(Mark One)
|
|
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
59-3551629
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
o
|
Accelerated filer
x
|
Non-accelerated filer
o
(Do not check if a
smaller reporting company)
|
Smaller reporting company
o
|
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
As of
June 30, 2012 |
|
As of
December 31, 2011 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
180,425
|
|
|
$
|
133,921
|
|
Restricted cash
|
—
|
|
|
25
|
|
||
Investments
|
159,792
|
|
|
153,779
|
|
||
Accounts receivable, net
|
99,617
|
|
|
62,156
|
|
||
Deferred income taxes
|
5,442
|
|
|
5,429
|
|
||
Prepaid expenses and other current assets
|
22,966
|
|
|
17,199
|
|
||
Total current assets
|
468,242
|
|
|
372,509
|
|
||
Property and equipment, net
|
95,395
|
|
|
89,667
|
|
||
Investments
|
130,398
|
|
|
119,507
|
|
||
Student loans receivable, net
|
14,998
|
|
|
9,255
|
|
||
Goodwill and intangibles, net
|
9,364
|
|
|
7,037
|
|
||
Deferred income taxes
|
10,810
|
|
|
11,200
|
|
||
Other long-term assets
|
2,390
|
|
|
4,461
|
|
||
Total assets
|
$
|
731,597
|
|
|
$
|
613,636
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
5,929
|
|
|
$
|
8,961
|
|
Accrued liabilities
|
57,858
|
|
|
40,205
|
|
||
Deferred revenue and student deposits
|
187,433
|
|
|
185,446
|
|
||
Total current liabilities
|
251,220
|
|
|
234,612
|
|
||
Rent liability
|
22,238
|
|
|
16,595
|
|
||
Other long-term liabilities
|
9,083
|
|
|
8,781
|
|
||
Total liabilities
|
282,541
|
|
|
259,988
|
|
||
Commitments and contingencies (see Note 10)
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.01 par value:
|
|
|
|
||||
20,000 shares authorized; zero shares issued and outstanding at June 30, 2012, and December 31, 2011
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value:
|
|
|
|
||||
300,000 shares authorized; 59,991 issued and 52,741 outstanding at June 30, 2012; 58,981 issued and 51,731 outstanding at December 31, 2011
|
600
|
|
|
590
|
|
||
Additional paid-in capital
|
151,708
|
|
|
137,447
|
|
||
Retained earnings
|
431,676
|
|
|
351,177
|
|
||
Accumulated other comprehensive gain (loss)
|
43
|
|
|
(595
|
)
|
||
Treasury stock, 7,250 shares at cost at both June 30, 2012, and December 31, 2011
|
(134,971
|
)
|
|
(134,971
|
)
|
||
Total stockholders' equity
|
449,056
|
|
|
353,648
|
|
||
Total liabilities and stockholders' equity
|
$
|
731,597
|
|
|
$
|
613,636
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Revenue
|
$
|
256,302
|
|
|
$
|
239,880
|
|
|
$
|
506,739
|
|
|
$
|
469,313
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Instructional costs and services
|
65,395
|
|
|
62,012
|
|
|
133,870
|
|
|
117,821
|
|
||||
Marketing and promotional
|
78,608
|
|
|
62,188
|
|
|
158,671
|
|
|
121,154
|
|
||||
General and administrative
|
36,763
|
|
|
33,131
|
|
|
86,309
|
|
|
61,677
|
|
||||
Total costs and expenses
|
180,766
|
|
|
157,331
|
|
|
378,850
|
|
|
300,652
|
|
||||
Operating income
|
75,536
|
|
|
82,549
|
|
|
127,889
|
|
|
168,661
|
|
||||
Other income, net
|
854
|
|
|
657
|
|
|
1,537
|
|
|
1,330
|
|
||||
Income before income taxes
|
76,390
|
|
|
83,206
|
|
|
129,426
|
|
|
169,991
|
|
||||
Income tax expense
|
28,932
|
|
|
31,057
|
|
|
48,927
|
|
|
63,923
|
|
||||
Net income
|
$
|
47,458
|
|
|
$
|
52,149
|
|
|
$
|
80,499
|
|
|
$
|
106,068
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.90
|
|
|
$
|
0.99
|
|
|
$
|
1.54
|
|
|
$
|
2.00
|
|
Diluted
|
0.84
|
|
|
0.90
|
|
|
1.43
|
|
|
1.82
|
|
||||
Weighted average number of common shares outstanding used in computing earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
52,531
|
|
|
52,911
|
|
|
52,269
|
|
|
52,943
|
|
||||
Diluted
|
56,233
|
|
|
57,939
|
|
|
56,203
|
|
|
58,253
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net income
|
$
|
47,458
|
|
|
$
|
52,149
|
|
|
$
|
80,499
|
|
|
$
|
106,068
|
|
Other comprehensive gain, net of tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized gains on investments
|
4
|
|
|
—
|
|
|
638
|
|
|
—
|
|
||||
Comprehensive income
|
$
|
47,462
|
|
|
$
|
52,149
|
|
|
$
|
81,137
|
|
|
$
|
106,068
|
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other
Comprehensive
Gain (Loss)
|
|
Treasury
Stock
|
|
|
||||||||||||||||
|
Shares
|
|
Par Value
|
|
Total
|
||||||||||||||||||||||
Balance at December 31, 2011
|
58,981
|
|
|
$
|
590
|
|
|
$
|
137,447
|
|
|
$
|
351,177
|
|
|
$
|
(595
|
)
|
|
$
|
(134,971
|
)
|
|
$
|
353,648
|
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
6,541
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,541
|
|
|||||||
Exercise of stock options
|
960
|
|
|
10
|
|
|
1,386
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,396
|
|
|||||||
Excess tax benefit of option exercises
|
—
|
|
|
—
|
|
|
5,625
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,625
|
|
|||||||
Stock issued under employee stock purchase plan
|
34
|
|
|
—
|
|
|
707
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
707
|
|
|||||||
Stock issued under restricted stock plan
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Exercise of warrants
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
80,499
|
|
|
—
|
|
|
—
|
|
|
80,499
|
|
|||||||
Unrealized gains on investments, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
638
|
|
|
—
|
|
—
|
|
638
|
|
||||||
Balance at June 30, 2012
|
59,991
|
|
|
$
|
600
|
|
|
$
|
151,708
|
|
|
$
|
431,676
|
|
|
$
|
43
|
|
|
$
|
(134,971
|
)
|
|
$
|
449,056
|
|
|
Six Months Ended June 30,
|
||||||
|
2012
|
|
2011
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net income
|
$
|
80,499
|
|
|
$
|
106,068
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Provision for bad debts
|
24,923
|
|
|
23,614
|
|
||
Depreciation and amortization
|
8,384
|
|
|
5,572
|
|
||
Amortization of premium/discount
|
3,594
|
|
|
1,380
|
|
||
Deferred income taxes
|
(2
|
)
|
|
—
|
|
||
Stock-based compensation
|
6,541
|
|
|
4,796
|
|
||
Excess tax benefit of option exercises
|
(5,625
|
)
|
|
(10,365
|
)
|
||
Loss on disposal of fixed assets
|
—
|
|
|
11
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(62,501
|
)
|
|
(43,539
|
)
|
||
Prepaid expenses and other current assets
|
(5,084
|
)
|
|
360
|
|
||
Student loans receivable
|
(5,626
|
)
|
|
(1,332
|
)
|
||
Other long-term assets
|
2,071
|
|
|
(122
|
)
|
||
Accounts payable and accrued liabilities
|
21,700
|
|
|
19,276
|
|
||
Deferred revenue and student deposits
|
1,987
|
|
|
7,154
|
|
||
Other liabilities
|
5,945
|
|
|
3,292
|
|
||
Net cash provided by operating activities
|
76,806
|
|
|
116,165
|
|
||
Cash flows from investing activities
|
|
|
|
||||
Capital expenditures
|
(14,957
|
)
|
|
(12,477
|
)
|
||
Purchases of investments
|
(108,354
|
)
|
|
(114,115
|
)
|
||
Restricted cash
|
25
|
|
|
—
|
|
||
Capitalized curriculum development costs
|
(2,935
|
)
|
|
(1,333
|
)
|
||
Sales and maturities of investments
|
88,189
|
|
|
75,500
|
|
||
Net cash used in investing activities
|
(38,032
|
)
|
|
(52,425
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from the exercise of stock options
|
1,396
|
|
|
3,577
|
|
||
Excess tax benefit of option exercises
|
5,625
|
|
|
10,365
|
|
||
Proceeds from the issuance of stock under employee stock purchase plan
|
707
|
|
|
642
|
|
||
Proceeds from the exercise of warrants
|
2
|
|
|
79
|
|
||
Repurchase of common stock
|
—
|
|
|
(56,426
|
)
|
||
Net cash provided by (used in) financing activities
|
7,730
|
|
|
(41,763
|
)
|
||
Net increase in cash and cash equivalents
|
46,504
|
|
|
21,977
|
|
||
Cash and cash equivalents at beginning of period
|
133,921
|
|
|
188,518
|
|
||
Cash and cash equivalents at end of period
|
$
|
180,425
|
|
|
$
|
210,495
|
|
Supplemental disclosure of non-cash transactions:
|
|
|
|
||||
Purchase of equipment included in accounts payable and accrued liabilities
|
$
|
1,036
|
|
|
$
|
3,524
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income
|
$
|
47,458
|
|
|
$
|
52,149
|
|
|
$
|
80,499
|
|
|
$
|
106,068
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average number of common shares outstanding
|
52,531
|
|
|
52,911
|
|
|
52,269
|
|
|
52,943
|
|
||||
Effect of dilutive options and restricted stock units
|
3,447
|
|
|
4,756
|
|
|
3,674
|
|
|
5,031
|
|
||||
Effect of dilutive warrants
|
255
|
|
|
272
|
|
|
260
|
|
|
279
|
|
||||
Diluted weighted average number of common shares outstanding
|
56,233
|
|
|
57,939
|
|
|
56,203
|
|
|
58,253
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
$
|
0.90
|
|
|
$
|
0.99
|
|
|
$
|
1.54
|
|
|
$
|
2.00
|
|
Diluted earnings per share
|
$
|
0.84
|
|
|
$
|
0.90
|
|
|
$
|
1.43
|
|
|
$
|
1.82
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
(in thousands)
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
Options
|
1,795
|
|
|
1,630
|
|
|
1,093
|
|
|
1,085
|
|
Restricted stock units
|
—
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
As of
June 30, 2012 |
|
As of
December 31, 2011 |
||||
Accounts receivable
|
$
|
131,888
|
|
|
$
|
97,783
|
|
Less allowance for doubtful accounts
|
(32,271
|
)
|
|
(35,627
|
)
|
||
Accounts receivable, net
|
$
|
99,617
|
|
|
$
|
62,156
|
|
|
|
|
|
||||
Student loans receivable
|
$
|
17,219
|
|
|
$
|
11,593
|
|
Less allowance for doubtful accounts
|
(2,221
|
)
|
|
(2,338
|
)
|
||
Student loans receivable, net
|
$
|
14,998
|
|
|
$
|
9,255
|
|
|
Beginning
Balance
|
|
Charged to
Expense
|
|
Deductions(1)
|
|
Ending
Balance
|
||||||||
Allowance for doubtful accounts receivable:
|
|
|
|
|
|
|
|
||||||||
For the six months ended June 30, 2012
|
$
|
(35,627
|
)
|
|
$
|
25,040
|
|
|
$
|
(28,396
|
)
|
|
$
|
(32,271
|
)
|
For the six months ended June 30, 2011
|
(28,090
|
)
|
|
23,269
|
|
|
(24,727
|
)
|
|
(26,632
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful student loans receivable:
|
|
|
|
|
|
|
|
||||||||
For the six months ended June 30, 2012
|
$
|
(2,338
|
)
|
|
$
|
(117
|
)
|
|
$
|
—
|
|
|
$
|
(2,221
|
)
|
For the six months ended June 30, 2011
|
(904
|
)
|
|
345
|
|
|
—
|
|
|
(1,249
|
)
|
(1)
|
Deductions represent accounts written off, net of recoveries.
|
|
As of
June 30, 2012 |
|
As of
December 31, 2011 |
||||
Prepaid expenses
|
$
|
9,304
|
|
|
$
|
5,588
|
|
Prepaid licenses
|
4,140
|
|
|
4,583
|
|
||
Prepaid income taxes
|
—
|
|
|
2,874
|
|
||
Prepaid insurance
|
4,778
|
|
|
1,206
|
|
||
Interest receivable
|
2,342
|
|
|
1,876
|
|
||
Other current assets
|
2,402
|
|
|
1,072
|
|
||
Total prepaid expenses and other current assets
|
$
|
22,966
|
|
|
$
|
17,199
|
|
|
As of
June 30, 2012 |
|
As of
December 31, 2011 |
||||
Land
|
$
|
7,091
|
|
|
$
|
7,091
|
|
Buildings and building improvements
|
22,861
|
|
|
18,947
|
|
||
Furniture, office equipment and software
|
81,352
|
|
|
74,793
|
|
||
Leasehold improvements
|
22,022
|
|
|
19,051
|
|
||
Vehicles
|
147
|
|
|
92
|
|
||
Total property and equipment
|
133,473
|
|
|
119,974
|
|
||
Less accumulated depreciation and amortization
|
(38,078
|
)
|
|
(30,307
|
)
|
||
Total property and equipment, net
|
$
|
95,395
|
|
|
$
|
89,667
|
|
|
As of
June 30, 2012 |
|
As of
December 31, 2011 |
||||
Accrued salaries and wages
|
$
|
12,963
|
|
|
$
|
13,107
|
|
Accrued bonus
|
2,981
|
|
|
3,067
|
|
||
Accrued vacation
|
8,862
|
|
|
7,492
|
|
||
Accrued expenses
|
18,400
|
|
|
16,539
|
|
||
Accrued litigation
|
10,800
|
|
|
—
|
|
||
Accrued income taxes payable
|
3,852
|
|
|
—
|
|
||
Total accrued liabilities
|
$
|
57,858
|
|
|
$
|
40,205
|
|
|
As of
June 30, 2012 |
|
As of
December 31, 2011 |
||||
Deferred revenue
|
$
|
64,619
|
|
|
$
|
48,831
|
|
Student deposits
|
122,814
|
|
|
136,615
|
|
||
Total deferred revenue and student deposits
|
$
|
187,433
|
|
|
$
|
185,446
|
|
|
As of June 30, 2012
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Demand notes
|
$
|
—
|
|
|
$
|
5,414
|
|
|
$
|
—
|
|
|
$
|
5,414
|
|
Corporate notes and bonds
|
—
|
|
|
165,298
|
|
|
—
|
|
|
165,298
|
|
||||
Commercial paper
|
—
|
|
|
9,989
|
|
|
—
|
|
|
9,989
|
|
||||
Total
|
$
|
—
|
|
|
$
|
180,701
|
|
|
$
|
—
|
|
|
$
|
180,701
|
|
|
As of December 31, 2011
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
Demand notes
|
$
|
—
|
|
|
$
|
28,700
|
|
|
$
|
—
|
|
|
$
|
28,700
|
|
Corporate notes and bonds
|
—
|
|
|
165,097
|
|
|
—
|
|
|
165,097
|
|
||||
Total
|
$
|
—
|
|
|
$
|
193,797
|
|
|
$
|
—
|
|
|
$
|
193,797
|
|
Exercise price per share
|
$
|
19.25
|
|
Risk-free interest rate
|
1.0
|
%
|
|
Expected dividend yield
|
—
|
|
|
Expected volatility
|
54.3
|
%
|
|
Expected life (in years)
|
5.7
|
|
|
Grant date fair value per share
|
$
|
9.53
|
|
•
|
Ashford University's plans in response to the denial of its application for initial accreditation by the Accrediting Commission for Senior Colleges and Universities of the Western Association of Schools and Colleges ("WASC");
|
•
|
Ashford University's plans in response to the letters from the Higher Learning Commission of the North Central Association of Colleges and Schools ("Higher Learning Commission") regarding the institution's compliance with the commission's jurisdictional requirements and the placement of the institution on special monitoring;
|
•
|
expectations regarding the continued growth of our admissions counselor workforce and increases in lead generation efforts to support such personnel;
|
•
|
expected investments in online and other advertising, including the recently launched branding campaign for our institutions;
|
•
|
the extent to which our historical results may be indicative of future results;
|
•
|
expectations regarding the adequacy of our cash and cash equivalents and other sources of liquidity for ongoing operations;
|
•
|
expectations regarding investment plans and capital expenditures;
|
•
|
our anticipated seasonal fluctuations in results of operations;
|
•
|
projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; and
|
•
|
management's goals and objectives and other similar matters that are not historical facts.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Consolidated Statement of Income Data:
|
(unaudited)
|
||||||||||||||
Revenue
|
$
|
256,302
|
|
|
$
|
239,880
|
|
|
$
|
506,739
|
|
|
$
|
469,313
|
|
Operating Income
|
75,536
|
|
|
82,549
|
|
|
127,889
|
|
|
168,661
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidated Other Data:
|
|
|
|
|
|
|
|
||||||||
Period end enrollment (1)
|
|
|
|
|
|
|
|
||||||||
Online
|
91,782
|
|
|
83,817
|
|
|
91,782
|
|
|
83,817
|
|
||||
Campus
|
838
|
|
|
728
|
|
|
838
|
|
|
728
|
|
||||
Total
|
92,620
|
|
|
84,545
|
|
|
92,620
|
|
|
84,545
|
|
(1)
|
We define enrollments as the number of active students on the last day of the financial reporting period. Prior to July 1, 2011, a student was considered active if the student attended a class within the prior 30 days unless the student had graduated or had provided us with notice of withdrawal. Effective July 1, 2011, a student is considered active if the student attended a class within the prior 15 days or is on an institutionally-approved break not to exceed 45 days, unless the student has graduated or provided a notice of withdrawal. The change in methodology has not had a material impact on the number of active students since it was implemented on July 1, 2011.
|
|
Q2 2011
|
|
Q3 2011
|
|
Q4 2011
|
|
Q1 2012
|
|
Q2 2012
|
|||||
Current year
|
19,050
|
|
|
22,000
|
|
|
13,500
|
|
|
24,275
|
|
|
19,300
|
|
Prior year
|
18,450
|
|
|
24,000
|
|
|
15,600
|
|
|
27,550
|
|
|
19,050
|
|
Percentage change
|
3.3
|
%
|
|
(8.3
|
)%
|
|
(13.5
|
)%
|
|
(11.9
|
)%
|
|
1.3
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||
Revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Costs and expenses:
|
|
|
|
|
|
|
|
||||
Instructional costs and services
|
25.5
|
|
|
25.9
|
|
|
26.4
|
|
|
25.1
|
|
Marketing and promotional
|
30.7
|
|
|
25.9
|
|
|
31.3
|
|
|
25.8
|
|
General and administrative
|
14.3
|
|
|
13.8
|
|
|
17.0
|
|
|
13.2
|
|
Total costs and expenses
|
70.5
|
|
|
65.6
|
|
|
74.7
|
|
|
64.1
|
|
Operating income
|
29.5
|
|
|
34.4
|
|
|
25.3
|
|
|
35.9
|
|
Other income, net
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
|
0.3
|
|
Income before income taxes
|
29.8
|
|
|
34.7
|
|
|
25.6
|
|
|
36.2
|
|
Income tax expense
|
11.3
|
|
|
13.0
|
|
|
9.7
|
|
|
13.6
|
|
Net income
|
18.5
|
%
|
|
21.7
|
%
|
|
15.9
|
%
|
|
22.6
|
%
|
|
Payments Due by Period
|
||||||||||||||||||||||||||
|
Total
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
Thereafter
|
||||||||||||||
|
(In thousands)
|
||||||||||||||||||||||||||
Operating lease obligations
|
$
|
281,979
|
|
|
$
|
16,537
|
|
|
$
|
35,416
|
|
|
$
|
36,882
|
|
|
$
|
37,256
|
|
|
$
|
38,204
|
|
|
$
|
117,684
|
|
Other contractual obligations
|
28,388
|
|
|
3,745
|
|
|
10,586
|
|
|
10,707
|
|
|
2,827
|
|
|
523
|
|
|
—
|
|
|||||||
Uncertain tax positions
|
8,726
|
|
|
—
|
|
|
8,726
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
319,093
|
|
|
$
|
20,282
|
|
|
$
|
54,728
|
|
|
$
|
47,589
|
|
|
$
|
40,083
|
|
|
$
|
38,727
|
|
|
$
|
117,684
|
|
•
|
developments regarding the accreditation of our academic institutions, particularly Ashford University;
|
•
|
our quarterly or annual earnings or those of other companies in our industry;
|
•
|
public reaction to our press releases, corporate communications and SEC filings;
|
•
|
changes in earnings estimates or recommendations by research analysts who track our common stock or the stocks of other companies in our industry;
|
•
|
seasonal variations in our student enrollment;
|
•
|
new laws or regulations or new interpretations of laws or regulations applicable to our industry or business;
|
•
|
negative publicity, including government hearings and other public lawmaker or regulator criticism, regarding our industry or business;
|
•
|
changes in our enrollment or in the growth rate of our enrollment;
|
•
|
changes in accounting standards, policies, guidance, interpretations or principles;
|
•
|
litigation involving our company or investigations or audits by regulators into the operations of our company or our competitors;
|
•
|
sales of common stock by our directors, executive officers and significant stockholders; and
|
•
|
changes in general conditions in the United States and global economies or financial markets, including those resulting from war, incidents of terrorism or responses to such events.
|
Exhibit
|
|
|
Description
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 10-Q filed on May 21, 2009).
|
3.2
|
|
|
Second Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to the Form S-1 filed on March 20, 2009).
|
4.1
|
|
|
Specimen of Stock Certificate (incorporated by reference to Exhibit 4.1 to the Form S-1 filed on March 30, 2009).
|
4.2
|
|
|
Second Amended and Restated Registration Rights Agreement (incorporated by reference to Exhibit 4.2 to the Form S-1 filed on September 4, 2009).
|
10.1
|
|
|
Amended and Restated Revolving Credit Agreement dated as of April 13, 2012.
|
10.2
|
|
†
|
First Amendment dated June 28, 2012, with CCP/MS SSIII Denver Tabor Center I Property Owner LLC, related to the premises located at 1200 17th Street and 1201 16th Street, Denver, Colorado.
|
31.1
|
|
|
Certification of Andrew S. Clark, President and Chief Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
|
Certification of Daniel J. Devine, Chief Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities and Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Andrew S. Clark, President and Chief Executive Officer, and Daniel J. Devine, Chief Financial Officer.
|
101
|
|
*
|
The following financial information from our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2012, filed with the SEC on August 7, 2012, formatted in Extensible Business Reporting Language ("XBRL"): (i) the Condensed Consolidated Balance Sheets as of June 30, 2012, and December 31, 2011; (ii) the Condensed Consolidated Statements of Income for the three and six months ended June 30, 2012 and 2011; (iii) the Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2012 and 2011; (iv) the Condensed Consolidated Statement of Stockholder's Equity for the six months ended June 30, 2012; (v) the Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2012 and 2011; and (vi) Notes to Condensed Consolidated Financial Statements.
|
|
BRIDGEPOINT EDUCATION, INC.
|
|
|
August 7, 2012
|
/s/ DANIEL J. DEVINE
|
|
Daniel J. Devine
Chief Financial Officer
(Principal financial officer and duly authorized to
sign on behalf of the registrant)
|
1.
|
DEFINITIONS.
