<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 September 26, 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 November 3, 1999, the Registrant had outstanding 12,645,000
shares of its common stock, par value $0.001 per share.
<PAGE>
INDEX TO FORM 10-Q
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<TABLE>
<S> <C> <C>
Part I. FINANCIAL INFORMATION:
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets -
September 26, 1999 (Unaudited) and December 27, 1998.................................3
Consolidated Statements of Income (Unaudited) -
Three and Nine Months Ended September 26, 1999 and September 27, 1998................4
Consolidated Statements of Cash Flows (Unaudited) -
Nine Months Ended September 26, 1999 and September 27, 1998..........................5
Notes to Consolidated Financial Statements...........................................6 - 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..............................................8 -16
Item 3. Quantitative and Qualitative Disclosures
about Market Risks..................................................................16
Part II. OTHER INFORMATION:
Item 1. Legal Proceedings.......................................................................17
Item 2. Changes in Securities...................................................................17
Item 3. Defaults Upon Senior Securities.........................................................17
Item 4. Submission of Matters to a Vote of Security Holders.....................................17
Item 5. Other Information.......................................................................17
Item 6. Exhibits and Reports on Form 8-K........................................................18
SIGNATURES
</TABLE>
2
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NAVIGANT INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
<TABLE>
<CAPTION>
September 26, December 27,
------------- ------------
1999 1998
---- ----
ASSETS (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................................... $ 4,386 $ 315
Accounts receivable, less allowance for doubtful accounts of $424 and $413,
respectively............................................................ 36,491 27,744
Prepaid expenses and other current assets................................... 2,975 2,517
Deferred income taxes....................................................... 2,811 2,610
---------- ----------
Total current assets................................................... 46,663 33,186
Property and equipment, net..................................................... 21,941 21,569
Intangible assets, net.......................................................... 177,549 150,554
Other assets.................................................................... 4,723 1,539
---------- ----------
Total assets........................................................... $ 250,876 $ 206,848
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term portion of long-term debt........................................ $ 7,768 $ 4,437
Short-term portion of capital lease obligations............................. 856 564
Accounts payable............................................................ 3,645 2,875
Accrued compensation........................................................ 5,772 5,907
Accrued income taxes........................................................ 205 1,334
Other accrued liabilities................................................... 14,547 16,861
---------- ----------
Total current liabilities.............................................. 32,793 31,978
Long-term debt, net of short-term portion....................................... 82,828 56,436
Capital lease obligations....................................................... 1,147 1,026
Deferred income taxes........................................................... 785 835
Other long-term liabilities..................................................... 8,382 2,448
---------- ----------
Total liabilities...................................................... 125,935 92,723
Commitments and contingencies
Stockholders' equity:
Common stock; $.001 par value, 150,000,000 shares authorized;
12,780,000 issued and outstanding (12,929,000 at December 27, 1998)....... 13 13
Additional paid-in-capital.................................................. 113,250 113,250
Treasury Stock.............................................................. (1,505) (311)
Accumulated other comprehensive income (loss)............................... 127 (95)
Retained earnings........................................................... 13,056 1,268
---------- ----------
Total stockholders' equity............................................. 124,941 114,125
---------- ----------
Total liabilities and stockholders' equity............................. $ 250,876 $ 206,848
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
3
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NAVIGANT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
September 26, September 27, September 26, September 27,
------------- ------------- ------------- -------------
1999 1998 1999 1998
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues.................................... $ 55,682 $ 45,059 $ 168,320 $ 124,231
Operating expenses.......................... 30,795 26,190 93,371 71,519
------------- -------------- ------------- -----------
Gross profit....................... 24,887 18,869 74,949 52,712
General and administrative expenses......... 14,539 12,152 43,087 34,255
Non-recurring expenses...................... 5,061
Depreciation and amortization expense....... 2,434 1,885 7,434 4,969
------------- -------------- ------------- -----------
Operating income................... 7,914 4,832 24,428 8,427
Other (income) expenses:
Interest expense........................ 1,386 628 3,516 981
Interest income......................... (14) (53) (28) (220)
Other................................... 76 9 270 (37)
------------- -------------- ------------- ------------
Income before provision for income taxes.... 6,466 4,248 20,670 7,703
Provision for income taxes.................. 2,773 2,089 8,881 4,668
------------- -------------- ------------- -----------
Net income.................................. $ 3,693 $ 2,159 $ 11,789 $ 3,035
============= ============== ============= ===========
Other comprehensive income:
Foreign currency translation adjustment 124 (96) 222 (82)
------------- -------------- ------------- -----------
Total Comprehensive income $ 3,817 $ 2,063 $ 12,011 $ 2,953
============= ============== ============= ===========
Weighted average number of common shares outstanding:
Basic................................... 12,860 12,984 12,896 13,210
Diluted................................. 12,916 12,995 12,924 13,335
Net income per share:.......................
Basic................................... $ 0.29 $ 0.17 $ 0.91 $ 0.23
Diluted................................. $ 0.29 $ 0.17 $ 0.91 $ 0.23
</TABLE>
See accompanying notes to consolidated financial statements.
4
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NAVIGANT INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
For the Nine Months Ended
September 26, 1999 September 27, 1998
------------------ ------------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income........................................................................ $ 11,789 $ 3,035
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization expense........................................... 7,434 4,969
Non-recurring charges........................................................... 3,290
Changes in current assets and liabilities (net of assets
acquired and liabilities assumed in combinations
accounted for under the purchase method):
Accounts receivable.......................................................... (4,648) (42)
Prepaid expenses and other assets............................................ 311 (357)
Accounts payable............................................................. 436 1,149
Accrued liabilities.......................................................... (13,778) (8,142)
Other long-term liabilities.................................................. 4,736 (710)
---------- ----------
Net cash provided by operating activities................................ 6,280 3,192
---------- ----------
Cash flows from investing activities:
Additions to property and equipment, net of disposals............................. (3,723) (3,050)
Proceeds from disposal of building................................................ 1,025
Cash paid in acquisitions and earn-outs consideration,
net of cash received......................................................... (17,857) (38,375)
----------- ----------
Net cash used in investing activities.................................... (20,555) (41,425)
---------- ----------
Cash flows from financing activities:
Payments of long-term debt........................................................ (4,274) (2,158)
Proceeds from credit facility, net................................................ 26,631 36,764
Repurchase of common stock........................................................ (1,194)
Proceeds from issuance of common stock............................................ 14,992
Payment of dividend to U. S. Office Products...................................... (6,889)
Payment of debt issue costs....................................................... (2,725) (656)
Net advances from U.S. Office Products Company.................................... (8,786)
---------- ----------
Net cash provided by financing activities................................ 18,438 33,267
---------- ----------
Effect of exchange rate changes on cash............................................... (92) 246
---------- ----------
Net increase (decrease) in cash and cash equivalents.................................. 4,071 (4,720)
Cash and cash equivalents at beginning of period...................................... 315 6,048
---------- ----------
Cash and cash equivalents at end of period............................................ $ 4,386 $ 1,328
========== ==========
Supplemental disclosures of cash flow information:
Interest paid..................................................................... $ 3,405 $ 817
Income taxes paid................................................................. $ 10,578 $ 1,064
</TABLE>
See accompanying notes to consolidated financial statements.
5
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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 based on airline sales. The Company manages all aspects of its clients'
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 September 26, 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 and nine
months ended September 26, 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. Additionally, certain reclassifications have been made in the 1998
financial statements to conform to the 1999 presentation.
NOTE 3--BUSINESS COMBINATIONS
From June 28, 1999 to September 26, 1999, the Company made four
additional acquisitions bringing the total acquisitions for 1999 to six. These
six acquisitions were accounted for under the purchase method for an aggregate
purchase price of $24,242 consisting of cash, net of cash acquired, of $17,857
and notes payable of $6,385. The total assets related to these six acquisitions
were $34,507 including intangible assets of $28,448. The results of these
acquisitions have been included in the Company's results from their respective
dates of acquisition.
6
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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. 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, 16 facilities have
been closed or consolidated, one location has been sold and 95 employees have
been terminated. Management believes that these measures will be substantially
completed as of December 1999. The activity in the restructuring liability
during the nine months ended September 26, 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........................... (477) (780) (1,257)
Non-cash usage..................... (53) (53)
----------- ----------- -----------
Balance at September 26, 1999...... $ 182 $ 125 $ 307
=========== =========== ===========
</TABLE>
7
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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 six companies acquired in business combinations in 1999
accounted for under the purchase method (the "1999 Purchased Companies") and 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
8
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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 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 October 1998, the airlines instituted a commission
cap of $100 on round-trip international tickets and $50 on one-way international
tickets. In October 1999, the airlines further cut the base commission on
domestic and international tickets from 8% to 5% of the ticket price.
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.
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 75% of its total transactions are currently generated from clients
under management contracts and service fee arrangements and expects this
percentage to increase to 98% by December 1999.
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 64.1% and 63.8% of total direct operating
expenses in the three and nine months ended September 26, 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 53.1% and 50.0% of total general
and administrative expenses in the three and nine months ended September 26,
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
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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, 16 facilities have been closed or consolidated, one building
has been sold and approximately 95 employees have been terminated. Management
anticipates that these measures will be completed by December 1999.
Results of Operations
The following table sets forth various items as a percentage of
revenues for the three and nine months ended September 26, 1999 and September
27, 1998.
<TABLE>
<CAPTION>
For the Three Months For the Nine Months
-------------------- -------------------
Ended Ended
----- -----
September September September September
26, 27, 26, 27,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues.......................................... 100.0% 100.0% 100.0% 100.0%
Operating Expenses................................ 55.3 58.1 55.5 57.6
------ ------ ------ ------
Gross profit.................................. 44.7 41.9 44.5 42.4
General and administrative expenses............... 26.1 27.0 25.6 27.6
Depreciation and amortization expense............. 4.4 4.2 4.4 4.0
Non-recurring costs............................... 4.0
------ ------ ------ ------
Operating income.............................. 14.2 10.7 14.5 6.8
Interest expense, net............................. 2.5 1.3 2.1 0.6
Other (income) expense............................ 0.1 0.0 0.1 0.0
------ ------ ------ ------
Income before provision for income taxes.......... 11.6 9.4 12.3 6.2
Provision for income taxes........................ 5.0 4.6 5.3 3.8
------ ------ ------ ------
Net income........................................ 6.6% 4.8% 7.0% 2.4%
====== ====== ====== ======
</TABLE>
Revenues
Consolidated revenues increased 23.6%, from $45.1 million for the three
months ended September 27, 1998 to $55.7 million for the three months ended
September 26, 1999. This increase was primarily due to the inclusion of the
revenues from the 1998 and 1999 Purchased Companies from their respective dates
of acquisition. Additionally, the Company has increased revenues in 1999 through
improved national contracts with certain of its vendors.
Consolidated revenues increased 35.5%, from $124.2 million for the nine
months ended September 27, 1998 to $168.3 million for the nine months ended
September 26, 1999. This increase was primarily due to the inclusion of the
revenues from the 1998 and 1999 Purchased Companies from their respective dates
of acquisition. Additionally, the Company has increased revenues in 1999 through
improved national contracts with certain of its vendors.
Gross Profit
Gross profit increased 31.9%, from $18.9 million, or 41.9% of revenues,
for the three months ended September 27, 1998 to $24.9 million, or 44.7% of
revenues, for the three months ended September 26, 1999. The increase in gross
profit as a percentage of revenues was due primarily to an increase in revenue
from certain vendors, due to the Company's negotiation of improved national
contracts with these vendors. Additionally, the Company experienced improved
gross profit due to the conversion
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of numerous customers to management contracts and service fee arrangements in
1998 and 1999. The increase in gross profit as a percentage of revenue is also
the result of spreading certain fixed operating expenses over a larger revenue
base.
Gross profit increased 42.2%, from $52.7 million, or 42.4% of revenues,
for the nine months ended September 27, 1998 to $74.9 million, or 44.5% of
revenues, for the nine months ended September 26, 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 due to the
conversion of numerous customers to management contracts and service fee
arrangements in 1998 and 1999. The increase in gross profit as a percentage of
revenue is also the result of spreading certain fixed operating expenses spread
over a larger revenue base.
General and Administrative Expenses
General and administrative expenses increased 19.6%, from $12.2
million, or 27.0% of revenues, for the three months ended September 27, 1998 to
$14.5 million, or 26.1% of revenues, for the three months ended September 26,
1999. The decrease in general and administrative expenses as a percentage of
revenues was due primarily to the 1998 and 1999 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 implementing integration
efforts to reduce redundant facilities and functions, resulting in a decrease in
general and administrative expenses during the three months ended September 26,
1999.
General and administrative expenses increased 25.8%, from $34.3
million, or 27.6% of revenues, for the nine months ended September 27, 1998 to
$43.1 million, or 25.6% of revenues, for the nine months ended September 26,
1999. The decrease in general and administrative expenses as a percentage of
revenues was due primarily to the 1998 and 1999 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 implementing integration
efforts to reduce redundant facilities and functions, resulting in a decrease in
general and administrative expenses during the nine months ended September 26,
1999.
Depreciation and Amortization Expense
Depreciation and amortization expense increased 29.1%, from $1.9
million, or 4.2% of revenues, for the three months ended September 27, 1998 to
$2.4 million, or 4.4% of revenues, for the three months ended September 26,
1999. This increase was due to the increase in the number of purchase
acquisitions included in the results for 1999 compared to 1998.
Depreciation and amortization expense increased 49.6%, from $5.0
million, or 4.0% of revenues, for the nine months ended September 27, 1998 to
$7.4 million, or 4.4% of revenues, for the nine months ended September 26, 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 $575,000 or 1.3% of revenues, for
the three months ended September 27, 1998 to $1.4 million, or 2.5% of revenues,
for the three months ended September 26, 1999. The increase was attributable to
financing the acquisition of the 1998 and 1999 Purchased Companies with
borrowings under the Company's credit facility.
11
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Interest expense, net, increased from $761,000 or 0.6% of revenues, for
the nine months ended September 27, 1998 to $3.5 million, or 2.1% of revenues,
for the nine months ended September 26, 1999. The increase was attributable to
financing the acquisition of the 1998 and 1999 Purchased Companies with
borrowings under the Company's credit facility.
Provision for Income Taxes
Provision for income taxes increased from $2.1 million for the three
months ended September 27, 1998 to $2.8 million for the three months ended
September 26, 1999, reflecting effective income tax rates of 49.2% and 42.9%,
respectively.
Provision for income taxes increased from $4.7 million for the nine
months ended September 27, 1998 to $8.9 million for the nine months ended
September 26, 1999, reflecting effective income tax rates of 60.6% and 43.0%,
respectively.
The high effective income tax rate compared to the federal statutory
rate of 35%, was primarily due to an increase in non-deductible goodwill
amortization resulting from acquisition activity. The effective rates in the
three and nine months ended September 26, 1999 were lower than the effective
rates in the three and nine months ended September 27, 1998 due to a lower ratio
of non-deductible goodwill amortization to pre-tax income in the later periods.
Liquidity and Capital Resources
At September 26, 1999, the Company had cash of $4.4 million, working
capital of $13.9 million, borrowings of $76.5 million under the Amended and
Restated Credit Agreement from NationsBank, N.A. as Administrative Agent (the
"Credit Facility"), $16.1 million of other indebtedness, including capital lease
obligations, and available capacity under the Credit Facility of $48.5 million.
The Company's capitalization, defined as the sum of long-term debt and
stockholders' equity at September 26, 1999 was approximately $217.5 million.
The Company has financed its operational growth and acquisitions
primarily from internally generated cash flow from operations and borrowings
under the Credit Facility. These borrowings are 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 nine months ended September 26, 1999, net cash provided by
operating activities was $6.3 million. Net cash used in investing activities was
$20.6 million, including $3.7 million for additions to property and equipment,
such as computer equipment and office furniture, and $17.9 million for the
acquisition of the 1999 Purchased Companies, offset by the proceeds from the
sale of a building for $1.0 million. Net cash provided by financing activities
was $18.4 million, consisting of $4.3 million for repayments by the Company of
long-term indebtedness and $2.7 million for payment of debt issuance costs
attributable to the Company's new revolving credit facility offset by net
increases in the Company's credit facility primarily to finance the 1999
Purchased Companies.
During the nine months ended September 27, 1998, net cash provided by
operating activities was $3.2 million. Net cash used in investing activities was
$41.4 million, including $3.0 million for additions to property and equipment,
such as computer equipment and office furniture, and $38.4
12
<PAGE>
million for the 1998 Purchased Companies. Net cash provided by financing
activities was $33.3 million, consisting of $36.8 million in proceeds from the
Company's credit facility and $15.0 million from the Stock Offering, partially
offset by repayment to U.S. Office Products of the $8.8 million of indebtedness
allocated to the Company in the Travel Distribution (net of advances from U.S.
Office Products in 1998) and by $6.9 million of dividends to U.S. Office
Products.
In August 1999, the Company obtained the Credit Facility, a secured
$125.0 million revolving credit facility to replace the Company's existing $60
million revolving credit facility and a $15 million short term bridge loan
agreement. The Credit Facility is available for working capital, capital
expenditures, and acquisitions, subject to compliance with the applicable
covenants. The Credit Facility is scheduled to expire in August 2004. 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 1.25% and 2.75%, 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 .25% and 1.75%, depending
on the Company's funded debt to EBITDA ratio. Indebtedness under the Credit
Facility is 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.
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 issuance 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
13
<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 existing back-office accounting software would have been adversely
affected by the Year 2000 Problem was completed by August 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 and the conversion to
these compliant mid-office systems was completed by September 30, 1999.
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 replaced in conjunction with the replacement of the
appropriate software systems.
14
<PAGE>
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 completed
this process in September 1999. Systems that were discovered to be adversely
impacted have been, or are scheduled to 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 97% of its significant, national
vendors, and from approximately 75% 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 currently evaluating whether
to discontinue relationships with vendors who have not provided satisfactory
disclosure.
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 has developed contingency plans to address these
situations, but these plans may not adequately address any unforeseen
circumstances. In addition, 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 within 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.
15
<PAGE>
$191,000 annualized increase or decrease in interest expense.
16
<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 U.S. Office Products Company and certain former and
present executive officers of U.S. Office Products as defendants. The
plaintiffs allege that U.S. Office Products Company and the named U.S.
Office Products Company executive officers made fraudulent
misrepresentations and omissions about among other things, U.S. Office
Products Company's plans to engage in a restructuring which would
include a spin-off of 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 intends to vigorously defend against this
lawsuit.
U.S. Office Products Company has also been named as a
defendant in a number of lawsuits which allege that U.S. Office
Products Company made materially false and misleading statements or
failed to disclose material facts in connection with the restructuring
of U.S. Office Products Company in June 1998. The validity and the
amount of the claims made in the lawsuits is uncertain. The Company
believes U.S. Products Company is vigorously defending these actions.
In connection with the Travel Distribution, the Company agreed
to indemnify U.S. Office Products Company for certain liabilities,
which could include claims such as those made against U.S. Office
Products Company in these lawsuits. If U.S. Office Products Company
were entitled to indemnification under this agreement, the Company's
indemnification obligation, however, likely 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.
