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EXHIBIT 10.5.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made and
entered into as of the 27th day of May, 1999, by and between EDUTREK
INTERNATIONAL, INC., a Georgia corporation ("Borrower"), the undersigned
Guarantors party hereto (the "Guarantors") and FIRST UNION NATIONAL BANK
("Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Lender are a party to that certain Credit
Agreement, dated as of March 25, 1999 (the "Credit Agreement") pursuant to which
Lender made available to Borrower a $10,000,000 revolving line of credit (the
"Original Line of Credit"); and
WHEREAS, Borrower has requested that Lender make available revolving
credit loans in excess of the amount permitted by the Original Line of Credit
and Lender, subject to the terms and conditions hereof, has agreed to such
request;
NOW, THEREFORE, for and in consideration of the foregoing premises, the
mutual promises, covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS. All capitalized terms used herein and not expressly
defined herein shall have the same respective meanings given to such terms in
the Credit Agreement.
2. AMENDMENTS. Subject to the conditions contained herein, the Credit
Agreement is hereby amended as follows:
2.1. DEFINITION OF AVAILABLE COMMITMENT. The
definition of "Available Commitment" contained in Section 1.1 of the
Credit Agreement is hereby amended by deleting such definition in its
entirety, and substituting in lieu thereof a new definition, to read as
follows:
"Available Commitment" means at any time, an amount
equal to the excess, if any, of (a) the aggregate amount of
the Commitment over (b) the sum of (i) the outstanding
principal amount of the Loans plus (ii) the outstanding
principal or face amount of the L/C Obligations.
2.2. DEFINITION OF COMMITMENT. The definition of
"Commitment" contained in Section 1.1 of the Credit Agreement is hereby
amended by deleting such definition in its entirety, and substituting
in lieu thereof a new definition, to read as follows:
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"Commitment" means collectively, the Facility A
Commitment and the Facility B Commitment.
2.3. DEFINITION OF CREDIT FACILITY. The definition of
"Credit Facility" contained in Section 1.1 of the Credit Agreement is
hereby amended by deleting such definition in its entirety, and
substituting in lieu thereof a new definition, to read as follows:
"Credit Facility" means, unless limited by a
reference to a specific facility, each of the revolving credit
facilities established pursuant to Article 2 hereof and the
letter of credit facility established pursuant to Article 3
hereof.
2.4. DEFINITION OF LEVERAGE RATIO. The definition of
"Leverage Ratio" contained in Section 1.1 of the Credit Agreement is
hereby amended by deleting such definition in its entirety, and
substituting in lieu thereof a new definition, to read as follows:
"Leverage Ratio" means, for Borrower and its
consolidated Subsidiaries at any date of determination
thereof, the ratio of (a) Funded Debt of Borrower and its
consolidated Subsidiaries as of such date of determination, to
(b) EBITDA of Borrower and its consolidated Subsidiaries for
the twelve (12) month period ending on or most recently ended
prior to such date, determined in each case on a consolidated
basis for Borrower and its Subsidiaries in accordance with
GAAP.
2.5. DEFINITION OF LOAN. The definition of "Loan"
contained in Section 1.1 of the Credit Agreement is hereby amended by
deleting such definition in its entirety, and substituting in lieu
thereof a new definition, to read as follows:
"Loan" means any revolving loan made to the Borrower
pursuant to Section 2.1, whether a Facility A Loan or a
Facility B Loan, and all such Loans collectively as the
context requires.
2.6. DEFINITION OF LOAN DOCUMENTS. The definition of
"Loan Documents" contained in Section 1.1 of the Credit Agreement is
hereby amended by deleting such definition in its entirety, and
substituting in lieu thereof a new definition, to read as follows:
"Loan Documents" means, collectively, this Agreement,
the Facility A Note, the Facility B Note, any Hedging
Agreement executed by Lender or any of its Affiliates, the
Applications, the Security Documents and each other document,
instrument and agreement executed and delivered by the
Borrower, its Subsidiaries or their counsel in connection with
this Agreement or otherwise referred to herein or contemplated
hereby, all as may be amended, restated or otherwise modified.