1
|
1.1
|
Certain Defined Terms
1
|
2.
|
REVOLVING CREDIT.
26
|
2.1
|
Commitment
27
|
2.2
|
Accrual of Interest and Maturity; Evidence of Indebtedness.
27
|
2.3
|
Requests for and Refundings and Conversions of Advances
28
|
2.4
|
Disbursement of Advances.
30
|
2.5
|
Swing Line.
32
|
2.6
|
Interest Payments; Default Interest
37
|
2.7
|
Optional Prepayments.
38
|
2.8
|
Base Rate Advance in Absence of Election or Upon Default
38
|
2.9
|
Revolving Credit Facility Fee
39
|
2.10
|
Mandatory Repayment of Revolving Credit Advances.
39
|
2.11
|
Optional Reduction or Termination of Revolving Credit Aggregate Commitment
41
|
2.12
|
Use of Proceeds of Advances
42
|
2.13
|
Optional Increase
42
|
2.1
|
Authorization to Debit Account
44
|
3.
|
LETTERS OF CREDIT.
44
|
3.1
|
Letters of Credit
44
|
3.2
|
Conditions to Issuance
45
|
3.3
|
Notice
47
|
3.4
|
Letter of Credit Fees; Increased Costs.
47
|
3.5
|
Other Fees
48
|
3.6
|
Participation Interests in and Drawings and Demands for Payment Under Letters of Credit.
48
|
3.7
|
Obligations Irrevocable
51
|
3.8
|
Risk Under Letters of Credit.
52
|
3.9
|
Indemnification
53
|
3.10
|
Right of Reimbursement
54
|
4.
|
[RESERVED].
54
|
5.
|
CONDITIONS.
54
|
5.1
|
Conditions of Initial Advances
55
|
5.2
|
Continuing Conditions
58
|
6.
|
REPRESENTATIONS AND WARRANTIES.
58
|
6.1
|
Corporate Authority
58
|
6.2
|
Due Authorization
58
|
6.4
|
Taxes
59
|
6.5
|
No Defaults
59
|
6.6
|
Enforceability of Agreement and Loan Documents
59
|
6.7
|
Compliance with Laws
59
|
6.8
|
Non-contravention
60
|
6.9
|
Litigation
60
|
6.10
|
Consents, Approvals and Filings, Etc
60
|
6.11
|
Agreements Affecting Financial Condition
61
|
6.12
|
No Investment Company or Margin Stock
61
|
6.13
|
ERISA
61
|
6.14
|
Conditions Affecting Business or Properties
61
|
6.15
|
Environmental and Safety Matters
61
|
6.16
|
Subsidiaries
62
|
6.17
|
[Intentionally Omitted]
62
|
6.18
|
Material Contracts
62
|
6.19
|
Franchises, Patents, Copyrights, Tradenames, etc
62
|
6.20
|
Capital Structure
62
|
6.21
|
Accuracy of Information.
62
|
6.22
|
Solvency
63
|
6.23
|
Employee Matters
63
|
6.24
|
No Misrepresentation
63
|
6.25
|
Corporate Documents and Corporate Existence
64
|
6.26
|
Title IV Eligibility
64
|
7.
|
AFFIRMATIVE COVENANTS.
64
|
7.1
|
Financial Statements
64
|
7.2
|
Certificates; Other Information
65
|
7.3
|
Payment of Obligations
66
|
7.4
|
Conduct of Business and Maintenance of Existence; Compliance with Laws.
66
|
7.5
|
Maintenance of Property; Insurance
67
|
7.6
|
Inspection of Property; Books and Records, Discussions
67
|
7.7
|
Notices
68
|
7.8
|
Hazardous Material Laws.
69
|
7.9
|
Financial Covenants.
70
|
7.10
|
Governmental and Other Approvals
70
|
7.11
|
Compliance with ERISA; ERISA Notices.
70
|
7.12
|
Defense of Collateral
71
|
7.13
|
Future Subsidiaries; Additional Collateral
71
|
7.14
|
Accounts
73
|
7.15
|
Use of Proceeds
73
|
7.16
|
Further Assurances and Information.
73
|
7.17
|
Funding Eligibility
73
|
8.
|
NEGATIVE COVENANTS.
74
|
8.1
|
Limitation on Debt
74
|
8.2
|
Limitation on Liens
75
|
8.3
|
Acquisitions
75
|
8.4
|
Limitation on Mergers, Dissolution or Sale of Assets
75
|
8.5
|
Restricted Payments
77
|
8.6
|
Limitation on Capital Expenditures
77
|
8.7
|
Limitation on Investments, Loans and Advances
77
|
8.8
|
Transactions with Affiliates
78
|
8.9
|
Sale-Leaseback Transactions
78
|
8.10
|
Limitations on Other Restrictions
79
|
8.11
|
Prepayment of Debt
79
|
8.12
|
Amendment of Subordinated Debt Documents
79
|
8.13
|
Modification of Certain Agreements
79
|
8.14
|
Fiscal Year
79
|
9.
|
DEFAULTS.
79
|
9.1
|
Events of Default
79
|
9.2
|
Exercise of Remedies
82
|
9.3
|
Rights Cumulative
82
|
9.4
|
Waiver by the Borrowers of Certain Laws
83
|
9.5
|
Waiver of Defaults
83
|
9.6
|
Set Off
83
|
10.
|
PAYMENTS, RECOVERIES AND COLLECTIONS.
83
|
10.1
|
Payment Procedure.
83
|
10.2
|
Application of Proceeds of Collateral
85
|
10.3
|
Pro-rata Recovery
85
|
10.4
|
Treatment of a Defaulting Lender; Reallocation of Defaulting Lender's Fronting Exposure.
86
|
11.
|
CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
87
|
11.1
|
Reimbursement of Prepayment Costs
87
|
11.2
|
Eurodollar Lending Office
87
|
11.3
|
Circumstances Affecting LIBOR Rate Availability
88
|
11.4
|
Laws Affecting LIBOR Rate Availability
88
|
11.5
|
Increased Cost of Advances Carried at the LIBOR Rate
88
|
11.6
|
Capital Adequacy and Other Increased Costs
89
|
11.7
|
Right of Lenders to Fund through Branches and Affiliates
90
|
12.
|
AGENT.
90
|
12.1
|
Appointment of the Agent
90
|
12.2
|
Deposit Account with the Agent or any Lender
90
|
12.3
|
Scope of the Agent's Duties
90
|
12.4
|
Successor Agent
91
|
12.5
|
Credit Decisions
92
|
12.6
|
Authority of the Agent to Enforce This Agreement
92
|
12.7
|
Indemnification of the Agent
92
|
12.8
|
Knowledge of Default
93
|
12.9
|
The Agent's Authorization; Action by Lenders
93
|
12.10
|
Enforcement Actions by the Agent
93
|
12.11
|
Collateral Matters.
93
|
12.12
|
The Agents in their Individual Capacities
94
|
12.13
|
The Agent's Fees
94
|
12.14
|
Documentation Agent or other Titles
95
|
12.15
|
No Reliance on the Agent's Customer Identification Program.
95
|
13.
|
MISCELLANEOUS.
95
|
13.1
|
Accounting Principles
95
|
13.2
|
Choice of Law and Venue
95
|
13.3
|
Reserved
96
|
13.4
|
Interest
96
|
13.5
|
Closing Costs and Other Costs; Indemnification.
96
|
13.6
|
Notices.
98
|
13.7
|
Further Action
99
|
13.8
|
Successors and Assigns; Participations; Assignments.
99
|
13.9
|
Counterparts
102
|
13.10
|
Amendment and Waiver
102
|
13.11
|
Confidentiality
105
|
13.12
|
Substitution or Removal of Lenders
105
|
13.13
|
Withholding Taxes
107
|
13.14
|
Taxes and Fees
108
|
13.15
|
WAIVER OF JURY TRIAL
109
|
13.16
|
Judicial Reference.
109
|
13.17
|
USA Patriot Act Notice
111
|
13.18
|
Complete Agreement; Conflicts
111
|
13.19
|
Severability
111
|
13.20
|
Table of Contents and Headings; Section References
111
|
13.21
|
Construction of Certain Provisions
112
|
13.22
|
Independence of Covenants
112
|
13.23
|
Electronic Transmissions
112
|
13.24
|
Advertisements
113
|
13.25
|
Reliance on and Survival of Provisions
113
|
13.26
|
Joint and Several Liability
113
|
13.27
|
Effect of this Agreement
116
|
1.
|
DEFINITIONS.
|
(b)
|
a percentage (expressed as a decimal) equal to 1.00 minus the maximum rate on such date at which Agent is required to maintain reserves on "Euro-currency Liabilities" as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as Agent is required to maintain reserves against a category of liabilities which includes eurodollar deposits or includes a category of assets which includes eurodollar loans, the rate at which such reserves are required to be maintained on such category.
|
(b)
|
a percentage equal to 100% minus the maximum rate on such date at which the Agent is required to maintain reserves on 'Eurocurrency Liabilities' as defined in and pursuant to Regulation D of the Board of Governors of the Federal Reserve System or, if such regulation or definition is modified, and as long as the Agent is required to maintain reserves against a category of liabilities which includes eurocurrency deposits or includes a category of assets which includes eurocurrency loans, the rate at which such reserves are required to be maintained on such category,
|
(a)
|
with respect to the principal amount of any Eurodollar-based Advance outstanding hereunder, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to the relevant Eurodollar-Interest Period, commencing on the first day of such Eurodollar-Interest Period, appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 11:00 a.m. (Detroit, Michigan time) (or soon thereafter as practical), two (2) Business Days prior to the first day of such Eurodollar-Interest Period. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service), the “LIBOR Rate” shall be determined by reference to such other publicly available service for displaying LIBOR rates as may be agreed upon by the Agent and the Borrowers, or, in the absence of such agreement, the “LIBOR Rate” shall, instead, be the per annum rate equal to the average (rounded upward, if necessary, to the nearest one-sixteenth of one percent (1/16%)) of the rate at which the Agent is offered dollar deposits at or about 11:00 a.m. (Detroit, Michigan time) (or soon thereafter as practical), two (2) Business Days prior to the first day of such Eurodollar-Interest Period in the interbank LIBOR market in an amount comparable to the principal amount of the relevant Eurodollar-based Advance which is to bear interest at such Eurodollar-based Rate and for a period equal to the relevant Eurodollar-Interest Period; and
|
(b)
|
with respect to the principal amount of any Advance carried at the Daily Adjusting LIBOR Rate outstanding hereunder, the per annum rate of interest determined on the basis of the rate for deposits in United States Dollars for a period equal to one (1) month appearing on Page BBAM of the Bloomberg Financial Markets Information Service as of 11:00 a.m. (Detroit, Michigan time) (or soon thereafter as practical) on such day, or if such day is not a Business Day, on the immediately preceding Business Day. In the event that such rate does not appear on Page BBAM of the Bloomberg Financial Markets Information Service (or otherwise on such Service), the “LIBOR Rate” shall be determined by reference to such other publicly available service for displaying eurodollar rates as may be agreed upon by the Agent and the Borrowers, or, in the absence of such agreement, the “LIBOR Rate” shall, instead, be the per annum rate equal to the average of the rate at which the Agent is offered dollar deposits at or about 11:00 a.m. (Detroit, Michigan time) (or soon thereafter as practical) on such day in the interbank eurodollar market in an amount comparable to the principal amount of
|
(a)
|
If such acquisition is structured as an acquisition of the Equity Interests of any Person, then the Person so acquired shall (X) become a wholly-owned direct Subsidiary of a Borrower or of a Guarantor and the applicable Borrower or the applicable Guarantor shall cause such acquired Person to comply with Section 7.13 hereof or (Y) provided that the Credit Parties continue to comply with Section 7.4(a) hereof, be merged with and into a Borrower (and, in the case of a Borrower, with such Borrower being the surviving entity), a Guarantor, or an Acquisition Subsidiary (so long as the surviving entity becomes a Borrower or a Guarantor);
|
(b)
|
If such acquisition is structured as the acquisition of assets, such assets shall be acquired directly by the Borrowers or any of them, an Acquisition Subsidiary that becomes a Borrower after the closing of the acquisition, or an entity which becomes a Guarantor in accordance with the provisions of Section 7.13 (subject to compliance with Section 7.4(a) hereof);
|
(c)
|
Both immediately before and after the consummation of such acquisition and after giving effect to the acquisition, no Default or Event of Default shall have occurred and be continuing; and
|
(d)
|
The purchase price of such proposed new acquisition, computed on the basis of total acquisition consideration paid or incurred, or required to be paid or incurred, with respect thereto, including the amount of Debt (such Debt being otherwise permitted under this Agreement) assumed or to which such assets, businesses or business or Equity Interests, or any Person so acquired is subject and including any portion of the purchase price allocated to any non-compete agreements, when added to the purchase price for each other acquisition consummated hereunder as a Permitted Acquisition during the term of this Agreement (not including acquisitions specifically consented to which fall outside of the terms of this definition) and Distributions and repurchase of Parent's Equity Interests pursuant
|
(a)
|
Investments made in accordance with the Cash Investment Policy adopted by Parent and approved by the Board of Directors of Parent, which policy has been provided to and approved by Agent.
|
(a)
|
Liens for (i) taxes or governmental assessments or charges or (ii) customs duties in connection with the importation of goods to the extent such Liens attach to the imported goods that are the subject of the duties, in each case (x) to the extent not yet due, (y) as to which the period of grace, if any, related thereto has not expired or (z) which are being contested in good faith by appropriate proceedings, provided that in the case of any such contest, any proceedings for the enforcement of such liens have been suspended and adequate reserves with respect thereto are maintained on the books of such Person in conformity with GAAP;
|
(b)
|
carriers', warehousemen's, mechanics', materialmen's, repairmen's, processor's, landlord's liens or other like liens arising in the ordinary course of business which secure obligations that are not overdue for a period of more than 30 days or which are being contested in good faith by appropriate proceedings, provided that in the case of any such contest, (x) any proceedings commenced for the enforcement of such Liens have been suspended and (y) appropriate reserves with respect thereto are maintained on the books of such Person in conformity with GAAP;
|
(c)
|
(i) Liens incurred in the ordinary course of business to secure the performance of statutory obligations arising in connection with progress payments or advance payments due under contracts with the United States government or any agency thereof entered into in the ordinary course of business and (ii) Liens incurred or deposits made in the ordinary course of business to secure the performance of statutory obligations (not otherwise permitted under subsection (g) of this definition), bids, leases, fee and expense arrangements with trustees and fiscal agents, trade contracts, surety and appeal bonds, performance bonds and other similar obligations (exclusive of obligations incurred in connection with the borrowing of money, any lease-purchase arrangements or the payment of the deferred purchase price of property), provided, that in each case full provision for the payment of all such obligations has been made on the books of such Person as may be required by GAAP;
|
(d)
|
any attachment or judgment lien that (i) remains unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period ending on the earlier of (i) thirty (30) consecutive days from the date of its attachment or entry (as applicable) or (ii) the commencement of enforcement steps with respect thereto, other than the filing of notice thereof in the public record or (ii) arise from judgments or attachments in circumstances not constituting a Default or Event of Default;
|
(e)
|
survey exceptions or encumbrances, easements or reservations, or rights of others for rights-of-way, utilities and other similar purposes, or zoning or other restrictions as to the use of real
|
(f)
|
Liens arising in connection with worker's compensation, unemployment insurance, old age pensions and social security benefits and similar statutory obligations (excluding Liens arising under ERISA), provided that no enforcement proceedings in respect of such Liens are pending and provisions have been made for the payment of such liens on the books of such Person as may be required by GAAP;
|
(g)
|
bankers' Liens, rights of setoff and other similar Liens existing solely with respect to cash and cash Equivalents on deposit in one or more accounts maintained by any Credit Party;
|
(h)
|
Liens on property of a person existing at the time such person is acquired or merged with or into or consolidated with any Credit Party to the extent permitted hereunder and to the extent not encumbering any property other than the property acquired;
|
(i)
|
Liens on earnest money deposits of cash or cash equivalents in connection with any Permitted Acquisition;
|
(j)
|
Liens constituting contractual rights of setoff under customer agreements, in each case, entered into in the ordinary course of business;
|
(k)
|
continuations of Liens that are permitted under subsections (a)-(j) hereof, provided such continuations do not violate the specific time periods set forth in subsections (b) and (d) and provided further that such Liens do not extend to any additional property or assets of any Credit Party or secure any additional obligations of any Credit Party;
|
(l)
|
Liens securing Debt permitted by Section 8.1(c), provided that (i) such Liens are created upon fixed or capital assets acquired by the applicable Credit Party after the date of this Agreement (including without limitation by virtue of a loan or a Capitalized Lease), (ii) any such Lien is created solely for the purpose of securing indebtedness representing or incurred to finance the cost of the acquisition of the item of property subject thereto, (iii) the principal amount of the Debt secured by any such Lien shall at no time exceed 100% of the sum of the purchase price or cost of the applicable property, equipment or improvements and the related costs and charges imposed by the vendors thereof and (iv) the Lien does not cover any property other than the fixed or capital asset acquired; provided, however, that no such Lien shall be created over any owned real property of any Credit Party for
|
(m)
|
Liens created pursuant to the Loan Documents; and
|
(n)
|
other Liens, existing on the Effective Date, set forth on Schedule 8.2 and renewals, refinancings and extensions thereof on substantially the same or better terms as in effect on the Effective Date and otherwise in compliance with this Agreement.
|
2.
|
REVOLVING CREDIT.
|
(a)
|
The Borrowers hereby jointly and severally and unconditionally promise to pay to the Agent for the account of each Revolving Credit Lender the then unpaid principal amount of each Revolving Credit Advance (plus all accrued and unpaid interest) of such Revolving Credit Lender to the Borrowers on the Revolving Credit Maturity Date and on such other dates and in such other amounts as may be required from time to time pursuant to this Agreement. Subject to the terms and conditions hereof, each Revolving Credit Advance shall, from time to time from and after the date of such Advance (until paid), bear interest at its Applicable Interest Rate.
|
(b)
|
Each Revolving Credit Lender shall maintain in accordance with its usual practice an account or accounts evidencing indebtedness of the Borrowers to the appropriate lending office of such Revolving Credit Lender resulting from each Revolving Credit Advance made by such lending office of such Revolving Credit Lender from time to time, including the amounts of principal and interest payable thereon and paid to such Revolving Credit Lender from time to time under this Agreement.
|
(c)
|
The Agent shall maintain the Register pursuant to Section 13.8(g), and a subaccount therein for each Revolving Credit Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount of each Revolving Credit Advance made hereunder, the type thereof and each Eurodollar-Interest Period applicable to any Eurodollar-based Advance, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Revolving Credit Lender hereunder in respect of the Revolving Credit Advances and (iii) both the amount of any sum received by the Agent hereunder from the Borrowers in respect of the Revolving Credit Advances and each Revolving Credit Lender's share thereof.
|
(d)
|
The entries made in the Register maintained pursuant to paragraph (c) of this Section 2.2 and Section 13.8(g) shall, absent manifest error, to the extent permitted by applicable law, be prima facie evidence of the existence and amounts of the obligations of the Borrowers therein recorded;
provided
,
however
, that the failure of any Revolving Credit Lender or the Agent to maintain the Register or any account, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrowers to repay the Revolving Credit
|
(e)
|
The Borrowers agree that, upon written request to the Agent by any Revolving Credit Lender, the Borrowers will execute and deliver, to such Revolving Credit Lender, at the Borrowers' own expense, a Revolving Credit Note evidencing the outstanding Revolving Credit Advances owing to such Revolving Credit Lender.