ITEM 5. OTHER INFORMATION.
---------------------------
Not applicable.
17
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
------------------------------------------
(a) Exhibits
10.1 Amended and Restated Credit Agreement dated
as of August 6, 1999
27.1 Financial Data Schedules
(b) Reports on Form 8-K
Not applicable.
18
<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: November 10, 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)
19
<PAGE>
Exhibit 10.1
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of August 6, 1999
among
NAVIGANT INTERNATIONAL, INC.,
as Borrower,
CERTAIN SUBSIDIARIES AND AFFILIATES,
as Guarantors,
THE LENDERS NAMED HEREIN
AND
NATIONSBANK, N.A.,
as Administrative Agent
Arranged by:
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SECTION 1 DEFINITIONS............................................... 1
1.1 Definitions................................................... 1
1.2 Computation of Time Periods................................... 25
1.3 Accounting Terms.............................................. 25
SECTION 2 CREDIT FACILITIES......................................... 26
2.1 Revolving Loans............................................... 26
2.2 Letter of Credit Subfacility.................................. 28
2.3 Swingline Loan Subfacility.................................... 35
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES............ 35
3.1 Default Rate.................................................. 35
3.2 Extension and Conversion...................................... 36
3.3 Prepayments................................................... 36
3.4 Termination and Reduction of Commitments...................... 37
3.5 Fees.......................................................... 38
3.6 Capital Adequacy.............................................. 38
3.7 Inability To Determine Interest Rate.......................... 39
3.8 Illegality.................................................... 40
3.9 Requirements of Law........................................... 39
3.10 Taxes........................................................ 40
3.11 Indemnity.................................................... 42
3.12 Pro Rata Treatment........................................... 43
3.13 Sharing of Payments.......................................... 43
3.14 Payments, Computations, Etc.................................. 44
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
3.15 Evidence of Debt........................................... 46
SECTION 4 GUARANTY.................................................. 47
4.1 The Guarantee............................................... 47
4.2 Obligations Unconditional................................... 47
4.3 Reinstatement............................................... 48
4.4 Certain Additional Waivers.................................. 49
4.5 Remedies.................................................... 49
4.6 Rights of Contribution...................................... 49
4.7 Continuing Guarantee........................................ 50
SECTION 5 CONDITIONS................................................ 50
5.1 Conditions to Closing....................................... 50
5.2 Conditions to All Extensions of Credit...................... 52
SECTION 6 REPRESENTATIONS AND WARRANTIES............................ 53
6.1 Financial Condition......................................... 53
6.2 No Changes or Restricted Payments........................... 54
6.3 Organization; Existence; Compliance with Law................ 54
6.4 Power; Authorization; Enforceable Obligations............... 54
6.5 No Legal Bar or Disputes.................................... 55
6.6 No Material Litigation...................................... 55
6.7 No Default.................................................. 56
6.8 Ownership of Property; Liens................................ 56
6.9 Intellectual Property....................................... 56
6.10 No Burdensome Restrictions................................. 56
6.11 Taxes...................................................... 56
6.12 ERISA...................................................... 57
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
6.13 Governmental Regulations, Etc.............................. 58
6.14 Subsidiaries............................................... 59
6.15 Purpose of Extensions of Credit............................ 59
6.16 Environmental Matters...................................... 59
6.18 No Material Misstatements.................................. 61
6.19 Security Documents......................................... 61
6.20 Location of Real Property and Leased Premises.............. 62
SECTION 7 AFFIRMATIVE COVENANTS..................................... 62
7.1 Financial Statements........................................ 62
7.2 Certificates; Other Information............................. 64
7.3 Notices..................................................... 65
7.4 Payment of Obligations...................................... 66
7.5 Conduct of Business and Maintenance of Existence............ 66
7.6 Maintenance of Property; Insurance.......................... 67
7.7 Inspection of Property; Books and Records; Discussions...... 67
7.8 Environmental Laws.......................................... 67
7.9 Financial Covenants......................................... 68
7.10 Administrative Fees........................................ 69
7.11 Additional Guaranties and Stock Pledges.................... 69
7.12 Ownership of Subsidiaries.................................. 70
7.13 Use of Proceeds............................................ 70
7.15 Pledged Assets............................................. 70
SECTION 8 NEGATIVE COVENANTS........................................ 71
8.1 Indebtedness................................................ 71
8.2 Liens....................................................... 72
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
8.3 Nature of Business.......................................... 73
8.4 Consolidation, Merger, Sale or Purchase of Assets,
Capital Expenditures, etc................................... 73
8.5 Advances, Investments and Loans............................. 74
8.6 Transactions with Affiliates................................ 75
8.7 Ownership of Equity Interests............................... 75
8.8 Fiscal Year................................................. 75
8.9 Prepayments of Indebtedness, etc............................ 75
8.10 Restricted Payments........................................ 76
8.11 Sale Leasebacks............................................ 76
8.12 No Further Negative Pledges................................ 76
SECTION 9 EVENTS OF DEFAULT......................................... 76
9.1 Events of Default........................................... 76
9.2 Acceleration; Remedies...................................... 79
SECTION 10 AGENCY PROVISIONS........................................ 80
10.1 Appointment................................................ 80
10.2 Delegation of Duties....................................... 80
10.3 Exculpatory Provisions..................................... 80
10.4 Reliance on Communications................................. 81
10.5 Notice of Default.......................................... 81
10.6 Non-Reliance on Administrative Agent and Other Lenders..... 82
10.7 Indemnification............................................ 82
10.8 Administrative Agent in its Individual Capacity............ 83
10.9 Successor Administrative Agent............................. 83
SECTION 11 MISCELLANEOUS............................................ 84
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C>
11.1 Notices.................................................... 84
11.2 Right of Set-Off........................................... 85
11.3 Benefit of Agreement....................................... 85
11.4 No Waiver; Remedies Cumulative............................. 88
11.5 Payment of Expenses, etc................................... 88
11.6 Amendments, Waivers and Consents........................... 89
11.7 Counterparts............................................... 90
11.8 Headings................................................... 90
11.9 Survival................................................... 90
11.10 Governing Law; Submission to Jurisdiction; Venue.......... 91
11.11 Severability.............................................. 91
11.12 Entirety.................................................. 92
11.13 Binding Effect; Termination............................... 92
11.14 Confidentiality........................................... 92
11.15 Source of Funds........................................... 93
11.16 Conflict.................................................. 93
</TABLE>
v
<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 2.2(b)-1 Existing Letters of Credit
Schedule 2.2(b)-2 Form of Notice of Request for Letter of Credit
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1(g)(v) Form of Officer's Certificate
Schedule 6.6 Description of Legal Proceedings
Schedule 6.8 Existing Liens
Schedule 6.14 Subsidiaries
Schedule 6.20 Mortgaged Properties
Schedule 7.2(b) Form of Officer's Compliance Certificate
Schedule 7.11-1 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 8.5 Existing Investments
Schedule 11.1 Lenders and Addresses
Schedule 11.3(b) Form of Assignment and Acceptance
vi
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of August 6, 1999
(the "Credit Agreement"), is by and among NAVIGANT INTERNATIONAL, INC., a
----------------
Delaware corporation (the "Borrower"), the Subsidiaries and Affiliates of the
--------
Borrower identified as Guarantors 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") for the Lenders.
--------------------
W I T N E S S E T H
WHEREAS, a $75 million revolving credit facility has been established in
favor of the Borrower pursuant to the terms of that Credit Agreement, dated as
of June 9, 1998 (as amended and modified, the "Original Credit Agreement") and a
-------------------------
$15 million bridge loan credit facility was established in favor of the Borrower
pursuant to the terms of that certain Bridge Credit Agreement dated as of April
26, 1999 (as amended and modified, the "Bridge Credit Agreement") by and among
the Borrower, the Subsidiaries and Affiliates of the Borrower identified
therein, as guarantors, the lenders identified therein, and NationsBank, N.A.,
as administrative agent for the lenders;
WHEREAS, the Borrower has requested certain modifications to the credit
facility established pursuant to the Original Credit Agreement, including, among
other things, an increase in the size of the facility to $125 million;
WHEREAS, the Lenders have agreed to the requested modifications on the
terms and conditions provided herein;
WHEREAS, this Credit Agreement is given in amendment to, restatement of and
substitution for the Original Credit Agreement;
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
- - -----------
a. 1.1 Definitions.
-----------
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
1
<PAGE>
"Additional Credit Party" means each Person that becomes a Guarantor
-----------------------
after the Closing Date by execution of a Joinder Agreement.
"Administrative Agent" shall have the meaning assigned to such term in
--------------------
the heading hereof, together with any successors or assigns.
"Administrative Agent's Fee Letter" means that certain letter
---------------------------------
agreement, dated as of August 6, 1999, between the Administrative Agent
and the Borrower, as amended, modified, supplemented or replaced from time
to time.
"Administrative Agent's Fees" shall have the meaning assigned to such
---------------------------
term in Section 3.5(c).
"Affiliate" means, with respect to any Person, any other Person (i)
---------
directly or indirectly controlling or controlled by or under direct or
indirect common control with such Person or (ii) directly or indirectly
owning or holding five percent (5%) or more of the equity interest in such
Person. For purposes of this definition, "control" when used with respect
to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agency Services Address" means NationsBank, N.A., NC1-001-15-04, 101
-----------------------
North Tryon Street, Charlotte, North Carolina 28255, Attn: Agency
Services, or such other address as may be identified by written notice from
the Administrative Agent to the Borrower.
"Aggregate Revolving Committed Amount" means the aggregate amount of
------------------------------------
Revolving Commitments in effect from time to time, being initially ONE
HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000).
"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 Letter of Credit Fee", (iii) the Letter of
Credit Fee shall be the percentage set forth under the column "Eurodollar
Margin and Letter of Credit Fee", and (iv) the Commitment Fee shall be the
percentage set forth under the column "Commitment Fee":
2
<PAGE>
<TABLE>
<CAPTION>
Consolidated Eurodollar
Pricing Leverage Base Rate Margin and Commitment
Level Ratio Margin Letter of Credit Fee Fee
------- ------------ --------- -------------------- ----------
<S> <C> <C> <C> <C>
I * 1.25 0.25% 1.25% 0.300%
II ** 1.25 but * 1.75 0.75% 1.75% 0.375%
III ** 1.75 but * 2.25 1.25% 2.25% 0.500%
IV ** 2.25 1.75% 2.75% 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), as applicable;
provided that:
--------
(i) the initial Applicable Percentages shall be 2.25% in the
case of the Eurodollar Margin and Letter of Credit Fee, 1.25% in the
case of the Base Rate Margin, and 0.500% in the case of the Commitment
Fee and shall remain in effect until the first Rate Determination Date
to occur after the date six months from the Closing Date; and
(ii) 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), 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.
"Approved Bank" shall have the meaning given such term in the
-------------
definition of "Cash Equivalents".
"Asset Disposition" means, other than a Securitization Transaction
-----------------
[and the Excluded Asset Dispositions], (i) the sale, lease or other
disposition of any
3
<PAGE>
property or asset by any member of the Consolidated Group, other than any
such sale permitted by Section 8.4(b) and other than to the extent
permitted by Section 8.5, and (ii) receipt by any member of the
Consolidated Group of any cash insurance proceeds or condemnation award
payable by reason of theft, loss, physical destruction or damage, taking or
similar event with respect to any of their property or assets.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
---------------
States Code, as amended, modified, succeeded or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence
----------------
of any of the following with respect to such Person: (i) a court or
governmental agency having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or ordering the winding up or
liquidation of its affairs; or (ii) there shall be commenced against such
Person an involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or any case, proceeding or
other action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded for a period of sixty (60) consecutive days; or (iii) such Person
shall commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent to the entry of
an order for relief in an involuntary case under any such law, or consent
to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such
Person or for any substantial part of its Property or make any general
assignment for the benefit of creditors; or (iv) such Person shall be
unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"Base Rate" means, for any day, the rate per annum (rounded upwards,
---------
if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the
greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1%
----
or (b) the Prime Rate in effect on such day. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable after due inquiry to
ascertain the Federal Funds Rate for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Base Rate shall be determined without
regard to clause (a) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective on the effective date of such change in the Prime Rate
or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate determined
--------------
by reference to the Base Rate.
4
<PAGE>
"Borrower" means Navigant International, Inc., a Delaware corporation,
--------
as referenced in the opening paragraph, its successors and permitted
assigns.
"Business Day" means a day other than a Saturday, Sunday or other day
------------
on which commercial banks in Charlotte, North Carolina or New York, New
York are authorized or required by law to close, except that, when used in
------ ----
connection with a Eurodollar Loan, such day shall also be a day on which
dealings between banks are carried on in Dollar deposits in London,
England.
"Capital Lease" means, as applied to any Person, any lease of any
-------------
Property by that Person as lessee which, in accordance with GAAP, is or
should be accounted for as a capital lease on the balance sheet of that
Person.
"Capital Lease Obligation" means the capital lease obligations
------------------------
relating to a Capital Lease determined in accordance with GAAP.
"Cash Equivalents" means (a) securities issued or directly and fully
----------------
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (b) Dollar
denominated time deposits and certificates of deposit of (i) any Lender, or
(ii) any domestic commercial bank of recognized standing (y) having capital
and surplus in excess of $500,000,000 and (z) whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or from
Moody's is at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than 270 days
-------------
from the date of acquisition, (c) commercial paper and variable or fixed
rate notes issued by any Approved Bank (or by the parent company thereof)
or any variable rate notes issued by, or guaranteed by, any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1
(or the equivalent thereof) or better by Moody's and maturing within six
months of the date of acquisition, (d) repurchase agreements entered into
by a Person with a bank or trust company (including any of the Lenders) or
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the
United States of America in which such Person shall have a perfected first
priority security interest (subject to no other Liens) and having, on the
date of purchase thereof, a fair market value of at least 100% of the
amount of the repurchase obligations, (e) obligations of any State of the
United States or any political subdivision thereof, the interest with
respect to which is exempt from federal income taxation under Section 103
of the Internal Revenue Code, having a long term rating of at least AA- or
Aa-3 by S&P or Moody's, respectively, and maturing within three years from
the date of acquisition thereof, (f) Investments in municipal auction
preferred stock (i) rated AAA (or the equivalent thereof) or better by S&P
or AAA (or the equivalent thereof) or better by Moody's and (ii) with
dividends that reset at least once every 365 days and (g) Investments,
classified in accordance with GAAP as current assets, in money market
investment programs registered under the Investment Company Act of 1940, as
amended, which are administered by
5
<PAGE>
reputable financial institutions having capital of at least $100,000,000
and the portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a) through (f).
"Change of Control" means the occurrence of any of the following
-----------------
events: (i) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership, directly or indirectly, of, or shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation, will result in its or their
acquisition of or control over, Voting Stock of the Borrower (or other
securities convertible into such Voting Stock) representing 35% or more of
the combined voting power of all Voting Stock of the Borrower, or (ii)
during any period of up to 24 consecutive months, commencing after the
Closing Date, individuals who at the beginning of such 24 month period were
directors of the Borrower (together with any new director whose election by
the Borrower's Board of Directors or whose nomination for election by the
Borrower's shareholders was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of
the directors of the Borrower then in office. As used herein, "beneficial
ownership" shall have the meaning provided in Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as
amended.
"Closing Date" means the date hereof.
------------
"Commitment" means the Revolving Commitment, the LOC Commitment and
----------
the Swingline Commitment.
"Commitment Fee" shall have the meaning given such term in Section
--------------
3.5(a).
"Commitment Percentage" means the Revolving Commitment Percentage.
---------------------
"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 Capital Expenditures" means, for any period for the
---------------------------------
Consolidated Group, without duplication, all expenditures (whether paid in
cash or other consideration) during such period that, in accordance with
GAAP, are or should be included in additions to property, plant and
equipment or similar items reflected in the consolidated statement of cash
flows for such period; provided, that Capital Expenditures shall not
--------
include, for purposes hereof, expenditures of proceeds of insurance
settlements, condemnation awards and other settlements in respect of lost,
destroyed, damaged or condemned assets, equipment or other property to the
extent such expenditures are made to replace or repair such lost,
6
<PAGE>
destroyed, damaged or condemned assets, equipment or other property or
otherwise to acquire assets or properties useful in the business of the
members of the Consolidated Group within 12 months of receipt of such
proceeds.
"Consolidated EBITDA" means, for any period for the Consolidated
-------------------
Group, the sum of Consolidated Net Income plus Consolidated Interest
----
Expense plus all provisions for any Federal, state or other domestic and
----
foreign income taxes plus depreciation and amortization plus one-time non-
---- ----
recurring restructuring charges deducted in calculating Consolidated Net
Income, in each case on a consolidated basis determined in accordance with
GAAP, but including pro forma historical EBITDA from acquisitions adjusted
for salaries, owners' perks and other items reasonably eliminated pursuant
to contractual provisions and excluding for purposes hereof extraordinary
gains and losses and related tax effects thereon. Except as otherwise
expressly provided, the applicable period shall be for the four consecutive
fiscal quarters ending as of the date of determination.
"Consolidated EBITDAR" means, for any period, the sum of (i)
--------------------
Consolidated EBITDA for such period plus (ii) to the extent deducted in
determining Consolidated EBITDA for such period, Consolidated Rental
Expense for such period.
"Consolidated Fixed Charge Coverage Ratio" means, for any period, the
----------------------------------------
ratio of Consolidated EBITDAR to Consolidated Fixed Charges.
"Consolidated Fixed Charges" means, for any period for the
--------------------------
Consolidated Group, the sum of Consolidated Interest Expense plus
----
Consolidated Rental Expense, in each case on a consolidated basis
determined in accordance with GAAP. Except as otherwise expressly
provided, the applicable period shall be for the four consecutive fiscal
quarters ending as of the date of determination.
"Consolidated Funded Debt" means Funded Debt of the Consolidated Group
------------------------
determined on a consolidated basis in accordance with GAAP.
"Consolidated Group" means the Borrower and its consolidated
------------------
subsidiaries, as determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period for the
-----------------------------
Consolidated Group, all interest expense, including the amortization of
debt discount and premium, the interest component under Capital Leases and
the implied interest component under Securitization Transactions, in each
case on a consolidated basis determined in accordance with GAAP. Except as
expressly provided otherwise, the applicable period shall be for the four
consecutive fiscal quarters ending as of the date of determination.
7
<PAGE>
"Consolidated Leverage Ratio" means, as of the last day of any fiscal
---------------------------
quarter, the ratio of Consolidated Funded Debt on such day to Consolidated
EBITDA for the period of four consecutive fiscal quarters ending as of such
day.
"Consolidated Net Income" means, for any period for the Consolidated
-----------------------
Group, net income on a consolidated basis determined in accordance with
GAAP. Except as expressly provided otherwise, the applicable period shall
be for the four consecutive fiscal quarters ending as of the date of
determination.
