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
I. 9.9 SURVIVAL.
--------
All indemnities set forth herein, including, without limitation, in Section
2.2(i), 3.9, 3.11, 8.7 or 9.5 shall survive the execution and delivery of this
Credit Agreement, the making of the Loans, the repayment of the Loans and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
J. 9.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
------------------------------------------------
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA. Any legal action or proceeding with respect to this Credit Agreement
or any other Credit Document may be brought in the courts of the State of North
Carolina in Mecklenburg County, or of the United States for the Western District
of North Carolina, and, by execution and delivery of this Credit Agreement, each
of the Credit Parties hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the nonexclusive jurisdiction of
such courts. Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address set out for notices pursuant to Section
9.1, such service to become effective three (3) days after such mailing. Nothing
herein shall affect the right of the Administrative Agent
37
<PAGE>
to serve process in any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against any Credit Party in any other
jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE AGENT, THE
LENDERS, THE BORROWER AND THE CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
K. 9.11 SEVERABILITY.
------------
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
L. 9.12 ENTIRETY.
--------
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
M. 9.13 BINDING EFFECT; TERMINATION.
---------------------------
(a) This Credit Agreement shall become effective at such time on or after
the Closing Date when it shall have been executed by the Borrower, the
Guarantors and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of the Borrower, the Guarantors, the
Administrative Agent and each Lender and their respective successors and
assigns.
(b) The term of this Credit Agreement shall be until no Loans or any other
amounts payable hereunder or under any of the other Credit Documents shall
remain outstanding and until all of the Commitments hereunder shall have expired
or been terminated.
N. 9.14 CONFIDENTIALITY.
---------------
38
<PAGE>
The Administrative Agent and the Lenders agree to keep confidential (and to
cause their respective affiliates, officers, directors, employees, agents and
representatives to keep confidential) all information, materials and documents
furnished to the Administrative Agent or any such Lender by or on behalf of any
Credit Party (whether before or after the Closing Date) which relates to the
Borrower or any of its Subsidiaries (the "Information"). Notwithstanding the
-----------
foregoing, the Administrative Agent and each Lender shall be permitted to
disclose Information (i) to its affiliates, officers, directors, employees,
Administrative Agents and representatives in connection with its participation
in any of the transactions evidenced by this Credit Agreement or any other
Credit Documents or the administration of this Credit Agreement or any other
Credit Documents; (ii) to the extent required by applicable laws and regulations
or by any subpoena or similar legal process, or requested by any Governmental
Authority; (iii) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this Credit Agreement or any agreement
entered into pursuant to clause (iv) below, (B) becomes available to the
Administrative Agent or such Lender on a non-confidential basis from a source
other than a Credit Party or (C) was available to the Administrative Agent or
such Lender on a non-confidential basis prior to its disclosure to the
Administrative Agent or such Lender by a Credit Party; (iv) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first specifically agrees
in a writing furnished to and for the benefit of the Credit Parties to be bound
by the terms of this Section 9.14; or (v) to the extent that the Borrower shall
have consented in writing to such disclosure. Nothing set forth in this Section
9.14 shall obligate the Administrative Agent or any Lender to return any
materials furnished by the Credit Parties.
O. 9.15 SOURCE OF FUNDS.
---------------
Each of the Lenders hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any separate
account maintained by such Lender in which any employee benefit plan (or its
related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets allocated
to any separate account maintained by such Lender, such Lender has disclosed to
the Borrower the name of each employee benefit plan whose assets in such account
exceed 10% of the total assets of such account as of the date of such purchase
(and, for purposes of this subsection (b), all employee benefit plans maintained
by the same employer or employee organization are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets of an
insurance company's general account, such insurance company has complied with
all of the requirements of the regulations issued under Section 401(c)(1)(A) of
ERISA; or
(d) such funds constitute assets of one or more specific benefit plans
which such Lender has identified in writing to the Borrower.
As used in this Section 9.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
P. 9.16 CONFLICT.
--------
39
<PAGE>
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
[Signature Page to Follow]
40
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: NAVIGANT INTERNATIONAL, INC.