|
(a)
|
each such Request for Revolving Credit Advance shall set forth the information required on the Request for Revolving Credit Advance, including without limitation:
|
(b)
|
each such Request for Revolving Credit Advance shall be delivered to the Agent by 9:00 a.m. (San Diego, California time) three (3) Business Days prior to the proposed date of the Revolving Credit Advance, except in the case of a Base Rate Advance, for which the Request for Revolving Credit Advance must be delivered by 9:00 a.m. (San Diego, California time) on the proposed date for such Revolving Credit Advance;
|
(c)
|
on the proposed date of such Revolving Credit Advance, the sum of (x) the aggregate principal amount of all Revolving Credit Advances and Swing Line Advances outstanding on such date (including, without duplication) the Advances that are deemed to be disbursed by the Agent under Section 3.6(a) hereof in
|
(d)
|
in the case of a Base Rate Advance, the principal amount of the initial funding of such Advance, as opposed to any refunding or conversion thereof, shall be at least $750,000 or the remainder available under the Revolving Credit Aggregate Commitment if less than $750,000;
|
(e)
|
in the case of a Eurodollar-based Advance, the principal amount of such Advance, plus the amount of any other outstanding Revolving Credit Advance to be then combined therewith having the same Eurodollar-Interest Period, if any, shall be at least $1,000,000 (or a larger integral multiple of $100,000) or the remainder available under the Revolving Credit Aggregate Commitment if less than $1,000,000 and at any one time there shall not be in effect more than 5 (five) different Eurodollar-Interest Periods;
|
(f)
|
a Request for Revolving Credit Advance, once delivered to the Agent, shall not be revocable by the Borrowers and shall constitute a certification by the Borrowers as of the date thereof that:
|
(a)
|
Upon receiving any Request for Revolving Credit Advance from Parent (on behalf of the Borrowers) under Section 2.3 hereof, the Agent shall promptly notify each Revolving Credit Lender by wire, telex or telephone (confirmed by wire, telecopy or telex) of the amount of such Advance being requested and the date such Revolving Credit Advance is to be made by each Revolving Credit Lender in an amount equal to its Revolving Credit Percentage of such Advance. Unless such Revolving Credit Lender's commitment to make Revolving Credit Advances hereunder shall have been suspended or terminated in accordance with this Agreement, each such Revolving Credit Lender shall make available the amount of its Revolving Credit Percentage of each Revolving Credit Advance in immediately available funds to the Agent, as follows:
|
(b)
|
Subject to submission of an executed Request for Revolving Credit Advance by Parent without exceptions noted in the compliance certification therein, the Agent shall make available to the Borrowers the aggregate of the amounts so received by it from the Revolving Credit Lenders in like funds and currencies:
|
(c)
|
The Agent shall deliver the documents and papers received by it for the account of each Revolving Credit Lender to such Revolving Credit Lender. Unless the Agent shall have been notified by any Revolving Credit Lender prior to the date of any proposed Revolving Credit Advance that such Revolving Credit Lender does not intend to make available to the Agent such Revolving Credit Lender's Percentage of such Advance, the Agent may assume that such Revolving Credit Lender has made such amount available to the Agent on such date, as aforesaid. The Agent may, but shall not be obligated to, make available to the Borrowers the amount of such payment in reliance on such assumption. If such amount is not in fact made available to the Agent by such Revolving Credit Lender, as aforesaid, the Agent shall be entitled to recover such amount on demand from such Revolving Credit Lender. If such Revolving Credit Lender does not pay such amount forthwith upon the Agent's demand therefor and the Agent has in fact made a corresponding amount available to the Borrowers, the Agent shall promptly notify the Borrowers and the Borrowers shall repay such amount to the Agent, if such notice is delivered to the Borrowers prior to 10:00 a.m. (San Diego, California time) on a Business Day, on the day such notice is received, and otherwise on the next Business Day, and such amount paid by the Borrowers shall be applied as a prepayment of the Revolving Credit (without any corresponding reduction in the Revolving Credit Aggregate Commitment), reimbursing the Agent for having funded said amounts on behalf of such Revolving Credit Lender. The Borrowers shall retain their claim against such Revolving Credit Lender with respect to the amounts repaid by them to the Agent and, if such Revolving Credit Lender subsequently makes such amounts available to the Agent, the Agent shall promptly make such amounts available to the Borrowers as a Revolving Credit Advance. The Agent shall also be entitled to recover from such Revolving Credit Lender or the Borrowers, as the case may be, but without duplication, interest on such amount in respect of each day from the date such amount was made available by the Agent to the Borrowers, to the date such amount is recovered by the Agent, at a rate per annum equal to:
|
(a)
|
Swing Line Advances
. The Swing Line Lender may, on the terms and subject to the conditions hereinafter set forth (including without limitation Section 2.5(c) hereof), but shall not be required to, make one or more Advances (each such advance being a “Swing Line Advance”) to the Borrowers from time to time on any Business Day during the period from the Effective Date hereof until (but excluding) the Revolving Credit Maturity Date in an aggregate amount not to exceed at any one time outstanding the Swing Line Maximum Amount. Subject to the terms set forth herein, advances, repayments and readvances may be made under the Swing Line.
|
(b)
|
Accrual of Interest and Maturity; Evidence of Indebtedness
.
|
(c)
|
Requests for Swing Line Advances
. The Parent (for and on behalf of the Borrowers) may request a Swing Line Advance by the delivery to Swing Line Lender of a Request for Swing Line Advance executed by an Authorized Signer for Parent, subject to the following:
|
(d)
|
Disbursement of Swing Line Advances
. Upon receiving any executed Request for Swing Line Advance from the Parent and the satisfaction of the conditions set forth in Section 2.5(c) hereof, Swing Line Lender shall, at its option, make available to the Borrowers, in accordance with the written disbursement instructions of Parent the amount so requested in Dollars not later than 1:00 p.m. (San Diego, California time) on the date of such Advance, by credit to an account
|
(e)
|
Refunding of or Participation Interest in Swing Line Advances
.
|
(a)
|
Interest on the unpaid balance of all Base Rate Advances of the Revolving Credit and the Swing Line from time to time outstanding shall accrue from the date of such Advance to the date repaid, at a per annum interest rate equal to the Base Rate, and shall be payable in immediately available funds quarterly in arrears
commencing on July 1, 2012, and on the first day of each October, January, April and July thereafter. Whenever any payment under this Section 2.6(a) shall become due on a day which is not a Business Day, the date for payment thereof shall be extended to the next Business Day. Interest accruing at the Base Rate shall be computed on the basis of a 360 day year and assessed for the actual number of days elapsed, and in such computation effect shall be given to any change in the interest rate resulting from a change in the Base Rate on the date of such change in the Base Rate.
|
(b)
|
Interest on each Eurodollar-based Advance of the Revolving Credit shall accrue at its Eurodollar-based Rate and shall be payable in immediately available funds on the last day of the Eurodollar-Interest Period applicable thereto (and, if any Eurodollar-Interest Period shall exceed three months, then on the last Business Day of the third month of such Eurodollar-Interest Period, and at three month intervals thereafter). Interest accruing at the Eurodollar-based Rate shall be computed on the basis of a 360 day year and assessed for the actual number of days elapsed from the first day of the Eurodollar-Interest Period applicable thereto to but not including the last day thereof.
|
(c)
|
Interest on each Quoted Rate Advance of the Swing Line shall accrue at its Quoted Rate and shall be payable in immediately available funds on the last day of the Interest Period applicable thereto. Interest accruing at the Quoted Rate shall be computed on the basis of a 360-day year and assessed for the actual number of days elapsed from the first day of the Interest Period applicable thereto to, but not including, the last day thereof.
|
(d)
|
Notwithstanding anything to the contrary in the preceding sections, all accrued and unpaid interest on any Revolving Credit Advance that is refunded or converted pursuant to Section 2.3 hereof and any Swing Line Advance that is refunded pursuant to Section 2.5(e) hereof, shall be due and payable in full on the date such Advance is refunded or converted.
|
(e)
|
In the case of any Event of Default under Section 9.1(i), immediately upon the occurrence thereof, and in the case of any other Event of Default, immediately upon receipt by the Agent of notice from the Majority Revolving Credit Lenders, interest shall be payable on demand on all Revolving Credit Advances and Swing Line Advances from time to time outstanding at a per annum rate equal to the Applicable Interest Rate in respect of each such Advance plus, in the case of
|
(a)
|
(i) The Borrowers may prepay all or part of the outstanding principal of any Base Rate Advance(s) of the Revolving Credit at any time, provided that, unless the “Sweep to Loan” system shall be in effect in respect of the Revolving Credit, after giving effect to any partial prepayment, the aggregate balance of Base Rate Advance(s) of the Revolving Credit remaining outstanding, if any, shall be at least Seven Hundred Fifty Thousand Dollars ($750,000), and (ii) subject to Section 2.10(c) hereof, the Borrowers may prepay all or part of the outstanding principal of any Eurodollar-based Advance of the Revolving Credit at any time (subject to not less than five (5) Business Day's notice to the Agent) provided that, after giving effect to any partial prepayment, the unpaid portion of such Advance which is to be refunded or converted under Section 2.3 hereof shall be at least One Million Dollars ($1,000,000). For the avoidance of doubt, nothing contained herein prohibits the Borrowers from making a prepayment which results in no Advances being outstanding.
|
(b)
|
(i) The Borrowers may prepay all or part of the outstanding principal of any Swing Line Advance carried at the Base Rate at any time, provided that after giving effect to any partial prepayment, the aggregate balance of such Base Rate Advances remaining outstanding, if any, shall be at least Two Hundred Fifty Thousand Dollars ($250,000) and (ii) subject to Section 2.10(c) hereof, the Borrowers may prepay all or part of the outstanding principal of any Swing Line Advance carried at the Quoted Rate at any time (subject to not less than one (1) day's notice to the Swing Line Lender) provided that after giving effect to any partial prepayment, the aggregate balance of such Quoted Rate Swing Line Advances remaining outstanding, if any, shall be at least Two Hundred Fifty Thousand Dollars ($250,000). For the avoidance of doubt, nothing contained herein prohibits the Borrowers from making a prepayment which results in no Advances being outstanding.
|
(c)
|
Any prepayment of a Base Rate Advance made in accordance with this Section shall be without premium or penalty and any prepayment of any other type of Advance shall be subject to the provisions of Section 11.1 hereof, but otherwise without premium or penalty.
|
(a)
|
If at any time and for any reason the aggregate outstanding principal amount of Revolving Credit Advances plus Swing Line Advances, plus the outstanding Letter of Credit Obligations, shall exceed the Revolving Credit Aggregate Commitment, the Borrowers shall immediately reduce any pending request for a Revolving Credit Advance on such day by the amount of such excess and, to the extent any excess remains thereafter, repay any Revolving Credit Advances and Swing Line Advances in an amount equal to the lesser of the outstanding amount of such Advances and the amount of such remaining excess, with such amounts to be applied between the Revolving Credit Advances and Swing Line Advances as determined by the Agent (subject to the proviso at the end of this sentence) and then, to the extent that any excess remains after payment in full of all Revolving Credit Advances and Swing Line Advances, to provide cash collateral in support of any Letter of Credit Obligations in an amount equal to the lesser of (x) 105% of the amount of such Letter of Credit Obligations and (y) the amount of such remaining excess, with such cash collateral to be provided on terms reasonably satisfactory to Agent. The Borrowers acknowledge that, in connection with any repayment required hereunder, they shall also be responsible for the reimbursement of any prepayment or other costs required under Section 11.1 hereof, provided that any prepayment hereunder shall be applied in a manner which minimizes the costs under Section 11.1 hereof. Any payments made
|
(b)
|
Subject to clauses (e) and (f) hereof, immediately upon receipt by any Credit Party of any Net Cash Proceeds from any Asset Sales which are not Reinvested as described in the following sentence, the Borrowers shall prepay the Advances by an amount equal to one hundred percent (100%) of such Net Cash Proceeds provided, however that the Borrowers shall not be obligated to prepay the Advances with such Net Cash Proceeds if the following conditions are satisfied: (i) promptly following the sale, the Borrowers provide to the Agent a certificate executed by a Responsible Officer of the Borrowers (“Reinvestment Certificate”) stating (x) that the sale has occurred, (y) that no Default or Event of Default has occurred and is continuing either as of the date of the sale or as of the date of the Reinvestment Certificate, and (z) a description of the planned Reinvestment of the proceeds thereof, (ii) the Reinvestment of such Net Cash Proceeds is commenced within the Initial Reinvestment Period and completed within the Reinvestment Period, and (iii) no Default or Event of Default has occurred and is continuing at the time of the sale and at the time of the application of such proceeds to Reinvestment. If any such proceeds have not been Reinvested at the end of the Reinvestment Period, the Borrowers shall promptly pay such proceeds to the Agent, to be applied to repay the Advances in accordance with clauses (e) and (f) hereof.
|
(c)
|
Subject to clauses (e) and (f) hereof, immediately upon receipt by any Credit Party of Net Cash Proceeds from the issuance of any Equity Interests of such Person (other than Equity Interests under any equity incentive plans and warrants listed on Schedule 6.13 hereto (or any successor plans), the Borrowers shall prepay the Advances by an amount equal to fifty percent (50%) of such Net Cash Proceeds.
|
(d)
|
Subject to clauses (e) and (f) hereof, immediately upon receipt by any Credit Party of any Insurance Proceeds or Condemnation Proceeds, the Borrowers shall be obligated to prepay the Advances by an amount equal to one hundred percent (100%) of such Insurance Proceeds or Condemnation Proceeds, as the case may be; provided, however, that any Insurance Proceeds or Condemnation Proceeds, as the case may be, may instead be Reinvested by the applicable Credit Party if the following conditions are satisfied: (i) promptly following the receipt of such Insurance Proceeds or Condemnation Proceeds, as the case may be, the Borrowers provide to the Agent a Reinvestment Certificate stating (x) that no Default or Event of Default has occurred and is continuing either as of the date of the receipt of such proceeds or as of the date of the Reinvestment Certificate, (y) that such Insurance Proceeds or Condemnation Proceeds have been received, and (z) a description of the planned Reinvestment of such Insurance Proceeds or Condemnation Proceeds, as the case may be), (ii) the Reinvestment of such proceeds is commenced within the Initial Reinvestment Period and completed
|
(e)
|
Payments to be made under subsections (b), (c) and (d) shall be applied to repay amounts outstanding under the Revolving Credit without resulting in a permanent reduction in the Revolving Credit Aggregate Commitment. Subject to Section 10.2 hereof, any payments made pursuant to this Section shall be applied first to outstanding Base Rate Advances under the Revolving Credit, next to Swing Line Advances carried at the Base Rate, next to Eurodollar-based Advances under the Revolving Credit, and then to Swing Line Advances carried at the Quoted Rate. If any amounts remain thereafter, a portion of such prepayment equivalent to the undrawn amount of any outstanding Letters of Credit shall be held by Lender as cash collateral for the Reimbursement Obligations, with any additional prepayment monies being applied to any Fees, costs or expenses due and outstanding under this Agreement, and with the remainder of such prepayment thereafter being returned to the Borrowers.
|
(f)
|
To the extent that, on the date any mandatory repayment of the Revolving Credit Advances under this Section 2.10 or payment pursuant to the terms of any of the Loan Documents is due, the Indebtedness under the Revolving Credit or any other Indebtedness to be prepaid is being carried, in whole or in part, at the Eurodollar-based Rate and no Default or Event of Default has occurred and is continuing, the Borrowers may deposit the amount of such mandatory prepayment in a cash collateral account to be held by the Agent, for and on behalf of the Revolving Credit Lenders, on such terms and conditions as are reasonably acceptable to the Agent and upon such deposit the obligation of the Borrowers to make such mandatory prepayment shall be deemed satisfied. Subject to the terms and conditions of said cash collateral account, sums on deposit in said cash collateral account shall be applied (until exhausted) to reduce the principal balance of the Revolving Credit on the last day of each Eurodollar-Interest Period attributable to the Eurodollar-based Advances of such Revolving Advance, thereby avoiding breakage costs under Section 11.1 hereof; provided, however, that if a Default or Event of Default shall have occurred at any time while sums are on deposit in the cash collateral account, the Agent may, in its sole discretion, elect to apply such sums to reduce the principal balance of such Eurodollar-based Advances prior to the last day of the applicable Eurodollar-Interest Period, and the Borrowers will be obligated to pay any resulting breakage costs under Section 11.1.
|
(1)
|
a pro forma Covenant Compliance Report demonstrating that, upon giving effect to the applicable increase, all financial covenants set forth in Section 7.9 would be satisfied on a pro forma basis on such date and for the most recent determination period for which Borrowers have delivered or is required to have delivered financial statements pursuant to Section 7.1(a) or (b);
|
(2)
|
a certificate signed by a Responsible Officer of Borrowers (A) certifying and attaching the resolutions adopted by Borrowers approving or consenting to such increase, and (B) certifying that, before and after giving effect to such increase, (1) the representations and warranties contained in this Agreement and the other Loan Documents are true and correct in all material respects on and as of the date such increase becomes available, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects as of such earlier date, and (2) no Default or Event of Default shall have occurred and be continuing; and
|
3.
|
LETTERS OF CREDIT.
|
(a)
|
(i) after giving effect to the Letter of Credit requested, the Letter of Credit Obligations do not exceed the Letter of Credit Maximum Amount; and (ii) after giving effect to the Letter of Credit requested, the Letter of Credit Obligations on such date plus the aggregate amount of all Revolving Credit Advances and Swing Line Advances (including all Advances deemed disbursed by the Agent under
|
(b)
|
the representations and warranties of the Credit Parties contained in this Agreement and the other Loan Documents are true and correct in all material respects and shall be true and correct in all material respects as of date of the issuance of such Letter of Credit (both before and immediately after the issuance of such Letter of Credit), other than (A) any representation or warranty that expressly speaks only as of a different date and (B) such exceptions and qualifications to such representations and warranties that are disclosed in writing to and approved by Agent and the Majority Lenders, with such approval not to be unreasonably withheld;
|
(c)
|
there is no Default or Event of Default in existence, and none will exist upon the issuance of such Letter of Credit;
|
(d)
|
with respect to any request for a new Letter of Credit, the Borrowers shall have delivered to Issuing Lender at its Issuing Office, not less than three (3) Business Days prior to the requested date for issuance (or such shorter time as the Issuing Lender, in its sole discretion, may permit), the Letter of Credit Agreement related thereto, together with such other documents and materials as may be required pursuant to the terms thereof, and the terms of the proposed Letter of Credit shall be reasonably satisfactory to Issuing Lender;
|
(e)
|
no order, judgment or decree of any court, arbitrator or Governmental Authority shall purport by its terms to enjoin or restrain Issuing Lender from issuing the Letter of Credit requested, or any Revolving Credit Lender from taking an assignment of its Revolving Credit Percentage thereof pursuant to Section 3.6 hereof, and no law, rule, regulation, request or directive (whether or not having the force of law) shall prohibit the Issuing Lender from issuing, or any Revolving Credit Lender from taking an assignment of its Revolving Credit Percentage of, the Letter of Credit requested or letters of credit generally;
|
(f)
|
there shall have been (i) no introduction of or change in the interpretation of any law or regulation, (ii) no declaration of a general banking moratorium by banking authorities in the United States, Michigan or the respective jurisdictions in which the Revolving Credit Lenders, the Borrowers and the beneficiary of the requested Letter of Credit are located, and (iii) no establishment of any new restrictions by any central bank or other governmental agency or authority on transactions involving letters of credit or on banks generally that, in any case described in this clause (e), would make it unlawful or unduly burdensome for the Issuing Lender to issue or any Revolving Credit Lender to take an assignment of its Revolving Credit Percentage of the requested Letter of Credit or letters of credit generally;
|
(g)
|
if any Revolving Credit Lender is a Defaulting Lender, the Issuing Lender has entered into arrangements satisfactory to it to eliminate the Fronting Exposure
|
(h)
|
Issuing Lender shall have received the issuance fees required in connection with the issuance of such Letter of Credit pursuant to Section 3.4 hereof.
|
(a)
|
The Borrowers shall pay letter of credit fees as follows:
|
(b)
|
All payments by the Borrowers to the Agent for distribution to the Issuing Lender or the Revolving Credit Lenders under this Section 3.4 shall be made in Dollars in immediately available funds at the Issuing Office or such other office of the Agent as may be designated from time to time by written notice to the Borrowers by the Agent. The fees described in clauses (a)(i) and (ii) above (i) shall be nonrefundable under all circumstances, (ii) in the case of fees due under clause (a)(i) above, shall be payable semi-annually in advance on the first day of each July and January and (iii) in the case of fees due under clause (a)(ii) above, shall be payable upon the issuance of such Letter of Credit and annually in advance thereafter
.
The fees due under clause (a)(i) above shall be determined by multiplying the Applicable Fee Percentage times the undrawn amount of the face amount of each such Letter of Credit on the date of determination, and shall be calculated on the basis of a 360 day year and assessed for the actual number of
|
(c)
|
If any Change in Law, shall either (i) impose, modify or cause to be deemed applicable any reserve, special deposit, limitation or similar requirement against letters of credit issued or participated in by, or assets held by, or deposits in or for the account of, Issuing Lender or any Revolving Credit Lender or (ii) impose on Issuing Lender or any Revolving Credit Lender any other condition regarding this Agreement, the Letters of Credit or any participations in such Letters of Credit, and the result of any event referred to in clause (i) or (ii) above shall be to increase the cost or expense to Issuing Lender or such Revolving Credit Lender of issuing or maintaining or participating in any of the Letters of Credit (which increase in cost or expense shall be determined by the Issuing Lender's or such Revolving Credit Lender's reasonable allocation of the aggregate of such cost increases and expenses resulting from such events), then, upon demand by the Issuing Lender or such Revolving Credit Lender, as the case may be, the Borrowers shall, within thirty (30) days following demand for payment, pay to Issuing Lender or such Revolving Credit Lender, as the case may be, from time to time as specified by the Issuing Lender or such Revolving Credit Lender, additional amounts which shall be sufficient to compensate the Issuing Lender or such Revolving Credit Lender for such increased cost and expense (together with interest on each such amount from ten days after the date such payment is due until payment in full thereof at the Base Rate), provided that if the Issuing Lender or such Revolving Credit Lender could take any reasonable action, without cost or administrative or other burden or restriction to such Lender, to mitigate or eliminate such cost or expense, it agrees to do so within a reasonable time after becoming aware of the foregoing matters. Each demand for payment under this Section 3.4(c) shall be accompanied by a certificate of Issuing Lender or the applicable Revolving Credit Lender setting forth the amount of such increased cost or expense incurred by the Issuing Lender or such Revolving Credit Lender, as the case may be, as a result of any event mentioned in clause (i) or (ii) above, and in reasonable detail, the methodology for calculating and the calculation of such amount, which certificate shall be prepared in good faith and shall be conclusive evidence, absent manifest error, as to the amount thereof.
|
(a)
|
Upon issuance by the Issuing Lender of each Letter of Credit hereunder (and on the Effective Date with respect to each Existing Letter of Credit), each Revolving Credit Lender shall automatically acquire a pro rata participation interest in such Letter of Credit and each related Letter of Credit Payment based on its respective Revolving Credit Percentage.
|
(b)
|
If the Issuing Lender shall honor a draft or other demand for payment presented or made under any Letter of Credit, the Borrowers agree to pay to the Issuing Lender an amount equal to the amount paid by the Issuing Lender in respect of such draft or other demand under such Letter of Credit and all reasonable expenses paid or incurred by the Agent relative thereto not later than 12:00 p.m. (San Diego, California time), in Dollars, on (i) the Business Day that the Borrowers received notice of such presentment and honor, if such notice is received prior to 10:00 a.m. (San Diego, California time) or (ii) the Business Day immediately following the day that the Borrowers received such notice, if such notice is received after 10:00 a.m. (San Diego, California time).
|
(c)
|
If the Issuing Lender shall honor a draft or other demand for payment presented or made under any Letter of Credit, but the Borrowers do not reimburse the Issuing Lender as required under clause (b) above and the Revolving Credit Aggregate Commitment has not been terminated (whether by maturity, acceleration or otherwise), the Borrowers shall be deemed to have immediately requested that the Revolving Credit Lenders make a Base Rate Advance of the Revolving Credit (which Advance may be subsequently converted at any time into a Eurodollar-based Advance pursuant to Section 2.3 hereof) in the principal amount equal to the amount paid by the Issuing Lender in respect of such draft or other demand under such Letter of Credit and all reasonable expenses paid or incurred by the Agent relative thereto. The Agent will promptly notify the Revolving Credit Lenders of such deemed request, and each such Lender shall make available to the Agent an amount equal to its pro rata share (based on its Revolving Credit Percentage) of the amount of such Advance.