"Consolidated Net Worth" means, as for any date for the Consolidated
----------------------
Group, shareholders' equity or net worth as determined in accordance with
GAAP.
"Consolidated Rental Expense" means, for any period, rental expense
---------------------------
under Operating Leases of the Consolidated Group on a consolidated basis
for such period, as determined in accordance with GAAP.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or of any material agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Credit Documents" means a collective reference to this Credit
----------------
Agreement, the Notes, the LOC Documents, the Pledge Agreement, the Security
Agreement, the Mortgages, each Joinder Agreement, the Administrative
Agent's Fee Letter, 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(a) - (i).
"Default" means any event, act or condition which with notice or lapse
-------
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at such time,
-----------------
(i) has failed to make an Extension of Credit required pursuant to the
terms of this Credit Agreement, (ii) has failed to pay to the
Administrative Agent or any Lender an amount owed by such Lender pursuant
to the terms of the Credit Agreement or any other of the Credit Documents,
or (iii) has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or to a receiver, trustee or similar proceeding.
8
<PAGE>
"Dollars" and "$" means lawful currency of the United States of
------- -
America.
"Domestic Credit Party" means any Credit Party which is incorporated
---------------------
or organized under the laws of any State of the United States or the
District of Columbia.
"Domestic Subsidiary" means any Subsidiary which is incorporated or
-------------------
organized under the laws of any State of the United States or the District
of Columbia.
"E-Commerce Subsidiary" means any direct or indirect subsidiary,
---------------------
whether wholly or partially owned, of the Borrower that is formed by a
Credit Party alone or in conjunction with a third party or parties to
engage in the business conducted by the Consolidated Group through
electronic media.
"Eligible Real Property" means, with respect to any member of the
----------------------
Consolidated Group, including any Person that becomes a member of the
Consolidated Group after the Closing Date as contemplated by Section 7.11,
any real property which (i) is located in the United States or (to the
extent deemed material by the Administrative Agent or the Required Lenders
in its or their sole reasonable discretion) located outside of the United
States, (ii) is owned or (to the extent deemed material by the
Administrative Agent or the Required Lenders in its or their sole
reasonable discretion) leased by such member of the Consolidated Group and
(iii) is not Excluded Property.
"Englewood Property" means the real property located at 84 Inverness
------------------
Circle East in Englewood, Colorado, and owned by a Guarantor.
"Environmental Laws" means any and all lawful and applicable Federal,
------------------
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises,
licenses, agreements or other governmental restrictions relating to the
environment or to emissions, discharges, releases or threatened releases of
Materials of Environmental Concern into the environment including, without
limitation, ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Materials of Environmental
Concern.
"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, (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, (iv) of the
capital stock of the Borrower in
9
<PAGE>
connection with an acquisition permitted under Section 8.4(c) or (v) that
is any private placement of equity in connection with the funding of an E-
Commerce Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity which is under common control with
---------------
any Credit Party within the meaning of Section 4001(a)(14) of ERISA, or is
a member of a group which includes the Borrower and which is treated as a
single employer under Section 414(b) or (c) of the Internal Revenue Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
-----------
Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal by the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a substantial employer (as
such term is defined in Section 4001(a)(2) of ERISA), or the termination of
a Multiple Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
terminate or the actual termination of a Plan by the PBGC under Section
4042 of ERISA; (v) any event or condition which would reasonably be
expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan;
(vi) the complete or partial withdrawal of the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate from a Multiemployer Plan; (vii) the
conditions for imposition of a lien under Section 302(f) of ERISA exist
with respect to any Plan; or (vii) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA.
"Eurodollar Loan" means any Loan bearing interest at a rate determined
---------------
by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
---------------
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate determined pursuant to
the following formula:
Eurodollar Rate = Interbank Offered Rate
-----------------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
-----------------------------
(expressed as a decimal) which is in effect from time to time under
Regulation D as the maximum reserve requirement (including, without
limitation, any basic, supplemental, emergency, special, or marginal
reserves) applicable with respect to Eurocurrency liabilities as that term
is defined in Regulation D (or against any other category of liabilities
that includes deposits by
10
<PAGE>
reference to which the interest rate of Eurodollar Loans is determined),
whether or not Lender has any Eurocurrency liabilities subject to such
reserve requirement at that time. Eurodollar Loans shall be deemed to
constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefits of credits for proration, exceptions
or offsets that may be available from time to time to a Lender. The
Eurodollar Rate shall be adjusted automatically on and as of the effective
date of any change in the Eurodollar Reserve Percentage.
"Event of Default" means such term as defined in Section 9.1.
----------------
"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.
"Excluded Asset Dispositions" means the real property owned by the
---------------------------
Borrower and commonly known as 32 Market Avenue S.W., Grand Rapids, MI
49503, and any private placement of equity or debt securities of any E-
Commerce Subsidiary.
"Excluded Property" means, with respect to any member of the
-----------------
Consolidated Group, including any Person that becomes a member of the
Consolidated Group after the Closing Date as contemplated by Section 7.11,
any Property of such member of the Consolidated Group which, subject to the
terms of Section 8.12, is subject to a Lien of the type described in clause
(viii) of the definition of "Permitted Liens" pursuant to documents which
prohibit such member of the Consolidated Group from granting any other
Liens in such Property.
"Existing Letters of Credit" means those Letters of Credit outstanding
--------------------------
on the Closing Date and identified on Schedule 2.2(b)-1.
-----------------
"Extension of Credit" means, as to any Lender, the making of, or
-------------------
participation in, a Loan by such Lender or the issuance or extension of, or
participation in, a Letter of Credit by such Lender.
"Fees" means all fees payable pursuant to Section 3.5.
----
"Federal Funds Rate" means, for any day, the rate of interest per
------------------
annum (rounded upwards, if necessary, to the nearest whole multiple of
1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day,
provided that (A) if such day is not a Business Day, the Federal Funds Rate
--------
for such day shall be such rate on such transactions on the next preceding
Business Day and (B) if no such rate is so
11
<PAGE>
published on such next preceding Business Day, the Federal Funds Rate for
such day shall be the average rate quoted to the Administrative Agent on
such day on such transactions as determined by the Administrative Agent.
"Foreign Subsidiary" means a Subsidiary which is not a Domestic
------------------
Subsidiary.
"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
Debt 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 Debt has been assumed,
provided that for purposes hereof the amount of such Funded Debt shall be
--------
limited to the greater of (A) the 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.
"GAAP" means generally accepted accounting principles in the United
----
States applied on a consistent basis and subject to the terms of Section
1.3.
"Governmental Authority" means any federal, state, local or foreign
----------------------
court or governmental agency, authority, instrumentality or regulatory
body.
"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 Credit Documents, and (ii)
12
<PAGE>
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.
"Hedging Agreements" means any interest rate protection agreement or
------------------
foreign currency exchange agreement between the Borrower and any Lender, or
any Affiliate of a Lender.
"Indebtedness" of any Person means (i) all obligations 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 obligations of such Person under
conditional sale or other title retention agreements relating to Property
purchased by such Person (other than customary reservations or retentions
of title under agreements with suppliers entered into in the ordinary
course of business), (iv) all obligations of such Person issued or assumed
as the deferred purchase price of Property or services purchased by such
Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (v) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (vi) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, Property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, provided that for purposes
--------
hereof the amount of such Indebtedness shall be limited to the greater of
(A) the amount of such Indebtedness as to which there is recourse to such
Person and (B) the fair market value of the property which is subject to
such Lien, (vii) all Support Obligations of such Person, (viii) the
principal portion of all obligations of such Person under Capital Leases,
(ix) all obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price
hedging agreements (including, but not limited to, the Hedging Agreements),
(x) the maximum amount of all standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (xi)
all preferred stock issued by such Person and required by the terms thereof
to be redeemed, or for which mandatory sinking fund payments are due, by a
fixed date, (xii) the outstanding attributed principal amount under any
Securitization Transaction and (xiii) 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 Indebtedness of any Person shall include the Indebtedness of any
partnership or joint venture in which such Person is a general partner or a
joint venturer, but only to the extent to which there is recourse to such
Person for payment of such Indebtedness.
13
<PAGE>
"Intellectual Property" shall have the meaning given such term in
---------------------
Section 6.9.
"Interbank Offered Rate" means, for the Interest Period for each
----------------------
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal
to the rate of interest, determined by the Administrative Agent on the
basis of the offered rates for deposits in Dollars for a period of time
corresponding to such Interest Period (and commencing on the first day of
such Interest Period), appearing on Telerate Page 3750 (or, if, for any
reason, Telerate Page 3750 is not available, the Reuters Screen LIBO Page)
as of approximately 11:00 A.M. (London time) two (2) Business Days before
the first day of such Interest Period. As used herein, "Telerate Page
3750" means the display designated as page 3750 by Dow Jones Markets, Inc.
(or such other page as may replace such page on that service for the
purpose of displaying the British Bankers Association London interbank
offered rates) and "Reuters Screen LIBO Page" means the display designated
as page "LIBO" on the Reuters Monitor Money Rates Service (or such other
page as may replace the LIBO page on that service for the purpose of
displaying London interbank offered rates of major banks).
"Interest Payment Date" means (i) as to any Base Rate Loan (other than
---------------------
a Swingline 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 and Swingline 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 such 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 (i) 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), and (ii) as to any Swingline Loan, a
period of such duration, not to exceed 30 days, as the Borrower may request
and the Swingline Lender may agree in accordance with the provisions of
Section 2.2(b)(i), commencing in each case, on the date of borrowing;
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 Business Day), (B) no Interest Period
shall extend beyond the Termination Date, and (C) in the case of Eurodollar
Loans, 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.
14
<PAGE>
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
---------------------
amended, and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to time.
References to sections of the Internal Revenue Code shall be construed also
to refer to any successor sections.
"Investment", in any Person, means any loan or advance to such Person,
----------
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of, or equity interest in, such
Person, any capital contribution to such Person or any other investment in
such Person, including, without limitation, any Support Obligation incurred
for the benefit of such Person.
"Issuing Lender" means NationsBank.
--------------
"Joinder Agreement" means a Joinder Agreement substantially in the
-----------------
form of Schedule 7.11-1, executed and delivered by an Additional Credit
---------------
Party in accordance with the provisions of Section 7.11.
"Lenders" means the Persons identified as a "Lender" on the signature
-------
pages hereto, and their successors and assigns.
"Letter of Credit" means any Existing Letter of Credit and any letter
----------------
of credit issued by the Issuing Lender for the account of the Borrower in
accordance with the terms of Section 2.2.
"Letter of Credit Fee" shall have the meaning given such term in
--------------------
Section 3.5(b)(i).
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the
Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any lease in
the nature thereof).
"Loan" or "Loans" means the Revolving Loans and/or Swingline Loans
---- -----
(and the Base Rate Loans, Eurodollar Loans and Quoted Rate Swingline Loans
comprising such Loans).
"LOC Commitment" means the commitment of the Issuing Lender to issue,
--------------
and to honor payment obligations under, Letters of Credit hereunder and
with respect to each Lender, the commitment of each Lender to purchase
participation interests in the Letters of Credit up to such Lender's LOC
Committed Amount as specified in Schedule 2.1(a), as such amount may be
---------------
reduced from time to time in accordance with the provisions hereof.
"LOC Committed Amount" means, collectively, the aggregate amount of
--------------------
all of the LOC Commitments of the Lenders to issue and participate in
Letters of
15
<PAGE>
Credit as referenced in Section 2.2(a) and, individually, the amount of
each Lender's LOC Commitment as specified in Schedule 2.1(a).
---------------
"LOC Documents" means, with respect to any Letter of Credit, such
-------------
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for (i)
the rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
---------------
amount which is, or at any time thereafter may become, available to be
drawn under Letters of Credit then outstanding, assuming compliance with
all requirements for drawings referred to in such Letters of Credit plus
----
(ii) the aggregate amount of all drawings under Letters of Credit honored
by the Issuing Lender but not theretofore reimbursed.
"Material Adverse Effect" means a material adverse effect on (i) the
-----------------------
condition (financial or otherwise), operations, business, assets,
liabilities or prospects of the Consolidated Group taken as a whole, (ii)
the ability of the Credit Parties taken as a whole to perform any material
obligation under the Credit Documents to which it is a party or (iii) the
rights and remedies of the Lenders under the Credit Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's" means Moody's Investors Service, Inc., or any successor or
-------
assignee of the business of such company in the business of rating
securities.
"Mortgaged Property" means the Property which is the subject of a
------------------
Mortgage as referenced therein.
"Mortgages" means those mortgages, deeds of trust, security deeds or
---------
like instruments given to the Administrative Agent, for the ratable benefit
of the Lenders, to secure the obligations of the Credit Parties under the
Credit Documents and Hedging Agreements, as such mortgages, deeds of trust,
security deeds or like instruments may be amended and modified from time to
time.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
------------------
defined in Sections 3(37) or 4001(a)(3) of ERISA.
16
<PAGE>
"Multiple Employer Plan" means a Plan which the Borrower, any
----------------------
Subsidiary of the Borrower or any ERISA Affiliate and at least one employer
other than the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. and its successors.
-----------
"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
Asset Disposition, Debt Transaction or Equity Transaction, net of (i)
reasonable transaction costs, including in the case of an Equity
Transaction or Debt Transaction, underwriting discounts and commissions and
in the case of an Asset Disposition occurring in connection with a claim
under an insurance policy, costs incurred in connection with adjustment and
settlement of the claim, (ii) estimated taxes payable in connection
therewith, and (iii) in the case of an Asset Disposition or 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).
------------------
"Non-Guarantor Subsidiaries" shall have the meaning given such term in
--------------------------
Section 7.11(a).
"Note" or "Notes" means the promissory notes of the Borrower in favor
---- -----
of each of the Lenders evidencing the Revolving Loans and Swingline 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 the written notice of extension
------------------------------
or conversion in substantially the form of Schedule 3.2, as required by
------------
Section 3.2.
"Obligations" means, collectively, the Revolving Loans, the Swingline
-----------
Loans and the LOC Obligations.
"Operating Lease" means, as applied to any Person, any lease
---------------
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property which is not a Capital Lease other than
any such lease in which that Person is the lessor.
17
<PAGE>
"Participation Interest" means the purchase by a Lender of a
----------------------
participation in Swingline Loans as provided in Section 2.2(b)(iii) and in
Loans as provided in Section 3.13.
"PBGC" means the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Investments" means Investments which are either (i) cash
and Cash Equivalents; (ii) accounts receivable created, acquired or made in
the ordinary course of business and payable or dischargeable in accordance
with customary trade terms; (iii) Investments consisting of stock,
obligations, securities or other property received in settlement of
accounts receivable (created in the ordinary course of business) from
bankrupt obligors; (iv) Investments existing as of the Closing Date and set
forth in Schedule 8.5, (v) Support Obligations permitted by Section 8.1(h);
------------
(vi) acquisitions permitted by Section 8.4(c); (vii) transactions permitted
by Section 8.6, (viii) advances or loans to employees, directors, officers
or agents not to exceed $200,000 in the aggregate at any time outstanding;
(ix) advances or loans to customers or suppliers that do not exceed
$750,000 in the aggregate at any one time outstanding, (x) Investments by a
member of the Consolidated Group or an Affiliate of a member of the
Consolidated Group in connection with a Permitted Securitization
Transaction, (xi) Investments by members of the Consolidated Group in their
Subsidiaries and Affiliates existing on the Closing Date, (xii) Investments
by members of the Consolidated Group in and to Domestic Credit Parties and
(xiii) other loans, advances and investments of a nature not contemplated
in the foregoing subsections in an amount not to exceed $1,000,000 in the
aggregate at any time outstanding.
"Permitted Liens" means:
---------------
(i) Liens in favor of the Administrative Agent on behalf of
the Lenders;
(ii) Liens in favor of a Lender or an Affiliate of a Lender
pursuant to a Hedging Agreement permitted hereunder, but only (A) to
the extent such Liens secure obligations under such agreements or
indebtedness permitted under Section 8.1, (B) to the extent such Liens
are on the same collateral as to which the Lenders also have a Lien
and (C) so long as the obligations of under such Hedging Agreements
and the obligations under the Credit Documents shall share pari passu
---- -----
in the collateral subject to such Liens;
(iii) Liens (other than Liens created or imposed under ERISA)
for taxes, assessments or governmental charges or levies not yet due
or Liens for taxes being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to
any such Lien is not yet subject to foreclosure, sale or loss on
account thereof);
18
<PAGE>
(iv) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens
imposed by law or pursuant to customary reservations or retentions of
title arising in the ordinary course of business, provided that such
--------
Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have
been established (and as to which the Property subject to any such
Lien is not yet subject to foreclosure, sale or loss on account
thereof);
(v) Liens (other than Liens created or imposed under ERISA)
incurred or deposits made by the Borrower and its Subsidiaries in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, bids,
leases, government contracts, performance and return-of-money bonds
and other similar obligations (exclusive of obligations for the
payment of borrowed money);
(vi) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments
--------
secured shall, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall have
been discharged within 30 days after the expiration of any such stay;
(vii) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect,
impairing the use of the encumbered Property for its intended
purposes;
(viii) Liens securing purchase money and sale/leaseback
Indebtedness (including Capital Leases) to the extent permitted under
Section 8.1(c), provided that any such Lien attaches only to the
--------
Property financed or leased and such Lien attaches thereto
concurrently with or within 90 days after the acquisition thereof in
connection with the purchase money transactions and within 30 days
after the closing of any sale/leaseback transaction;
(ix) leases or subleases granted to others not interfering in
any material respect with the business of any member of the
Consolidated Group;
(x) any interest of title of a lessor under, and Liens
arising from UCC financing statements (or equivalent filings,
registrations or agreements in foreign jurisdictions) relating to,
leases permitted by this Credit Agreement;
19
<PAGE>
(xi) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(xii) Liens created or deemed to exist in connection with a
Permitted Securitization Transaction (including any related filings of
any financing statements), but only to the extent that any such Lien
relates to the applicable receivables and related property actually
sold, contributed or otherwise conveyed pursuant to such transaction;
(xiii) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 8.5;
(xiv) normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;
(xv) Liens granted to holders of Seller Subordinated Debt so
long as (a) such Liens relate solely to the assets purchased from such
holder(s), (b) such Liens are subordinate to the Liens granted to the
Lenders, and (c) the holders of such Seller Subordinated Debt agree to
stand still provisions and provisions not to contest the validity of
the Lenders' Liens satisfactory to the Required Lenders;
(xvi) Liens existing as of the Closing Date and set forth on
Schedule 6.8; provided that (a) no such Lien shall at any time be
------------ --------
extended to or cover any Property other than the Property subject
thereto on the Closing Date and (b) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced; and
(xvii) the lien of that certain mortgage held by U.S. Bank with
respect to the Englewood Property.