- --------
a Delaware corporation
By: /s/ Eugene A. Over, Jr.
------------------------
Name: Eugene A. Over, Jr.
Title: Vice President
GUARANTORS: PROFESSIONAL TRAVEL CORPORATION,
- ----------
a Colorado corporation
ASSOCIATED TRAVEL SERVICES, LLC,
a Delaware limited liability company
MCGREGOR TRAVEL MANAGEMENT, INC.,
a Connecticut corporation
MTA, INC.,
a Washington corporation
ENVISION VACATIONS, INC.,
a Michigan corporation
OMNI TRAVEL SERVICE, INC.,
a Massachusetts corporation
SIMMONS ASSOCIATES, INC.,
a Virginia corporation
TRAVEL CONSULTANTS, INC.,
a Michigan corporation
TRAVELCORP., INC.,
a Minnesota corporation
WAREHEIM TRAVEL SERVICES, INC.,
a Maryland corporation
WORLD EXPRESS TRAVEL, INC.,
an Alaska corporation
BOWERS WORLDWIDE TRAVEL SERVICE, INC.,
an Arizona corporation
ARRINGTON TRAVEL CENTER, INC.,
an Illinois corporation
By: /s/ Eugene A. Over, Jr.
------------------------
Name: Eugene A. Over, Jr.
Title: Vice President of each of the foregoing
Guarantors
[Signature Pages Follow]
<PAGE>
ATLAS TRAVEL SERVICES, LP,
a Texas limited partnership
By: ATLAS TRAVEL GP, INC.,
a Texas corporation
By: /s/ Eugene A. Over, Jr.
------------------------
Name: Eugene A. Over, Jr.
Title: Vice President
[Signature Pages Follow]
<PAGE>
LENDERS: NATIONSBANK, N.A.,
- -------
individually in its capacity as a
Lender and in its capacity as Administrative Agent
By: /s/ Chittaranjan D. Swamidasan
-------------------------------
Name: Chittaranjan D. Swamidasan
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ George E. Adams
-------------------
Name: George E. Adams
Title: Vice President
<PAGE>
Schedule 2.1(a)
---------------
Schedule of Lenders and Commitments
<TABLE>
<CAPTION>
Revolving Revolving
Lender Committed Amount Commitment Percentage
- ------------------------------------------- ------------------------------- --------------------------------
<S> <C> <C>
NationsBank, N.A. $10,000,000 66.666666667%
US Bank National Association $ 5,000,000 33.333333333%
----------- --------------
Total $15,000,000 100.000000000%
</TABLE>
<PAGE>
Schedule 2.1(b)(i)
------------------
FORM OF NOTICE OF BORROWING
NationsBank, N.A.
as Administrative Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
RE: Bridge Credit Agreement dated as of April __, 1999 (as amended and
modified, the "Credit Agreement") among Navigant International, Inc.,
------ ---------
(the "Borrower") the Guarantors and Lenders identified therein and
--------
NationsBank, N.A., as Administrative Agent. Terms used but not
otherwise defined herein shall have the meanings provided in the
Credit Agreement.
Ladies and Gentlemen:
The Borrower hereby gives notice of a request for Revolving Loan pursuant to
Section 2.1(b) of the Credit Agreement as follows:
(A) Date of Borrowing
(which is a Business Day) ______________________________
(B) Principal Amount of
Borrowing ______________________________
(C) Interest rate basis ______________________________
(D) Interest Period and the
last day thereof ______________________________
In accordance with the requirements of Section 5.2 of the Credit Agreement, the
Borrower hereby certifies that:
(a) The representations and warranties contained in the Credit Agreement
and the other Credit Documents are true and correct in all material respects as
of the date of this request, and will be true and correct after giving effect to
the requested Extension of Credit (except for those which expressly related to
an earlier date).
(b) No Default or Event of Default exists or will exist after giving
effect to the requested Extension of Credit.
(c) As to any Credit Party, no involuntary action has been commenced under
applicable bankruptcy, insolvency or other similar law in effect, or any case,
proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) as to any
<PAGE>
Credit Party or as to any substantial party of the property of any Credit Party
or for the winding up or liquidation of its affairs, and remains undismissed,
undischarged or unbonded.