|
(d)
|
If the Issuing Lender shall honor a draft or other demand for payment presented or made under any Letter of Credit, but the Borrowers do not reimburse the Issuing Lender as required under clause (b) above, and (i) the Revolving Credit Aggregate Commitment has been terminated (whether by maturity, acceleration or otherwise), or (ii) any reimbursement received by the Issuing Lender from the Borrowers is or must be returned or rescinded upon or during any bankruptcy or reorganization of any Credit Party or otherwise, then the Agent shall notify each Revolving Credit Lender, and each Revolving Credit Lender will be obligated to pay the Agent for the account of the Issuing Lender its pro rata share (based on its Revolving Credit Percentage) of the amount paid by the Issuing Lender in respect of such draft or other demand under such Letter of Credit and all reasonable expenses paid or incurred by the Agent relative thereto (but no such payment shall diminish the obligations of the Borrowers hereunder). Upon receipt thereof, the Agent will deliver to such Revolving Credit Lender a participation certificate evidencing its participation interest in respect of such payment and expenses. To
|
(e)
|
In the case of any Advance made under this Section 3.6, each such Advance shall be disbursed notwithstanding any failure to satisfy any conditions for disbursement of any Advance set forth in Article 2 hereof or Article 5 hereof, and, to the extent of the Advance so disbursed, the Reimbursement Obligation of the Borrowers to the Agent under this Section 3.6 shall be deemed satisfied (unless, in each case, taking into account any such deemed Advances, the aggregate outstanding principal amount of Advances of the Revolving Credit and the Swing Line, plus the Letter of Credit Obligations (other than the Reimbursement Obligations to be reimbursed by this Advance) on such date exceed the then applicable Revolving Credit Aggregate Commitment).
|
(f)
|
If the Issuing Lender shall honor a draft or other demand for payment presented or made under any Letter of Credit, the Issuing Lender shall provide notice thereof to the Borrowers on the date such draft or demand is honored, and to each Revolving Credit Lender on such date unless the Borrowers shall have satisfied its reimbursement obligations by payment to the Agent (for the benefit of the Issuing Lender) as required under this Section 3.6. The Issuing Lender shall further use reasonable efforts to provide notice to the Borrowers prior to honoring any such draft or other demand for payment, but such notice, or the failure to provide such notice, shall not affect the rights or obligations of the Issuing Lender with respect to any Letter of Credit or the rights and obligations of the parties hereto, including without limitation the obligations of the Borrowers under this Section 3.6.
|
(g)
|
Notwithstanding the foregoing however no Revolving Credit Lender shall be deemed to have acquired a participation in a Letter of Credit if the officers of the Issuing Lender immediately responsible for matters concerning this Agreement shall have received written notice from the Agent or any Lender at least two (2) Business Days prior to the date of the issuance or extension of such Letter of Credit or, with respect to any Letter of Credit subject to automatic extension, at least five (5) Business Days prior to the date that the beneficiary under such Letter of Credit must be notified that such Letter of Credit will not be renewed, that the issuance or extension of Letters of Credit should be suspended based on the occurrence and continuance of a Default or Event of Default and stating that such notice is a “notice of default”; provided, however that the Revolving Credit Lenders shall be deemed to have acquired such a participation upon the date on
|
(h)
|
Nothing in this Agreement shall be construed to require or authorize any Revolving Credit Lender to issue any Letter of Credit, it being recognized that the Issuing Lender shall be the sole issuer of Letters of Credit under this Agreement.
|
(i)
|
In the event that any Revolving Credit Lender becomes a Defaulting Lender, the Issuing Lender may, at its option, require that the Borrowers enter into arrangements satisfactory to Issuing Lender to eliminate the Fronting Exposure with respect to the participation in the Letter of Credit Obligations by such Defaulting Lender, including creation of a cash collateral account on terms satisfactory to Agent or delivery of other security to assure payment of such Defaulting Lender's Percentage of all outstanding Letter of Credit Obligations.
|
(a)
|
Any lack of validity or enforceability of any Letter of Credit, any Letter of Credit Agreement, any other documentation relating to any Letter of Credit, this Agreement or any of the other Loan Documents (the “Letter of Credit Documents”);
|
(b)
|
Any amendment, modification, waiver, consent, or any substitution, exchange or release of or failure to perfect any interest in collateral or security, with respect to or under any Letter of Credit Document;
|
(c)
|
The existence of any claim, setoff, defense or other right which the Borrowers may have at any time against any beneficiary or any transferee of any Letter of Credit (or any persons or entities for whom any such beneficiary or any such transferee may be acting), the Agent, the Issuing Lender or any Revolving Credit Lender or any other Person, whether in connection with this Agreement, any of the Letter of Credit Documents, the transactions contemplated herein or therein or any unrelated transactions;
|
(d)
|
Any draft or other statement or document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect;
|
(e)
|
Payment by the Issuing Lender to the beneficiary under any Letter of Credit against presentation of documents which do not comply with the terms of such
|
(f)
|
Any failure, omission, delay or lack on the part of the Agent, Issuing Lender or any Revolving Credit Lender or any party to any of the Letter of Credit Documents or any other Loan Document to enforce, assert or exercise any right, power or remedy conferred upon the Agent, Issuing Lender, any Revolving Credit Lender or any such party under this Agreement, any of the other Loan Documents or any of the Letter of Credit Documents, or any other acts or omissions on the part of the Agent, Issuing Lender, any Revolving Credit Lender or any such party; or
|
(g)
|
Any other event or circumstance that would, in the absence of this Section 3.7, result in the release or discharge by operation of law or otherwise of the Borrowers from the performance or observance of any obligation, covenant or agreement contained in Section 3.6 hereof.
|
(a)
|
In the administration and handling of Letters of Credit and any security therefor, or any documents or instruments given in connection therewith, Issuing Lender shall have the sole right to take or refrain from taking any and all actions under or upon the Letters of Credit.
|
(b)
|
Subject to other terms and conditions of this Agreement, Issuing Lender shall issue the Letters of Credit and shall hold the documents related thereto in its own name and shall make all collections thereunder and otherwise administer the Letters of Credit in accordance with Issuing Lender's regularly established practices and procedures and will have no further obligation with respect thereto. In the administration of Letters of Credit, Issuing Lender shall not be liable for any action taken or omitted on the advice of counsel, accountants, appraisers or other experts selected by Issuing Lender with due care and Issuing Lender may rely upon any notice, communication, certificate or other statement from the Borrowers, beneficiaries of Letters of Credit, or any other Person which Issuing Lender believes to be authentic. Issuing Lender will, upon request, furnish the Revolving Credit Lenders with copies of Letter of Credit Documents related thereto.
|
(c)
|
In connection with the issuance and administration of Letters of Credit and the assignments hereunder, Issuing Lender makes no representation and shall have no responsibility with respect to (i) the obligations of the Borrowers or the validity, sufficiency or enforceability of any document or instrument given in connection therewith, or the taking of any action with respect to same, (ii) the financial condition of, any representations made by, or any act or omission of the Borrowers or any other Person, or (iii) any failure or delay in exercising any rights or powers possessed by Issuing Lender in its capacity as issuer of Letters of Credit in the absence of its gross negligence or willful misconduct. Each of the Revolving Credit Lenders expressly acknowledges that it has made and will continue to make its own evaluations of the Borrowers' creditworthiness without reliance on any representation of Issuing Lender or Issuing Lender's officers, agents and employees.
|
(d)
|
If at any time Issuing Lender shall recover any part of any unreimbursed amount for any draw or other demand for payment under a Letter of Credit, or any interest thereon, the Agent or Issuing Lender, as the case may be, shall receive same for the
pro
rata
benefit of the Revolving Credit Lenders in accordance with their respective Percentages and shall promptly deliver to each Revolving Credit Lender its share thereof, less such Revolving Credit Lender's pro rata share of the costs of such recovery, including court costs and attorney's fees. If at any time any Revolving Credit Lender shall receive from any source whatsoever any payment on any such unreimbursed amount or interest thereon in excess of such Revolving Credit Lender's Percentage of such payment, such Revolving Credit Lender will promptly pay over such excess to the Agent, for redistribution in accordance with this Agreement.
|
(a)
|
the use which may be made of any Letter of Credit or for any acts or omissions of any beneficiary in connection therewith;
|
(b)
|
the validity, sufficiency or genuineness of documents or of any endorsement thereon, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged;
|
(c)
|
payment by the Issuing Lender to the beneficiary under any Letter of Credit against presentation of documents which do not strictly comply with the terms of any Letter of Credit (unless such payment resulted from the gross negligence or
|
(d)
|
any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit; or
|
(e)
|
any other event or circumstance whatsoever arising in connection with any Letter of Credit.
|
4.
|
[RESERVED].
|
5.
|
CONDITIONS.
|
(a)
|
Notes, this Agreement and the other Loan Documents
. The Borrowers shall have executed and delivered to the Agent for the account of each Lender requesting Notes, the Swing Line Note and/or the Revolving Credit Notes, as applicable; the Borrowers shall have executed and delivered this Agreement; and each Credit Party shall have executed and delivered the other Loan Documents to which such Credit Party is required to be a party (including all schedules and other documents to be delivered pursuant hereto); and such Notes (if any), this Agreement and the other Loan Documents shall be in full force and effect.
|
(b)
|
Corporate Authority
. The Agent shall have received, with a counterpart thereof for each Lender, from each Credit Party, a certificate of its Secretary or Assistant Secretary dated as of the Effective Date as to:
|
(c)
|
Collateral Documents, Guaranties and other Loan Documents
. The Agent shall have received the following documents, each in form and substance satisfactory to the Agent and fully executed by each party thereto:
|
(d)
|
Insurance
. The Agent shall have received evidence reasonably satisfactory to it that the Credit Parties have obtained the insurance policies required by Section 7.5 hereof and that such insurance policies are in full force and effect.
|
(e)
|
Compliance with Certain Documents and Agreements
. Each Credit Party shall have each performed and complied in all material respects with all agreements and conditions contained in this Agreement and the other Loan Documents, to the extent required to be performed or complied with by such Credit Party. No Person (other than the Agent, Lenders and Issuing Lender) party to this Agreement or any other Loan Document shall be in material default in the performance or compliance with any of the terms or provisions of this Agreement or the other Loan Documents or shall be in material default in the performance or compliance
|
(f)
|
Opinions of Counsel
. The Credit Parties shall furnish the Agent prior to the initial Advance under this Agreement, with signed copies for each Lender, opinions of counsel to the Credit Parties, including opinions of local counsel to the extent deemed necessary by the Agent, in each case dated the Effective Date and covering such matters as reasonably required by and otherwise reasonably satisfactory in form and substance to the Agent and each of the Lenders.
|
(g)
|
Payment of Fees
. The Borrowers shall have paid to Comerica Bank any fees due under the terms of the Fee Letter, along with any other fees, costs or expenses due and outstanding to the Agent or the Lenders as of the Effective Date (including reasonable fees, disbursements and other charges of counsel to the Agent).
|
(h)
|
Material Contracts
. The Agent shall have received copies of all Material Contracts described on Schedule 6.18 hereof.
|
(i)
|
Governmental and Other Approvals
. The Agent shall have received copies of all authorizations, consents, approvals, licenses, qualifications or formal exemptions, filings, declarations and registrations with, any court, governmental agency or regulatory authority or any securities exchange or any other person or party (whether or not governmental) received by any Credit Party in connection with the transactions contemplated by the Loan Documents to occur on the Effective Date.
|
(j)
|
Closing Certificate
. The Agent shall have received, with a signed counterpart for each Lender, a certificate of a Responsible Officer of the Borrowers' Representative dated the Effective Date (or, if different, the date of the initial Advance hereunder), stating (solely in such officer's capacity as Responsible Officer of the Borrowers' and not in his or her individual capacity) that to the best of his or her respective knowledge, (a) the conditions set forth in this Section 5 have been satisfied to the extent required to be satisfied by any Credit Party; (b) the representations and warranties made by the Credit Parties in this Agreement or any of the other Loan Documents, as applicable, are true and correct in all material respects; (c) no Default or Event of Default shall have occurred and be continuing; and (d) since December 31, 2010, nothing shall have occurred which has had, or could reasonably be expected to have, a material adverse change on the business, results of operations, conditions, property or prospects (financial or otherwise) of the Borrowers or any other Credit Party.
|
(k)
|
Customer Identification Forms
. The Agent shall have received completed customer identification forms (forms to be provided by the Agent to the Borrowers) from the Borrowers and each Guarantor.
|
(a)
|
No Default or Event of Default shall exist as of the date of the Advance or the request for the Letter of Credit, as the case may be; and
|
(b)
|
Each of the representations and warranties contained in this Agreement and in each of the other Loan Documents shall be true and correct in all material respects as of the date of the Advance or Letter of Credit (as the case may be) as if made on and as of such date (other than (1) any representation or warranty that expressly speaks only as of a different date and (2) such exceptions and qualifications to such representations and warranties that are disclosed in writing to and approved by Agent and the Majority Lenders, with such approval not to be unreasonably withheld).
|
6.
|
REPRESENTATIONS AND WARRANTIES.
|
(a)
|
Each Credit Party, to the extent applicable, has good and valid title (or, in the case of real property, good and marketable title) to all assets owned by it, subject only to the Liens permitted under section 8.2 hereof, and each Credit Party has a valid leasehold or interest as a lessee or a licensee in all of its leased real property;
|
(b)
|
Schedule 6.3(b) hereof identifies all of the real property owned or leased, as lessee thereunder, by the Credit Parties on the Effective Date, including all warehouse or bailee locations;
|
(c)
|
The Credit Parties will collectively own or collectively have a valid leasehold interest in all assets that were owned or leased (as lessee) by the Credit Parties immediately prior to the Effective Date to the extent that such assets are necessary for the continued operation of the Credit Parties' businesses in substantially the manner as such businesses were operated immediately prior to the Effective Date;
|
(d)
|
Each Credit Party owns or has a valid leasehold interest in all real property necessary for its continued operations and, to the best knowledge of the Borrowers, no material condemnation, eminent domain or expropriation action has been commenced or threatened against any such owned or leased real property; and
|
(e)
|
There are no Liens with respect to any of the assets owned by the Credit Parties, except for the Liens permitted pursuant to Section 8.2 of this Agreement.
|
(a)
|
all facilities and property owned or leased by the Credit Parties are in compliance with all Hazardous Material Laws;
|
(b)
|
to the best knowledge of the Borrowers, there have been no unresolved and outstanding past, and there are no pending or threatened:
|
(c)
|
to the best knowledge of the Borrowers, no conditions exist at, on or under any property now or previously owned or leased by any Credit Party which, with the passage of time, or the giving of notice or both, are reasonably likely to give rise to liability under any Hazardous Material Law or create a significant adverse effect on the value of the property.
|
(a)
|
The audited financial statements for the Fiscal Year ended December 31, 2010, furnished to the Agent and the Lenders prior to the Effective Date fairly present in all material respects the financial condition of the Borrowers and their respective Subsidiaries and the results of their operations, in each case, for the periods covered thereby, and have been prepared in accordance with GAAP. The projections, the Pro Forma Balance Sheet and the other pro forma financial information delivered to the Agent prior to the Effective Date are based upon good faith estimates and assumptions believed by management of each Borrower to be accurate and reasonable at the time made, it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein.
|
(b)
|
Since December 31, 2010, there has been no material adverse change in the business, operations, condition, property or prospects (financial or otherwise) of the Credit Parties, taken as a whole.
|
(c)
|
To the best knowledge of the Credit Parties, as of the Effective Date, (i) the Credit Parties do not have any material contingent obligations (including any liability for taxes) not disclosed by or reserved against in the opening balance sheet to be delivered hereunder and (ii) there are no unrealized or anticipated losses from any present commitment of the Credit Parties which contingent obligations and losses in the aggregate could reasonably be expected to have a Material Adverse Effect.
|
7.
|
AFFIRMATIVE COVENANTS.
|
(a)
|
as soon as available, but in any event within one hundred twenty (120) days after the end of Parent's fiscal year, audited consolidated financial statements of Parent prepared in accordance with GAAP, together with an unqualified opinion on such financial statements of an independent certified public accounting firm that is nationally recognized; and
|
(b)
|
as soon as available, but in any event within forty-five (45) days after the end of each fiscal quarter of Parent, a company prepared detailed cash balances and deferred revenue (including but not limited to prepaid tuition) for Borrowers' consolidated operations during such period, in a form acceptable to the Agent and certified by a Responsible Officer and, at any time when Parent is not a publicly reporting entity, forty-five (45) days after the end of each fiscal quarter of Parent, consolidated quarterly financial statements; and
|
(a)
|
Concurrently with the delivery of the financial statements described in Sections 7.1(a) for each fiscal year end, and 7.1(b) for each fiscal quarter end, a Covenant Compliance Report (or, in the case of Borrower prepared financial statements for the last fiscal quarter of each fiscal year, a draft Covenant Compliance Certificate) duly executed by a Responsible Officer of the Borrowers' Representative;
|
(b)
|
Promptly upon receipt thereof, copies of all significant reports submitted by the Credit Parties' firm(s) of certified public accountants in connection with each annual, interim or special audit or review of any type of the financial statements or related internal control systems of the Credit Parties made by such accountants, including any comment letter submitted by such accountants to management in connection with their services;
|
(c)
|
On or before March 1 of each year, an Annual Budget for the current year;
|
(d)
|
Within forty-five (45) days after and as of the end of each of the first three fiscal quarters of each fiscal year and within seventy-five (75) days after and as of the end of the last fiscal quarter of each fiscal year, an internally prepared detailed cash balances and deferred revenue (including but not limited to prepaid tuition) report for the Borrowers' consolidated operations in form acceptable to Agent and certified by a Responsible Officer of Borrowers;
|
(e)
|
Any additional information as required by any Loan Document, and such additional schedules, certificates and reports respecting all or any of the Collateral, the items or amounts received by the Credit Parties in full or partial payment thereof, and any goods (the sale or lease of which shall have given rise to any of the Collateral) possession of which has been obtained by the Credit Parties, all to such extent as the Agent may reasonably request from time to time, any such schedule, certificate or report to be certified as true and correct in all material respects by a Responsible Officer of the applicable Credit Party and shall be in such form and detail as the Agent may reasonably specify;
|
(f)
|
Promptly after filing, the Parent's Form 10-Q and Form 10-K reports filed with the United States Securities and Exchange Commission (“SEC”), and in any event, with respect to the Form 10-Q Report, within sixty (60) days of the end of each of the first three fiscal quarters of each of Parent's Fiscal Years, and with respect to the Form 10-K Report, within one hundred twenty (120) days after and as of the end of each of Parent's Fiscal Years; and, promptly following the filing thereof, any proxy or registration statements filed with the SEC;
|
(g)
|
Within forty-five (45) days after the consummation of any Permitted Acquisition:
|
(h)
|
Such additional financial and/or other information as the Agent or any Lender may from time to time reasonably request, promptly following such request.
|
(a)
|
Continue to engage in their respective business and operations substantially as conducted immediately prior to the Effective Date;
|
(b)
|
Preserve, renew and keep in full force and effect its existence and maintain its qualifications to do business in each jurisdiction where such qualifications are
|
(c)
|
Take all action it deems necessary in its reasonable business judgment to maintain all rights, privileges, licenses and franchises necessary for the normal conduct of its business except where the failure to so maintain such rights, privileges or franchises could not, either singly or in the aggregate, reasonably be expected to have a Material Adverse Effect;
|
(d)
|
Comply with all Contractual Obligations and Requirements of Law, except to the extent that failure to comply therewith could not, either singly or in the aggregate, reasonably be expected to have a Material Adverse Effect; and
|
(e)
|
(i) Continue to be a Person whose property or interests in property is not blocked or subject to blocking pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support Terrorism (66 Fed. Reg. 49079 (2001)) (the “Order”), (ii) not engage in the transactions prohibited by Section 2 of that Order or become associated with Persons such that a violation of Section 2 of the Order would arise, and (iii) not become a Person on the list of Specially Designated National and Blocked Persons, or (iv) otherwise not become subject to the limitation of any OFAC regulation or executive order.
|
(a)
|
the occurrence of any Default or Event of Default of which any Responsible Officer of any Credit Party has knowledge;
|
(b)
|
any (i) litigation or proceeding existing at any time between any Credit Party and any Governmental Authority or other third party, or any investigation of any Credit Party conducted by any Governmental Authority, which in any case if adversely determined would have a Material Adverse Effect or (ii) any material adverse change in the financial condition of the Credit Parties (taken as a whole) since the date of the last audited financial statements delivered pursuant to Section 7.1(a) hereof;
|
(c)
|
the occurrence of any event which any Credit Party believes could reasonably be expected to have a Material Adverse Effect, promptly after concluding that such event could reasonably be expected to have such a Material Adverse Effect;
|
(d)
|
promptly after becoming aware thereof, the taking by the Internal Revenue Service or any foreign taxing jurisdiction of a written tax position (or any such tax position taken by any Credit Party in a filing with the Internal Revenue Service or any foreign taxing jurisdiction) which could reasonably be expected to have a
|
(e)
|
(i) the acquisition or creation of any new Subsidiaries, (ii) any material change after the Effective Date in the authorized and issued Equity Interests of any Credit Party or any other material amendment to any Credit Party's charter, by-laws or other organizational documents, such notice, in each case, to identify the applicable jurisdictions, capital structures or amendments as applicable, provided that such notice shall be given not less than ten (10) Business Days prior to the proposed effectiveness of such changes, acquisition or creation, as the case may be (or such shorter period to which the Agent may consent);
|
(f)
|
not less than fifteen (15) Business Days (or such other shorter period to which the Agent may agree) prior to the proposed effective date thereof, any proposed material amendments, restatements or other modifications to any Subordinated Debt Documents; and
|
(g)
|
any default or event of default by any Person under any Subordinated Debt Document, concurrently with delivery or promptly after receipt (as the case may be) of any notice of default or event of default under the applicable document, as the case may be.
|
(a)
|
Use and operate all of its facilities and properties in material compliance with all applicable Hazardous Material Laws, keep all material required permits, approvals, certificates, licenses and other authorizations required under such Hazardous Material Laws in effect and remain in compliance therewith, and handle all Hazardous Materials in material compliance with all applicable Hazardous Material Laws;
|
(b)
|
(i) Promptly notify the Agent and provide copies upon receipt of all written claims, complaints, notices or inquiries received by any Credit Party relating to its facilities and properties or compliance with Hazardous Material Laws which, if adversely determined, could reasonably be expected to have a Material Adverse Effect and (ii) promptly cure and have dismissed with prejudice to the reasonable satisfaction of the Agent and the Majority Lenders any material actions and proceedings relating to compliance with Hazardous Material Laws to which any Credit Party is named a party, other than such actions or proceedings being contested in good faith and with the establishment of reasonable reserves;
|
(c)
|
To the extent necessary to comply in all material respects with Hazardous Material Laws, remediate or monitor contamination arising from a release or
|
(d)
|
Provide such information and certifications which the Agent or any Lender may reasonably request from time to time to evidence compliance with this Section 7.8.