"Permitted Securitization Transaction" means any Securitization
------------------------------------
Transaction; provided that (i) the Administrative Agent and the Required
--------
Lenders shall be reasonably satisfied with the structure and documentation
for any such transaction and that the terms of such transaction entered
into after the Closing Date, including the discount applicable to the
receivables which are subject of such financing and any termination events,
shall be (in the good faith understanding of the Administrative Agent and
the Required Lenders) consistent with those prevailing in the market at the
time of commitment thereto for similar transactions involving a receivables
originator/servicer of similar credit quality and a receivables pool or
other similar characteristics and (ii) the documentation for such
transaction shall not be amended or modified in a way which is materially
detrimental to the Lenders without the prior written approval of the
Administrative Agent and the Required Lenders.
20
<PAGE>
"Person" means any individual, partnership, joint venture, firm,
------
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
----
ERISA) which is covered by ERISA and with respect to which the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate is (or, if such plan
were terminated at such time, would under Section 4069 of ERISA be deemed
to be) an "employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the Amended and Restated Pledge Agreement,
----------------
dated as of the Closing Date, given by the Borrower and the other pledgors
identified therein to the Administrative Agent to secure the obligations of
the Credit Parties under the Credit Documents and Hedging Agreements, as
such Pledge Agreement may be amended and modified from time to time.
"Prime Rate" means the rate of interest per annum publicly announced
----------
from time to time by NationsBank as its prime rate in effect at its
principal office in Charlotte, North Carolina, with each change in the
Prime Rate being effective on the date such change is publicly announced as
effective (it being understood and agreed that the Prime Rate is a
reference rate used by NationsBank in determining interest rates on certain
loans and is not intended to be the lowest rate of interest charged on any
extension of credit by NationsBank to any debtor).
"Pro Forma Basis" means, with respect to any Transaction, that such
---------------
Transaction shall be deemed to have occurred as of the first day of the
four fiscal-quarter period ending as of the most recent fiscal quarter end
preceding the date of such Transaction with respect to which the
Administrative Agent and the Lenders have received the officer's
certificate in accordance with the provisions of Section 7.2(b). As used
herein, "Transaction" means (i), any corporate merger or consolidation as
referred to in Section 8.4(a), (ii) any sale or other disposition of assets
as referred to in Section 8.4(b), (iii) any acquisition of capital stock or
securities or any purchase, lease or other acquisition of property as
referred to in Section 8.4(c) or (iv) the making of any Restricted Payment
as referred to in Section 8.10.
"Pro Rata Share" shall have the meaning given such term in Section
--------------
4.6. "Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Quoted Rate" means, with respect to a Quoted Rate Swingline Loan, the
-----------
fixed or floating percentage rate per annum, if any, offered by the
Swingline Lender and accepted by the Borrower.
"Quoted Rate Swingline Loan" means a Swingline Loan bearing interest
--------------------------
at the Quoted Rate.
21
<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 11.3(c).
--------
"Regulation D, O, T, U or X" means Regulation D, O, T, U or X,
--------------------------
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
-------
emptying, discharging, injecting, escaping, leaching, dumping or disposing
into the environment (including the abandonment or discarding of barrels,
containers and other closed receptacles containing any Materials of
Environmental Concern).
"Reportable Event" means any of the events set forth in Section
----------------
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Lenders" means, at any time, Lenders having more than fifty
----------------
percent (50%) of the Commitments, or if the Commitments have been
terminated, Lenders having more than fifty percent (50%) of the aggregate
principal amount of the Obligations outstanding (taking into account in
each case Participation Interests or obligations to participate therein);
provided that the Commitments of, and outstanding principal amount of
--------
Obligations (taking into account Participation Interests or obligations to
participate therein) owing to, a Defaulting Lender shall be excluded for
purposes hereof in making a determination of Required Lenders.
"Requirement of Law" means, as to any Person, the certificate of
------------------
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its material property
is subject.
"Responsible Officer" means the Chief Executive Officer, the Chief
-------------------
Financial Officer, the Controller, any Vice President and the General
Counsel.
"Restricted Payment" means (i) any dividend or other distribution,
------------------
direct or indirect, on account of any shares of any class of stock now or
hereafter outstanding, except (A) a dividend payable solely in shares of
that class to the holders of that class and (B) dividends and other
distributions payable to a Credit Party, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock now or hereafter
outstanding, and (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock now or hereafter outstanding.
22
<PAGE>
"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 Commitment Percentage of the Aggregate
Revolving Committed Amount as specified in Schedule 2.1(a), as such amount may
---------------
be reduced from time to time in accordance with the provisions hereof.
"Revolving Commitment Percentage" means, for each Lender, a fraction
-------------------------------
(expressed as a percentage) the numerator of which is the Revolving Commitment
of such Lender at such time and the denominator of which is the Aggregate
Revolving Committed Amount at such time. The initial Revolving Commitment
Percentages are set out on Schedule 2.1(a).
---------------
"Revolving Committed Amount" means, collectively, the aggregate amount of
--------------------------
all of the Revolving Commitments and, individually, the amount of each Lender's
Revolving Commitment as specified in Schedule 2.1(a).
---------------
"Revolving Loans" shall have the meaning assigned to such term in Section
---------------
2.1(a).
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
---
Inc., or any successor or assignee of the business of such division in the
business of rating securities.
"Securitization Transaction" means any financing transaction or series of
--------------------------
financing transactions that have been or may be entered into by a member of the
Consolidated Group pursuant to which such member of the Consolidated Group may
sell, convey or otherwise transfer to (i) a Subsidiary or an Affiliate (a
"Securitization Subsidiary"), or (ii) any other Person, or may grant a security
- - --------------------------
interest in, any receivables or interests therein secured by merchandise or
services financed thereby (whether such receivables are then existing or arising
in the future) of such member of the Consolidated Group, and any assets related
thereto, including without limitation, all security interests in merchandise or
services financed thereby, the proceeds of such receivables, and other assets
which are customarily sold or in respect of which security interests are
customarily granted in connection with securitization transactions involving
such assets.
"Security Agreement" means the Amended and Restated Security Agreement,
------------------
dated as of the Closing Date, given by the Borrower and the other grantors
identified therein to the Administrative Agent to secure the obligations of the
Credit Parties under the Credit Documents and Hedging Agreements, as amended and
modified.
"Seller Subordinated Debt" means Subordinated Debt issued to a seller in
------------------------
connection with an acquisition permitted under Section 8.4 of the Credit
Agreement.
23
<PAGE>
"Single Employer Plan" means any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Subject Properties" shall have the meaning assigned to such term in
------------------
Section 6.16(a)
"Subordinated Debt" means any Indebtedness of a member of the Consolidated
-----------------
Group which by its terms is expressly subordinated in right of payment to the
prior payment of the obligations under the Credit Agreement and the other Credit
Documents on terms and conditions, and evidenced by documentation, satisfactory
to the Required Lenders.
"Subsidiary" means, as to any Person, (a) any corporation more than 50% of
----------
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries, and
(b) any partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than 50% of the
voting interests at any time. Unless otherwise identified, "Subsidiary" or
"Subsidiaries" shall mean Subsidiaries of the Borrower.
"Support Obligations" means, with respect to any Person, without
-------------------
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any Property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Support Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Support Obligation is made.
"Swingline Commitment" means the commitment of the Swingline Lender to make
--------------------
Swingline Loans in an aggregate principal amount at any time outstanding up to
the Swingline Committed Amount and the commitment of the Lenders to purchase
participation interests in the Swingline Loans up to their respective Revolving
Commitment
24
<PAGE>
Percentage as provided in Section 2.3(b)(iii), as such amounts may be reduced
from time to time in accordance with the provisions hereof.
"Swingline Committed Amount" means the amount of the Swingline Lender's
--------------------------
Swingline Commitment as specified in Section 2.3(a).
"Swingline Lender" means NationsBank.
----------------
"Swingline Loan" means a swingline revolving loan made by the Swingline
--------------
Lender pursuant to the provisions of Section 2.3.
"Termination Date" means August 6, 2004 (five years from the Closing Date),
----------------
or if extended with the written consent of each of the Lenders, such later date
as to which the Termination Date may be extended.
"Threshold Requirement" shall have the meaning given such term in Section
---------------------
7.11(a).
"Transaction" shall have the meaning given such term in the definition of
-----------
"Pro Forma Basis".
"Voting Stock" means, with respect to any Person, capital stock issued by
------------
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100% of whose
-----------------------
Voting Stock or other equity interests is at the time owned by such Person
directly or indirectly through other Wholly Owned Subsidiaries.
"Year 2000 Compliant" shall have the meaning given to such term in Section
-------------------
6.17.
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."
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
25
<PAGE>
(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 (or, prior to the delivery of the
first financial statements pursuant to Section 7.1, consistent with the annual
audited financial statements referenced in Section 6.1(i)); 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 (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.
2. 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
Eurodollar Loans, or a combination thereof, as the Borrower may request, and may
be repaid and reborrowed in accordance with the provisions hereof.
26
<PAGE>
(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 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;
27
<PAGE>
(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.
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.
b. 2.2 Letter of Credit Subfacility.
----------------------------
(a) Issuance. During the Commitment Period, subject to the terms and
--------
conditions hereof and of the LOC Documents, if any, and such other terms and
conditions which the Issuing Lender may reasonably require, the Issuing Lender
shall issue, and the Lenders shall participate in, such Letters of Credit as the
Borrower may request for its own account or for the account of any Subsidiary as
provided herein, in a form acceptable to the Issuing Lender, for the purposes
hereinafter set forth; provided that (i) the aggregate amount of LOC Obligations
--------
shall not exceed FIFTEEN MILLION DOLLARS ($15,000,000) at any time (the "LOC
---
Committed Amount"), (ii) 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 (iii) 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. Letters of Credit issued hereunder shall not have an original expiry
date more than one year from the date of issuance or extension, nor an expiry
date, whether as originally issued or by extension, extending beyond the
Termination Date. Each Letter of Credit shall comply with the related LOC
Documents. The issuance date of each Letter of Credit shall be a Business Day.
(b) Notice and Reports. Except for those Letters of Credit described on
------------------
Schedule 2.2(b)-1 which shall be issued on the Closing Date, the request for the
- - -----------------
issuance of a Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of issuance
(or such shorter period as may be agreed by the Issuing Lender). A form of
Notice of Request for Letter of Credit is attached as Schedule 2.2(b)-2. The
-----------------
Issuing Lender will provide to the Administrative Agent at least monthly, and
more frequently upon request, a detailed summary report on each Letter of Credit
and the activity thereon, in form and substance acceptable to the Administrative
Agent. In addition, the Issuing Lender will provide to the Administrative Agent
for dissemination to the
28
<PAGE>
Lenders at least quarterly, and more frequently upon request, a detailed summary
report on each Letter of Credit and the activity thereon, including, among other
things, the Credit Party for whose account the Letter of Credit is issued, the
beneficiary, the face amount, and the expiry date. The Issuing Lender will
provide copies of the Letters of Credit to the Administrative Agent and the
Lenders promptly upon request.
(c) Participation. Each Lender, with respect to the Existing Letters of
-------------
Credit, hereby purchases a participation interest in such Existing Letters of
Credit, and with respect to Letters of Credit issued after the Closing Date,
upon issuance of a Letter of Credit, shall be deemed to have purchased without
recourse a risk participation from the Issuing Lender in such Letter of Credit
and the obligations arising thereunder, in each case in an amount equal to its
pro rata share of the obligations under such Letter of Credit (based on the
respective Revolving Commitment Percentages of the Lenders) and shall
absolutely, unconditionally and irrevocably assume, as primary obligor and not
as surety, and be obligated to pay to the Issuing Lender therefor and discharge
when due, its pro rata share of the obligations arising under such Letter of
Credit. Without limiting the scope and nature of each Lender's participation in
any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit, each such
Lender shall pay to the Issuing Lender its pro rata share of such unreimbursed
drawing in same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) below. The
obligation of each Lender to so reimburse the Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of a Default, an
Event of Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.
(d) Reimbursement. In the event of any drawing under any Letter of Credit,
-------------
the Issuing Lender will promptly notify the Borrower. Unless the Borrower shall
immediately notify the Issuing Lender that the Borrower intends to otherwise
reimburse the Issuing Lender for such drawing, the Borrower shall be deemed to
have requested that the Lenders make a Revolving Loan in the amount of the
drawing as provided in subsection (e) below on the related Letter of Credit, the
proceeds of which will be used to satisfy the related reimbursement obligations.
The Borrower promises to reimburse the Issuing Lender on the day of drawing
under any Letter of Credit (either with the proceeds of a Revolving Loan
obtained hereunder or otherwise) in same day funds. If the Borrower shall fail
to reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount
of such drawing shall bear interest at a per annum rate equal to the Base Rate
plus the sum of (i) the Applicable Percentage and (ii) two percent (2%). The
Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have against the
Issuing Lender, the Administrative Agent, the Lenders, the beneficiary of the
Letter of Credit drawn upon or any other Person, including without limitation
any defense based on any failure of the Borrower or any other Credit Party to
receive consideration or the legality, validity, regularity or unenforceability
of the Letter of Credit. The Issuing Lender will promptly notify the other
Lenders of the amount of any unreimbursed drawing and each Lender shall promptly
pay to the Administrative Agent for the account of the Issuing Lender in Dollars
and in immediately available
29
<PAGE>
funds, the amount of such Lender's pro rata share of such unreimbursed drawing.
Such payment shall be made on the day such notice is received by such Lender
from the Issuing Lender if such notice is received at or before 2:00 P.M.
(Charlotte, North Carolina time) otherwise such payment shall be made at or
before 12:00 Noon (Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Administrative Agent for the account of the Issuing Lender
interest on the unpaid amount during the period from the date of such drawing
until such Lender pays such amount to the Issuing Lender in full at a rate per
annum equal to, if paid within two (2) Business Days of the date that such
Lender is required to make payments of such amount pursuant to the preceding
sentence, the Federal Funds Rate and thereafter at a rate equal to the Base
Rate. Each Lender's obligation to make such payment to the Issuing Lender, and
the right of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and without
regard to the termination of this Credit Agreement or the Commitments hereunder,
the existence of a Default or Event of Default or the acceleration of the
obligations of the Borrower hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the making
of each such payment by a Lender to the Issuing Lender, such Lender shall,
automatically and without any further action on the part of the Issuing Lender
or such Lender, acquire a participation in an amount equal to such payment
(excluding the portion of such payment constituting interest owing to the
Issuing Lender) in the related unreimbursed drawing portion of the LOC
Obligation and in the interest thereon and in the related LOC Documents, and
shall have a claim against the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Borrower shall
------------------------------
have requested, or been deemed to have requested, a Revolving Loan advance to
reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Lenders that a Revolving Loan has been requested or deemed
requested by the Borrower to be made in connection with a drawing under a Letter
of Credit, in which case a Revolving Loan advance comprised of Base Rate Loans
(or Eurodollar Loans to the extent the Borrower has complied with the procedures
of Section 2.1(b)(i) with respect thereto) shall be immediately made to the
Borrower by all Lenders (notwithstanding any termination of the Commitments
pursuant to Section 9.2) pro rata based on the respective Revolving Commitment
--- ----
Percentages of the Lenders (determined before giving effect to any termination
of the Commitments pursuant to Section 9.2) and the proceeds thereof shall be
paid directly to the Issuing Lender for application to the respective LOC
Obligations. Each such Lender hereby irrevocably agrees to make its pro rata
share of each such Revolving Loan immediately upon any such request or deemed
request in the amount, in the manner and on the date specified in the preceding
sentence notwithstanding (i) the amount of such borrowing may not comply with
---------------
the minimum amount for advances of Revolving Loans otherwise required hereunder,
(ii) whether any conditions specified in Section 5.2 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time otherwise
required hereunder, (v) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (vi) any
termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a
30
<PAGE>
proceeding under the Bankruptcy Code with respect to the Borrower or any Credit
Party), then each such Lender hereby agrees that it shall forthwith purchase (as
of the date such borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from the Issuing Lender such participation in the outstanding LOC
Obligations as shall be necessary to cause each such Lender to share in such LOC
Obligations ratably (based upon the respective Revolving Commitment Percentages
of the Lenders (determined before giving effect to any termination of the
Commitments pursuant to Section 9.2)), provided that in the event such payment
--------
is not made on the day of drawing, such Lender shall pay in addition to the
Issuing Lender interest on the amount of its unfunded Participation Interest at
a rate equal to, if paid within two (2) Business Days of the date of drawing,
the Federal Funds Rate, and thereafter at the Base Rate.
(f) Designation of Subsidiaries as Account Parties. Notwithstanding
----------------------------------------------
anything to the contrary set forth in this Credit Agreement, including without
limitation Section 2.2(a), a Letter of Credit issued hereunder may contain a
statement to the effect that such Letter of Credit is issued for the account of
a Subsidiary, provided that notwithstanding such statement, the Borrower shall
be the actual account party for all purposes of this Credit Agreement for such
Letter of Credit and such statement shall not affect the Borrower's
reimbursement obligations hereunder with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of Credit
------------------
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Letters of Credit shall be subject
-----------------------------
to The Uniform Customs and Practice for Documentary Credits, as published as of
the date of issue by the International Chamber of Commerce (the "UCP"), in which
---
case the UCP may be incorporated therein and deemed in all respects to be a part
thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
--------------------------------------------------
(i) In addition to its other obligations under this Section 2.2, the
Borrower hereby agrees to protect, indemnify, pay and save the Issuing
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called
"Government Acts"), except to the extent any such claims, demands,
---------------
liabilities, damages, costs, charges and expenses arise out of or relate to
disputes solely between or among the Administrative Agent and/or the
Lenders.
(ii) As between the Borrower and the Issuing Lender, the Borrower shall
assume all risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof.
31
<PAGE>
The Issuing Lender shall not be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party (other than the Issuing Lender) in connection with
the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or
assign any Letter of Credit or the rights or benefits thereunder or
proceeds thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions, interruptions or
delays (other than by the Issuing Lender) in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (D) for any loss or delay (other than by the Issuing
Lender) in the transmission or otherwise of any document required in order
to make a drawing under a Letter of Credit or of the proceeds thereof; and
(E) for any consequences arising from causes beyond the control of the
Issuing Lender, including, without limitation, any Government Acts. None of
the above shall affect, impair, or prevent the vesting of the Issuing
Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith and not
constituting gross negligence, shall not put the Issuing Lender under any
resulting liability to the Borrower or any other Credit Party. It is the
intention of the parties that this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all of which risks
(except as set forth herein) are hereby assumed by the Borrower (on behalf
of itself and each of the other Credit Parties), including, without
limitation, any and all Government Acts. The Issuing Lender shall not, in
any way, be liable for any failure by the Issuing Lender or anyone else to
pay any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (i) shall
survive the termination of this Credit Agreement. No act or omissions of
any current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of any liability incurred by the Issuing Lender
(A) arising out of the negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction, or (B) caused
by the Issuing Lender's failure to pay under any Letter of Credit after
presentation to it of a request strictly complying with the terms and
conditions of such Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited, as determined by a court
of competent jurisdiction.