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2.7. DEFINITION OF NOTE. The definition of "Note"
contained in Section 1.1 of the Credit Agreement is hereby amended by
deleting such definition in its entirety, and substituting in lieu
thereof a new definition, to read as follows:
"Note" means, collectively, the Facility A Note and
the Facility B Note.
2.8. NEW DEFINITIONS. Section 1.1 of the Credit
Agreement is hereby further amended by adding thereto in appropriate
alphabetical order the following new definitions:
"Capital Expenditures" means, with respect to any
Person, for any period of calculation thereof, all
expenditures made and liabilities incurred for the acquisition
of assets during such period which are not, in accordance with
GAAP, treated as expense items for such Person in such period
or as a prepaid expense applicable to a future period or
periods.
"Facility A" means the Credit Facility established
pursuant to Section 2.1(a) hereof
"Facility A Commitment" means the obligation of the
Lender to make Loans to, or to issue Letters of Credit for the
account of, the Borrower pursuant to Section 2.1(a) hereof in
an aggregate principal at any time outstanding not to exceed
$10,000,000, as the same may be reduced or modified at any
time or from time to time pursuant to the terms hereof.
"Facility A Loan" means any revolving loan made to
the Borrower pursuant to Section 2.1(a), and all such Loans
collectively as the context requires.
"Facility A Note" means the Revolving Credit Note
made by the Borrower payable to the order of the Lender,
substantially in the form of Exhibit A-1 hereto, evidencing
the Facility A Credit Facility, and any amendments and
modifications thereto, any substitutes therefor, and any
replacements, restatements, renewals or extension thereof, in
whole or in part.
"Facility B" means the Credit Facility established
pursuant to Section 2.1(b) hereof
"Facility B Commitment" means the obligation of the
Lender to make Loans to the Borrower pursuant to Section
2.1(b) hereof in an aggregate principal at any time
outstanding not to exceed during the applicable periods set
forth below, the amount set forth below in respect of each
such period:
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PERIOD: FACILITY AMOUNT
First Amendment Effective $ 650,000
Date - 05/31/99
06/01/99 - 06/30/99 $2,800,000
07/01/99 - 08/31/99 $3,300,000
09/01/99 - 09/30/99 $2,800,000
10/01/99 - 10/31/99 $2,300,000
11/01/99 - 12/30/99 $1,300,000
Thereafter $ 0
as the same may be reduced or modified at any time or from
time to time pursuant to the terms hereof.
"Facility B Loan" means any revolving loan made to
the Borrower pursuant to Section 2.1(b), and all such Loans
collectively as the context requires.
"Facility B Note" means the Revolving Credit Note
made by the Borrower payable to the order of the Lender,
substantially in the form of Exhibit B-2 hereto, evidencing
the Facility B Credit Facility, and any amendments and
modifications thereto, any substitutes therefor, and any
replacements, restatements, renewals or extension thereof, in
whole or in part.
"Facility B Termination Date" means the earliest of
(a) December 31, 1999, (b) the date of termination by the
Borrower pursuant to Section 2.5(a), (c) the Termination Date;
and (d) the date of termination by the Lender pursuant to
Section 11.2(a).
"First Amendment" shall mean that certain First
Amendment to Credit Agreement, dated as of May 27, 1999,
between Borrower and Lender.
"First Amendment Effective Date" shall mean that date
on which all of the conditions precedent set forth in Section
3 of the First Amendment have been satisfied and the First
Amendment has become effective.
2.9. REVOLVING LOANS. Section 2.1 of the Credit
Agreement is hereby amended by deleting such section in its entirety,
and substituting in lieu thereof a new Section 2.1, to read as follows:
SECTION 2.1. Revolving Credit Loans.
(a) Facility A Loans. Subject to the terms
and conditions of this Agreement, Lender agrees to make
Facility A Loans to
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the Borrower from time to time from the Closing Date through
the Termination Date as requested by the Borrower in
accordance with the terms of Section 2.2 provided, that (i)
the aggregate principal amount of all outstanding Facility A
Loans (after giving effect to any amount requested), when
aggregated with the outstanding principal amount of the L/C
Obligations, shall not exceed the Facility A Commitment and
(ii) the aggregate principal amount of all outstanding Loans
(after giving effect to any amount requested), when aggregated
with the outstanding principal amount of the L/C Obligations,
shall not exceed the aggregate amount of the Commitments.