(d) All conditions set forth in Section 2.1 of the Credit Agreement as to
the making of Revolving Loans have been satisfied.
Very truly yours,
NAVIGANT INTERNATIONAL, INC.
By:______________________________
Name:
Title:
<PAGE>
Schedule 2.1(e)
---------------
FORM OF NOTE
April __, 1999
FOR VALUE RECEIVED, Navigant International, Inc., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of ______________________,
--------
and its successors and assigns, on or before the Termination Date to the office
of the Administrative Agent in immediately available funds as provided in the
Credit Agreement, such Lender's Revolving Committed Amount or, if less, the
aggregate unpaid principal amount of all Revolving Loans owing to such Lender,
together with interest thereon at the rates and as provided in the Credit
Agreement.
This Note is one of the Notes referred to in the Bridge Credit Agreement
dated as of April __, 1999 (as amended and modified, the "Credit Agreement")
----------------
among the Borrowers, the Guarantors and Lenders identified therein and
NationsBank, N.A., as Administrative Agent. Terms used but not otherwise
defined herein shall have the meanings provided in the Credit Agreement.
The holder may endorse and attach a schedule to reflect borrowings
evidenced by this Note and all payments and prepayments thereon; provided that
--------
any failure to endorse such information shall not affect the obligation of the
undersigned Borrower to pay amounts evidenced hereby.
Upon the occurrence of an Event of Default, all amounts evidenced by this
Note may, or shall, become immediately due and payable as provided in the Credit
Agreement without presentment, demand, protest or notice of any kind, all of
which are waived by the Borrower. In the event payment of amounts evidenced by
this Note is not made at any stated or accelerated maturity, the Borrower agrees
to pay, in addition to principal and interest, all costs of collection,
including reasonable attorneys' fees.
This Note and the Loans and amounts evidenced hereby may be transferred
only as provided in the Credit Agreement.
This Note shall be governed by, and construed and interpreted in accordance
with, the law of the State of North Carolina.
In WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
as of the date first above written.
NAVIGANT INTERNATIONAL, INC.,
a Delaware corporation
By: _______________________________
Name:
Title:
<PAGE>
Schedule 3.2
------------
Form of Notice of Extension/Conversion
NationsBank, N.A.,
as Administrative Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Re: Bridge Credit Agreement dated as of April __, 1999 (as amended and
modified, the "Credit Agreement") among Navigant International, Inc.
----------------
(the "Borrower"), the Guarantors and Lenders identified therein and
--------
NationsBank, N.A., as Administrative Agent. Terms used but not
otherwise defined herein shall have the meanings provided in the
Credit Agreement.
Ladies and Gentlemen:
The Borrower hereby gives notice pursuant to Section 3.2 of the Credit
Agreement that it requests an extension or conversion of a Revolving Loan
outstanding under the Credit Agreement, and in connection therewith sets forth
below the terms on which such extension or conversion is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the
applicable Interest Period) _______________________________
(B) Principal Amount of
Extension or Conversion _______________________________
(C) Interest rate basis _______________________________
(D) Interest Period and the
last day thereof
_______________________________
In accordance with the requirements of Section 5.2 of the Credit Agreement,
the undersigned Borrower hereby certifies that:
(a) The representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all
material respects as of the date of this request, and will be true and
correct after giving effect to the requested Extension of Credit (except
for those which expressly relate to an earlier date).
<PAGE>
(b) No Default or Event of Default exists or will exist after giving
effect to the requested Extension of Credit.
(c) As to any Credit Party, no involuntary action has been commenced
under applicable bankruptcy, insolvency or other similar law in effect, or
any case, proceeding or other action for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) as to any Credit Party or as to any substantial part of the
property of any Credit Party or for the winding up or liquidation of its
affairs, and remains undismissed, undischarged or unbonded.
Very truly yours,
NAVIGANT INTERNATIONAL, INC.