32
<PAGE>
(j) Responsibility of Issuing Lender. It is expressly understood and
--------------------------------
agreed that the obligations of the Issuing Lender hereunder to the Lenders are
only those expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set forth in
Section 5.2 have been satisfied unless it shall have acquired actual knowledge
that any such condition precedent has not been satisfied; provided, however,
-------- -------
that nothing set forth in this Section 2.2 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section 2.2 in
the event that it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit constituted gross negligence or
willful misconduct on the part of the Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict between
---------------------------
this Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
c. 2.3 Swingline Loan Subfacility.
--------------------------
(a) Swingline Commitment. Subject to the terms and conditions hereof and
--------------------
in reliance upon the representations and warranties set forth herein, the
Swingline Lender, in its individual capacity, agrees to make certain revolving
credit loans requested by the Borrower in Dollars to the Borrower (each a
"Swingline Loan" and, collectively, the "Swingline Loans") from time to time
- - --------------- ---------------
from the Closing Date until the Termination Date for the purposes hereinafter
set forth; provided, however, (i) the aggregate principal amount of Swingline
-------- -------
Loans outstanding at any time shall not exceed TEN MILLION DOLLARS ($10,000,000)
(the "Swingline Committed Amount"), and (ii) with regard to the Lenders
--------------------------
collectively, the aggregate principal amount of Obligations outstanding at any
time shall not exceed the Aggregate Revolving Committed. Swingline Loans may
consist of Base Rate Loans or Quoted Rate Swingline Loans, or a combination
thereof, as the Borrower may request, and may be repaid and reborrowed in
accordance with the provisions hereof.
(b) Swingline Loan Advances.
-----------------------
(i) Notices; Disbursement. Whenever the Borrower desires a Swingline
---------------------
Loan advance hereunder it shall give written notice (or telephonic notice
promptly confirmed in writing) to the Swingline Lender not later than 11:00
A.M. (Charlotte, North Carolina time) on the Business Day of the requested
Swingline Loan advance. Each such notice shall be irrevocable and shall
specify (A) that a Swingline Loan advance is requested, (B) the date of the
requested Swingline Loan advance (which shall be a Business Day) and (C)
the principal amount of and Interest Period for the Swingline Loan advance
requested. Each Swingline Loan shall have such maturity date as the
Swingline Lender and the Borrower shall agree. The Swingline Lender shall
initiate the transfer of funds representing the Swingline Loan advance to
the Borrower by 3:00 P.M. (Charlotte, North Carolina time) on the Business
Day of the requested borrowing.
33
<PAGE>
(ii) Minimum Amounts. Each Swingline Loan advance shall be in a
---------------
minimum principal amount of $100,000 and in integral multiples of $100,000
in excess thereof (or the remaining amount of the Swingline Committed
Amount, if less).
(iii) Repayment of Swingline Loans. The principal amount of all
----------------------------
Swingline Loans shall be due and payable on the earlier of (A) the maturity
date agreed to by the Swingline Lender and the Borrower with respect to
such Loan (which maturity date shall not be a date more than thirty (30)
Business Days from the date of advance thereof) or (B) the Termination
Date. The Swingline Lender may, at any time, in its sole discretion, by
written notice to the Borrower and the Lenders, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case the
Borrower shall be deemed to have requested a Revolving Loan advance
comprised solely of Base Rate Loans in the amount of such Swingline Loans;
provided, however, that any such demand shall be deemed to have been given
-------- -------
one Business Day prior to the Termination Date and on the date of the
occurrence of any Event of Default described in Section 9.1 and upon
acceleration of the indebtedness hereunder and the exercise of remedies in
accordance with the provisions of Section 9.2. Each Lender hereby
irrevocably agrees to make its pro rata share of each such Revolving Loan
in the amount, in the manner and on the date specified in the preceding
sentence notwithstanding (I) the amount of such borrowing may not comply
---------------
with the minimum amount for advances of Revolving Loans otherwise required
hereunder, (II) whether any conditions specified in Section 5.2 are then
satisfied, (III) whether a Default or an Event of Default then exists, (IV)
failure of any such request or deemed request for Revolving Loan to be made
by the time otherwise required hereunder, (V) whether the date of such
borrowing is a date on which Revolving Loans are otherwise permitted to be
made hereunder or (VI) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the event
that any Revolving Loan cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower or any other Credit Party), then each Lender hereby agrees that it
shall forthwith purchase (as of the date such borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on
or after such date and prior to such purchase) from the Swingline Lender
such Participation Interests in the outstanding Swingline Loans as shall be
necessary to cause each such Lender to share in such Swingline Loans
ratably based upon its Commitment Percentage of the Revolving Committed
Amount (determined before giving effect to any termination of the
Commitments pursuant to Section 3.4), provided that (A) all interest
--------
payable on the Swingline Loans shall be for the account of the Swingline
Lender until the date as of which the respective Participation Interest is
funded and (B) from the date of funding of the respective Participation
Interest, all interest payable on the Swingline Loans shall be shared
ratably with the Lenders which have funded their respective Participation
Interests.
(c) Interest on Swingline Loans.
---------------------------
Subject to the provisions of Section 3.1, each Swingline Loan shall bear
interest at a per annum rate equal to (i) in the case of Swingline Loans which
are Base Rate
34
<PAGE>
and (ii) in the case of Swingline Loans which are Quoted Rate Swingline Loans,
the Quoted Rate. Interest on Swingline Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be specified
herein).
(d) Swingline Note. The Swingline Loans shall be evidenced by the Note of
--------------
the Swingline Lender.
3. 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.
------------------------
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 the conditions of Section 5.2 shall have been satisfied as of 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 into, 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 Section
5.2. In the event the Borrower fails to request extension or conversion of any
35
<PAGE>
Eurodollar Loan in accordance with this 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. The Loans may be prepaid 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 in 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, (A) the aggregate principal
---------------------
amount of Obligations shall exceed the Aggregate Revolving Committed Amount, (B)
the aggregate amount of LOC Obligations shall exceed the LOC Committed Amount,
or (C) the aggregate amount of Swingline Loans shall exceed the Swingline
Committed Amount, the Borrower shall immediately make payment on the Loans
and/or to a cash collateral account in respect of the LOC Obligations in an
amount sufficient to eliminate the excess.
(c) Application. Unless otherwise specified by the Borrower,
-----------
prepayments made hereunder shall be applied first to Swingline Loans, then to
Revolving Loans and then to a cash collateral account to secure the LOC
Obligations, and, in each case, first to Base Rate Loans and then to Eurodollar
Loans and Quoted Rate Swingline 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 Reduction. The Revolving Commitments may be terminated or
-------------------
permanently reduced in whole or in part by the Borrower 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 in minimum principal amounts of $5,000,000, and in
integral multiples of $1,000,000 in excess thereof.
(b) Mandatory Reduction.
-------------------
36
<PAGE>
(i) Debt and Equity Transactions. The Revolving Commitments shall
----------------------------
be permanently reduced in an amount equal to fifty percent (50%) of the Net
Proceeds received by any member of the Consolidated Group from any Debt
Transaction or Equity Transaction.
(ii) Asset Dispositions. The Revolving Commitments shall be
------------------
permanently reduced in an amount equal to one hundred percent (100%) of the
Net Proceeds received by any member of the Consolidated Group from Asset
Dispositions in any fiscal year; but only to the extent that (i) such Net
Proceeds are not reinvested in other property or assets within six (6)
months of the date of sale, lease, disposition, casualty, theft or loss
giving rise thereto, and (ii) the aggregate amount of such Net Proceeds not
reinvested in accordance with the foregoing subsection (i) in any fiscal
year shall exceed $1,000,000.
(c) Termination. The Commitments hereunder shall terminate on the
-----------
Termination Date.
e. 3.5 Fees.
----
(a) Commitment Fee. 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
--------------
(i) during any period that the unused amount of the Aggregate Revolving
Committed Amount is less than fifty percent (50%) of the Aggregate Revolving
Committed Amount, the Applicable Percentage per annum on the average daily
unused amount of the Aggregate Revolving Committed Amount for the applicable
period and (ii) during any period that the unused amount of the Aggregate
Revolving Committed Amount is equal to or greater than fifty percent (50%) of
the Aggregate Revolving Committed Amount, 100 basis points (1.0%) per annum on
the average daily unused 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 calendar quarter (or portion thereof) beginning with the
first such date to occur after the Closing Date (as well as on the Termination
Date and each date that the Revolving Committed Amount is reduced). For purposes
of computation of the Commitment Fee, Swingline Loans shall not be counted
toward or considered usage of the Aggregate Revolving Committed Amount.
(b) Letter of Credit Fees.
---------------------
(i) Letter of Credit Fee. In consideration of the LOC Commitment
--------------------
hereunder, the Borrower agrees to pay to the Administrative Agent for the
ratable benefit of the Lenders a fee (the "Letter of Credit Fee") equal to
--------------------
the Applicable Percentage per annum on the average daily maximum amount
available to be drawn under Letters of Credit from the date of issuance to
the date of expiration.
37
<PAGE>
The Letter of Credit Fee shall be payable quarterly in arrears on the 15th
day following the last day of each calendar quarter for the immediately
preceding calendar quarter (or portion thereof) beginning with the first
such date to occur after the Closing Date (as well as on the Termination
Date).
(ii) Issuing Lender Fee. In addition to the Letter of Credit Fee,
------------------
the Borrower agrees to pay to the Issuing Lender for its own account
without sharing by the other Lenders (A) a fronting and negotiation fee of
0.125% per annum on the average daily maximum amount available to be drawn
under Letters of Credit issued by it from the date of issuance to the date
of expiration, and (B) customary charges of the Issuing Lender with respect
to the issuance, amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit.
(c) Administrative Agent's Fees. The Borrower agrees to pay to the
---------------------------
Administrative Agent, for its own account, an annual administrative fee and such
other fees, if any, referred to in the Administrative Agent's Fee Letter
(collectively, the "Administrative Agent's Fees").
---------------------------
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
38
<PAGE>
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 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 Letter of Credit, 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));
39
<PAGE>
(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 issuing or participating in Letters of Credit 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 Section 3.9,
it shall provide prompt notice thereof to the Borrower, through the
Administrative Agent, certifying (x) that one of the events described in this
paragraph 3.9 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.
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
40
<PAGE>
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 Section 3.10 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;
(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
41
<PAGE>
(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 subsection 11.3 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 or conversion 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
42
<PAGE>
an amount equal to the excess, if any, of (i) the amount of interest which would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment, conversion or
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
-----
(other than Swingline Loans), each payment of interest on the Loans, each
payment of Commitment Fees, each reduction of the Revolving Committed Amount and
each conversion or extension of any Loan (other than Swingline Loans), shall be
allocated pro rata among the Lenders in accordance with their respective
Revolving Commitment Percentages.
(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.
-------------------
43
<PAGE>
The Lenders agree among themselves that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligation or 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 Credit Agreement, such Lender shall promptly purchase from the other
Lenders a participation in such Loans, LOC Obligations 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, LOC
Obligation 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 11.1 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
44
<PAGE>
the Loans, LOC Obligations, 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 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 Agent 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 Agent and/or the
Lenders;
FOURTH, to the payment of all accrued interest and fees on or in
respect of the Obligations;
45
<PAGE>
FIFTH, to the payment of the outstanding principal amount of the
Obligations (including the payment or cash collateralization of outstanding
LOC Obligations) and all obligations owing by the Credit Parties under
Hedging Agreements permitted hereunder;
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; and (iii) to the extent that any amounts
available for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding letters of credit, such amounts
shall be held by the Administrative Agent in a cash collateral account and
applied (A) first, to reimburse the issuing lender for any drawings under such
letters of credit and (B) then, following the expiration of all letters of
credit, to all other obligations of the types described in clauses "FIFTH" and
"SIXTH" above in the manner provided in this Section 3.14(b).
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 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 11.3(c), 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
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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 and other obligations owing to
such Lender in accordance with the terms hereof.
4. 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.
-------------------------
The obligations of the Guarantors under Section 4.1 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
47
<PAGE>
or contribution against the Borrower or any other Guarantor of the Guaranteed
Obligations for amounts paid under this Section 4 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.
c. 4.3 Reinstatement.
-------------
48
<PAGE>
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 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 9.2) for purposes of Section 4.1 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
49
<PAGE>
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 "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.
5. 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 and the Security Agreement,
and the UCC financing statements relating thereto, if any, 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.
50
<PAGE>
(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. To the extent not already in the possession
------------------
of the Administrative Agent, 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.
(d) Financial Information. To the extent not already in the
---------------------
possession of the Administrative Agent, 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) Real Property Collateral. Receipt by the Administrative Agent of
------------------------
standard ALTA mortgagee polices insuring the priority of the Mortgages in
amounts and from companies acceptable to the Administrative Agent and the
Lenders. The title policies shall include only such exceptions as are
acceptable to the Administrative Agent. Copies of recorded documentation
relating to all such exceptions shall be provided to the Administrative Agent.
(f) Evidence of Insurance. Receipt of insurance certificates or
---------------------
policies evidencing flood hazard insurance (for improvements located in areas
having "special flood hazards"), casualty insurance (including builders' risk
and all-risk permanent policies) and liability insurance conforming to the
requirements of this Credit Agreement and the other Credit Documents, showing
the Administrative Agent as sole loss payee with respect to the flood hazard and
casualty insurance and as additional insured with respect to the liability
insurance, together with evidence of payment of premiums thereon.
(g) 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.
(h) Corporate Documents. Receipt of the following (or their
-------------------
equivalent) for each of the Credit Parties:
(i) Articles of Incorporation. Copies of the articles of
-------------------------
incorporation or charter documents certified to be true and complete as of
a recent date by the appropriate governmental authority of the state of its
incorporation.
51
<PAGE>
(ii) 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.
(iii) Bylaws. Copies of the bylaws 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.
(iv) 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.
(v) 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(h)(v) with appropriate insertions and attachments.
(i) Fees. Receipt of all fees, if any, owing pursuant to the
----
Administrative Agent's Fee Letter, Section 3.5 or otherwise.
(j) Section 5.2 Conditions. The conditions specified in Section 5.2
----------------------
shall be satisfied.
(k) 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 Administrative Agent and
the Lenders.
b. 5.2 Conditions to All Extensions of Credit.
--------------------------------------
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 and in the 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
52
<PAGE>
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.
(g) Additional Conditions to Letters of Credit. If the issuance of a
------------------------------------------
Letter of Credit is requested pursuant to Section 2.2, all conditions set forth
therein shall have been satisfied.
(g) Additional Conditions to Swingline Loans. If a Swingline Loan is
----------------------------------------
made pursuant to Section 2.3, 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) and (d), and in (e), (f) or
(g), of this Section 5.2 have been satisfied.
6. SECTION 6
REPRESENTATIONS AND WARRANTIES
- - ------------------------------
To induce the Lenders to enter into this Credit Agreement and to make
Extensions of Credit herein provided for, each of the members of the
Consolidated Group parties hereto hereby represents and warrants to the
Administrative Agent and to each Lender that:
a. 6.1 Financial Condition.
-------------------
53
<PAGE>
Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders), have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition and results from operations
of the entities and for the periods specified, subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes:
(i) an audited consolidated balance sheet of the Borrower and its
consolidated subsidiaries dated as of December 31, 1998, together with
related consolidated statements of income and cash flows certified by
PricewaterhouseCoopers, certified public accountants;
(ii) a company-prepared consolidated balance sheet of the Borrower
and its consolidated subsidiaries dated as of March 31, 1999, together with
related consolidated statements of income and cash flows; and
(iii) after the Closing Date, the annual and quarterly financial
statements provided in accordance with Sections 7.1(a) and (b).
b. 6.2 No Changes or Restricted Payments.
---------------------------------
Since the date of the financial statements referenced in Section 6.1(i),
(a) there has been no circumstance, development or event relating to or
affecting the members of the Consolidated Group which has had or would be
reasonably expected to have a Material Adverse Effect, and (b) except as
permitted herein, no Restricted Payments have been made or declared or are
contemplated by any members of the Consolidated Group.
c. 6.3 Organization; Existence; Compliance with Law.
--------------------------------------------
Each of the members of the Consolidated Group (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not, in the aggregate, have a Material
Adverse Effect, and (d) is in compliance with all Requirements of Law, except to
the extent that the failure to comply therewith would not, in the aggregate, be
reasonably expected to have a Material Adverse Effect.
d. 6.4 Power; Authorization; Enforceable Obligations.
---------------------------------------------
54
<PAGE>
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate or other
action to authorize the execution, delivery and performance by it of the Credit
Documents to which it is a party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with acceptance of extensions of credit
or the making of the guaranties hereunder or with the execution, delivery or
performance of any Credit Documents by the Credit Parties (other than those
which have been obtained, such filings as are required by the Securities and
Exchange Commission and to fulfill other reporting requirements with
Governmental Authorities) or with the validity or enforceability of any Credit
Document against the Credit parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
Each Credit Document to which it is a party constitutes a legal, valid and
binding obligation of such Credit Party enforceable against such Credit Party in
accordance with their respective terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
e. 6.5 No Legal Bar or Disputes.
------------------------
(a) The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law or any Contractual Obligation of any member of the
Consolidated Group (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. No member of the
Consolidated Group is in default under or with respect to any of its Contractual
Obligations in any respect which would reasonably be expected to have a Material
Adverse Effect.
(b) No default exists, nor, to the best knowledge of the Credit Parties,
is any such default asserted under any Contractual Obligations to which any
member of the Consolidated Group is a party which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
f. 6.6 No Material Litigation.
----------------------
No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Credit Parties,
55
<PAGE>
threatened by or against, any members of the Consolidated Group or against any
of their respective properties or revenues which (a) relate to the Credit
Documents or any of the transactions contemplated hereby or thereby, (b) if
adversely determined, would reasonably be expected to have a Material Adverse
Effect. Set forth on Schedule 6.6 is a summary of all material claims,
------------
litigation, investigations and proceedings pending or, to the best knowledge of
the Credit Parties, threatened by or against the members of the Consolidated
Group or against any of their respective properties or revenues, and none of
such actions, individually or in the aggregate, is reasonably expected to have a
Material Adverse Effect.
g. 6.7 No Default.
----------
No Default or Event of Default has occurred and is continuing.
h. 6.8 Ownership of Property; Liens.
----------------------------
Each of the members of the Consolidated Group has good record and
marketable title in fee simple to, or a valid leasehold interest in, all its
material real property, and good title to, or a valid leasehold interest in, all
its other material property, and none of such property is subject to any Lien,
except for Permitted Liens.
i. 6.9 Intellectual Property.
---------------------
Each of the members of the Consolidated Group owns, or has the legal right
to use, all United States trademarks, tradenames, copyrights, technology, know-
how and processes, if any, necessary for each of them to conduct its business as
currently conducted (the "Intellectual Property") except for those the failure
---------------------
to own or have such legal right to use would be subject to indemnification in
favor of a member of the Consolidated Group or would not be reasonably expected
to have a Material Adverse Effect. No claim has been asserted and is pending by
any Person challenging or questioning the use of any such Intellectual Property
or the validity or effectiveness of any such Intellectual Property, nor does any
Credit Party know of any such claim, and the use of such Intellectual Property
by the members of the Consolidated Group does not infringe on the rights of any
Person, except for such claims and infringements that in the aggregate, would
not be reasonably expected to have a Material Adverse Effect.
j. 6.10 No Burdensome Restrictions.