|
(a)
|
Maintain at all times a Fixed Charge Coverage Ratio of not less than 1.75 to 1.00.
|
(b)
|
Maintain at all times a Total Debt to EBITDA Ratio of not more than 1.00 to 1.00.
|
(c)
|
Cause each educational institution owned or operated by any Credit Party to maintain a financial responsibility composite score, as determined by the DOE pursuant to Title IV and the regulations promulgated thereunder, of at least 1.5 for each fiscal year; provided that, if any such educational institutions report a financial responsibility composite score to the DOE on a consolidated basis, then cause such institutions to maintain a financial responsibility composite score of at least 1.5 for each fiscal year on a consolidated basis.
|
(a)
|
Comply in all material respects with all material requirements imposed by ERISA and the Internal Revenue Code, including, but not limited to, the minimum funding requirements for any Pension Plan, except to the extent that any noncompliance could not reasonably be expected to have a Material Adverse Effect.
|
(b)
|
Promptly notify the Agent upon the occurrence of any of the following events in writing: (i) the termination, other than a standard termination, as defined in ERISA, of any Pension Plan subject to Subtitle C of Title IV of ERISA by any Credit Party; (ii) the appointment of a trustee by a United States District Court to administer any Pension Plan subject to Title IV of ERISA; (iii) the commencement by the PBGC, of any proceeding to terminate any Pension Plan subject to Title IV of ERISA; (iv) the failure of any Credit Party to make any
|
(a)
|
With respect to each Person which becomes a Domestic Subsidiary of any Borrower (directly or indirectly) subsequent to the Effective Date, whether by Permitted Acquisition or otherwise, cause such new Domestic Subsidiary to execute and deliver to the Agent, for and on behalf of each of the Lenders (unless waived by the Agent):
|
(b)
|
With respect each Person which becomes, through the acquisition or its Equity Interests (whether by Permitted Acquisition or otherwise) subsequent to the Effective Date, (i) a Domestic Subsidiary, cause the Credit Party that holds such Equity Interests to execute and deliver such Pledge Agreements, and take such actions as may be necessary to ensure a valid first priority perfected Lien over one hundred percent (100%) of the Equity Interests of such Domestic Subsidiary held by a Credit Party, such Pledge Agreements to be executed and delivered (unless waived by the Agent) within forty five (45) days after the date such Person becomes a Domestic Subsidiary (or such longer time period as the Agent may determine); and (ii) a Foreign Subsidiary, the Equity Interests of which is held directly by a Borrower or one of its Domestic Subsidiaries, cause the Credit Party that holds such Equity Interests to execute and deliver such Pledge Agreements and take such actions as may be necessary to ensure a valid first priority perfected Lien over sixty-five percent (65%) of the Equity Interests of such Subsidiary, such Pledge Agreements to be executed and delivered (unless waived by the Agent) within forty five (45) days after the date such Person becomes a Foreign Subsidiary (or such longer time period as the Agent may determine); and
|
(c)
|
(i) With respect to the acquisition of a fee interest in real property by any Credit Party after the Effective Date (whether by Permitted Acquisition or otherwise) having a market value in excess of Five Million Dollars ($5,000,000), not later than forty five (45) days after the acquisition is consummated or the owner of such property becomes a Domestic Subsidiary (or such longer time period as the Agent may determine), such Credit Party shall execute or cause to be executed (unless waived by the Agent), a Mortgage (or an amendment to an existing mortgage, where appropriate) covering such real property, together with such additional real estate documentation, environmental reports, title policies and surveys as may be reasonably required by the Agent; and (ii) with respect to the acquisition of any leasehold interest in real property by any Credit Party after the Effective Date (whether by Permitted Acquisition or otherwise), which leasehold location is the main location of Borrowers' books and records, not later than forty five (45) days after the acquisition is consummated or the owner of the applicable leasehold interest becomes a Domestic Subsidiary (or such longer time period as the Agent may determine), the applicable Credit Party shall deliver to the Agent a copy of the applicable lease agreement and shall execute or cause to be executed, at the Agent's option, unless otherwise waived by the Agent, Collateral Access Agreement in form and substance reasonably acceptable to the Agent together with such other documentation as may be reasonably required by the Agent;
|
(a)
|
Take such actions as the Agent or Majority Lenders may from time to time reasonably request to establish and maintain first priority perfected security interests in and Liens on all of the Collateral, subject only to those Liens permitted under Section 8.2 hereof, including executing and delivering such additional pledges, assignments, mortgages, lien instruments or other security instruments covering any or all of the Credit Parties' assets as the Agent may reasonably require, such documentation to be in form and substance reasonably acceptable to the Agent, and prepared at the expense of the Borrowers.
|
(b)
|
Execute and deliver or cause to be executed and delivered to the Agent within a reasonable time following the Agent's request, and at the expense of the Borrowers, such other documents or instruments as the Agent may reasonably require to effectuate more fully the purposes of this Agreement or the other Loan Documents.
|
(c)
|
Provide the Agent and the Lenders with any other information required by Section 326 of the USA Patriot Act or necessary for the Agent and the Lenders to verify the identity of any Credit Party as required by Section 326 of the USA Patriot Act.
|
8.
|
NEGATIVE COVENANTS.
|
(a)
|
Indebtedness of any Credit Party to the Agent and the Lenders under this Agreement and/or the other Loan Documents;
|
(b)
|
any Debt existing on the Effective Date and set forth in Schedule 8.1 attached hereto and any renewals or refinancing of such Debt (provided that (i) the aggregate principal amount of such renewed or refinanced Debt shall not exceed the aggregate principal amount of the original Debt outstanding on the Effective Date (less any principal payments and the amount of any commitment reductions made thereon on or prior to such renewal or refinancing), (ii) the renewal or refinancing of such Debt shall be on substantially the same or better terms as in effect with respect to such Debt on the Effective Date, and shall otherwise be in compliance with this Agreement, and (iii) at the time of such renewal or refinancing no Default or Event of Default has occurred and is continuing or would result from the renewal or refinancing of such Debt;
|
(c)
|
any Debt of such Borrower or any of its Subsidiaries incurred to finance the acquisition of fixed or capital assets, whether pursuant to a loan or a Capitalized Lease provided that both at the time of and immediately after giving effect to the incurrence thereof (i) no Default or Event of Default shall have occurred and be continuing, and (ii) the aggregate amount of all such Debt at any one time outstanding (including, without limitation, any Debt of the type described in this clause (c) which is set forth on Schedule 8.1 hereof) shall not exceed $2,000,000, and any renewals or refinancings of such Debt on terms substantially the same or better than those in effect at the time of the original incurrence of such Debt;
|
(d)
|
Subordinated Debt approved by the Agent and the Majority Lenders;
|
(e)
|
Debt under any Hedging Transactions, provided that such transaction is entered into for risk management purposes and not for speculative purposes;
|
(f)
|
Debt arising from judgments or decrees not deemed to be a Default or Event of Default under subsection (g) of Section 9.1;
|
(g)
|
Debt owing to a Person that is a Credit Party, but only to the extent permitted under Section 8.7 hereof; and
|
(h)
|
trade, utility or accounts payable arising in the ordinary course of business;
|
(i)
|
Debt to current and former employees of any Company incurred in the ordinary course of business or existing on the Effective Date arising from (i) deferred
|
(j)
|
Debt representing installment insurance premiums of the Credit Parties owing to insurance companies in the ordinary course of business in an aggregate amount not exceeding $2,000,000 at any time outstanding;
|
(k)
|
Debt arising in connection with endorsement of instruments for deposit in the ordinary course of business;
|
(l)
|
Debt in respect of bid, performance or surety bonds issued for the account of any Credit Party in the ordinary course of business, including guarantees or obligations of any Credit Party with respect to letters of credit supporting such bid, performance or surety obligations (in each case other than for an obligation for money borrowed) in an aggregate amount not exceeding $25,000,000 at any time outstanding;
|
(m)
|
additional unsecured Debt not otherwise described above, provided that both at the time of and immediately after giving effect to the incurrence thereof (i) no Default or Event of Default shall have occurred and be continuing or result therefrom and (ii) the aggregate amount of all such Debt shall not exceed $5,000,000 at any one time outstanding; and
|
(n)
|
any guaranties of Debt otherwise permitted under this Section 8.1.
|
(a)
|
Inventory leased or sold in the ordinary course of business;
|
(b)
|
obsolete, damaged, uneconomic or worn out machinery or equipment, or machinery or equipment no longer used or useful in the conduct of the applicable Credit Party's business;
|
(c)
|
Permitted Acquisitions;
|
(d)
|
mergers or consolidations of any Subsidiary of a Borrower with or into any Borrower or any Guarantor so long as such Borrower or such Guarantor shall be the continuing or surviving entity; provided that at the time of each such merger or consolidation, both before and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing or result from such merger or consolidation;
|
(e)
|
any Subsidiary of a Borrower may liquidate or dissolve into a Borrower or a Guarantor if the Borrowers determine in good faith that such liquidation or dissolution is in the best interests of the Borrowers, so long as no Default or Event of Default has occurred and is continuing or would result therefrom;
|
(f)
|
sales, dispositions, or transfers, including without limitation upon voluntary liquidation from any Credit Party to a Borrower or a Guarantor, provided that the applicable Borrowers or Guarantor takes such actions as the Agent may reasonably request to ensure the perfection and priority of the Liens in favor of the Lenders over such transferred assets;
|
(g)
|
subject to Section 2.10(b) hereof, (i) Asset Sales (exclusive of asset sales permitted pursuant to all other subsections of this Section 8.4) in which the sales price is at least equal to the fair market value of the assets sold and the consideration received is cash or cash equivalents or Debt of any Credit Party being assumed by the purchaser, provided that the aggregate amount of such Asset Sales does not exceed $2,000,000 in any Fiscal Year and no Default or Event of Default has occurred and is continuing at the time of each such sale (both before and after giving effect to such Asset Sale), and (ii) other Asset Sales approved by the Majority Lenders in their sole discretion;
|
(h)
|
the sale or disposition of Permitted Investments and other cash equivalents in the ordinary course of business;
|
(i)
|
dispositions of owned or leased vehicles in the ordinary course of business;
|
(j)
|
dispositions of owned or leased vehicles in the ordinary course of business;
|
(k)
|
Distributions otherwise permitted hereunder;
|
(l)
|
the Ashford Reorganization so long as (x) the successor entity has assumed all of Ashford University, LLC's Indebtedness under an assumption agreement in form satisfactory to the Agent and the Lenders and (y) the Agent has received all documents, instruments, resolutions, opinions (which may be satisfied by an opinion of in-house counsel for Parent) and other due diligence items as the Agent may reasonably request to insure the enforceability of the obligations of Ashford University, LLC to the Agent and the Lenders hereunder and the perfection and effectiveness of the Agent's Liens on the assets of Ashford University, LLC; and
|
(m)
|
any disposition of property as a result of a casualty event.
|
(a)
|
each Credit Party may pay cash Distributions to any Borrower;
|
(b)
|
each Credit Party may declare and make Distributions payable in the Equity Interests of such Credit Party, provided that the issuance of such Equity Interests does not otherwise violate the terms of this Agreement and no Default or Event of Default has occurred and is continuing at the time of making such Distribution or would result from the making of such Distribution; and
|
(c)
|
each Borrower may make Distributions and Parent may make repurchases of its Equity Interests which, when combined with the purchase price for Permitted Acquisitions consummated during the term of this Agreement, do not exceed an aggregate amount of $300,000,000 during the term of this Agreement, so long as, in each case, no Default or Event of Default has occurred and is continuing or would result from or could reasonably be expected to exist after giving effect to such transactions.
|
(a)
|
Permitted Investments;
|
(b)
|
Investments existing on the Effective Date and listed on Schedule 8.7 hereof;
|
(c)
|
sales on open account in the ordinary course of business;
|
(d)
|
intercompany loans or intercompany Investments made by any Credit Party to or in any Guarantor or any Borrower; provided that, in the case of any intercompany loans or intercompany Investments made by any Borrower in any Guarantor, the
|
(e)
|
Investments in respect of Hedging Transactions provided that such transaction is entered into for risk management purposes and not for speculative purposes;
|
(f)
|
loans and advances to employees, officers and directors of any Credit Party for moving, entertainment, travel, relocation, and other similar expenses in the ordinary course of business not to exceed $1,000,000 in the aggregate at any time outstanding;
|
(g)
|
Permitted Acquisitions and Investments in any Person acquired pursuant to a Permitted Acquisition;
|
(h)
|
Investments constituting deposits made in connection with the purchase of goods or services in the ordinary course of business in an aggregate amount for such deposits not to exceed $1,000,000 at any one time outstanding; and
|
(i)
|
other Investments not described above provided that both at the time of and immediately after giving effect to any such Investment (i) no Default or Event of Default shall have occurred and be continuing or shall result from the making of such Investment and (ii) the aggregate amount of all such Investments shall not exceed $1,000,000 at any time outstanding.
|
9.
|
DEFAULTS.
|
(a)
|
non-payment when due of (i) the principal or interest on the Indebtedness under the Revolving Credit (including the Swing Line) or (ii) any Reimbursement Obligation or (iii) any Fees;
|
(b)
|
non-payment of any other amounts due and owing by a Borrower under this Agreement or by any Credit Party under any of the other Loan Documents to
|
(c)
|
default in the observance or performance of any of the conditions, covenants or agreements of the Borrowers set forth in Sections 7.1, 7.2, 7.4(a) and (e), 7.5, 7.6, 7.7, 7.9, 7.13, 7.14, 7.15, 7.16
or Article 8 in its entirety, provided that an Event of Default arising from a breach of Sections 7.1 or 7.2 shall be deemed to have been cured upon delivery of the required item; and provided further that any Event of Default arising solely due to a breach of Section 7.7(a) shall be deemed cured upon the earlier of (x) the giving of the notice required by Section 7.7(a) and (y) the date upon which the Default or Event of Default giving rise to the notice obligation is cured or waived;
|
(d)
|
default in the observance or performance of any of the other conditions, covenants or agreements set forth in this Agreement or any of the other Loan Documents by any Credit Party and continuance thereof for a period of thirty (30) consecutive days;
|
(e)
|
any representation or warranty made by any Credit Party herein or in any certificate, instrument or other document submitted pursuant hereto proves untrue or misleading in any material adverse respect when made;
|
(f)
|
(i) default by any Credit Party in the payment of any indebtedness for borrowed money, whether under a direct obligation or guaranty (other than Indebtedness hereunder) of any Credit Party in excess of Five Million Dollars ($5,000,000) (or the equivalent thereof in any currency other than Dollars) individually or in the aggregate when due and continuance thereof beyond any applicable period of cure and or (ii) failure to comply with the terms of any other obligation of any Credit Party with respect to any indebtedness for borrowed money (other than Indebtedness hereunder) in excess of Five Million Dollars ($5,000,000) (or the equivalent thereof in any currency other than Dollars) individually or in the aggregate, which continues beyond any applicable period of cure and which would permit the holder or holders thereto to accelerate such other indebtedness for borrowed money, or require the prepayment, repurchase, redemption or defeasance of such indebtedness;
|
(g)
|
the rendering of any judgment(s) by any court or arbitrator (not covered by adequate insurance from a solvent carrier which is defending such action without reservation of rights) for the payment of money in excess of the sum of Five Million Dollars ($5,000,000) (or the equivalent thereof in any currency other than Dollars) individually or in the aggregate against any Credit Party, and such judgments shall remain unpaid, unvacated, unbonded or unstayed by appeal or otherwise for a period of fifteen (15) consecutive days from the date of its entry;
|
(h)
|
the occurrence of (i) a “reportable event”, as defined in ERISA, which is determined by the PBGC to constitute grounds for a distress termination of any Pension Plan subject to Title IV of ERISA maintained or contributed to by or on
|
(i)
|
except as expressly permitted under this Agreement, any Credit Party shall be dissolved (other than a dissolution of a Subsidiary of a Borrower which is not a Guarantor or a Borrower) or liquidated (or any judgment, order or decree therefor shall be entered) except as otherwise permitted herein; or if a creditors' committee shall have been appointed for the business of any Credit Party; or if any Credit Party shall have made a general assignment for the benefit of creditors or shall have been adjudicated bankrupt and if not an adjudication based on a filing by a Credit Party, it shall not have been dismissed within thirty (30) days, or shall have filed a voluntary petition in bankruptcy or for reorganization or to effect a plan or arrangement with creditors or shall fail to pay its debts generally as such debts become due in the ordinary course of business (except as contested in good faith and for which adequate reserves are made in such party's financial statements); or shall file an answer to a creditor's petition or other petition filed against it, admitting the material allegations thereof for an adjudication in bankruptcy or for reorganization; or shall have applied for or permitted the appointment of a receiver or trustee or custodian for any of its property or assets; or such receiver, trustee or custodian shall have been appointed for any of its property or assets (otherwise than upon application or consent of a Credit Party ) and shall not have been removed within thirty (30) days; or if an order shall be entered approving any petition for reorganization of any Credit Party and shall not have been reversed or dismissed within sixty (60) days;
|
(j)
|
a Change of Control;
|
(k)
|
the validity, binding effect or enforceability of any subordination provisions relating to any Subordinated Debt shall fail to be enforceable by the Agent and the Lenders in accordance with the terms thereof, or the Indebtedness shall for any reason not have the priority contemplated by this Agreement or such subordination provisions;
|
(l)
|
any Loan Document shall at any time for any reason cease to be in full force and effect (other than in accordance with the terms thereof or the terms of any other Loan Document), as applicable, or the validity, binding effect or enforceability thereof shall be contested by any party thereto (other than any Lender, the Agent, Issuing Lender or Swing Line Lender), or any Person shall deny that it has any or further liability or obligation under any Loan Document, or any such Loan Document shall be terminated (other than in accordance with the terms thereof or the terms of any other Loan Document), invalidated, revoked or set aside or in any way cease to give or provide to the Lenders and the Agent the benefits purported to be created thereby, or any Loan Document purporting to grant a Lien to secure any Indebtedness shall, at any time after the delivery of such Loan Document, fail to create a valid and enforceable Lien on any Collateral purported to be covered thereby or such Lien shall fail to cease to be a perfected Lien with the priority required in the relevant Loan Document (subject to the Agent's or Majority Lender's election not to perfect their Lien in any asset); or
|
(m)
|
if there occurs an event which has a Material Adverse Effect.
|
10.
|
PAYMENTS, RECOVERIES AND COLLECTIONS.
|
(a)
|
Except as otherwise provided herein, all payments to be made by the Borrowers of principal, interest, fees or other amounts hereunder shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff on the date specified for payment under this Agreement and must be received by the Agent not later than 1:00 p.m. (Detroit time) on the date such payment is required
|
(b)
|
Unless the Agent shall have been notified in writing by the Borrowers at least two (2) Business Days prior to the date on which any payment to be made by the Borrowers is due that the Borrowers do not intend to remit such payment, the Agent may, in its sole discretion and without obligation to do so, assume that the Borrowers have remitted such payment when so due and the Agent may, in reliance upon such assumption, make available to each Revolving Credit Lender on such payment date an amount equal to such Lender's share of such assumed payment. If the Borrowers have not in fact remitted such payment to the Agent, each Lender shall forthwith on demand repay to the Agent the amount of such assumed payment made available or transferred to such Lender, together with the interest thereon, in respect of each day from and including the date such amount was made available by the Agent to such Lender to the date such amount is repaid to the Agent at a rate per annum equal to the Federal Funds Effective Rate for the first two (2) Business Days that such amount remains unpaid, and thereafter at a rate of interest then applicable to such Revolving Credit Advances.
|
(c)
|
Subject to the definition of “Interest Period” in Section 1 of this Agreement, whenever any payment to be made hereunder shall otherwise be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in computing interest, if any, in connection with such payment.
|
(d)
|
All payments to be made by the Borrowers under this Agreement or any of the Notes (including without limitation payments under the Swing Line and/or Swing Line Note) shall be made without setoff or counterclaim, as aforesaid, and, subject to full compliance by each Lender (and each assignee and participant pursuant to Section 13.8) with Section 13.13, without deduction for or on account of any present or future withholding or other taxes of any nature imposed by any Governmental Authority or of any political subdivision thereof or any federation or organization of which such Governmental Authority may at the time of payment be a member (other than any Excluded Taxes), unless the Borrowers are compelled by law to make payment subject to such tax. In such event, the Borrowers shall:
|
(e)
|
The Borrowers shall be reimbursed by the applicable Lender for any payment made by the Borrowers under Section 10.1(d) if the applicable Lender is not in compliance with its obligations under Section 13.13 at the time of the Borrowers' payment.
|
11.
|
CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.
|
(a)
|
subject any of the Lenders (or any of their respective Eurodollar Lending Offices) to any tax, duty or other charge with respect to any Advance (except for any withholding taxes which are covered by Section 10.1(d) hereof) or shall change the basis of taxation of payments to any of the Lenders (or any of their respective Eurodollar Lending Offices) of the principal of or interest on any Advance or any other amounts due under this Agreement in respect thereof (except for changes in any Excluded Taxes); or
|
(b)
|
impose, modify or deem applicable any reserve (including, without limitation, any imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any of the Lenders (or any of their respective Eurodollar Lending Offices) or shall impose on any of the Lenders (or any of their respective
|
(b)
|
Notwithstanding the foregoing, however, except in the case of a Change in Law of the type referred to in clauses (x), (y) or (z) of the definition thereof, Borrowers shall not be required to pay any increased costs under Sections 11.5, 11.6 or 3.4(c) for any period ending prior to the date that is 180 days prior to the making of a Lender's initial request for such additional amounts unless the applicable Change in Law or other event resulting in such increased costs is effective retroactively to a date more than 180 days prior to the date of such request, in which case a Lender's request for such additional amounts relating to the period more than 180 days prior to the making of the request must be given not more than 180 days after such Lender becomes aware of the applicable Change in Law or other event resulting in such increased costs.”
|
12.
|
AGENT.
|
(a)
|
The Agent is authorized on behalf of all the Lenders, without the necessity of any notice to or further consent from the Lenders, from time to time to take any action with respect to any Collateral or the Collateral Documents which may be necessary to perfect and maintain a perfected security interest in and Liens upon the Collateral granted pursuant to the Loan Documents.