Subject to the terms and conditions hereof, the Borrower may
borrow, repay and reborrow Facility A Loans hereunder until
the Termination Date.
(b) Facility B Loans. Subject to the terms
and conditions of this Agreement, Lender agrees to make
Facility B Loans to the Borrower from time to time from the
First Amendment Effective Date through the Facility B
Termination Date as requested by the Borrower in accordance
with the terms of Section 2.2 provided, that (i) the aggregate
principal amount of all outstanding Facility B Loans (after
giving effect to any amount requested) shall not exceed the
Facility B Commitment as then in effect and (ii) the aggregate
principal amount of all outstanding Loans (after giving effect
to any amount requested), when aggregated with the outstanding
principal amount of the L/C Obligations, shall not exceed the
aggregate amount of the Commitments. Subject to the terms and
conditions hereof, the Borrower may borrow, repay and reborrow
Facility B Loans hereunder until the Facility B Termination
Date. The Borrower may not borrow any Facility B Loans unless
and until Facility A has been fully drawn.
2.10. REPAYMENT OF LOANS. The Credit Agreement is
hereby further amended by deleting Section 2.3 thereof in its entirety
and by substituting therefor a new Section 2.3 to read as follows:
SECTION 2.3 Repayment of Loans.
(a) Repayment of Facility A Loans. The Borrower
shall repay the outstanding principal amount of all Facility A
Loans in full, together with all accrued but unpaid interest
thereon, on the Termination Date.
(b) Repayment of Facility B Loans. The Borrower
shall repay the Facility B Loans (i) on the date of any
reduction in the Facility B Commitment, to the extent the
principal amount of the outstanding Facility B Loans exceeds
the Facility B Commitment, giving effect to such reduction and
(ii) in full, on the Facility B Termination Date.
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(c) Optional Repayments. The Borrower may at any
time and from time to time repay the Loans, in whole or in
part, upon delivery of notice, in the form attached hereto as
Exhibit D (a "Notice of Prepayment") specifying the date and
amount of repayment; provided, however, that except as
provided in Section 3.1 hereof, no Facility A Loans may be
repaid until the outstanding Facility B Loans have been repaid
in full. If any such notice is given, the amount specified in
such notice shall be due and payable on the date set forth in
such notice. Partial repayments shall be in an aggregate
amount of at least $100,000 or a whole multiple of $10,000 in
excess thereof.
2.11. NOTES. The Credit Agreement is hereby amended
by deleting Section 2.4 thereof in its entirety, and substituting in
lieu thereof the following new Section 2.4 to read as follows:
SECTION 2.4. Notes.
(a) The Facility A Loans and the obligation
of the Borrower to repay the Facility A Loans shall be
evidenced by a Facility A Note executed by the Borrower
payable to the order of the Lender representing the Borrower's
obligation to pay the Facility A Commitment or, if less, the
aggregate unpaid principal amount of all Facility A Loans made
and to be made to the Borrower hereunder, plus interest and
all other fees, charges and other amounts due thereon. The
Facility A Note shall be dated the date of issuance thereof
and shall bear interest on the unpaid principal amount thereof
at the applicable interest rate per annum specified in Section
4.1.
(b) The Facility B Loans and the obligation
of the Borrower to repay the Facility B Loans shall be
evidenced by a Facility B Note executed by the Borrower
payable to the order of the Lender representing the Borrower's
obligation to pay the Facility B Commitment or, if less, the
aggregate unpaid principal amount of all Facility B Loans made
and to be made to the Borrower hereunder, plus interest and
all other fees, charges and other amounts due thereon. The
Facility B Note shall be dated the First Amendment Effective
Date and shall bear interest on the unpaid principal amount
thereof at the applicable interest rate per annum specified in
Section 4.1.