--------------------------
No Requirement of Law applicable to, or Contractual Obligation of, the
members of the Consolidated Group would be reasonably expected to have a
Material Adverse Effect.
k. 6.11 Taxes.
-----
56
<PAGE>
Each of the members of the Consolidated Group has filed or caused to be
filed all income tax returns (federal, state, local and foreign) and all other
material tax returns which are required to be filed and has paid (i) all amounts
shown therein to be due (including interest and penalties) and (ii) all other
taxes, fees, assessments and other governmental charges (including mortgage
recording taxes, documentary stamp taxes and intangibles taxes) owing, except
for such taxes which are not yet delinquent or as are being contested in good
faith by proper proceedings and against which adequate reserves are being
maintained in accordance with GAAP. To the best knowledge of the Credit
Parties, no tax claim or assessment has been asserted against members of the
Consolidated Group which if adversely determined would reasonably be expected to
have a Material Adverse Effect.
l. 6.12 ERISA
-----
Except as would be subject to indemnification in favor of a member of the
Consolidated Group or would not reasonably be expected to have a Material
Adverse Effect, to the knowledge of the Credit Parties:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best knowledge of the Credit Parties, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code, whether or not waived, has occurred with respect to any Plan;
(iii) each Plan has been maintained, operated, and funded in compliance with its
own terms and in material compliance with the provisions of ERISA, the Internal
Revenue Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as defined
in Section 4001(a)(16) of ERISA), whether or not vested, under each Single
Employer Plan, as of the last annual valuation date prior to the date on which
this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value of the
assets of such Plan.
(c) No member of the Consolidated Group nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be reasonably
expected to incur, any withdrawal liability under ERISA to any Multiemployer
Plan or Multiple Employer Plan. No member of the Consolidated Group nor any
ERISA Affiliate would become subject to any withdrawal liability under ERISA if
any member of the Consolidated Group or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. No member of the Consolidated Group nor any ERISA Affiliate
has received any notification that any Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA), is
57
<PAGE>
insolvent (within the meaning of Section 4245 of ERISA), or has been terminated
(within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the
best knowledge of the Credit Parties, reasonably expected to be in
reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Internal Revenue Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or may
subject any member of the Consolidated Group or any ERISA Affiliate to any
liability under Section 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Internal Revenue Code, or under any agreement or other instrument pursuant
to which any member of the Consolidated Group or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability.
(e) To the knowledge of the Borrower, no member of the Consolidated Group
nor any ERISA Affiliates has any material liability with respect to "expected
post-retirement benefit obligations" within the meaning of the Financial
Accounting Standards Board Statement 106. Each Plan which is a welfare plan (as
defined in Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section
4980B of the Internal Revenue Code apply has been administered in compliance in
all material respects of such sections.
(f) Neither the execution and delivery of this Credit Agreement nor the
consummation of the financing transactions contemplated thereunder will involve
any transaction which is subject to the prohibitions of Sections 404, 406 or 407
of ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Internal Revenue Code. The representation by the Credit Parties in
the preceding sentence is made in reliance upon and subject to the accuracy of
the Lenders' representation in Section 11.15 with respect to their source of
funds and is subject, in the event that the source of the funds used by the
Lenders in connection with this transaction is an insurance company's general
asset account, to the application of Prohibited Transaction Class Exemption 95-
60, 60 Fed. Reg. 35,925 (1995), compliance with the regulations issued under
Section 401(c)(1)(A) of ERISA, or the issuance of any other prohibited
transaction exemption or similar relief, to the effect that assets in an
insurance company's general asset account do not constitute assets of an
"employee benefit plan" within the meaning of Section 3(3) of ERISA of a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code.
m. 6.13 Governmental Regulations, Etc.
-----------------------------
(a) No part of the proceeds of the Extensions of Credit hereunder will be
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or for the purpose of
purchasing or carrying or trading in any securities. If requested by any Lender
or the Administrative Agent, the Borrower will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in Regulation U. No indebtedness being
reduced or retired out of the proceeds of the Extensions of Credit hereunder was
or will be incurred for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U or any "margin security" within the meaning
of Regulation T. "Margin stock" within the meanings of Regulation
58
<PAGE>
U does not constitute more than 25% of the value of the consolidated assets of
the Borrower and its Subsidiaries. None of the transactions contemplated by this
Credit Agreement (including, without limitation, the direct or indirect use of
the proceeds of the Loans) will violate or result in a violation of the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, or regulations issued pursuant thereto, or Regulation T, U or X.
(b) None of the members of the Consolidated Group is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act or
the Investment Company Act of 1940, each as amended. In addition, none of the
members of the Consolidated Group is (i) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as amended,
and is not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any member
of the Consolidated Group is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O.
n. 6.14 Subsidiaries.
------------
Set forth on Schedule 6.14 are all the Subsidiaries of the Borrower at the
-------------
Closing Date, the jurisdiction of their incorporation and the direct or indirect
ownership interest of the Borrower therein.
o. 6.15 Purpose of Extensions of Credit.
-------------------------------
The Loans shall be used by the Borrower solely to finance working capital,
capital expenditures and other lawful corporate purposes, including acquisitions
permitted hereunder and to provide funds for the retirement of all outstanding
indebtedness under the Bridge Credit Agreement.
p. 6.16 Environmental Matters.
---------------------
Except as would be subject to indemnification in favor of a member of the
Consolidated Group or would not reasonably be expected to have a Material
Adverse Effect, and to the knowledge of the Credit Parties:
(a) Each of the facilities and properties owned, leased or operated by the
members of the Consolidated Group (the "Subject Properties") and all operations
------------------
at the Subject Properties are in compliance with all applicable Environmental
Laws, and there is no violation of any Environmental
59
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Law with respect to the Subject Properties or the businesses operated by the
members of the Consolidated Group (the "Businesses"), and there are no
----------
conditions relating to the Businesses or Subject Properties that could give rise
to liability under any applicable Environmental Laws.
(b) None of the Subject Properties contains, or has previously contained,
any Materials of Environmental Concern at, on or under the Subject Properties in
amounts or concentrations that constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
(c) None of the members of the Consolidated Group has received any written
or verbal notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Subject Properties or the Businesses, nor does any member
of the Consolidated Group have knowledge or reason to believe that any such
notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Subject Properties, or generated, treated, stored or
disposed of at, on or under any of the Subject Properties or any other location,
in each case by or on behalf any members of the Consolidated Group in violation
of, or in a manner that would be reasonably likely to give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the best knowledge of any Credit Party, threatened, under any
Environmental Law to which any member of the Consolidated Group is or will be
named as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
any member of the Consolidated Group, the Subject Properties or the Businesses.
(f) There has been no release or, threat of release of Materials of
Environmental Concern at or from the Subject Properties, or arising from or
related to the operations (including, without limitation, disposal) of any
member of the Consolidated Group in connection with the Subject Properties or
otherwise in connection with the Businesses, in violation of or in amounts or in
a manner that could give rise to liability under Environmental Laws.
6.17 Year 2000 Compliance.
--------------------
The Borrower has (i) initiated a review and assessment of all areas within
its and each of its Subsidiaries' business and operations (including those
affected by suppliers, vendors and customers) that could be adversely affected
by the "Year 2000 Problem" (that is, the risk that computer applications used by
-----------------
the Borrower or any of its Subsidiaries (or suppliers, vendors and customers)
may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999), (ii)
developed a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (iii) to date, implemented that plan in accordance with that
timetable. Based on the foregoing, the Borrower believes that all computer
60
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applications (including those of its suppliers, vendors and customers) that are
material to its or any of its Subsidiaries' business and operations are
reasonably expected on a timely basis to be able to perform properly date-
sensitive functions for all dates before and after January 1, 2000 (that is, be
"Year 2000 Compliant"), except to the extent that a failure to do so could not
-------------------
reasonably be expected to have a Material Adverse Effect.
q. 6.18 No Material Misstatements.
-------------------------
None of the information, reports, financial statements, exhibits or
schedules, take as a whole, furnished by or on behalf of the Consolidated Group
to the Administrative Agent or any Lender in connection with the negotiation of
the Credit Documents or included therein or delivered pursuant thereto
contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were, are or
will be made, not materially misleading, provided that to the extent any such
--------
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, each of the Credit Parties represents only
that it acted in good faith and utilized reasonable assumptions and due care in
the preparation of such information, report, financial statement exhibit or
schedule.
r. 6.19 Security Documents.
------------------
(a) Security Agreement. The Security Agreement is effective to create in
------------------
favor of the Administrative Agent, for the ratable benefit of the holders of the
Secured Obligations identified therein, a legal valid and enforceable security
interest in the Collateral (as defined in the Security Agreement) owned by the
Credit Parties and, when financing statements in appropriate form are filed in
the appropriate offices for the locations specified in Schedule 2 to the
Security Agreement, the Security Agreement shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the grantors
thereunder in such Collateral that may be perfected by filing, recording or
registering a financing statement under the Uniform Commercial Code as in
effect, in each case prior and superior in right to any other Lien on any
Collateral other than Permitted Liens.
(b) Pledge Agreement. The Pledge Agreement is effective to create in
----------------
favor of the Administrative Agent, for the ratable benefit of the holders of the
Secured Obligations identified therein, a legal valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement) and, when such
Collateral is delivered to the Administrative Agent, the Pledge Agreement shall
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the pledgors thereunder in such Collateral, in
each case prior and superior in right to any other Lien.
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(c) Intellectual Property. The Security Agreement together with the Notice
---------------------
of Grant of Security Interest in Trademarks and the Notice of Grant of Security
Interest in Patents filed with the United States Patent and Trademark Office,
and the Notice of Grant of Security Interest in Copyrights filed with the United
States Copyright Office will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in all
Patents and Patent Licenses, Trademarks and Trademark Licenses and Copyrights
and Copyright Licenses (each as defined in the Security Agreement) and in which
a security interest may be perfected by filing, recording or registration of a
Notice in the United States Patent and Trademark Office and the United States
Copyright Office, in each case prior and superior in right to any other Lien
other than Permitted Liens.
(d) Mortgages. The Mortgages are effective to create in favor of the
---------
Administrative Agent, for the ratable benefit of the holders of the Secured
Obligations identified therein, a legal, valid and enforceable Lien on all of
the respective grantors' right, title and interest in and to the Mortgaged
Properties thereunder and the proceeds thereof, and when the Mortgages are
recorded in the appropriate offices and the proper amount of mortgage recording
or similar taxes (if any) are paid and when the financing statements are duly
filed in the appropriate public records, the Mortgages shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the grantors in such Mortgaged Properties and the proceeds thereof, in each case
prior and superior in right to any other Lien other than Permitted Liens.
s. 6.20 Location of Real Property and Leased Premises.
---------------------------------------------
Set forth on Schedule 6.20 is a complete and correct list of all real
-------------
property located in the United States and owned or leased by any member of the
Consolidated Group with street address and state where located.
7. SECTION 7
AFFIRMATIVE COVENANTS
---------------------
Each of the Credit Parties covenants and agrees that on the Closing Date,
and so long as this Credit Agreement is in effect and until the Commitments have
been terminated, no Obligations remain outstanding and all amounts owing
hereunder or in connection herewith have been paid in full, each of the members
of the Consolidated Group party hereto shall:
a. 7.1 Financial Statements.
--------------------
Furnish, or cause to be furnished, to the Administrative Agent and the
Lenders:
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(a) Audited Financial Statements. As soon as available, but in any
----------------------------
event within 90 days after the end of each fiscal year, an audited
consolidated balance sheet of the Borrower and its subsidiaries as of the
end of such fiscal year and the related consolidated statements of income,
retained earnings, shareholders' equity and cash flows for such fiscal
year, audited by PricewaterhouseCoopers, or other firm of independent
certified public accountants of nationally recognized standing reasonably
acceptable to the Required Lenders, setting forth in each case in
comparative form the figures as of the end of and for the previous fiscal
year, reported without a "going concern" or like qualification or
exception, or qualification indicating that the scope of the audit was
inadequate to permit such independent certified public accountants to
certify such financial statements without such qualification or other
material qualification or exemption.
(b) Company-Prepared Financial Statements. As soon as available, but
-------------------------------------
in any event
(i) within 45 days after the end of each of the first three
fiscal quarters, a company-prepared consolidated balance sheet of the
Borrower and its subsidiaries as of the end of such fiscal quarter and
related company-prepared consolidated statements of income, retained
earnings, shareholders' equity and cash flows for such quarterly
period and for the fiscal year to date;
(ii) within 60 days after the end of the fourth fiscal quarter,
a company-prepared consolidated balance sheet of the Borrower and its
subsidiaries as of the end of such fiscal quarter and related company-
prepared consolidated statements of income, retained earnings,
shareholders' equity and cash flows for such quarterly period and for
the fiscal year to date; and
(iii) prior to the end of each fiscal year, an annual business
plan and budget for the members of the Consolidated Group, containing,
among other things, pro forma financial statements for the next fiscal
year,
in each case setting forth in comparative form the consolidated figures for
the corresponding date or period or periods of the preceding fiscal year or
the portion of the fiscal year ending with such period, as applicable, in
each case subject to normal recurring year-end audit adjustments.
All such financial statements shall be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring year-
end audit adjustments) and shall be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b)
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above, in accordance with GAAP applied consistently throughout the periods
reflected therein and further accompanied by a description of, and an estimation
of the effect on the financial statements on account of, a change in the
application of accounting principles as provided in Section 1.3.
b. 7.2 Certificates; Other Information.
-------------------------------
Furnish, or cause to be furnished, to the Administrative Agent for
distribution to the Lenders:
(a) Accountant's Certificate and Reports. Concurrently with the
------------------------------------
delivery of the financial statements referred to in subsection 7.1(a)
above, a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate.
(b) Officer's Compliance Certificate. Concurrently with the delivery
--------------------------------
of the financial statements referred to in Sections 7.1(a) and 7.1(b)
above, a certificate of a Responsible Officer of the Borrower stating that,
to the best of such Responsible Officer's knowledge and belief, (i) such
financial statements fairly present in all material respects the financial
condition and results from operations of the parties covered by such
financial statements, (ii) during such period the members of the
Consolidated Group have observed or performed in all material respects the
covenants and other agreements hereunder and under the other Credit
Documents relating to them, and satisfied in all material respects the
conditions, contained in this Credit Agreement to be observed, performed or
satisfied by them, and (iii) such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate. Such certificate shall include the calculations required to
indicate compliance with Section 7.9. A form of Officer's Certificate is
attached as Schedule 7.2(b).
---------------
(c) Accountants' Reports. Promptly upon receipt, a copy of any final
--------------------
(as distinguished from a preliminary or discussion draft) "management
letter" or other similar report submitted by independent accountants or
financial consultants to the members of the Consolidated Group in
connection with any annual, interim or special audit.
(d) Public Information. Within thirty days after the same are sent,
------------------
copies of all proxies, notices and reports (other than those otherwise
provided pursuant to subsection 7.1) and other financial information which
any member of the Consolidated Group sends to its public stockholders or to
the holders of any Funded Debt of members of the Consolidated Group, and
within thirty days after the same are filed, copies of all financial
statements and non-confidential reports
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<PAGE>
which any member of the Consolidated Group may make to, or file with, the
Securities and Exchange Commission or any successor or analogous
Governmental Authority.
(e) Other Information. Promptly, such additional financial and other
-----------------
information as the Administrative Agent, at the request of any Lender, may
from time to time reasonably request.
c. 7.3 Notices.
-------
Give notice to the Administrative Agent (which shall promptly transmit such
notice to each Lender) of:
(a) Defaults. Immediately (and in any event within two (2) Business
--------
Days) after a responsible officer of a Credit Party has knowledge of the
occurrence of an Event of Default.
(b) Contractual Obligations. Promptly, the occurrence of any default
-----------------------
or event of default under any Contractual Obligation of any member of the
Consolidated Group which would reasonably be expected to have a Material
Adverse Effect.
(c) Legal Proceedings. Promptly, any litigation, or any investigation
-----------------
or proceeding (including without limitation, any environmental proceeding)
known to any member of the Consolidated Group, or any material development
in respect thereof, affecting any member of the Consolidated Group which,
if adversely determined, would reasonably be expected to have a Material
Adverse Effect.
(d) ERISA. Promptly, after any Responsible Officer of the Borrower
-----
knows or has reason to know of (i) any event or condition, including, but
not limited to, any Reportable Event, that constitutes, or might reasonably
lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the
receipt of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against any of its ERISA Affiliates, or of a
determination that any Multiemployer Plan is in reorganization or insolvent
(both within the meaning of Title IV of ERISA); (iii) the failure to make
full payment on or before the due date (including extensions) thereof of
all amounts which the members of the Consolidated Group or any ERISA
Affiliate are required to contribute to each Plan pursuant to its terms and
as required to meet the minimum funding standard set forth in ERISA and the
Internal Revenue Code with respect thereto; or (iv) any change in the
funding status of any Plan that reasonably could be expected to have a
Material Adverse Effect; together with a description of any such event or
condition or a copy of any such notice and a statement by the chief
financial officer of the
65
<PAGE>
Borrower briefly setting forth the details regarding such event, condition,
or notice, and the action, if any, which has been or is being taken or is
proposed to be taken by the Credit Parties with respect thereto. Promptly
upon request, the members of the Consolidated Group shall furnish the
Administrative Agent and the Lenders with such additional information
concerning any Plan as may be reasonably requested, including, but not
limited to, copies of each annual report/return (Form 5500 series), as well
as all schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to ERISA
and the Internal Revenue Code, respectively, for each "plan year" (within
the meaning of Section 3(39) of ERISA).
(e) Other. Promptly, any other development or event which a
-----
Responsible Officer of the Borrower determines could reasonably be expected
to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the relevant Credit Parties propose
to take with respect thereto.
d. 7.4 Payment of Obligations.
----------------------
Pay its Indebtedness and other monetary obligations promptly and in
accordance with their terms and pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before such taxes, assessments
and governmental charges shall become delinquent or in default, as well as all
lawful claims for labor, materials and supplies or otherwise that, if unpaid,
might give rise to a Lien upon such properties or any part thereof; provided,
--------
however, that such payment and discharge shall not be required with respect to
(i) any such tax, assessment, charge, levy or claim so long as adequate reserves
have been set aside with respect thereto in accordance with GAAP and such
contest operates to suspend collection of the contested obligation, tax,
assessment or charge and enforcement of a Lien and, in the case of a Mortgaged
Property, there is no risk of forfeiture of such property and (ii) any
Indebtedness or other obligation or any tax, assessment, charge, levy or claims,
the failure to pay and discharge when due which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
e. 7.5 Conduct of Business and Maintenance of Existence.