|
(b)
|
The Lenders irrevocably authorize the Agent, in its reasonable discretion, to the full extent set forth in Section 13.10(d) hereof, (1) to release or terminate any Lien granted to or held by the Agent upon any Collateral (a) upon termination of the Revolving Credit Aggregate Commitment and payment in full of all Indebtedness payable under this Agreement and under any other Loan Document; (b) constituting property (including, without limitation, Equity Interests in any Person) sold or to be sold or disposed of as part of or in connection with any disposition (whether by sale, by merger or by any other form of transaction and including the property of any Subsidiary that is disposed of as permitted hereby) permitted in accordance with the terms of this Agreement; (c) constituting property in which a Credit Party owned no interest at the time the Lien was granted or at any time thereafter; or (d) if approved, authorized or ratified in writing by the Majority Lenders, or all the Lenders, as the case may be, as provided in Section 13.10; (2) to subordinate the Lien granted to or held by the Agent on any Collateral to any other holder of a Lien on such Collateral which is permitted by Section 8.2(b) hereof; and (3) if all of the Equity Interests held by the Credit Parties in any Person are sold or otherwise transferred to any transferee other than a Borrower or a Subsidiary of a Borrower as part of or in connection with any disposition (whether by sale, by merger or by any other form of transaction) permitted in accordance with the terms of this Agreement, to release such Person from all of its obligations under the Loan Documents (including, without limitation, under any Guaranty). Upon request by the Agent at any time, the Lenders will confirm in writing the Agent's authority to release particular types or items of Collateral pursuant to this Section 12.11(b).
|
(a)
|
Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on the Agent to carry out such Lender's, Affiliate's, participant's or assignee's customer identification program, or other obligations required or imposed under or pursuant to the USA Patriot Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with a Borrower or any of its Subsidiaries, any of their respective Affiliates or agents, the Loan Documents or the transactions hereunder: (i) any identity verification procedures, (ii) any record keeping, (iii) any comparisons with government lists, (iv) any customer notices or (v) any other procedures required under the CIP Regulations or such other laws.
|
(b)
|
Each Lender or assignee or participant of a Lender that is not organized under the laws of the United States or a state thereof (and is not excepted from the certification requirement contained in Section 313 of the USA Patriot Act and the applicable regulations because it is both (i) an affiliate of a depository institution or foreign bank that maintains a physical presence in the United States or foreign country, and (ii) subject to supervision by a banking authority regulating such affiliated depository institution or foreign bank) shall deliver to the Agent the certification, or, if applicable, recertification, certifying that such Lender is not a “shell” and certifying to other matters as required by Section 313 of the USA Patriot Act and the applicable regulations: (x) within 10 days after the Effective Date, and (y) at such other times as are required under the USA Patriot Act.
|
13.
|
MISCELLANEOUS.
|
(a)
|
The Borrowers shall pay or reimburse (a) the Agent and its Affiliates for payment of, on demand, all reasonable and invoiced costs and expenses, including, by way of description and not limitation, reasonable and invoiced outside attorney fees and advances, appraisal and accounting fees, lien search fees, and required travel costs, incurred by the Agent and its Affiliates in connection with the commitment, consummation and closing of the loans contemplated hereby, or in connection with the administration or enforcement of this Agreement or the other Loan Documents (including the obtaining of legal advice regarding the rights and responsibilities of the parties hereto) or any refinancing or restructuring of the loans or Advances provided under this Agreement or the other Loan Documents, or any amendment or modification thereof requested by the Borrowers, and (b) the Agent and its Affiliates and each of the Lenders, as the case may be, for all stamp and other taxes and duties payable or determined to be payable in
|
(b)
|
The Borrowers agree to indemnify and hold the Agent and each of the Lenders (and their respective Affiliates) harmless from all loss, cost, damage, liability or expenses, including reasonable house and outside attorneys' fees and disbursements (but without duplication of such fees and disbursements for the same services), incurred by the Agent and each of the Lenders by reason of an Event of Default, or enforcing the obligations of any Credit Party under this Agreement or any of the other Loan Documents, as applicable, or in the prosecution or defense of any action or proceeding concerning any matter growing out of or connected with this Agreement or any of the Loan Documents, excluding, however, any loss, cost, damage, liability or expenses to the extent arising as a result of the gross negligence or willful misconduct of the party seeking to be indemnified under this Section 13.5(b).
|
(a)
|
Except as expressly provided otherwise in this Agreement (and except as provided in clause (b) below), all notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing and shall be given by personal delivery, by mail, by reputable overnight courier or by facsimile and addressed or delivered to it at its address set forth on Schedule 13.6 or at such other address as may be designated by such party in a notice to the other parties that complies as to delivery with the terms of this Section 13.6 or posted to an E-System set up by or at the direction of the Agent (as set forth below). Any notice, if personally delivered or if mailed and properly addressed with postage prepaid and sent by registered or certified mail, shall be deemed given when received or when delivery is refused; any notice, if given to a reputable overnight courier and properly addressed, shall be deemed given two (2) Business Days after the date on which it was sent, unless it is actually received sooner by the named addressee; and any notice, if transmitted by facsimile, shall be deemed given when received. The Agent may, but, except as specifically provided herein, shall not be required to, take any action on the basis of any notice given to it by telephone, but the giver of any such notice shall promptly confirm such notice in writing or by facsimile, and such notice will not be deemed to have been received until such confirmation is deemed received in accordance with the provisions of this Section set forth above. If such telephonic notice conflicts with any such confirmation, the terms of such telephonic notice shall control. Any notice given by the Agent or any Lender to any Borrower shall be deemed to be a notice to all of the Credit Parties.
|
(b)
|
Notices and other communications provided to the Agent and the Lenders party hereto under this Agreement or any other Loan Document may be delivered or furnished by electronic communication (including email and Internet or intranet websites) pursuant to procedures approved by the Agent. The Agent or the Borrowers may, in their respective discretion, agree to accept notices and other communications to it hereunder by electronic communications (including email and any E-System) pursuant to procedures approved by it. Unless otherwise agreed to in a writing by and among the parties to a particular communication, (i) notices and other communications sent to an email address shall be deemed received upon the sender's receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, return email, or other written acknowledgment) and (ii) notices and other communications posted to any
|
(a)
|
This Agreement shall be binding upon and shall inure to the benefit of the Borrowers and the Lenders and their respective successors and assigns.
|
(b)
|
The foregoing shall not authorize any assignment by the Borrowers of their respective rights or duties hereunder, and, except as otherwise provided herein, no such assignment shall be made (or be effective) without the prior written approval of the Lenders, provided that Ashford University, LLC may assign its rights and duties hereunder in connection with the Ashford Reorganization.
|
(c)
|
No Lenders may at any time assign or grant participations in such Lender's rights and obligations hereunder and under the other Loan Documents except (i) by way of assignment to any Eligible Assignee in accordance with clause (d) of this Section, (ii) by way of a participation in accordance with the provisions of clause (e) of this Section or (iii) by way of a pledge or assignment of a security interest subject to the restrictions of clause (f) of this Section (and any other attempted assignment or transfer by any Lender shall be deemed to be null and void).
|
(d)
|
Each assignment by a Lender of all or any portion of its rights and obligations hereunder and under the other Loan Documents, shall be subject to the following terms and conditions:
|
(e)
|
The Borrowers and the Agent acknowledge that each of the Lenders may at any time and from time to time, subject to the terms and conditions hereof, grant participations in such Lender's rights and obligations hereunder (on a pro rata basis only) and under the other Loan Documents to any Person (other than a natural person or to a Borrower or any of such Borrower's Affiliates or Subsidiaries); provided that any participation permitted hereunder shall comply with all applicable laws and shall be subject to a participation agreement that incorporates the following restrictions:
|
(f)
|
Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including its Notes, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledge or assignee for such Lender as a party hereto.
|
(g)
|
The Borrowers hereby designate the Agent, and Agent agrees to serve, as the Borrowers' non-fiduciary agent solely for purposes of this Section 13.8(g) to maintain at its principal office in the United States a copy of each Assignment Agreement delivered to it and a register (the “Register”) for the recordation of the names and addresses of the Lenders, the Percentages of such Lenders and the principal amount of each type of Advance owing to each such Lender from time to time. The entries in the Register shall be conclusive evidence, absent manifest error, and the Borrowers, the Agent, and the Lenders may treat each Person whose name is recorded in the Register as the owner of the Advances recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the Borrowers or any Lender (but only with respect to any entry relating to such Lender's Percentages and the principal amounts owing to such Lender) upon reasonable notice to the Agent and a copy of such information shall be provided to any such party on their prior written request. The Agent shall give prompt
|
(h)
|
The Borrowers authorize each Lender to disclose to any prospective assignee or participant which has satisfied the requirements hereunder, any and all financial information in such Lender's possession concerning the Credit Parties which has been delivered to such Lender pursuant to this Agreement, provided that each such prospective assignee or participant shall execute a confidentiality agreement consistent with the terms of Section 13.11 hereof or shall otherwise agree to be bound by the terms thereof.
|
(i)
|
Nothing in this Agreement, the Notes or the other Loan Documents, expressed or implied, is intended to or shall confer on any Person other than the respective parties hereto and thereto and their successors and assignees and participants permitted hereunder and thereunder any benefit or any legal or equitable right, remedy or other claim under this Agreement, the Notes or the other Loan Documents.
|
(a)
|
No amendment or waiver of any provision of this Agreement or any other Loan Document, nor consent to any departure by any Credit Party therefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent and the Majority Lenders (or by the Agent at the written request of the Majority Lenders) or, if this Agreement expressly so requires with respect to the subject matter thereof, by all Lenders (and, with respect to any amendments to this Agreement or the other Loan Documents, by any Credit Party or the Guarantors that are signatories thereto), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. All references in this Agreement to “Lenders” or “the Lenders” shall refer to all Lenders, unless expressly stated to refer to Majority Lenders (or the like).
|
(b)
|
Notwithstanding anything to the contrary herein,
|
(c)
|
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove of any amendment, consent, waiver or any other modification to any Loan Document (and all amendments, consents, waivers and other modifications may be effected without the consent of the Defaulting Lenders), except that the foregoing shall not permit, in each case without such Defaulting Lender's consent, (i) an increase in such Defaulting Lender's stated commitment amounts, (ii) the waiver, forgiveness or reduction of the principal amount of any Indebtedness owing to such Defaulting Lender (unless all other Lenders affected thereby are treated similarly), (iii) the extension of the final maturity date(s) of such Defaulting Lenders' portion of any of the Indebtedness or the extension of any commitment to extend credit of such Defaulting Lender, or (iv) any other modification which requires the consent of all Lenders or the Lender(s) affected thereby which affects such Defaulting Lender more adversely than the other affected Lenders (other than a modification which results in a reduction of such Defaulting Lender's Percentage of any Commitments or repayment of any amounts owing to such Defaulting Lender on a non pro-rata basis).
|
(d)
|
The Agent shall, upon the written request of the Borrowers, execute and deliver to the Credit Parties such documents as may be necessary to evidence (1) the release of any Lien granted to or held by the Agent upon any Collateral: (a) upon termination of the Revolving Credit Aggregate Commitment and payment in full of all Indebtedness payable under this Agreement and under any other Loan Document; (b) which constitutes property (including, without limitation, Equity Interests in any Person) sold or to be sold or disposed of as part of or in connection with any disposition (whether by sale, by merger or by any other form of transaction and including the property of any Subsidiary that is disposed of as permitted hereby) permitted in accordance with the terms of this Agreement; (c) which constitutes property in which a Credit Party owned no interest at the time the Lien was granted or at any time thereafter; or (d) if approved, authorized or ratified in writing by the Majority Lenders, or all the Lenders, as the case may be, as provided in this Section 13.10; or (2) the release of any Person from its obligations under the Loan Documents (including without limitation the Guaranty) if all of the Equity Interests of such Person that were held by a Credit Party are sold or otherwise transferred to any transferee other than a Borrower or a Subsidiary of a Borrower as part of or in connection with any disposition (whether by sale, by merger or by any other form of transaction) permitted in accordance with the terms of this Agreement;
provided
that (i) the Agent shall not be required to execute any such release or subordination agreement under clauses
|
(e)
|
Notwithstanding anything to the contrary herein the Agent may, with the consent of the Borrowers only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.
|
(a)
|
With respect to any Lender (i) whose obligation to make Eurodollar-based Advances has been suspended pursuant to Section 11.3 or 11.4, (ii) that has demanded compensation under Sections 3.4(c), 11.5 or 11.6, (iii) that has become a Defaulting Lender or (iv) that has failed to consent to a requested amendment, waiver or modification to any Loan Document as to which the Majority Lenders have already consented (in each case, an “Affected Lender”), then the Agent or the Borrowers may, at the Borrowers' sole expense, require the Affected Lender to sell and assign all of its interests, rights and obligations under this Agreement, including, without limitation, its Commitments, to an assignee (which may be one or more of the Lenders) (such assignee shall be referred to herein as the “Purchasing Lender” or “Purchasing Lenders”) within two (2) Business Days after receiving notice from the Borrowers requiring it to do so, for an aggregate price equal to the sum of the portion of all Advances made by it, interest and fees accrued for its account through but excluding the date of such payment, and all
|
(b)
|
If any Lender is an Affected Lender of the type described in Section 13.12(a)(iii) and (iv) (any such Lender, a “Non-Compliant Lender”), the Borrowers may, with the prior written consent of the Agent, and notwithstanding Section 10.3 of this Agreement or any other provisions requiring pro rata payments to the Lenders, elect to reduce any Commitments by an amount equal to the Non-Compliant Lender's Percentage of the Commitment of such Impaired Lender and repay such Non-Compliant Lender an amount equal the principal amount of all Advances owing to it, all interest and fees accrued for its account through but excluding the date of such repayment, and all other amounts payable to it hereunder (including without limitation, if demanded by the Non-Compliant Lender, the amount of any compensation that due to the Non-Compliant Lender under Sections 3.4(c), 11.1, 11.5 and 11.6 to but excluding said date), payable (in immediately available funds) in cash, so long as, after giving effect to the termination of Commitments and the repayments described in this clause (b), any Fronting Exposure of such Non-Compliant Lender shall be reallocated among the Lenders that are not Non-Compliant Lenders in accordance with their respective Revolving Credit Percentages, but only to the extent that the sum of the aggregate principal amount of all Revolving Credit Advances made by each such Lender, plus such Lender's Percentage of the aggregate outstanding principal amount of Swing Line Advances and Letter of Credit Obligations prior to giving effect to such reallocation plus such Lender's Percentage of the Fronting Exposure to be reallocated does not exceed such Lender's Percentage of the Revolving Credit
|
(a)
|
Each Lender that is not a “United States person,” within the meaning of Section 7701(a)(30) of the Internal Revenue Code (each, a “Non-U.S. Lender”) that, at any of the following times, is entitled to an exemption from United States withholding tax or, after a change in any Requirement of Law, is subject to such withholding tax at a reduced rate under an applicable tax treaty, shall (w) on or prior to the date such Lender becomes a Non-U.S. Lender hereunder, (x) on or prior to the date on which any such form or certification expires or becomes obsolete (to the extent such Lender has actual knowledge thereof, or is so advised in writing by the Borrowers), (y) after the occurrence of any event requiring a change in the most recent form of certification previously delivered by it pursuant to this clause (a) (to the extent such Lender has actual knowledge thereof, or is so advised in writing by the Borrowers) and (z) from time to time if reasonably requested by the Borrowers or Agent, provide Agent and the Borrowers with such properly completed and executed documentation prescribed by applicable law as will permit payments to such Lender to be made without withholding, or at a reduced rate of withholding, as the case may be. Without limiting the generality of the foregoing, each Non-U.S. Lender shall deliver originals of the following (in such number as shall be reasonably requested by the recipient), as applicable: (A) Forms W-8ECI (claiming exemption from U.S. withholding tax because the income is effectively connected with a U.S. trade or business), W-8BEN (claiming exemption from, or a reduction of, U.S. withholding tax under an income tax treaty) and/or W-8IMY or any successor forms, (B) in the case of a Non-U.S. Lender claiming exemption under Sections 871(h) or 881(c) of the Internal Revenue Code, Form W-8BEN (claiming exemption from U.S. withholding tax under the portfolio interest exemption) or any successor form and a certificate that such Non-U.S. Lender is not (1) a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (2) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code or (3) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code or (C) any other applicable document prescribed by the Internal Revenue Service certifying as to the entitlement of such Non-U.S. Lender to such exemption from United States withholding tax or such reduced rate with respect to all payments to be made to such Non-U.S. Lender under the Loan Documents, all as reasonably requested by the Borrowers or the Agent. Unless the Borrowers and the Agent have received forms or other documents satisfactory to them indicating that payments under any Loan Document to or for a Non-U.S. Lender are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Agent may (and shall, if directed to do so by the Borrowers) withhold
|
(b)
|
Each Lender that is a “United States person,” within the meaning of Section 7701(a)(30) of the Code (each a “U.S. Lender”) shall (A) on or prior to the date such Lender becomes a “U.S. Lender” hereunder, (B) on or prior to the date on which any such form or certification expires or becomes obsolete (to the extent such Lender has actual knowledge thereof, or is so advised in writing by Borrower), (C) after the occurrence of any event requiring a change in the most recent form or certification previously delivered by it pursuant to this clause (b) (to the extent such Lender has actual knowledge thereof, or is so advised in writing by the Borrowers) and (D) from time to time if requested by the Borrowers or Agent, provide Agent and the Borrowers with two completed originals of Form W-9 (certifying that such U.S. Lender Party is entitled to an exemption from U.S. backup withholding tax) or any successor form.
|
(c)
|
If a payment made to a Non-U.S. Lender would be subject to United States federal withholding tax imposed by FATCA if such Non-U.S. Lender fails to comply with the applicable reporting requirements of FATCA, such Non-U.S. Lender shall deliver to Agent and the Borrowers any documentation under any requirement of law or reasonably requested by any Agent or the Borrowers sufficient for Agent or the Borrowers to comply with their obligations under FATCA and to determine that such Non-U.S. Lender has complied with such applicable reporting requirements.
|
(d)
|
Promptly upon notice from the Agent of any determination by the Internal Revenue Service that any payments previously made to such Lender hereunder were subject to United States income tax withholding when made (or subject to withholding at a higher rate than that applied to such payments), such Lender shall pay to the Agent the excess of the aggregate amount required to be withheld from such payments over the aggregate amount (if any) actually withheld by the Agent, provided that, following any such payment, such Lender shall retain all of its rights and remedies against the Borrowers with respect thereto.
|
(a)
|
The parties prefer that any dispute between them be resolved in litigation subject to a Jury Trial Waiver as set forth in this Agreement, the Notes or the other Loan Documents (“Jury Trial Waiver”), but the Jury Trial Waiver may not be enforceable under certain circumstances. In the event the Jury Trial Waiver is not enforceable, the parties elect to proceed under this Reference Provision.
|
(b)
|
Other than (i) nonjudicial foreclosure of security interests in real or personal property and self-help remedies, (ii) the appointment of a receiver or (iii) the exercise of other provisional remedies (any of which may be initiated pursuant to applicable law), any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Agreement, the Notes or the other Loan Documents, will be resolved by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in this Agreement, the Notes or the other Loan Documents, venue for the reference proceeding will be in the Superior Court or Federal District Court in the County or District where venue is otherwise appropriate under applicable law (the “Court”).
|
(c)
|
The referee shall be a retired Judge or Justice selected by mutual written agreement of the parties. If the parties do not agree, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. The referee shall be appointed to sit with all the powers provided by law. Each party shall have one peremptory challenge pursuant to CCP §170.6. Pending appointment of the referee, the Court has power to issue temporary or provisional remedies.
|
(d)
|
The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested to (a) set the matter for a
|
(e)
|
The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffs for good cause, including a party's failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.
|
(f)
|
Except as expressly set forth in this Agreement, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee's power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial.
|
(g)
|
The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, provide all temporary or provisional remedies, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a trial, including without limitation motions for summary judgment or summary adjudication . The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference. The referee's decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision.
|
(h)
|
If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or Justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.
|
(i)
|
THE PARTIES RECOGNIZE AND AGREE THAT ALL DISPUTES RESOLVED UNDER THIS REFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY, AND THAT THEY ARE IN EFFECT WAIVING THEIR RIGHT TO TRIAL BY JURY IN AGREEING TO THIS REFERENCE PROVISION. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY AND FOR THEIR MUTUAL BENEFIT AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY DISPUTE BETWEEN THEM WHICH ARISES OUT OF OR IS RELATED TO THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS.
|
(a)
|
Each of the Agent, the Lenders, and each of their Affiliates and each of the Credit Parties is authorized (but not required) to transmit, post or otherwise make or communicate, in its sole discretion, Electronic Transmissions in connection with any Loan Document and the transactions contemplated therein. The Borrowers and each other Credit Party hereby acknowledges and agrees that the use of Electronic Transmissions is not necessarily secure and that there are risks associated with such use, including risks of interception, disclosure and abuse and each indicates it assumes and accepts such risks by hereby authorizing the transmission of Electronic Transmissions.
|
(b)
|
All uses of an E-System shall be governed by and subject to, in addition to Section 13.6 and this Section 13.22, separate terms and conditions posted or referenced in such E-System and related contractual obligations executed by the Agent, the Credit Parties and the Lenders in connection with the use of such E-System.
|
(c)
|
All E-Systems and Electronic Transmissions shall be provided “as is” and “as available”. None of the Agent or any of its Affiliates, nor any Borrower or any of their respective Affiliates warrants the accuracy, adequacy or completeness of any E-Systems or Electronic Transmission, and each disclaims all liability for errors or omissions therein. No warranty of any kind is made by the Agent or any of its Affiliates, or any Borrower or any of their respective Affiliates in connection with any E-Systems or Electronic Transmission, including any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects. The Agent, the Borrowers
|
(a)
|
Each Borrower acknowledges and agrees that it is the intent of the parties that each such Borrower be primarily liable for the obligations as a joint and several obligor. It is the intention of the parties that with respect to liability of any Borrower hereunder arising solely by reason of its being jointly and severally liable for Advances and other extensions of credit taken by the Borrowers, the obligations of such Borrower shall be absolute, unconditional and irrevocable irrespective of:
|
(b)
|
Each Borrower agrees that its joint and several liability hereunder shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Indebtedness is rescinded or must be restored by any Lender or any holder of any Note, upon the insolvency, bankruptcy or reorganization of any Borrower, as the case may be, as though such payment had not been made;
|
(c)
|
Each Borrower hereby expressly waives: (i) notice of the Lenders' acceptance of this Agreement; (ii) notice of the existence or creation or non payment of all or any of the Indebtedness other than notices expressly provided for in this Agreement; (iii) presentment, demand, notice of dishonor, protest, and all other notices whatsoever other than notices expressly provided for in this Agreement; (iv) any claim or defense based on an election of remedies; and (v) all diligence in collection or protection of or realization upon the Indebtedness or any part thereof, any obligation hereunder, or any security for or guaranty of any of the foregoing.
|
(d)
|
No delay on any of the Lenders part in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by any of the Lenders of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy. No action of any of the Lenders permitted hereunder shall in any way affect or impair any such Lenders' rights or any Borrower's Indebtedness under this Agreement.