2.12. COMMITMENT REDUCTION. The Credit Agreement is
hereby amended by deleting Section 2.5 thereof in its entirety, and
substituting in lieu thereof the following new Section 2.5 to read as
follows:
SECTION 2.13 Permanent Reduction of the Commitment.
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(a) The Borrower shall have the right at any time
and from time to time, upon at least five (5) Business Days
prior written notice to the Lender, to permanently reduce, in
whole at any time or in part from time to time, without
premium or penalty, either the Facility A Commitment or the
Facility B Commitment in an aggregate principal amount not
less than $100,000 or any whole multiple of $10,000 in excess
thereof.
(b) Each permanent reduction permitted or required
pursuant to this Section 2.5 shall be accompanied by a payment
of principal sufficient to reduce the sum of the aggregate
outstanding Facility A Loans plus the outstanding L/C
Obligations after such reduction to the Facility A Commitment
as so reduced and/or to reduce the sum of the aggregate
outstanding Facility B Loans after such reduction to the
Facility B Commitment as so reduced. Any reduction of the
Commitment to zero shall be accompanied by payment of all
outstanding Obligations (and furnishing of cash collateral
satisfactory to the Lender for all L/C Obligations).
2.14. LETTERS OF CREDIT. The Credit Agreement is
hereby amended by deleting Section 3.1 thereof in its entirety, and
substituting in lieu thereof the following new Section 3.1 to read as
follows:
SECTION 3.1 L/C Commitment. Subject to the terms and
conditions hereof, the Lender agrees to issue standby letters
of credit ("Letters of Credit") for the account of the
Borrower on any Business Day from the Closing Date through but
not including the Termination Date in such form as may be
approved from time to time by the Lender; provided, that the
Lender shall have no obligation to issue any Letter of Credit
if, after giving effect to such issuance, (a) the L/C
Obligations would exceed the L/C Commitment, (b) the Available
Commitment would be less than zero or (c) the sum of the
aggregate amount of the L/C Obligations and the aggregate
principal amount of the Facility A Loans would exceed the
Facility A Commitment. Each Letter of Credit shall (i) be
denominated in Dollars in a minimum amount of $10,000, (ii) be
a standby letter of credit issued to support obligations of
the Borrower or any of its Subsidiaries, contingent or
otherwise, incurred in the ordinary course of business, (iii)
expire on a date satisfactory to the Lender, which date shall
be no later than the Termination Date and (iv) be subject to
the Uniform Customs and, to the extent not inconsistent
therewith, the laws of the State of Georgia. The Lender shall
not at any time be obligated to issue any Letter of Credit
hereunder if such issuance would conflict with, or cause the
Lender to exceed any limits imposed by, any Applicable Law.
References herein to "issue" and derivations thereof with
respect to Letters of Credit shall also include extensions or
modifications of any existing Letters of Credit, unless the
context otherwise requires. All Letters of Credit will be
issued under
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Facility A. In the event Borrower requests a Letter of Credit
at a time when Facility A is fully utilized but Facility B is
unutilized in an amount equal to or greater than the amount of
the Letter of Credit requested, then simultaneously with its
request for such Letter of Credit Borrower shall be deemed to
have requested a Facility B Loan in a principal amount equal
to the Letter of Credit requested. Such Facility B Loan shall
be made simultaneously with the issuance of such Letter of
Credit and the proceeds of such Facility B Loans shall be used
to prepay the outstanding Facility A Loans to the extent
necessary to allow such Letter of Credit to be issued.
2.15. LETTER OF CREDIT REIMBURSEMENT. The Credit
Agreement is hereby amended by deleting the last sentence of Section
3.4 thereof in its entirety, and substituting in lieu thereof the
following new sentence to read as follows:
If the Borrower fails to timely reimburse the Lender on the
date the Borrower receives the notice referred to in this
Section 3.4, the Borrower shall be deemed to have timely given
a Notice of Borrowing hereunder to the Lender requesting a
Facility A Loan on such date in an amount equal to the amount
of such drawing and, subject to the satisfaction or waiver of
the conditions precedent specified in Article 5, the Lender
shall make a Facility A Loan in such amount, the proceeds of
which shall be applied to reimburse the Lender for the amount
of the related drawing and costs and expenses.