------------------------------------------------
Continue to engage in business of the same general type as now conducted by
it on the date hereof and similar or related businesses; except as permitted by
Section 8.4(b), preserve, renew and keep in full force and effect its corporate
existence and take
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<PAGE>
all reasonable action to maintain all rights, privileges, licenses and
franchises necessary or desirable in the normal conduct of its business; and
comply with all Contractual Obligations and Requirements of Law applicable to it
except to the extent that failure to comply therewith would not, in the
aggregate, have a Material Adverse Effect.
f. 7.6 Maintenance of Property; Insurance.
----------------------------------
Keep all material property useful and necessary in its business in
reasonably good working order and condition (ordinary wear and tear excepted);
maintain with financially sound and reputable insurance companies casualty,
liability and such other insurance (which may include plans of self-insurance)
with such coverage and deductibles, and in such amounts as may be consistent
with prudent business practice and in any event consistent with normal industry
practice (except to any greater extent as may be required by the terms of any of
the other Credit Documents); and furnish to the Administrative Agent, upon
written request, full information as to the insurance carried.
g. 7.7 Inspection of Property; Books and Records; Discussions.
------------------------------------------------------
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities; and
permit, during regular business hours and upon reasonable notice by the
Administrative Agent, the Administrative Agent to visit and inspect any of its
properties and examine and make abstracts (including photocopies) from any of
its books and records (other than materials protected by the attorney-client
privilege and materials which the Credit Parties may not disclose without
violation of a confidentiality obligation binding upon them) at any reasonable
time, and to discuss the business, operations, properties and financial and
other condition of the members of the Consolidated Group with officers and
employees of the members of the Consolidated Group and with their independent
certified public accountants. The cost of the inspection referred to in the
preceding sentence shall be for the account of the Lenders unless an Event of
Default has occurred and is continuing, in which case the cost of such
inspection shall be for the account of the Credit Parties.
h. 7.8 Environmental Laws.
------------------
(a) Comply in all material respects with, and take reasonable actions to
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply in all
material respects with and maintain, and take reasonable actions to ensure that
all tenants and subtenants obtain
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and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws except to the extent that failure to do so would not
reasonably be expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and testing,
and all remedial, removal and other actions actually and lawfully required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the failure to do or the pendency of such
proceedings would not reasonably be expected to have a Material Adverse Effect;
and
(c) Defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective employees, agents, officers and directors, from
and against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the members of the Consolidated Group or the
Subject Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. The agreements in this paragraph shall
survive repayment of the Loans and all other amounts payable hereunder, and
termination of the Commitments.
i. 7.9 Financial Covenants.
-------------------
(a) Consolidated Leverage Ratio. As of the end of each fiscal quarter, the
---------------------------
Consolidated Leverage Ratio shall be not greater than 2.5:1.0.
(b) Consolidated Fixed Charge Coverage Ratio. As of the end of each fiscal
----------------------------------------
quarter, the Consolidated Fixed Charge Coverage Ratio shall be not less than
2.0:1.0.
(c) Consolidated Net Worth. As of the end of each fiscal quarter,
----------------------
Consolidated Net Worth shall be not less than the sum of $100 million plus on
----
the last day of each fiscal quarter to end after the Closing Date, 75% of
Consolidated Net Income for the fiscal quarter then ended, such increases to be
cumulative, plus 100% of the net proceeds from Equity Transactions occurring
----
after the Closing Date.
(d) Consolidated Capital Expenditures. Consolidated Capital Expenditures
---------------------------------
shall not in any fiscal year exceed in the aggregate an amount equal to five
percent (5%) of Consolidated Net Worth as of the last day of the immediately
preceding fiscal year.
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Notwithstanding anything to the contrary in this Agreement, for purposes of
determining compliance with covenants (a) - (d) above, any costs, charges,
losses, capital expenditures or other items reflected or included in calculating
compliance with any such covenant that relates to an E-Commerce Subsidiary shall
be disregarded in such calculations.
j. 7.10 Administrative Fees.
-------------------
Pay to the Administrative Agent the annual agency fee and comply with the
other agreements provided for in the Administrative Agent's Fee Letter.
k. 7.11 Additional Guaranties and Stock Pledges.
---------------------------------------
(a) Domestic Subsidiaries. Where Domestic Subsidiaries of the Borrower
---------------------
which are not Credit Parties hereunder (the "Non-Guarantor Subsidiaries") shall
--------------------------
at any time constitute more than (the "Threshold Requirement"):
---------------------
(i) in any instance for any such Non-Guarantor Subsidiary, five
percent (5%) of consolidated assets for the Consolidated Group at the end
of the immediately preceding fiscal year or five percent (5%) of
consolidated revenues for the Consolidated Group for the immediately
preceding fiscal year, or
(ii) in the aggregate for all such Non-Guarantor Subsidiaries, ten
percent (10%) of consolidated assets for the Consolidated Group at the end
of the immediately preceding fiscal year or ten percent (10%) of
consolidated revenues for the Consolidated Group for the immediately
preceding fiscal year,
then the Borrower shall promptly (i) notify the Administrative Agent thereof,
(ii) cause such Domestic Subsidiary or Subsidiaries to become a Guarantor by
execution of a Joinder Agreement, such that immediately after joinder as a
Guarantor, the remaining Non-Guarantor Subsidiaries shall not in any instance,
or collectively, exceed the Threshold Requirement, (iii) deliver stock
certificates and related pledge agreements or pledge joinder agreements
evidencing the pledge of 100% of the capital stock of all such Domestic
Subsidiaries (whether or not they are Guarantors), together with undated stock
transfer powers executed in blank, (iv) cause such Domestic Subsidiary or
Subsidiaries to deliver to the Administrative Agent, with respect to such
Eligible Real Property, documents, instruments and other items of the types
required to be delivered pursuant to Section 5.5(e) all in form, content and
scope reasonably satisfactory to the Administrative Agent and (v) deliver such
other documentation as the Administrative Agent may reasonably request in
connection with the foregoing, including, without limitation, appropriate UCC-1
financing statements, real estate title insurance policies, environmental
reports, landlord's waivers, certified resolutions and other organizational
69
<PAGE>
and authorizing documents of such Person, favorable opinions of counsel to such
Person and other items reasonably requested by the Administrative Agent, all in
form, content and scope reasonably satisfactory to the Administrative Agent.
l.
(b) Foreign Subsidiaries. At any time any Person becomes a Foreign
--------------------
Subsidiary, the Borrower will promptly (i) notify the Administrative Agent
thereof, (ii) cause delivery of supporting resolutions, incumbency certificates,
corporation formation and organizational documentation and opinions of counsel
as the Administrative Agent may reasonably request, and (iii) cause delivery of
stock certificates (where required for perfection under local law) and a related
pledge agreement or pledge joinder agreement evidencing the pledge of 65% (or
such greater percentage which would not result in material adverse tax
consequences) of the issued and outstanding capital stock entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
and outstanding capital stock not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) of such Foreign Subsidiary directly owned by the
Borrower or any Domestic Subsidiary of the Borrower, together in each case with
undated stock transfer powers executed in blank.
m. 7.12 Ownership of Subsidiaries.
-------------------------
Except to the extent otherwise permitted in Section 8.4(b) and Section 8.7
and to the extent as would not cause a Change of Control and except as set forth
on Schedule 6.14, the Borrower shall, directly or indirectly, own at all times
-------------
100% of the Voting Stock of each of its Subsidiaries.
n. 7.13 Use of Proceeds.
---------------
Extensions of Credit will be used solely for the purposes provided in
Section 6.15.
7.14 Year 2000 Compatibility.
-----------------------
Take all action reasonably necessary to assure that its computer based
systems are able to operate and effectively process data including dates on and
after January 1, 2000, and, at the reasonable request of the Administrative
Agent or the Required Lenders, provide evidence to the Lenders of such year 2000
compatibility.
o. 7.15 Pledged Assets.
--------------
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(a) Each Credit Party will cause all of its owned personal property
located in the United States other than Excluded Property and all of its
Eligible Property to be subject at all times to first priority, perfected and,
in the case of real property (whether leased or owned), title insured Liens in
favor of the Administrative Agent to secure the obligations of the Credit
Parties under the Credit Documents pursuant to the terms of the Credit Documents
or, with respect to any such property acquired subsequent to the Closing Date,
such other additional security documents as the Administrative Agent shall
reasonably request, subject in any case to Permitted Liens. Without limiting
the generality of the above, the Credit Parties will cause (i) 100% of the
issued and outstanding capital stock of each Domestic Subsidiary and (ii) 65%
(or such greater percentage which would not result in material adverse tax
consequences) of the issued and outstanding capital stock entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
and outstanding capital stock not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) of each Foreign Subsidiary directly owned by the
Borrower or any Domestic Subsidiary of the Borrower to be subject at all times
to a first priority, perfected Lien in favor of the Administrative Agent
pursuant to the terms and conditions of the Pledge Agreement or such other
security documents as the Administrative Agent shall reasonably request.
(b) If, subsequent to the Closing Date, a Credit Party shall acquire (a)
any intellectual property, securities, instruments, chattel paper or other
personal property required to be pledged to the Administrative Agent as
collateral under any of the Credit Documents or (b) acquire or lease any real
property, the Credit Parties shall promptly notify the Administrative Agent of
same. Each Credit Party shall, and shall cause each of its Subsidiaries to, take
such action (including, but not limited to, the actions set forth in Sections
5.1(e)) at its own expense as requested by the Administrative Agent to ensure
that the Administrative Agent has a first priority perfected Lien to secure the
obligations of the Credit Parties under the Credit Documents in such Property as
required by Section 7.15(a). Each Credit Party shall, and shall cause each of
its Subsidiaries to, adhere to the covenants regarding the location of personal
property as set forth in the Security Agreement.
8. SECTION 8
NEGATIVE COVENANTS
Each of the Credit Parties covenants and agrees that on the Closing Date,
and so long as this Credit Agreement is in effect and until the Commitments have
been terminated, no Obligations remain outstanding and all amounts owing
hereunder or in connection herewith, have been paid in full, no member of the
Consolidated Group shall:
a. 8.1 Indebtedness.
------------
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Contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness set forth in Schedule 8.1, and renewals, refinancings and
------------
extensions thereof on terms and conditions not less favorable in any material
respect than for such existing Indebtedness;
(c) Capital Lease Obligations and Indebtedness incurred, in each case, to
provide all or a portion of the purchase price or costs of construction of an
asset or, in the case of a sale/leaseback transaction as described in Section
8.11, to finance the value of such asset owned by a member of the Consolidated
Group, provided that (i) such Indebtedness when incurred shall not exceed the
--------
purchase price or cost of construction of such asset or, in the case of a
sale/leaseback transaction, the fair market value of such asset, (ii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing, and (iii)
the total amount of all such Indebtedness shall not exceed $10,000,000 at any
time outstanding;
(d) Indebtedness and obligations owing under interest rate, commodities
and foreign currency exchange protection agreements entered into in the ordinary
course of business to manage existing or anticipated risks and not for
speculative purposes;
(e) unsecured intercompany Indebtedness owing by a member of the
Consolidated Group to another member of the Consolidated Group (subject,
however, to the limitations of Section 8.5 in the case of the member of the
Consolidated Group extending the intercompany loan, advance or credit);
(f) Subordinated Debt of the Borrower;
(g) other unsecured Indebtedness of the Borrower of up to $5,000,000 in
the aggregate at any time outstanding; and
(h) Support Obligations of Indebtedness permitted under this Section 8.1.
(i) Any private sale, issuance or placement of debt to a third party to
fund an E-Commerce Subsidiary.
b. 8.2 Liens.
-----
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Contract, create, incur, assume or permit to exist any Lien with respect to
any of their respective Property, whether now owned or hereafter acquired,
except for Permitted Liens.
c. 8.3 Nature of Business.
------------------
Alter the character of their business in any material respect from that
conducted as of the Closing Date and similar or related businesses.
d. 8.4 Consolidation, Merger, Sale or Purchase of Assets,
--------------------------------------------------
Capital Expenditures, etc.
- - --------------------------
(a) Enter into a transaction of merger or consolidation, except
------
(i) a member of the Consolidated Group may be a party to a
transaction of merger or consolidation with another member of the
Consolidated Group, provided that (A) if the Borrower is a party thereto,
--------
it shall be the surviving corporation, (B) if a Guarantor is a party
thereto and the Borrower is not a party thereto, a Guarantor shall be the
surviving corporation or the surviving corporation shall be a Domestic
Subsidiary and shall become a Guarantor hereunder pursuant to Section 7.11
concurrently therewith, and (C) no Default or Event of Default shall exist
either immediately prior to or immediately after giving effect thereto; and
(ii) a member of the Consolidated Group (other than the
Borrower) may be a party to a transaction of merger or consolidation with
any other Person, provided that (A) the provisions of Section 7.11
--------
regarding joinder of certain Subsidiaries as Additional Credit Parties
hereunder shall be complied with, (B) no Default or Event of Default shall
exist either immediately prior to or immediately after giving effect
thereto, and (C) the provisions of subsection (c) of this Section shall be
complied with.
(b) Sell, lease, transfer or otherwise dispose of assets, property
and/or operations (including any sale-leaseback transaction, but excluding and
not subject to clauses (i) and (ii) below, the sale of inventory in the ordinary
course of business, the sale or disposition of plant, property and equipment
which is no longer useful in the business or as to which the proceeds therefrom
are reinvested in plant, property and equipment within six months thereof and
the Excluded Asset Dispositions), other than to another Credit Party, which
(i) in the aggregate in any fiscal year shall constitute more
than ten percent (10%) of total assets for the Consolidated Group at the
end of the
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immediately preceding fiscal year or shall account for more than ten
percent (10%) Consolidated Net Income for the immediately preceding fiscal
year, and
(ii) no Default of Event of Default exists prior thereto or would
exist immediately after giving effect thereto on a Pro Forma Basis,
without the prior written consent of the Required Lenders (which consent shall
not be unreasonably withheld or delayed).
(c) Acquire, including in connection with an Equity Transaction, all
or any portion of the capital stock or other ownership interest in any Person
which is not a Subsidiary or all or any substantial portion of the assets,
property and/or operations of a Person which is not a Subsidiary, without the
prior written consent of the Required Lenders (which consent shall not be
unreasonably withheld or delayed), unless
------
(i) in the case of an acquisition of capital stock or other
ownership interest if, after giving effect thereto, such Person will not be
a Subsidiary, then such acquisition will not cause a violation of Section
8.5;
(ii) in the case of either an acquisition of capital stock or
other ownership interest if, after giving effect thereto, such Person will
be a Subsidiary, or an acquisition of assets, property and/or operations,
then
(A) the cost (including cash and non-cash consideration,
the fair value of any capital stock of the Borrower issued in
connection therewith and Indebtedness assumed) of any such acquisition
(or series of related transactions) shall not exceed $15 million in
any instance;
(B) the acquisition is in the same or a similar or related
line of business as that of the Credit Parties;
(C) the Board of Directors of the Person which is the
subject of the acquisition shall have approved the acquisition; and
(D) no Default or Event of Default exists immediately prior
thereto or would exist after giving effect thereto on a Pro Forma
Basis.
(d) In the case of the Borrower, liquidate, wind-up or dissolve,
whether voluntarily or involuntarily (or suffer to permit any such liquidation
or dissolution).
e. 8.5 Advances, Investments and Loans.
-------------------------------
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Lend money or extend credit or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, or otherwise make an Investment in, any Person
except as permitted by Section 8.4 or as may be Permitted Investments.
f. 8.6 Transactions with Affiliates.
----------------------------
Enter into or permit to exist any transaction or series of transactions,
whether or not in the ordinary course of business, with any officer, director,
shareholder or Affiliate other than (i) transactions permitted by Section 8.1,
Section 8.4(b), Section 8.5 or Section 8.10, (ii) customary fees and expenses
paid to directors and (iii) where such transactions are on terms and conditions
substantially as favorable as would be obtainable in a comparable arm's-length
transaction with a Person other than an officer, director, shareholder or
Affiliate.
g. 8.7 Ownership of Equity Interests.
-----------------------------
Issue, sell, transfer, pledge or otherwise dispose of any partnership
interests, shares of capital stock or other equity or ownership interests
("Equity Interests") in any member of the Consolidated Group, except (i)
----------------
issuance, sale or transfer of Equity Interests to a Credit Party by a Subsidiary
of such Credit Party, (ii) in connection with a transaction permitted by Section
8.4, and (iii) as needed to qualify directors under applicable law.
h. 8.8 Fiscal Year.
-----------
Change its fiscal year from an April 30 fiscal year end to any year-end
other than December 31 (and only then upon prior notice to the Administrative
Agent and adjustment of the financial covenants to reflect any partial year
periods).
i. 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 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) Except in connection with a refinancing permitted hereunder, 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
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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) other than regularly scheduled payments of principal and interest on
such Funded Debt.
j. 8.10 Restricted Payments.
-------------------
Make or permit any Restricted Payments, unless and to the extent that no
Default or Event of Default shall exist immediately prior or after giving effect
thereto on a Pro Forma Basis.
k. 8.11 Sale Leasebacks.
---------------
Except as permitted pursuant to Section 8.1(c), directly or indirectly,
become or remain liable as lessee or as guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any Property,
whether now owned or hereafter acquired, (i) which such Person has sold or
transferred or is to sell or transfer to any other Person other than a Credit
Party or (ii) which such Person intends to use for substantially the same
purpose as any other Property which has been sold or is to be sold or
transferred by such Person to any other Person in connection with such lease.
l. 8.12 No Further Negative Pledges.
---------------------------
Except with respect to 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), 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.
9. SECTION 9
EVENTS OF DEFAULT
- - -----------------
a. 9.1 Events of Default.
-----------------
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "Event of Default"):
----------------
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(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 default 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 (except in the case of the negative covenants contained in Sections 8.1
through 8.12, 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 subsection (a), (b)
or (c)(i) of this Section 9.1) 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), 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
(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
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dissolution, merger or disposition permitted by Section 8.4(a), Section 8.4(b)
or Section 8.4(c), 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 Internal Revenue 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
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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 Internal
Revenue Code) or breach of fiduciary responsibility shall occur which may
subject a member of the Consolidated Group or any ERISA Affiliate to any
liability under Section 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Internal Revenue 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.
---------
b. 9.2 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 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
9.1(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.
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10. SECTION 10
AGENCY PROVISIONS
- - -----------------
a. 10.1 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 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 Lender 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. 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 of this Section
10 or (ii) have any other rights otherwise and elsewhere given them limited by
the provisions of this Section 10. 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. 10.2 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. 10.3 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
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(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 with this Credit Agreement 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 other 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
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. 10.4 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 11.3(b). 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 11.6, 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. 10.5 Notice of Default.
-----------------
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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. 10.6 Non-Reliance on Administrative Agent and Other Lenders.
------------------------------------------------------
Each Lender expressly acknowledges that each of the Administrative Agent
and its officers, directors, employees, 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 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, agents, attorneys-in-fact or
affiliates.
g. 10.7 Non-Reliance on Administrative Agent and Other Lenders.
------------------------------------------------------
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
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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. 10.8 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. 10.9 Successor Administrative Agent.