By:__________________________________
Name:
Title:
<PAGE>
Schedule 5.1(f)(iii)
--------------------
Assistant Secretary's Certificate
Pursuant to Section 5.1(f)(iii) of the Bridge Credit Agreement (the "Credit
------
Agreement"), dated as of April __, 1999, among Navigant International, Inc., a
- ---------
Delaware corporation, the Guarantors and Lenders identified therein and
NationsBank, N.A., as Administrative Agent, the undersigned,
___________________________, Assistant Secretary of ____________________ (the
"Corporation"), hereby certifies as follows:
- ------------
1. Attached hereto as Annex I is a true and complete copy of resolutions
duly adopted by the Board of Directors of the Corporation on
_______________________, 199_. The attached resolutions have not been rescinded
or modified and remain in full force and effect. The attached resolutions are
the only corporate proceedings of the Corporation now in force relating to or
affecting the matters referenced to therein.
2. Attached hereto as Annex II is a true and complete copy of the By-laws
of the Corporation as in effect on the date hereof.
3. Attached hereto as Annex III is a true and complete copy of the
Certificate of Incorporation of the Corporation and all amendments thereto as in
effect on the date hereof.
4. The following persons are now duly elected and qualified officers of
the Corporation, holding the offices indicated, and the signature appearing
opposite his name below is his true and genuine signature, and such officer is
duly authorized to execute and deliver on behalf of the Corporation, the Credit
Agreement, the Notes to be issued pursuant thereto and the other Credit
Documents and to act as a Responsible Officer on behalf of the Corporation under
the Credit Agreement.
Name Office Signature
- ---- ------ ---------
________________________
________________________
IN WITNESS WHEREOF, the undersigned has hereunto set his/her name and
affixed the corporate seal of the Corporation.
_____________________________
Assistant Secretary
Date: April __, 1999
<PAGE>
I, _____________________, ___________________ of _________________________,
hereby certify that _____________________, whose genuine signature appears
above, is, and has been at all times since ______________________, a duly
elected, qualified and acting ____________________ of _________________________.
_______________________________ of
__________________________________
April __, 1999
<PAGE>
Schedule 9.1
------------
Lenders and Addresses
Notice Address
--------------
NationsBank, N.A. NationsBank, N.A.
101 N. Tryon Street
Independence Center, 15th Floor
Agency Services
Charlotte, NC 28255
ATTN: Ret Taylor
with a copy to:
NationsBank, N.A.
Corporate Finance Group
6610 Rockledge Drive
MD2-600-06-13
Bethesda, MD 20817-1876
ATTN: Michael R. Heredia
U.S. Bank National Association U.S. Bank National Association
8401 E. Belleview Avenue
Denver, Colorado 80237
ATTN: George E. Adams
<PAGE>
Schedule 9.3(b)
---------------
Form of Assignment and Acceptance
THIS ASSIGNMENT AND ACCEPTANCE dated as of ________, 199_ is entered into
between THE LENDER IDENTIFIED ON THE SIGNATURE PAGES AS THE "ASSIGNOR" (the
"Assignor") and THE PARTY IDENTIFIED ON THE SIGNATURE PAGES AS "ASSIGNEES"
--------
("Assignee").
--------
Reference is made to that Bridge Credit Agreement dated as of April __,
1999 (as amended and modified, the "Credit Agreement") among Navigant
----------------
International, Inc., a Delaware corporation (the "Borrower"), the Guarantors and
--------
Lenders identified therein and NationsBank, N.A., as Administrative Agent.
Terms defined in the Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date shown below, those rights and
interests of the Assignor under the Credit Agreement identified below (the
"Assigned Interests"), including the Obligations and Commitments relating
------------------
thereto, together with unpaid interest and fees relating thereto accruing from
the Effective Date. The Assignor represents and warrants that it owns the
interests assigned hereby free and clear of liens, encumbrances or other claims.