2.16. INTEREST. Section 4.1 of the Credit Agreement
is hereby amended by deleting subsections (a), (b) and (c) thereof in
their entirely and substituting in lieu thereof new subsections (a),
(b) and (c) to read as follows:
(a) Interest Rate. Subject to the provisions of
this Section 4.1, (i) the aggregate principal amount of the
Facility A Loans or any portion thereof shall bear interest at
the LIBOR Market Index Rate plus 2.75%, as that rate may
change from day to day in accordance with changes in the LIBOR
Market Index Rate and (ii) the aggregate principal amount of
the Facility B Loans shall bear interest at the Base Rate plus
2.00%, as that rate may change from day to day in accordance
with changes in the Prime Rate or the Federal Funds Rate.
(b) Circumstances Affecting LIBOR Market Index Rate
Availability. If the Lender shall determine that, by reason of
circumstances affecting the foreign exchange and interbank
markets generally, deposits in eurodollars, in the applicable
amounts are not being quoted via Telerate Page 3750 or offered
to the Lender, then the Lender shall forthwith give notice
thereof to the Borrower. Thereafter, until the Lender notifies
the Borrower that such circumstances no longer exist, the
aggregate principal
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amounts of the Facility A Loans or any portion thereof, shall
bear interest at the Base Rate.
(c) Laws Affecting LIBOR Market Index Rate
Availability. If, after the date hereof, the introduction of,
or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the
Lender with any request or directive (whether or not having
the force of law) of any such Authority, central bank or
comparable agency, shall make it unlawful or impossible for
the Lender to quote or maintain Loans based on the LIBOR
Market Index Rate, the Lender shall promptly give notice
thereof to the Borrower. Thereafter, until the Lender notifies
the Borrower that such circumstances no longer exist, the
aggregate principal amounts of the Facility A Loans or any
portion thereof, shall bear interest at the Base Rate.
2.17. CERTIFICATION. Section 6.1 of the Credit
Agreement is hereby amended by adding at the end thereof a new
subsection (aa) to read as follows:
(aa) CERTIFICATION. The schools operated by Borrower
and its Subsidiaries (i) have been accredited by the Southern
Association of Colleges and Schools or other accrediting
agency approved by the United States Department of Education
("DOE"); (ii) have been provisionally certified by the DOE for
participation in the financial assistance programs under Title
IV of the Higher Education Act of 1965, as amended (the "Title
IV Programs") and (iii) are eligible in all other respects for
participation in the Title IV Programs. Borrower knows of no
reason why it will not be given full certification by the DOE
for participation in the Title IV Programs prior to the
expiration of such provisional certification. Borrower has not
received any notice of any termination of such accreditation,
certification or eligibility and knows of no event or
condition which would provide a basis for the termination of
such accreditation, certification or eligibility.
2.18. INTERIM FINANCIAL STATEMENTS. Section 7.1 of
the Credit Agreement is hereby amended by deleting subsection (a)
thereof in its entirety and by substituting therefor a new subsection
(a) to read as follows:
(a) Monthly Financial Statements. As soon as
practicable and in any event within twenty-five (25) days
after the end of each month, unaudited consolidated and
consolidating balance sheets of the Borrower and its
Subsidiaries as of the close of such month and unaudited
consolidated and consolidating statements of operations and
cash flows for the month then ended and that portion of the
Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in
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comparative form the corresponding figures for the preceding
Fiscal Year and prepared by the Borrower in accordance with
GAAP (except as to the absence of footnotes) and, if
applicable, containing disclosure of the effect on the
financial position or results of operations of any change in
the application of accounting principles and practices during
the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the
financial condition of the Borrower and its Subsidiaries as of
their respective dates and the results of operations of the
Borrower and its Subsidiaries for the respective periods then
ended, subject to normal year end adjustments.
2.19. MONTHLY CASH FLOW PROJECTION. Section 7.1 of
the Credit Agreement is hereby further amended by added at the end
thereof a new subsection (d) to read as follows:
(d) Cash Flow Projection. So long as the Facility B
Commitment is in effect or any Facility B Loans remain
outstanding, not later than the twenty-fifth (25th) day of
each month, an updated cash flow projection for the month
immediately following such month.