|
(e)
|
Each Borrower hereby represents and warrants to each of the Lenders that it now has and will continue to have independent means of obtaining information concerning such Borrower's affairs, financial condition and business. Lenders
|
(f)
|
Each Borrower represents and warrants (i) that the business operations of the Borrowers are interrelated and that the business operations of the Borrowers complement one another, and such entities have a common business purpose, and (ii) that, to permit their uninterrupted and continuous operations, such entities now require and will from time to time hereafter require funds and credit accommodations for general business purposes and that (iii) the proceeds of advances under the Revolving Credit, the Swing Line and the other credit facilities extended hereunder will directly or indirectly benefit the Borrowers hereunder, severally and jointly, regardless of which Borrowers receive part or all of the proceeds of such Advances.
|
(g)
|
Notwithstanding anything to the contrary contained herein, it is the intention of the Borrowers, the Agent and the Lenders that the amount of the respective the Borrowers' obligations hereunder shall be in, but not in excess of, the maximum amount thereof not subject to avoidance or recovery by operation of applicable law governing bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (collectively, “Applicable Insolvency Laws”). To that end, but only in the event and to the extent that the Borrowers' respective obligations hereunder or any payment made pursuant thereto would, but for the operation of the foregoing proviso, be subject to avoidance or recovery under Applicable Insolvency Laws, the amount of the Borrowers' respective obligations hereunder shall be limited to the largest amount which, after giving effect thereto, would not, under Applicable Insolvency Laws, render such Borrower's respective obligations hereunder unenforceable or avoidable or subject to recovery under Applicable Insolvency Laws. To the extent any payment actually made hereunder exceeds the limitation contained in this Section 13.26(g), then the amount of such excess shall, from and after the time of payment by the Borrowers (or any of them), be reimbursed by the Lenders upon demand by such Borrower. The foregoing proviso is intended solely to preserve the rights of the Agent and the Lenders hereunder against the Borrowers to the maximum extent permitted by Applicable Insolvency Laws and neither any Borrower nor any Guarantor nor any other Person shall have any right or claim under this Section 13.26(g) that would not otherwise be available under Applicable Insolvency Laws.
|
(h)
|
Borrowers irrevocably appoint Parent as their agent to give and receive notices, demands and elections, and to exercise all of its rights as a Borrower, under this Agreement. Agent, the Issuing Lender and each lender may rely on communications from Parent alone as evidence of the actions, elections and notices of the Borrowers for all purposes under this Agreement, without inquiry to any Borrower and notwithstanding any contrary notice from any Borrower. Each Borrower agrees that it shall be bound by any action taken by Parent on its behalf pursuant to such appointment.
|
COMERICA BANK
, as Administrative
Agent
|
BRIDGEPOINT EDUCATION, INC.,
a Delaware corporation
|
By:
/s/ Greg Park
Its:
SVP
|
By:
/s/ Daniel J. Devine
Name: Daniel J. Devine
Title: Executive Vice President and Chief Financial Officer
|
|
|
|
BRIDGEPOINT EDUCATION REAL
ESTATE HOLDINGS, LLC,
an Iowa limited liability company
By: Bridgepoint Education, Inc.,
a Delaware corporation
Its: Sole Member
By:
/s/ Daniel J. Devine
Name: Daniel J. Devine
Title: Executive Vice President and Chief Financial Officer
|
|
ASHFORD UNIVERSITY, LLC,
an Iowa limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By:
/s/ Daniel J. Devine
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
UNIVERSITY OF THE ROCKIES, LLC,
a Colorado limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By:
/s/ Daniel J. Devine
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
WAYPOINT OUTCOMES, LLC,
a Delaware limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By:
/s/ Daniel J. Devine
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
RE:
|
Amended and Restated Revolving Credit Agreement made as of the 13th day of April, 2012 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”), by and among the financial institutions from time to time signatory thereto (individually a “Lender,” and any and all such financial institutions collectively the “Lenders”), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the “Agent”), Bridgepoint Education, Inc., Bridgepoint Education Real Estate Holdings, LLC, Ashford University, LLC, University of the Rockies, LLC, and Waypoint Outcomes, LLC (collectively, the “Borrowers”).
|
(A)
|
Date of Advance: ________________________
|
(B)
|
o
(check if applicable)
|
(C)
|
Type of Advance (check only one):
|
(D)
|
Amount of Advance:
|
(E)
|
Interest Period (applicable to Eurodollar-based Advances)
|
|
BRIDGEPOINT EDUCATION, INC.,
a Delaware corporation
By: ____________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
BRIDGEPOINT EDUCATION REAL
ESTATE HOLDINGS, LLC,
an Iowa limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By: ____________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
ASHFORD UNIVERSITY, LLC,
an Iowa limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By: _____________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
UNIVERSITY OF THE ROCKIES, LLC,
a Colorado limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By: _____________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
WAYPOINT OUTCOMES, LLC,
a Delaware limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By: _____________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
BRIDGEPOINT EDUCATION, INC.,
a Delaware corporation
By: ____________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
BRIDGEPOINT EDUCATION REAL
ESTATE HOLDINGS, LLC,
an Iowa limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By: ____________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer Officer
|
|
ASHFORD UNIVERSITY, LLC,
an Iowa limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By: _____________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
UNIVERSITY OF THE ROCKIES, LLC,
a Colorado limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By: _____________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
|
WAYPOINT OUTCOMES, LLC,
a Delaware limited liability company
By:Bridgepoint Education, Inc.,
a Delaware corporation
Its:Sole Member
By: ______________________________
Name:Daniel J. Devine
Title:Executive Vice President and Chief Financial Officer
|
RE:
|
Amended and Restated Revolving Credit Agreement made as of the 13
th
day of April, 2012 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”), by and among the financial institutions from time to time signatory thereto (individually a “Lender,” and any and all such financial institutions collectively the “Lenders”), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the “Agent”), Bridgepoint Education, Inc., Bridgepoint Education Real Estate Holdings, LLC, Ashford University, LLC, University of the Rockies, LLC, and Waypoint Outcomes, LLC (collectively, the “Borrowers”).
|
(A)
|
Date of Advance: _____________________
|
(B)
|
|
(C)
|
o
(check if applicable)
|
(D)
|
Type of Advance (check only one):--
|
(E)
|
Amount of Advance:
|
|
BRIDGEPOINT EDUCATION, INC., for itself and the other Borrowers
By: ____________________________
Its: ____________________________
|
|
|
|
|
|
|
|
|
RE:
|
Issuance of Letter of Credit pursuant to Article 3 of the Amended and Restated Revolving Credit Agreement made as of the 13
th
day of April, 2012 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”), by and among the financial institutions from time to time signatory thereto (individually a “Lender,” and any and all such financial institutions collectively the “Lenders”), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the “Agent”), Bridgepoint Education, Inc., Bridgepoint Education Real Estate Holdings, LLC, Ashford University, LLC, University of the Rockies, LLC, and Waypoint Outcomes, LLC (collectively, the “Borrowers”).
|
|
Amended and Restated Security Agreement
|
A.
|
Debtors and Comerica Bank entered into a Credit Agreement dated January 29, 2010 (as amended, the “Prior Credit Agreement”) and in connection therewith, Debtors executed and delivered to Comerica Bank a Security Agreement dated January 29, 2010 (the “Prior Security Agreement”).
|
B.
|
The Prior Credit Agreement has been amended and restated under an Amended and Restated Revolving Credit Agreement dated April 13, 2012 by and among Debtors, the Agent, and the lenders party thereto (the “Lenders”) (as amended or restated form time to time, the “Credit Agreement”).
|
2.
|
“Collateral”
shall mean, subject to the proviso below, all assets of each Debtor, including all personal property, of Debtors Including, without limitation, all of the following property any Debtor now or later owns or has an interest in, wherever located:
|
•
|
all Accounts Receivable (for purposes of this Agreement, “Accounts Receivable” consists of all accounts, general intangibles, chattel paper (including without limit electronic chattel paper and tangible chattel paper), contract rights, deposit accounts, money, documents (including negotiable documents), instruments (including promissory notes), rights to payment evidenced by chattel paper, documents or instruments, health care insurance receivables, commercial tort claims, letters of credit, letter of credit rights, supporting obligations, and rights to payment for money or funds advanced or sold),
|
•
|
all goods, inventory (including all goods held for sale or lease or to be furnished under a contract of sale or service and including returns and repossessions), equipment and fixtures,
|
•
|
all of each Debtor's present and future rights, title and interest in, to and under each Debtor's securities accounts, and all Debtors' investment property contained therein, including without limitation all securities and securities entitlements, financial assets, instruments or other property contained in such securities account(s), and all other investment property, financial assets, instruments or other property at any time
|
•
|
all Software (for purposes of this Agreement “Software” consists of all (i) computer programs and supporting information provided in connection with a transaction relating to the program, and (ii) computer programs embedded in goods and any supporting information provided in connection with a transaction relating to the program whether or not the program is associated with the goods in such a manner that it customarily is considered part of the goods, and whether or not, by becoming the owner of the goods, a person acquires a right to use the program in connection with the goods, and whether or not the program is embedded in goods that consist solely of the medium in which the program is embedded),
|
•
|
all investment property (including, without limit, securities, securities entitlements, and financial assets),
|
•
|
all property identified on attached Schedule A are also included in Collateral;
|
•
|
all goods, instruments (including, without limit, promissory notes), documents (including, without limit negotiable documents), policies and certificates of insurance, deposit accounts, and money or other property (except real property which is not a fixture) which are now or later in possession of Bank, or as to which the Agent now or later controls possession by documents or otherwise,
|
•
|
all additions, attachments, accessions, parts, replacements, substitutions, renewals, interest, dividends, distributions, rights of any kind (including but not limited to stock splits, stock rights, voting and preferential rights), products, and all cash and non-cash proceeds of or pertaining to the above including, without limit, insurance proceeds and cash or other property which were or are proceeds and are recovered by a bankruptcy trustee or otherwise as a preferential transfer by any Debtor; and
|
•
|
all of each Debtor's books and records with respect to any of the foregoing, and the computers and equipment containing said books and records;
|
3.
|
Warranties, Covenants and Agreements
. Each Debtor warrants, covenants and agrees as follows:
|
(a)
|
Debtor shall furnish to Agent, in form and at reasonable intervals as Agent may request, any information Agent may reasonably request and allow Agent, at reasonable times and intervals, to examine, inspect, and copy any of Debtor's books and records. Debtor shall, at the request of Agent, mark its records and the Collateral to clearly indicate the security interest of Agent under this Agreement.
|
(b)
|
At the time any Collateral becomes, or is represented to be, subject to a security interest In favor of Agent, Debtor shall be deemed to have warranted that, other than Permitted Liens: (a) the applicable Debtor is the lawful owner of the Collateral and has the right and authority to subject it to a security interest granted to Agent; (b) none of the Collateral is subject to any security interest other than that in favor of Agent; (c) there are no financing statements on file, other than in favor of Agent; and (d) no person, other than Bank, has possession or control (as defined in the UCC) of any Collateral of such nature that perfection of a security interest may be accomplished by control.
|
(c)
|
Debtor will keep the Collateral free at all times from all claims, liens, security interests and encumbrances other than Permitted Liens. Debtor will not, without the prior written consent of Agent and the Majority Lenders, sell, transfer or lease, or permit to be sold, transferred or leased, any or all of the Collateral, except to the extent permitted under the terms of the Credit Agreement and other Loan Documents. Agent or its representatives may, after giving Debtor reasonable prior notice (unless a Default or an Event of Default has occurred), at all reasonable times inspect the Collateral and may enter upon all premises where the Collateral is kept or might be located in which case no notice shall be required.
|
(d)
|
Debtor will do all acts and will execute or cause to be executed all writings reasonably requested by Agent to establish, maintain and continue a perfected and first security interest of Agent in the Collateral, subject only to Permitted Liens. Debtor agrees that Agent and the Lenders has no obligation to acquire or perfect any lien on or security interest in any asset(s), whether realty or personalty, to secure payment of the Indebtedness, and Debtor is not relying upon assets in which the Agent may have a lien or security interest for payment of the Indebtedness.
|
(e)
|
Debtor will pay within the time that they can be paid without interest or penalty all taxes, assessments and similar charges which at any time are or may become a lien, charge, or encumbrance upon any Collateral, except (a) to the extent contested in good faith and bonded in a manner satisfactory to Agent, (b) to the extent that any such lien, charge or encumbrance is a Permitted Lien and (c) to the extent that the failure to pay such taxes, assessments or similar charges could not reasonably be expected to have a Material Adverse Effect. If Debtor fails to pay any of such taxes, assessments, or other charges in the time provided above, but subject to the exceptions described above, Agent has the option (but not the obligation) to do so and Debtor agrees to repay such amounts so expended by Agent immediately upon demand, together with interest at the default interest rate set forth in Section 2.6 of the Credit Agreement.
|
(f)
|
Debtor will keep the Collateral in good condition and will protect it from loss, damage, or deterioration from any cause, except to the extent the failure to take such action could not reasonably be expected to have a Material Adverse Effect. Debtor has and will maintain at all times insurance which complies with the terms of the Credit Agreement. Debtor will deliver to Agent, upon reasonable request of Agent, evidence satisfactory to Agent that the required insurance has been procured. If Debtor fails to maintain insurance in accordance with the terms of the Credit Agreement, Agent has the option (but not the obligation) to do so and Debtor agrees to repay all reasonable amounts so expended to Agent immediately upon demand, together with interest at the default interest rate set forth in Section 2.6 of the Credit Agreement.
|
(g)
|
Debtor represents and warrants that: (a) each Account Receivable owned by such Debtor is valid and enforceable without performance by Debtor of any act; (b) each account balance, represented to Bank as due and owing, are in fact owing; (c) except to the extent permitted by the Loan Documents, there are no setoffs, recoupments, credits, contra accounts, counterclaims or defenses against any Accounts Receivable; (d) as to any Account Receivable represented by a note, trade acceptance, draft or other instrument or by any chattel paper or document, the same have been or will be upon the request of Agent, endorsed and/or delivered by Debtor to Agent, provided that Debtor shall not be required to deliver any promissory notes held by its loan servicers on its behalf; (e) Debtor has not received with respect to any Account Receivable, any notice of the death of the related account debtor, nor of the dissolution, liquidation, termination of existence, insolvency, business failure, appointment of a receiver for, assignment for the benefit of creditors by, or filing of a petition in bankruptcy by or against, the account debtor; and (f) as to each Account Receivable, except as may be expressly permitted by Agent to the contrary in another document, the account debtor is not an affiliate of Debtor, the United
|
(h)
|
Debtor at all times shall be in strict compliance with all applicable laws, including without limit any laws, ordinances, directives, orders, statutes, or regulations an object of which is to regulate or improve health, safety, or the environment (“Environmental Laws”), except to the extent the failure to so comply could not reasonably be expected to have a Material Adverse Effect.
|
(i)
|
If Agent, acting in its sole discretion, redelivers Collateral to Debtor or Debtor's designee for the purpose of (a) the ultimate sale or exchange thereof; or (b) presentation, collection, renewal, or registration of transfer thereof; or (c) loading, unloading, storing, shipping, transshipping, manufacturing, processing or otherwise dealing with it preliminary to sale or exchange; such redelivery shall be in trust for the benefit of Agent and shall not constitute a release of Agent's security interest in it or in the proceeds or products of it unless Agent specifically so agrees in writing. Any proceeds of Collateral coming into Debtor's possession as a result of any such redelivery shall be held in trust for Agent and immediately delivered to Agent for application on the Indebtedness. Agent may (in its sole discretion) deliver any or all of the Collateral to Debtor, and such delivery by Agent shall discharge Agent from all liability or responsibility for such Collateral. With respect to any Collateral consisting of certificated securities, instruments, documents, certificates of title or the like, as to which Agent's security interest need be perfected by, or the priority thereof need be assured by, possession of such Collateral, Debtor will upon demand of Agent deliver possession of same in pledge to Agent, provided that Debtor shall not be required to deliver any promissory notes held by its loan servicers on its behalf.
|
(j)
|
At any time and without notice, Agent may, as to Collateral other than Equipment, Fixtures or Inventory: (1) subject to all applicable cure or grace periods, upon the occurrence of a Default or an Event of Default (a) cause any or all of such Collateral to be transferred to its name or to the name of its nominees; (b) receive or collect by legal proceedings or otherwise all dividends, interest, principal payments and other sums and all other distributions at any time payable or receivable on account of such collateral, and hold the same as Collateral, or apply the same to the Indebtedness, the manner and distribution of the application to be in the sole discretion of Agent; (c) enter into any extension, subordination, reorganization, deposit, merger or consolidation agreement or any other agreement relating to or affecting such Collateral, and deposit or surrender control of such Collateral, and accept other property in exchange for such Collateral and hold or apply the property or money so received pursuant to this Agreement; and (2) whether or not a Default or an Event of Default has occurred, take such actions in its own name or in Debtor's name as Agent, in its sole discretion, deems necessary or appropriate to establish exclusive control (as defined in the UCC) over any Collateral of such nature that perfection of the Bank's security interest may be accomplished by control.
|
(k)
|
Subject to the terms of the Loan Documents, Agent may assign any of the Indebtedness and deliver any or all of the Collateral to any successor agent, who then shall have with respect to Collateral so delivered all the rights and powers of Agent under this Agreement, and after that Agent shall be fully discharged from all liability and responsibility with respect to Collateral so delivered.
|
(l)
|
Debtor authorizes Agent to file at any time financing statements, continuation statements, and amendments thereto that (i) either specifically describe the Collateral or describe the Collateral as all assets of Debtor of the kind pledged hereunder, and (ii) contain any other information required by the UCC for the sufficiency of filing office acceptance of any financing statement, continuation statement, or amendment, including whether Debtor is an organization, the type of organization and any organizational identification number issued to Debtor, if applicable. Any such financing statements may be filed at any time in any jurisdiction. Debtor shall from time to time endorse and deliver to Agent, at the request of Agent, all present and future letters of credit of which it is a beneficiary, drafts,
|
(m)
|
Debtor agrees that no security or guarantee now or later held by Agent for the payment of any Indebtedness, whether from any guarantor, or otherwise, and whether in the nature of a security interest, pledge, lien, assignment, setoff, suretyship, guaranty, indemnity, insurance or otherwise, shall affect in any manner the unconditional pledge of Debtor under this Agreement, and Agent, at its reasonable discretion, without notice to the undersigned, may release, exchange, modify, enforce and otherwise deal with any security or guaranty without affecting in any manner the unconditional pledge of Debtor under this Agreement. Debtor acknowledges and agrees that Agent has no obligation to acquire or perfect any lien on or security interest in any assets, whether realty or personalty, or to obtain any guaranty to secure payment of the Indebtedness, and Debtor is not relying upon any guaranty which Agent has or may have or assets in which Agent has or may have a lien or security interest for payment of the Indebtedness.
|
(a)
|
Each Debtor agrees to collect and enforce payment of all Collateral in accordance with the terms of such Collateral. Subject to all applicable cure or grace periods, upon the occurrence and during the continuance of Default or an Event of Default, immediately upon notice to any Debtor by Agent and at all times after that, each Debtor agrees to fully and promptly cooperate and assist Agent in the collection and enforcement of all Collateral and to hold in trust for Agent all payments received in connection with collateral and from the sale, lease or other disposition of any Collateral, all rights by way of suretyship or guaranty and all rights in the nature of a lien or security interest which any Debtor now or later has regarding Collateral. Subject to all applicable cure or grace periods, upon the occurrence and during the continuance of Default or an Event of Default, immediately upon and after such notice, each Debtor agrees to (a) endorse to Agent and immediately deliver to Agent all payments received on collateral or from the sale, lease or other disposition of any Collateral or arising from any other rights or interests of any Debtor in the Collateral, in the form received by such Debtor without commingling with any other funds, and (b) immediately deliver to Agent all property in each Debtor's possession or later coming into each Debtor's possession through enforcement of any Debtor's rights or interests in the collateral. Subject to all applicable cure or grace periods, upon the occurrence and during the continuance of Default or an Event of Default, each Debtor irrevocably authorizes Agent or any Agent employee or agent to endorse the name of each Debtor upon any checks or other items which are received in payment for any Collateral, and to do any and all things necessary in order to reduce these items to money. Agent shall have no duty as to the collection or protection of Collateral or the proceeds of it, nor as to the preservation of any related rights, beyond the use of reasonable care in the custody and preservation of Collateral in the possession of Agent. Each Debtor agrees to take all steps reasonably deemed necessary by Agent to preserve rights against prior parties with respect to the Collateral. Nothing in this Section 3.1 shall be deemed a consent by Agent or any Lender to any sale, lease or other disposition of any Collateral.
|
(b)
|
Subject to the terms of the Credit Agreement, all items or amounts which are delivered by or for the benefit of any Debtor to Agent on account of partial or full payment of, or with respect to, any Collateral shall be applied to the payment of the Indebtedness, whether then due or not, in such order or at such time of application as Agent may determine in its sole discretion. Each Debtor agrees that Agent shall not be liable for any loss or damage which any Debtor may suffer as a result of Agent's processing of items or its exercise of any other rights or remedies under this Agreement, including without limitation indirect, special or consequential damages, loss of revenues or profits, or any claim, demand or action by any third party arising out of or in connection with the processing of items or the exercise of any other rights or remedies under this Agreement, except to the extent (but only to the extent) caused by Agent's gross negligence or willful misconduct.
|
(a)
|
The occurrence of any Event of Default, as that term is defined in the Credit Agreement, shall be an Event of Default under this Agreement
|
(b)
|
Subject to all applicable grace or cure periods, upon the occurrence and during the continuance of any Event of Default, Agent may at its discretion and without prior notice to any Debtor declare any or all of the indebtedness to be immediately due and payable, and shall have and may exercise any right or remedy available to it including, without limitation, any one or more of the following rights and remedies:
|
(i)
|
Exercise all the rights and remedies upon default, in foreclosure and otherwise, available to secured parties under the provisions of the UCC and other applicable law;
|
(ii)
|
Institute legal proceedings to foreclose upon the lien and security interest granted by this Agreement, to recover judgment for all amounts then due and owing as Indebtedness, and to collect the same out of any Collateral or the proceeds of any sale of it;
|
(iii)
|
Institute legal proceedings for the sale, under the judgment or decree of any court of competent jurisdiction, of any or all Collateral; and/or
|
(iv)
|
Personally or by agents, attorneys, or appointment of a receiver, enter upon any premises where Collateral may then be located, and take possession of all or any of it and/or render it unusable; and without being responsible for loss or damage to such Collateral, hold, operate, sell, lease, or dispose of all or any Collateral at one or more public or private sales, leasings or other dispositions, at places and times and on terms and conditions as Agent may deem fit, without any previous demand or advertisement; and except as provided in this Agreement, all notice of sale, lease or other disposition, and advertisement, and other notice or demand, any right or equity of redemption, and any obligation of a prospective purchaser or lessee to inquire as to the power and authority of Agent to sell, lease, or otherwise dispose of the Collateral or as to the application by Agent of the proceeds of sale or otherwise, which would otherwise be required by, or available to any Debtor under, applicable law are expressly waived by each Debtor to the fullest extent permitted.