Each of the Assignees represents that it is a permitted Assignee under Section
9.3 of the Credit Agreement. The Assignor and the Assignee hereby make and
agree to be bound by all the representations, warranties and agreements set
forth in Section 9.3 of the Credit Agreement, a copy of which has been received
by each such party. From and after the Effective Date (i) the Assignee, if it
is not already a Lender under the Credit Agreement, shall be a party to and be
bound by the provisions of the Credit Agreement and, to the extent of the
interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of
the interests assigned by this Assignment and Acceptance, relinquish its rights
and be released from its obligations under the Credit Agreement (other than the
rights of indemnification referenced in Section 9.9 of the Credit Agreement).
Schedule 2.1(a) is deemed modified and amended to the extent necessary to give
- ---------------
effect to this Assignment.
2. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of North Carolina.
3. Terms of Assignment
(a) Date of Assignment: ___________, 199__
(b) Legal Name of Assignor: SEE SIGNATURE PAGE
(c) Legal Name of Assignee: SEE SIGNATURE PAGE
(d) Effective Date of Assignment: ___________, 199__
See Schedule I attached for a description of the Loans, Obligations and
----------
Commitments (and the percentage interests therein and relating thereto) which
are the subject of this Assignment and Acceptance.
4. The fee payable to the Administrative Agent in connection with this
Assignment is enclosed.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused the execution of this
instrument by their duly authorized officers as of the date first above written.
ASSIGNOR: ASSIGNEE:
- -------- --------
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
Address for Notices:
-------------------
ACKNOWLEDGMENT AND CONSENT
- --------------------------
NATIONSBANK, N.A. NAVIGANT INTERNATIONAL, INC.
as Administrative Agent
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
<PAGE>
SCHEDULE I
----------
TO ASSIGNMENT AND ACCEPTANCE
NAVIGANT INTERNATIONAL, INC.
REVOLVING LOANS PRIOR TO ASSIGNMENT
<TABLE>
<CAPTION>
Revolving Revolving Revolving
Committed Commitment Loans
Amount Percentage Outstanding
----------------- ----------------- -----------------
<S> <C> <C> <C>
ASSIGNOR
- --------
ASSIGNEES
- ---------
------------------- ------------------- -------------------
$ $
</TABLE>
<PAGE>
REVOLVING LOANS SUBJECT TO THIS ASSIGNMENT
<TABLE>
<CAPTION>
Revolving Revolving Revolving
Committed Commitment Loans
Amount Percentage Outstanding
----------------- ----------------- -----------------
<S> <C> <C> <C>
ASSIGNOR
- --------
ASSIGNEES
- ---------
------------------- ------------------- -------------------
$ $
</TABLE>
<PAGE>
SCHEDULE I
----------
TO ASSIGNMENT AND ACCEPTANCE
NAVIGANT INTERNATIONAL, INC.
REVOLVING LOANS AFTER ASSIGNMENT
<TABLE>
<CAPTION>
Revolving Revolving Revolving
Committed Commitment Loans
Amount Percentage Outstanding
----------------- ----------------- -----------------
<S> <C> <C> <C>
ASSIGNOR
- --------
ASSIGNEES
- ---------
------------------- ------------------- -------------------
$ $
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NAVIGANT'S
1999 1ST QUARTER AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-26-1999
<PERIOD-START> DEC-28-1998
<PERIOD-END> MAR-28-1999
<CASH> 239
<SECURITIES> 0
<RECEIVABLES> 29,468
<ALLOWANCES> 400
<INVENTORY> 0
<CURRENT-ASSETS> 34,846
<PP&E> 32,836
<DEPRECIATION> 10,585
<TOTAL-ASSETS> 209,763
<CURRENT-LIABILITIES> 29,247
<BONDS> 0
0
0
<COMMON> 112,851
<OTHER-SE> 4,607
<TOTAL-LIABILITY-AND-EQUITY> 209,763
<SALES> 54,603
<TOTAL-REVENUES> 54,603
<CGS> 30,472
<TOTAL-COSTS> 47,380
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,095
<INCOME-PRETAX> 6,111
<INCOME-TAX> 2,648
<INCOME-CONTINUING> 3,463
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,463
<EPS-PRIMARY> 0.27
<EPS-DILUTED> 0.27
</TABLE>