2.20. LEVERAGE RATIO. Section 9.3 of the Credit
Agreement is hereby amended by deleting such Section in its entirety,
and substituting in lieu thereof a new Section 9.3 to read as follows:
SECTION 9.3 Leverage Ratio. Permit Borrower's
Leverage Ratio to be more than (a) 6.15 to 1.00 for the fiscal
quarter of Borrower ending December 31, 1999 or (b) 2.50 to
1.00 as of the last day of any fiscal quarter thereafter.
2.21. RATIO OF ACTUAL TO BUDGETED REVENUES. Section
9.5 of the Credit Agreement is hereby amended by deleting such Section
in its entirety, and substituting in lieu thereof a new Section 9.5, to
read as follows:
SECTION 9.5. Ratio of Actual to Budgeted Revenues.
For the period from the First Amendment Closing Date to and
including December 31, 1999, permit Borrower's Revenues for
each month to be less than ninety-five percent (95%) of the
revenues budgeted by Borrower for such fiscal quarter in the
budget set forth on Schedule 9.5 hereto.
2.22. ADDITIONAL FINANCIAL COVENANTS. The Credit
Agreement is hereby further amended by adding at the end of Article 9
thereof new Sections 9.7 and 9.8 to read as follows:
SECTION 9.7. Capital Expenditures. Permit the Capital
Expenditures made or committed to by Borrower and its
Subsidiaries during the period from
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May 1, 1999 to and including December 31, 1999 to exceed
$5,750,000, determined on a consolidated basis for Borrower
and its Subsidiaries in accordance with GAAP.
SECTION 9.8. Accounts Payable. Permit at any time
more than ten percent (10%) of the aggregate amount of the
trade accounts payable of Borrower and its Subsidiaries to
remain unpaid more than sixty (60) days from the date of the
invoice therefor, determined on a consolidated basis for
Borrower and its Subsidiaries in accordance with GAAP.
2.23. LIMITATIONS ON DIVIDENDS AND DISTRIBUTIONS.
Section 10.6 of the Credit Agreement is hereby amended by deleting ";
and" at the end of subsection (b) thereof, by substituting a period
therefor and by deleting subsection (c) thereof in its entirety.
2.24. FORM OF NOTES. The Credit Agreement is hereby
further amended by deleting Exhibit A attached thereto, and
substituting in lieu thereof new Exhibits A-1 and A-2 in the forms of
Exhibit A-1 and A-2 attached hereto, respectively.
2.25. FORM OF OFFICER'S CERTIFICATE. The Credit
Agreement is hereby further amended by deleting Exhibit E attached
thereto, and substituting in lieu thereof a new Exhibit E in the form
of Exhibit E attached hereto.
2.26. BUDGET. The Credit Agreement is hereby further
amended by deleting Schedule 9.5 attached thereto, and substituting in
lieu thereof a new Schedule 9.5 in the form of Schedule 9.5 attached
hereto.
3. CONDITIONS PRECEDENT. The amendments and consents contained herein,
shall not become effective unless and until the Lender shall have received each
of the following instruments, documents and agreements:
(a) this Amendment, duly executed and delivered by the
Borrower and each Guarantor;
(b) the Facility A Note and the Facility B Notes, duly
executed and delivered by the Borrower;
(c) a certificate from the chief executive officer or chief
financial officer of the Borrower, in form and substance satisfactory
to the Lender, to the effect that all representations and warranties of
the Borrower contained in the Credit Agreement, this Amendment and the
other Loan Documents are true, correct and complete; that giving effect
to this Amendment the Borrower is not in violation of any of the
covenants contained in the Credit Agreement and the other Loan
Documents; and that, after giving effect to this Amendment, no Default
or Event of Default has occurred and is continuing.