------------------------------
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
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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 10
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.
11. SECTION 11 MISCELLANEOUS
-------------
a. 11.1 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
--------
11.1, or at such other address as such party may specify by written notice to
- - ----
the other parties hereto:
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
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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. 11.2 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 11.3(d) may exercise all rights of set-off
with respect to its participation interest as fully as if such Person were a
Lender hereunder.
c. 11.3 Benefit of Agreement.
--------------------
(a) Generally. This Credit Agreement shall be binding upon and inure to
---------
the 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 11.3, 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.
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(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 11.3(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 11.3(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 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
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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 or the date of any mandatory prepayment), 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
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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 11.2 on the same basis as if it were a Lender.
d. 11.4 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. 11.5 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 in paying 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 Extension 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
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<PAGE>
incurred in connection with any such investigation, litigation or other
proceeding, or (B) the presence or Release of any Materials of Environmental
Concern at, under or from any Subject Property, 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 seeking to be indemnified).
Notwithstanding anything to the contrary in the preceding paragraph, under no
circumstances will the Borrower be required to pay any costs that arise out of
or relate to disputes solely between or among the Administrative Agent and/or
the Lenders.
f. 11.6 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
(other than a waiver or modification of a mandatory prepayment or
commitment reduction hereunder which shall be subject to the consent
of the Required Lenders unless expressly provided otherwise),
(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, release the Borrower or substantially all of the other
Credit Parties from its or their obligations under the Credit
Documents,
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(vi) 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,
(vii) except as a result of or in connection with a dissolution,
merger or disposition of a Subsidiary permitted under Section 8.4,
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 11.6
or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 9.1(a),
11.2, 11.3, 11.5 or 11.9,
(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;
(b) without the consent of the Agent, no provision of Section 10
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 supersede 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. 11.7 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. 11.8 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. 11.9 Survival.
--------
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All indemnities set forth herein, including, without limitation, in
Sections 2.2(i), 3.6, 3.9, 3.10, 3.11, 10.7 or 11.5 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. 11.10 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
11.1, such service to become effective three (3) days after such mailing.
Nothing herein shall affect the right of the Administrative Agent 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 OTHER 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. 11.11 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
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full force and effect and shall be construed without giving effect to the
illegal, invalid or unenforceable provisions.
l. 11.12 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. 11.13 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. 11.14 Binding Effect; Termination.
---------------------------
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,
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
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specifically agrees in a writing furnished to and for the benefit of the Credit
Parties to be bound by the terms of this Section 11.14; or (v) to the extent
that the Borrower shall have consented in writing to such disclosure. Nothing
set forth in this Section 11.14 shall obligate the Administrative Agent or any
Lender to return any materials furnished by the Credit Parties.
o. 11.15 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 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
p. 11.16 Conflict.
--------
To the extent that there is a conflict or inconsistency between any
provision of this Credit Agreement, on the one hand, and any provision of any
other Credit Document, on the other hand, this Credit Agreement shall control.
[Signature Pages to Follow]
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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 of each of the foregoing
Guarantors
GUARANTORS: AKRA TRAVEL, INC.,
- - ---------- a Florida corporation
ARRINGTON TRAVEL CENTER, INC.,
an Illinois corporation
ASSOCIATED TRAVEL SERVICES, LLC,
a Delaware limited liability company
BOWERS WORLDWIDE TRAVEL SERVICES, INC.,
an Arizona corporation
CHARTREK INTERNATIONAL, INC.,
a Connecticut corporation
COUCH/MOLLICA TRAVEL, LTD.,
a Pennsylvania corporation
ENVISION VACATIONS, INC.,
a Michigan corporation
EVANS TRAVEL GROUP, INC.,
a Louisiana corporation
FORBES TRAVEL SERVICE, INC.,
a Pennsylvania corporation
MCGREGOR TRAVEL MANAGEMENT, INC.,
a Connecticut corporation
MORAN TRAVEL BUREAU, INC.,
a Massachusetts corporation
MTA, INC.,
a Washington corporation
MTMUK ACQUISITION CORP.,
a Delaware corporation
NAVIGANT CRUISE CENTER, INC.,
a Delaware corporation
NAVIGANTVACATIONS.COM, INC.,
a Delaware corporation
OMNI TRAVEL SERVICE, INC.,
a Massachusetts corporation
PROFESSIONAL TRAVEL CORPORATION,
a Colorado corporation
<PAGE>
SIMMONS ASSOCIATES, INC.,
a Virginia corporation
TRAVEL CONSULTANTS, INC.,
a Michigan corporation
TRAVELCORP., INC.,
a Minnesota corporation
WORLD EXPRESS TRAVEL, INC.,
an Alaska corporation
By: /s/ Eugene A. Over, Jr.
------------------------
Name: Eugene A. Over, Jr.
Title: Vice President of each of the foregoing
Guarantors
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
<PAGE>
LENDERS: NATIONSBANK, N.A.,
- - -------
individually in its capacity as a
Lender and in its capacity as Administrative Agent
By: /s/ Chitt Swamidasan
---------------------------
Name: Chitt Swamidasan
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: /s/ George E. Adams
---------------------------
Name: George E. Adams
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ Jon Burckin
---------------------------
Name: Jon Burckin
Title: Relationship Manager
BANK ONE, COLORADO, N.A.
By: /s/ David L. Ericson
---------------------------
Name: David L. Ericson
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Hagopv Jazmadarian
---------------------------
Name: Hagopv Jazmadarian
Title: Vice President
KEYBANK, N.A.
By: /s/ Richard P. Stults
---------------------------
Name: Richard P. Stults
Title: Vice President
<PAGE>
Schedule 2.1(a)
---------------
Schedule of Lenders and Commitments
<TABLE>
<CAPTION>
Revolving Revolving LOC
Lender Committed Amount Commitment Percentage Committed Amount
- - ------------------------------------------- ---------------- ---------------------- ----------------
<S> <C> <C> <C>
NationsBank, N.A. $ % $
[other Lenders] $ % $
Total $125,000,000 100.00% $15,000,000
</TABLE>
<PAGE>
Schedule 2.1(b)(i)
------------------
FORM OF NOTICE OF BORROWING
NationsBank, N.A. NationsBank, N.A.,
as Administrative Agent under the as Swingline Lender under the
Credit Agreement referenced to below Credit Agreement referenced to below
101 N. Tryon Street 101 N. Tryon Street
Independence Center, Independence Center, 15th Floor
NC1-001-15-04 NC1-001-15-04
Charlotte, North Carolina 28255 Charlotte, North Carolina 28255
Attention: Agency Services Attention: Agency Services
RE: Amended and Restated Credit Agreement, dated as of August __, 1999 (as
amended and modified, the "Credit Agreement"), among Navigant
------ ---------
International, Inc., 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 undersigned hereby gives notice of a request for Revolving Loan pursuant to
Section 2.1(b) of the Credit Agreement or of a request for Swingline Loan
pursuant to Section 2.2(b) of the Credit Agreement as follows:
__________________ Revolving Loan
__________________ Swingline Loan
(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
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 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.
<PAGE>
(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 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) No circumstances, events or conditions have occurred since the date of
the audited financial statements referenced in Section 6.1 of the Credit
Agreement which would have a Material Adverse Effect.
(e) All conditions set forth in Section 2.1 of the Credit Agreement as to
the making of Revolving Loans or in Section 2.2 of the Credit Agreement as to
the making of Swingline Loans, as appropriate, have been satisfied.
Very truly yours,
NAVIGANT INTERNATIONAL, INC.
By:__________________________
Name:
Title:
3
<PAGE>
Schedule 2.1(e)
---------------
FORM OF NOTE
August __, 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 (the "Lender"), on or before the Termination Date
------
to the office of the Administrative Agent in immediately available funds as
provided in the Credit Agreement,
(i) in the case of Revolving Loans, the Lender's Revolving
Committed Amount or, if less, the aggregate unpaid principal amount of all
Revolving Loans owing to the Lender,
(ii) in the case of Swingline Loans, if the Lender is the Swingline
Lender, the aggregate Swingline Committed Amount or, if less, the aggregate
unpaid principal amount of all Swingline Loans owing to such Swingline
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 Amended and Restated
Credit Agreement, dated as of August __, 1999 (as amended and modified, the
"Credit Agreement"), among 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.
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
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.
4
<PAGE>
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:
5
<PAGE>
Schedule 2.2(b)-1
-----------------
Existing Letters of Credit
6
<PAGE>
Schedule 2.2(b)-2
-----------------
Form of Notice of Request for Letter of Credit
[Date]
NationsBank, N.A. NationsBank, N.A.
as Issuing Lender under the as Administrative Agent under the
Credit Agreement referred to below Credit Agreement referred to below
101 N. Tryon Street 101 N. Tryon Street
Independence Center, 15th Floor Independence Center, 15th Floor
NC1-001-15-04 NC1-001-15-04
Charlotte, North Carolina 28255 Charlotte, North Carolina 28255
Attention: Agency Services
RE: Amended and Restated Credit Agreement, dated as of August __, 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, pursuant to Section 2.2(b) of the Credit Agreement, hereby
requests that the following Letter of Credit be made on [date] as follows:
(1) Account Party:
(2) For use by:
(3) Beneficiary:
(4) Face Amount of Letter of Credit:
(5) Date of Issuance:
Delivery of Letter of Credit should be made as follows:
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).
7
<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.
(d) No circumstances, events or conditions have occurred since the date of
the audited financial statements referenced in Section 7.1 of the Credit
Agreement which could reasonably be expected to have a Material Adverse Effect.
(e) All conditions set forth in Section 2.2 of the Credit Agreement as to
the issuance of a Letter of Credit have been satisfied.
Very truly yours,
NAVIGANT INTERNATIONAL, INC.
By:_________________________________
Name:
Title:
8
<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: Amended and Restated Credit Agreement, dated as of August __, 1999 (as
amended and modified, the "Credit Agreement"), among Navigant
------ ---------
International, Inc., 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 undersigned 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).
(b) No Default or Event of Default exists, or will exist after giving
effect to the requested Extension of Credit.
9
<PAGE>
(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.
(d) No circumstances, events or conditions have occurred since the
date of the audited financial statements referenced in Section 6.1 of the
Credit Agreement which would have a Material Adverse Effect.
(e) 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:
10
<PAGE>
Schedule 5.1(h)(v)
------------------
Assistant Secretary's Certificate
Pursuant to Section 5.1(g)(v) of the Amended and Restated Credit Agreement
(the "Credit Agreement"), dated as of August __, 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. Each of the following persons is now a duly elected and qualified
officer of the Corporation, holding the office(s) 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 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: August __, 1999
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 _________________________.
_______________________________
[Title]
August __, 1999
11
<PAGE>
Schedule 6.6
------------
Description of Legal Proceedings
12
<PAGE>
Schedule 6.8
------------
Existing Liens
13
<PAGE>
Schedule 6.14
-------------
Subsidiaries
14
<PAGE>
Schedule 6.20
-------------
Locations of Mortgaged Properties
15
<PAGE>
Schedule 7.2(b)
---------------
Form of Officer's Compliance Certificate
This Certificate is delivered in accordance with the provisions of Section
7.2(b) of that Amended and Restated Credit Agreement, dated as of August __,
1999 (as amended, modified and supplemented, 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 used but not otherwise defined herein shall have
the same meanings provided in the Credit Agreement.
The undersigned, being a Responsible Officer of the Borrower, hereby
certifies, in my official capacity and not in my individual capacity, that to
the best of my knowledge and belief:
(a) the financial statements accompanying this Certificate fairly present
the financial condition of the parties covered by such financial statements in
all material respects;
(b) during the period covered by such financial statements the Credit
Parties have observed or performed all of their covenants and other agreements
in all material respects, and satisfied in all material respects every material
condition, contained in this Credit Agreement to be observed, performed or
satisfied by them;
(c) the undersigned has no actual knowledge of any Default or Event of
Default; and
(d) detailed calculations demonstrating compliance with the financial
covenants set out in Section 7.9 of the Credit Agreement accompany this
Certificate.
This the _______________ day of ________________________, 199_.
NAVIGANT INTERNATIONAL, INC.
By:___________________________________
Name:
Title:
16
<PAGE>
Attachment to Officer's Certificate
-----------------------------------
Computation of Financial Covenants
17
<PAGE>
Schedule 7.11-1
---------------
Form of Joinder Agreement
THIS JOINDER AGREEMENT (the "Agreement"), dated as of ___________________,
---------
199_, is by and between _______________________, a __________________ (the
"Applicant Guarantor"), and NATIONSBANK, N.A., in its capacity as Administrative
-------------------
Agent under that certain Amended and Restated Credit Agreement, dated as of
August __, 1999 (as amended and modified, the "Credit Agreement"), by and among
----------------
Navigant International, Inc., a Delaware corporation, the Guarantors and Lenders
identified therein and NationsBank, N.A., as Administrative Agent. All of the
defined terms in the Credit Agreement are incorporated herein by reference.
The Applicant Guarantor has indicated its desire to become a Guarantor or
is required by the terms of Section 7.11 of the Credit Agreement to become a
Guarantor under the Credit Agreement.
Accordingly, the Applicant Guarantor hereby agrees as follows with the
Administrative Agent for the benefit of the Lenders:
1. The Applicant Guarantor hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the Applicant Guarantor will be deemed to be
a party to the Credit Agreement and a "Guarantor" for all purposes of the Credit
Agreement and the other Credit Documents, and shall have all of the obligations
of a Guarantor thereunder as if it had executed the Credit Agreement and the
other Credit Documents. The Applicant Guarantor agrees to be bound by all of
the terms, provisions and conditions contained in the Credit Documents,
including without limitation (i) all of the affirmative and negative covenants
set forth in Sections 7 and 8 of the Credit Agreement and (ii) all of the
undertakings and waivers set forth in Section 4 of the Credit Agreement.
Without limiting the generality of the foregoing terms of this paragraph 1, the
Applicant Guarantor hereby (A) jointly and severally together with the other
Guarantors, guarantees to each Lender and the Administrative Agent as provided
in Section 4 of the Credit Agreement, the prompt payment and performance of the
Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof, (B) agrees that if any
of the Guaranteed Obligations are not paid or performed in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a
mandatory cash collateralization or otherwise), the Applicant Guarantor will,
jointly and severally together with the other Guarantors, promptly pay and
perform 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, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such
extension or renewal, (C) grants to the Administrative Agent a security interest
in its Collateral as referred in, and pursuant to the terms of, the Security
Agreement, and (D) pledges and grants a security interest to the Administrative
Agent in the Pledged Stock identified in Schedule A attached and the other
----------
Collateral as referred in, and pursuant to the terms of, the Pledge Agreement.
18
<PAGE>
2. The Applicant Guarantor acknowledges and confirms that it has received
a copy of the Credit Agreement and the Schedules and Exhibits thereto. The
information on the Schedule 1 to the Security Agreement and Schedule 1 to the
Pledge Agreement are amended to provide the information shown on the attached
Schedule A.
- - ----------
3. The Applicant Guarantor hereby waives acceptance by the Administrative
Agent and the Lenders of the guaranty by the Applicant Guarantor under Section 4
of the Credit Agreement upon the execution of this Joinder Agreement by the
Applicant Guarantor.
4. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
5. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Applicant Guarantor has caused this Joinder
Agreement to be duly executed by its authorized officers, and the Administrative
Agent, for the benefit of the Lenders, has caused the same to be accepted by its
authorized officer, as of the day and year first above written.
APPLICANT GUARANTOR
By: ______________________________
Name:
Title:
Address for Notices:
Attn:
Telephone:
Telecopy:
Acknowledged and accepted:
NATIONSBANK, N.A., as Administrative Agent
By: ______________________________
Name:
Title:
19
<PAGE>
Schedule A
----------
to
Joinder Agreement
Schedule 1 to Security Agreement
- - --------------------------------
Address for Chief Executive Locations of Record
Applicant Guarantor Notices Office Collateral Owner
------------------- ----------- --------------- ------------ ------
Schedule 1 to Pledge Agreement
- - ------------------------------
<TABLE>
<CAPTION>
Pledgor/Applicant Guarantor Issuer Class Cert. No. No. Shares Percent
--------------------------- ------ ----- --------- ---------- -------
<S> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
Schedule 8.1
------------
Indebtedness
<PAGE>
Schedule 8.5
------------
Existing Investments
<PAGE>
Schedule 11.1
-------------
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
[other Lenders]
<PAGE>
Schedule 11.3(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 "ASSIGNEE"
--------
("Assignee").
--------
Reference is made to that Amended and Restated Credit Agreement, dated as
of August __, 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 interests
assigned hereby free and clear of liens, encumbrances or other claims. The
Assignee represents that it is an assignee permitted under Section 11.3 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
11.3 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 11.9 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
Revolving Revolving Revolving
Committed Commitment Loans
Amount Percentage Outstanding
------ ---------- -----------
ASSIGNOR
- - --------
ASSIGNEE
- - --------
--------- ---------- -----------
$ $
<PAGE>
SCHEDULE I
----------
TO ASSIGNMENT AND ACCEPTANCE
NAVIGANT INTERNATIONAL, INC.
REVOLVING LOANS SUBJECT TO THIS ASSIGNMENT
Revolving Revolving Revolving
Committed Commitment Loans
Amount Percentage Outstanding
------ ---------- -----------
ASSIGNOR
- - --------
ASSIGNEE
- - --------
--------- ---------- -----------
$ $
<PAGE>
SCHEDULE I
----------
TO ASSIGNMENT AND ACCEPTANCE
NAVIGANT INTERNATIONAL, INC.
REVOLVING LOANS AFTER ASSIGNMENT
Revolving Revolving Revolving
Committed Commitment Loans
Amount Percentage Outstanding
------ ---------- -----------
ASSIGNOR
- - --------
ASSIGNEE
- - --------
--------- ------------ -----------
$ $
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NAVIGANTS
1999 3RD QUARTER AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-26-1999 DEC-26-1999
<PERIOD-START> DEC-28-1998 DEC-28-1998
<PERIOD-END> SEP-26-1999 SEP-26-1999
<CASH> 4,386 0
<SECURITIES> 0 0
<RECEIVABLES> 36,915 0
<ALLOWANCES> (424) 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 46,663 0
<PP&E> 34,433 0
<DEPRECIATION> 12,492 0
<TOTAL-ASSETS> 250,876 0
<CURRENT-LIABILITIES> 32,793 0
<BONDS> 0 0
0 0
0 0
<COMMON> 111,758 0
<OTHER-SE> 13,183 0
<TOTAL-LIABILITY-AND-EQUITY> 250,876 0
<SALES> 55,682 168,320
<TOTAL-REVENUES> 55,682 168,320
<CGS> 30,795 93,371
<TOTAL-COSTS> 47,768 143,892
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,386 3,516
<INCOME-PRETAX> 6,466 20,670
<INCOME-TAX> 2,773 8,881
<INCOME-CONTINUING> 3,693 11,789
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 3,693 11,789
<EPS-BASIC> 0.29 0.91
<EPS-DILUTED> 0.29 0.91
</TABLE>