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(d) a certificate of the secretary or assistant secretary of
each Credit Party certifying that (i) the certificate or articles of
incorporation and by-laws of such Credit Party, or the comparable
organizational documents of such Credit Party, have not been amended,
modified or supplemented since the Closing Date and (ii) attached
thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of the Borrower authorizing the execution, delivery
and performance of this Amendment and the other Amendment Documents to
which it is a party; and as to the incumbency and genuineness of the
signature of each officer of such Credit Party executing the Amendment
Documents to which it is a party.
(e) favorable opinions of counsel to the Borrower and the
Guarantors addressed to the Lender with respect to the Borrower, the
Guarantors, this Amendment, the Loan Documents and such other matters
as the Lender shall reasonably request.
(f) such other instruments, documents and agreements as the
Lender may reasonably request.
4. ARRANGEMENT FEES. In consideration of Lender entering into this
Amendment, Borrower hereby agrees to pay the following arrangement fees to
Lender:
4.1. FIXED ARRANGEMENT FEE. Borrower agrees to pay a fixed
arrangement fee equal to $250,000 payable on the earlier to occur of
(a) the termination of the Credit Agreement and the repayment of the
Obligations in full and (b) January 3, 2000. Borrower and each
Guarantor hereby acknowledges and agrees that such fee has been fully
earned by Lender, is non-refundable and is irrevocably payable on the
due date thereof without offset, deduction, counterclaim.
4.2. CONTINGENT ARRANGEMENT FEE. Borrower also agrees to pay a
contingent arrangement fee equal to the lesser of (a) $250,000 and (b)
0.50% of the increase in the Market Capitalization (as such term is
hereinafter defined) of Borrower between the date hereof and the
earlier of (i) December 31, 1999 and (ii) the date the Credit Agreement
is terminated and the Obligations are repaid in full, payable on the
earlier of January 3, 2000 and the date of such termination and
repayment. As used herein, "Market Capitalization" as of any date shall
be an amount equal to the number of issued and outstanding shares of
capital stock of Borrower multiplied by the average closing price of
Borrower's Class A Common Stock for the 20 consecutive date period
ending on the day immediately preceding such date.
5. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The Borrower and each of
the Guarantors (individually a `Credit Party and collectively, the "Credit
Parties") hereby jointly and severally represent and warrant to the Lender that
(a) all of Credit Parties' representations and warranties contained in the
Credit Agreement, the other Loan Documents and this Amendment are true and
correct on and as of the date of this Amendment (or, if any such representation
or warranty is expressly stated to have been made as of a specific date, as of
such specific date); (b) no Default or Event of Default has occurred and is
continuing as of such date under any Loan Document; (c) each Credit Party has
the power and authority to enter into this Amendment and the instruments,
documents
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and agreements executed and delivered pursuant hereto or in connection
herewith (the "Amendment Documents") and to perform all of its obligations
hereunder and thereunder; (d) the execution, delivery and performance of this
Amendment and the Amendment Documents have been duly authorized by all necessary
corporate or partnership action on the part of each Credit Party; (e) this
Amendment and the Amendment Documents are the legal, valid and binding
obligations of the Credit Parties, enforceable in accordance with their
respective terms, except as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar state or federal debtor relief
laws from time to time in effect which affect the enforcement of creditors'
rights in general and the availability of equitable remedies; and (f) the
execution and delivery of this Amendment and the Amendment Documents and
performance thereof by the Credit Parties do not and will not violate the
Certificate or Articles of Incorporation, By-laws or other organizational
documents of any Credit Party and do not and will not violate or conflict with
any law, order, writ, injunction, or decree of any court, administrative agency
or other governmental authority applicable to any Credit Party or its
properties.
6. REAFFIRMATION OF LOAN DOCUMENTS.
(a) Each of the Credit Parties other than American European
acknowledges and agrees that the portion of the Obligations of Borrower
arising under Facility B or under this Amendment, including, but not
limited to, the Facility B Loans:
(i) are included in the "Guaranteed Obligations," as
such term is defined in the Guaranty, and are guaranteed by
the Guaranty;
(ii) are included in the "Secured Obligations," as
such term is defined in the Security Agreement, and are
secured by the Security Agreement;
(iii) are included in the "Secured Obligations," as
such term is defined in the Pledge Agreement, and are secured
by the Pledge Agreement;
(b) Lender, American European and the other Credit Parties
agree that the obligations of American European under the Guaranty,
Security Agreement and Pledge Agreement are limited to that portion of
the Obligations arising under Facility A or otherwise arising out of
the Credit Agreement and the Loan Documents but not arising out of the
Facility B.
(c) Each of the Credit Parties hereby reaffirms its
obligations under the Loan Documents, and acknowledges and agrees that
each of the Loan Documents to which such Credit Party is a party, and
the obligations of such Credit Party thereunder, remain in full force
and effect, without release, diminution or impairment, notwithstanding
the execution and delivery of this Amendment or any other agreement,
document or instrument in connection therewith and notwithstanding the
limitation of American European's liability pursuant to the forgoing
Section 6(b).
7. EXPENSES. The Credit Parties, jointly and severally, agree to pay,
immediately upon demand by the Lender, all costs, expenses, reasonable
attorneys' fees and other charges and expenses
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actually incurred by the Lender in connection with the negotiation, preparation,
execution and delivery of this Agreement and any other instrument, document,
agreement or amendment executed in connection with this Agreement.
8. DEFAULTS HEREUNDER. The breach of any representation, warranty or
covenant contained herein or in any document executed in connection herewith, or
the failure to serve or comply with any term or agreement contained herein shall
constitute an Event of Default under the Credit Agreement and the Lender shall
be entitled to exercise all rights and remedies it may have under the Credit
Agreement, any other documents executed in connection therewith and applicable
law.
9. REFERENCES. All references in the Credit Agreement and the Loan
Documents to the Credit Agreement shall hereafter be deemed to be references to
the Credit Agreement as amended hereby and as the same may hereafter be amended
from time to time.
10. LIMITATION OF AGREEMENT. Except as especially set forth herein,
this Amendment shall not be deemed to waive, amend or modify any term or
condition of the Credit Agreement, each of which is hereby ratified and
reaffirmed and which shall remain in full force and effect, nor to serve as a
consent to any matter prohibited by the terms and conditions thereof.
11. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, and any party hereto may execute any counterpart, each of which,
when executed and delivered, will be deemed to be an original and all of which,
taken together will be deemed to be but one and the same agreement.
12. FURTHER ASSURANCES. Borrower agrees to take such further action as
the Lender shall reasonably request in connection herewith to evidence the
amendments herein contained to the Credit Agreement.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the successors and permitted assigns of the parties
hereto.
14. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Georgia, without regard to
principles of conflicts of law.
15. NO CLAIM. Each Credit Party hereby represents, warrants,
acknowledges and agrees to and with the Lender that as of the date hereof (a)
such Credit Party neither holds nor claims any right of action, claim, cause of
action or damages, either at law or in equity, against the Lender, its officers,
directors, agents, employees or Affiliates, or any of them, which arises from,
may arise from, allegedly arise from, are based upon or are related in any
manner whatsoever to the Credit Agreement and the Loan Documents or which are
based upon acts or omissions of the Lender, any such officer, director, agent,
employee or Affiliate of Lender, or any of them, in connection therewith and (b)
the Obligations are absolutely owed to the Lender, without offset, deduction or
counterclaim.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment
under seal as of the date first written above.
CREDIT PARTIES:
BORROWER:
[CORPORATE SEAL] EDUTREK INTERNATIONAL, INC.
By:
Name:
Title:
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GUARANTORS:
[CORPORATE SEAL] EDUTREK SYSTEMS, INC.
By:
----------------------------------------
Name:
Title:
[CORPORATE SEAL] AMERICAN INTERCONTINENTIAL
UNIVERSITY, INC.
By:
Name:
Title:
[CORPORATE SEAL] AMERICAN COLLEGE IN LONDON, LTD, U.S.
By:
Name:
Title:
[CORPORATE SEAL] AMERICAN EUROPEAN MIDDLE EAST
CORPORATION, LLC
By: American College in London, Ltd., U.S.
By:
Name:
Title:
(signatures continued on next page)
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(signatures continued from previous page)
LENDER:
FIRST UNION NATIONAL BANK
By:
-------------------------------------
Name:
Title:
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