|
(c)
|
Each Debtor shall at the request of Agent, notify the account debtors or obligors of Agent's security interest in the Collateral and, subject to all applicable cure or grace periods, upon the occurrence and during the continuance of an Event of Default, direct payment of it to Agent. Agent may, itself, upon the occurrence of any Event of Default, so notify and direct any account debtor or obligor. At the request of Agent, whether or not an Event of Default shall have occurred, each Debtor shall immediately take such actions as the Agent shall request to establish exclusive control (as defined in the UCC) by Agent over any Collateral which is of such a nature that perfection of a security interest may be accomplished by control.
|
(d)
|
The proceeds of any sale or other disposition of Collateral authorized by this Agreement shall be applied by Agent as provided under the terms of the Credit Agreement.
|
(e)
|
Nothing in this Agreement is intended, nor shall it be construed, to preclude Agent from pursuing any other remedy provided by law or in equity for the collection of the Indebtedness or for the recovery of any other sum to which Agent may be entitled for the breach of this Agreement by any Debtor.
|
(f)
|
No waiver of default or consent to any act by any Debtor shall be effective unless in writing and signed by an authorized officer of Agent. No waiver of any default or forbearance on the part of Agent in enforcing any of its rights under this Agreement shall operate as a waiver of any other default or of the same default on a future occasion or of any rights.
|
(g)
|
Subject to all applicable cure or grace periods, upon the occurrence and during the continuance of an Event of Default (except as otherwise indicated), each Debtor (a) irrevocably appoints Agent or any agent of Bank (which appointment is coupled with an interest) the true and lawful attorney of Debtors (with full power of substitution) in the name, place and stead of, and at the expense of, Debtors and (b) authorizes Agent or any agent of Agent, in its own name, at Debtors' expense, to do any of the following, as the Agent, in its sole discretion, deems appropriate:
|
(i)
|
to demand, receive, sue for, and give receipts or acquittances for any moneys due or to become due on any Collateral and to endorse any item representing any payment on or proceeds of the Collateral;
|
(ii)
|
whether or not an Event of Default has occurred or is continuing, to execute and file in the name of and on behalf of each Debtor all financing statements or other filings deemed necessary or desirable by Agent to evidence, perfect, or continue the security interests granted in this Agreement; and
|
(iii)
|
to do and perform any act on behalf of each Debtor permitted or required under this Agreement.
|
(h)
|
Subject to all applicable cure or grace periods, upon the occurrence and during the continuance of an Event of Default, each Debtor also agrees, upon request of Agent, to assemble the Collateral and make it
|
(i)
|
The following shall be the basis for any finder of fact's determination of the value of any Collateral which is the subject matter of a disposition giving rise to a calculation of any surplus or deficiency under the UCC: (a) The Collateral which is the subject matter of the disposition shall be valued in an “as is” condition as of the date of the disposition, without any assumption or expectation that such Collateral will be repaired or improved in any manner; (b) the valuation shall be based upon an assumption that the transferee of such Collateral desires a resale of the Collateral for cash promptly (but no later than 30 days) following the disposition; (c) all reasonable and documented closing costs customarily borne by the seller in commercial sales transactions relating to property similar to such Collateral shall be deducted including, without limitation, brokerage commissions, tax prorations, reasonable attorney's fees, whether inside or outside counsel is used, and marketing costs; (d) the value of the Collateral which is the subject matter of the disposition shall be further discounted to account for any estimated holding costs associated with maintaining such Collateral pending sale (to the extent not accounted for in (c) above), and other maintenance, operational and ownership expenses; and (e) any expert opinion testimony given or considered in connection with a determination of the value of such Collateral must be given by persons having at least 5 years experience in appraising property similar to the Collateral and who have conducted and prepared a complete written appraisal of such Collateral taking into consideration the factors set forth above. The “value” of any such Collateral shall be a factor in determining the amount of proceeds which would have been realized in a disposition to a transferee other than a secured party, a person related to a secured party or a secondary obligor under the UCC.
|
(a)
|
Until Agent is advised in writing by Parent to the contrary, all notices, requests and demands required under this Agreement or by law shall be given to, or made upon, Debtors at the following address:
|
(b)
|
Each Debtor will notify Agent promptly, but in any event within thirty (30) days after any such Debtor changes its chief executive office, principal place of business, and/or location, other than in the ordinary course of business, of any material Collateral, but the giving of this notice shall not cure any Event of Default caused by this change, it any Event of Default would result therefrom.
|
(c)
|
Agent and the Lenders assume no duty of performance or other responsibility under any contracts contained within the Collateral.
|
(d)
|
Subject to the terms of the Loan Documents, the Lenders has the right to sell, assign, transfer, negotiate or grant participations or any interest in, any or all of the Indebtedness and any related obligations, including without limit this Agreement. Subject to the terms of the Loan Documents, in connection with the above, but without limiting its ability to make other disclosures to the full extent allowable, the Agent and the Lenders may disclose all documents and information which the Agent now or later has relating to any Debtor, the Indebtedness or this Agreement, however obtained. Subject to the terms of the Loan Documents, each Debtor further agrees that Agent and the Lenders may provide information relating to this Agreement or relating to any Debtor or the Indebtedness to their respective parents, affiliates, subsidiaries, and service providers.
|
(e)
|
In addition to Agent's other rights, any indebtedness owing from any Lender to any Debtor can be set off and applied by such Lender on any Indebtedness at any time(s) either before or after maturity or demand without notice to anyone. Any such action shall not constitute acceptance of collateral in discharge of any portion of the Indebtedness, except to the extent of the amount so set off.
|
(f)
|
Each Debtor, to the extent not expressly prohibited by applicable law, waives any right to require the Agent or any Lender to: (a) proceed against any person or property; (b) give notice of the terms, time and place of any public or private sale of personal property security held from any other person, or otherwise comply with the provisions of Section 9.504 of the UCC in effect prior to July 1, 2001 or its successor provisions thereafter; or (c) pursue any other remedy in the Agent's power. Each Debtor waives notice of acceptance of this Agreement and presentment, demand, protest, notice of protest, dishonor, notice of dishonor, notice of default, notice of intent to accelerate or demand payment of any Indebtedness, any and all other notices to which the undersigned might otherwise be entitled, and diligence in collecting any Indebtedness, and agree(s) that the Agent and the Lenders may to the extent permitted by the terms of the Loan Documents, once or any number of times, modify the terms of any Indebtedness, compromise, extend, increase, accelerate, renew or forbear to enforce payment of any or all Indebtedness, or permit any other person to incur additional Indebtedness, all without notice to any Debtor and without affecting in any manner the unconditional obligation of Debtors under this Agreement. Each Debtor unconditionally and irrevocably waives each and every defense and setoff of any nature which, under principles of guaranty or otherwise, would operate to impair or diminish in any way the obligation of any Debtor under this Agreement, and acknowledges that such waiver is by this reference incorporated into each security agreement, collateral assignment, pledge and/or other document from any Debtor now or later securing the Indebtedness, and acknowledges that as of the date of this Agreement no such defense or setoff exists.
|
(g)
|
Reserved.
|
(h)
|
In the event that applicable law shall obligate Agent or any Lender to give prior notice to any Debtor of any action to be taken under this Agreement, each Debtor agrees that a written notice given to Parent at least ten days before the date of the act shall be reasonable notice of the act and, specifically, reasonable notification of the time and place of any public sale or of the time after which any private sale, lease, or other disposition is to be made, unless a shorter notice period is reasonable under the circumstances. A notice shall be deemed to be given under this Agreement when delivered to Parent or Agent, as the case may be, as provided in the Credit Agreement.
|
(i)
|
Notwithstanding any prior revocation, termination, surrender, or discharge of this Agreement in whole or in part, the effectiveness of this Agreement shall automatically continue or be reinstated in the event that any payment received or credit given by Agent or any Lender in respect of the Indebtedness is returned, disgorged, or rescinded under any applicable law, including, without limitation, bankruptcy or insolvency laws, in which case this Agreement, shall be enforceable against each Debtor as if the returned, disgorged, or rescinded payment or credit had not been received or given by Agent or any Lender, and whether or not Agent or such Lender relied upon this payment or credit or changed its position as a consequence of it. In the event of continuation or reinstatement of this Agreement, each Debtor agrees upon demand by Agent to execute and deliver to the Agent those documents which Agent determines are appropriate to further evidence (in the public records or otherwise) this continuation or reinstatement, although the failure of any Debtor to do so shall not affect in any way the reinstatement or continuation.
|
(j)
|
This Agreement and all the rights and remedies of Agent under this Agreement shall inure to the benefit of Agent's successors and assigns and to any other holder who derives from Agent title to or an interest in the Indebtedness or any portion of it, and shall bind each Debtor and the heirs, legal representatives, successors, and assigns of each Debtor. Nothing in this Section 5.10 is deemed a consent by Agent or any Lender to any assignment by any Debtor.
|
(k)
|
If there is more than one Debtor, all undertakings, warranties and covenants made by Debtor and all rights, powers and authorities given to or conferred upon the Agent are made or given jointly and severally.
|
(l)
|
Capitalized terms not otherwise defined herein shall have the meanings given to those terms in the Credit Agreement. Except as otherwise provided in this Agreement, all terms in this Agreement have the meanings assigned to them in Division 9 (or, absent definition in Division 9, in any other Division) of the UCC, as those meanings may be amended, supplemented, revised or replaced from time to time. Notwithstanding the foregoing, the parties intend that the terms used herein which are defined
|
(m)
|
No single or partial exercise, or delay in the exercise, of any right or power under this Agreement, shall preclude other or further exercise of the rights and powers under this Agreement. The unenforceability of any provision of this Agreement shall not affect the enforceability of the remainder of this Agreement. The Loan Documents constitute the entire agreement of Debtors, the Agent and the Lenders with respect to the subject matter of this Agreement. No amendment or modification of this Agreement shall be effective unless the same shall be in writing and signed by each Debtor and an authorized officer of Agent.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
.
|
(n)
|
To the extent that any of the Indebtedness is payable upon demand, nothing contained in this Agreement shall modify the terms and conditions of that Indebtedness nor shall anything contained in this Agreement prevent Bank from making demand, without notice and with or without reason, for immediate payment of any or all of that Indebtedness at any time(s), whether or not an Event of Default has occurred.
|
(o)
|
Each Debtor represents and warrants that Debtor's exact name is the name set forth on the signature pages to this Agreement. The respective Debtors further represent and warrant the following:
|
(p)
|
A carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement under the UCC and may be filed by Agent in any filing office.
|
(q)
|
This Agreement and all obligations of Debtors hereunder shall be released and terminated when all of the Indebtedness has been indefeasibly paid in full and when the Lenders have no obligation to make any credit extension under any Loan Document. Without limiting the foregoing, but subject to the last sentence of this Section 5.17, all covenants, representations and warranties made in any Loan Document shall continue in full force and effect so long as any Indebtedness (including Indebtedness under guaranties delivered by any Debtor in favor of Agent and the Lenders) remains outstanding or any Lender has any obligation to make any credit extension to any Loan Party. The representations and warranties contained in this Agreement shall be deemed to be continuing representations and warranties during the entire life of this Agreement, subject to (a) changes reflected in a Schedule delivered to Agent and the Lenders in accordance with the Credit Agreement promptly following any such changes, so long as Agent and the Majority Lenders have approved such changes (which approval shall not unreasonably be withheld), or (b) such changes as are otherwise permitted by this Agreement or the other Loan Documents.
|
(r)
|
The Agent shall, upon the written request of the Debtors, execute and deliver to the Debtors a proper instrument or instruments acknowledging the release of the security interest and Liens established hereby on any Collateral: (a) if the sale or other disposition of such Collateral is permitted under the terms of the Credit Agreement and, at the time of such proposed release, both before and after giving effect thereto, no Default or Event of Default has occurred and is continuing, (b) if the sale or other disposition of such Collateral is not permitted under the terms of the Credit Agreement, provided that the requisite Lenders under such Credit Agreement shall have consented to such sale or disposition in accordance with the terms thereof, or (c) if such release has been approved by the requisite Lenders in accordance with Section 12.11 of the Credit Agreement.
|
(s)
|
Each Debtor agrees that with respect to each Person which becomes a Subsidiary of a Debtor subsequent to the date hereof, such Debtor shall cause such Person to execute and deliver such joinders or security agreements or other pledge documents as are required by the Credit Agreement, within the time periods set forth therein
|
8.
|
Special Provisions Applicable to this Agreement
. (*None, if left blank)
|
Re:
|
Amended and Restated Revolving Credit Agreement made as of the 13
th
day of April, 2012 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”), by and among the financial institutions from time to time signatory thereto (individually a “Lender,” and any and all such financial institutions collectively the “Lenders”), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the “Agent”), Bridgepoint Education, Inc., Bridgepoint Education Real Estate Holdings, LLC, Ashford University, LLC, University of the Rockies, LLC, and Waypoint Outcomes, LLC (collectively, the “Borrowers”).
|
(a)
|
the Assignee: (i) shall be deemed automatically to have become a party to the Credit Agreement and the other Loan Documents, to have assumed all of the Assignor's obligations thereunder to the extent of the Assignee's interest assigned to it hereby, and to have all the rights and obligations of a party to the Credit Agreement and the other Loan Documents, as if it were an original signatory thereto to the extent specified in the second paragraph hereof; and (ii) agrees to be bound by the terms and conditions set forth in the Credit Agreement and the other Loan Documents as if it were an original signatory thereto; and
|
(b)
|
the Assignor's obligations under the Credit Agreement and the other Loan Documents shall be reduced by the assigned to Assignee hereby.
|
(1)
|
the delivery to the Agent of an original of this Assignment Agreement executed by the Assignor and the Assignee;
|
(2)
|
the payment to the Agent of the processing fee referred to in Section 13.8(d)(1) of the Credit Agreement; and
|
(3)
|
all other restrictions and items noted in Section 13.8 of the Credit Agreement have been completed.
|
(i)
|
The parties prefer that any dispute between them be resolved in litigation subject to a Jury Trial Waiver as set forth in this Guaranty (“Jury Trial Waiver”), but the Jury Trial Waiver may not be enforceable under certain circumstances. In the event the Jury Trial Waiver is not enforceable, the parties elect to proceed under this Reference Provision.
|
(ii)
|
Other than (i) nonjudicial foreclosure of security interests in real or personal property and self-help remedies, (ii) the appointment of a receiver or (iii) the exercise of other provisional remedies (any of which may be initiated pursuant to applicable law), any controversy, dispute or claim (each, a “Claim”) between the parties arising out of or relating to this Guaranty or any other Loan Document will be resolved by a reference proceeding in California in accordance with the provisions of Section 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided in the Guaranty, venue for the reference proceeding will be in the Superior Court or Federal District Court in the County or District where venue is otherwise appropriate under applicable law (the “Court”).
|
(iii)
|
The referee shall be a retired Judge or Justice selected by mutual written agreement of the parties. If the parties do not agree, the referee shall be selected by the Presiding Judge of the Court (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would result if ex parte relief is not granted. The referee shall be appointed to sit with all the powers provided by law. Each party shall have one peremptory challenge pursuant to CCP §170.6. Pending appointment of the referee, the Court has power to issue temporary or provisional remedies.
|
(iv)
|
The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested to (a) set the matter for a status and trial-setting conference within fifteen (15) days after the date of selection of the referee, (b) if practicable, try all issues of law or fact within ninety (90) days after the date of the conference and (c) report a statement of decision within twenty (20) days after the matter has been submitted for decision. Any decision rendered by the referee will be final, binding and conclusive, and judgment shall be entered pursuant to CCP §644.
|
(v)
|
The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffs for good cause, including a party's failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding.
|
(vi)
|
Except as expressly set forth in this Section, the referee shall determine the manner in which the reference proceeding is conducted including the time and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee's power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter at trial.
|
(vii)
|
The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered to enter equitable as well as legal relief, provide all temporary or provisional remedies, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a trial, including without limitation motions for summary judgment or summary adjudication . The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that are the subject of the reference. The referee's decision shall be entered by the Court as a judgment or an order in the same manner as if the action had been tried by the Court. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee. The parties reserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, which new trial, if granted, is also to be a reference proceeding under this provision.
|
(viii)
|
If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between the parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by a retired judge or Justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding.
|
1.
|
Fixed Charge Coverage Ratio (Section 7.9(a))
. On the Computation Date, the Fixed Charge Coverage Ratio, which is required to be not less than 1.75 to 1.00 was ______ to 1.00, as computed in the supporting documents attached hereto as Schedule 1.
|
2.
|
Total Debt to EBITDA Ratio (Section 7.9(b))
. On the Computation Date, the Total Debt to EBITDA Ratio, which is required to be not more than 1.00 to 1.00 was ____ to 1.00, as computed in the supporting documents attached hereto as Schedule 2.
|
3.
|
U.S. Department of Education Financial Responsibility Composite Score (Section ___)
. On the Computation Date, the U.S. Department of Education Financial Responsibility Composite Score, which is required to be not less than 1.5 was _________.
|
4.
|
Capital Expenditures (Section 8.6)
. On the Computation Date, Capital Expenditures, which were required to be not more than $75,000,000 in the aggregate for the Fiscal Year in which the Computation Date occurs, were $_____________ in the aggregate to date for the Fiscal Year in which the Computation Date occurs.
|
Re:
|
Amended and Restated Revolving Credit Agreement made as of the 13
th
day of April, 2012 (as amended, restated or otherwise modified from time to time, the “Credit Agreement”), by and among the financial institutions from time to time signatory thereto (individually a “Lender,” and any and all such financial institutions collectively the “Lenders”), Comerica Bank, as Administrative Agent for the Lenders (in such capacity, the “Agent”), Bridgepoint Education, Inc., Bridgepoint Education Real Estate Holdings, LLC, Ashford University, LLC, University of the Rockies, LLC, and Waypoint Outcomes, LLC (collectively, the “Borrowers”).
|
1.
|
The New Lender hereby confirms that it has received a copy of the Credit Agreement and the exhibits and schedules referred to therein, and all other Loan Documents which it considers necessary, together with copies of the other documents which were required to be delivered under the Credit Agreement as a condition to the making of the loans thereunder. The New Lender acknowledges and agrees that it: (a) has made and will continue to make such inquiries and has taken and will take such care on its own behalf as would have been the case had its commitment been granted and its loans been made directly by such New Lender to the Borrowers without the intervention of the Agent or any other Lender; and (b) has made and will continue to make, independently and without reliance upon the Agent or any other Lender, and based on such documents and information as it has deemed appropriate, its own credit analysis and decisions relating to the Credit Agreement. The New Lender further acknowledges and agrees that the Agent has not made any representations or warranties about the creditworthiness of the Borrower or any other party to the Credit Agreement or any other of the Loan Documents, or with respect to the legality, validity, sufficiency or enforceability of the Credit Agreement, or any other of the Loan Documents.
|
2.
|
New Lender represents and warrants that it is a Person to which assignments are permitted pursuant to Section 13.8 of the Credit Agreement.
|
3.
|
Except as otherwise provided in the Credit Agreement, effective as of the Addendum Effective Date (as defined below):
|
(a)
|
the New Lender (i) shall be deemed automatically to have become a party to the Credit Agreement and the other Loan Documents, and to have all the rights and obligations of a Lender as a party to the Credit Agreement and the other Loan Documents, as if it were an original signatory thereto; and (ii) agrees to be bound by the terms, provisions and conditions set forth in the Credit Agreement and the other Loan Documents as if it were an original signatory thereto; and
|
(b)
|
the New Lender shall be a Lender and its Revolving Credit Percentage (and its risk participation in Letters of Credit and Swing Line Advances) shall be as set forth in the attached revised Annex 1 (Schedule of Commitments and Revolving Credit Percentages); provided any fees paid prior to the Addendum Effective Date, including any Letter of Credit Fees, shall not be recalculated, redistributed or reallocated by the Borrowers, Agent or the Lenders.
|
4.
|
As used herein, the term “Addendum Effective Date” means the date on which all of the following have occurred or have been completed, as reasonably determined by the Agent:
|
(a)
|
the Borrowers shall have paid to the Agent all interest, fees (including the Revolving Credit Facility Fee) and other amounts, if any, accrued to the Addendum Effective Date for which reimbursement is then due and owing under the Credit Agreement;
|
(b)
|
New Lender shall have remitted to the Agent finds in an amount equal to its Revolving Credit Percentage of all outstanding Revolving Credit Advances outstanding on the Addendum Effective Date; and
|
(c)
|
if requested by New Lender, the Borrowers shall have executed and delivered to the Agent for the New Lender, new Revolving Credit Notes payable to such New Lender in the face amount of such New Lender's Revolving Credit Percentage (after giving effect to this New Lender Addendum, and any other New Lender Addendum executed concurrently herewith).
|
5.
|
The Agent shall notify the New Lender, along with the Borrowers, of the Addendum Effective Date. The New Lender shall deliver herewith to the Agent administrative details with respect to the funding and distribution of Loans (and, as applicable, Letters of Credit) as requested by Agent.
|
6.
|
Terms defined in the Credit Agreement and not otherwise defined herein shall have their defined meanings when used herein.
|
New Lender
|
Revolving Credit Commitment Amount
|
Revolving Credit Percentage
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Totals
|
100%
|
|
Revolving Credit Eurodollar Margin
|
150.00
|
Revolving Credit Base Rate Margin
|
50.00
|
Revolving Credit Facility Fee
|
25.00
|
Letter of Credit Fees (exclusive of facing fees)
|
150.00
|
LENDERS
|
REVOLVING CREDIT
PERCENTAGE
|
REVOLVING CREDIT ALLOCATIONS
|
Comerica Bank
|
60%
|
$30,000,000
|
Union Bank, N.A.
|
40%
|
$20,000,000
|
TOTALS
|
100%
|
$50,000,000
|
Correct Legal Name
|
Address
|
Type of Organization
|
Jurisdiction of Organization
|
Tax identification number
|
Bridgepoint Education, Inc.
|
13500 Evening Creek Drive North, Suite 600, San Diego, CA 92128
|
Corporation
|
Delaware
|
59-3551629
|
Bridgepoint Education Real Estate Holdings, LLC
|
400 North Bluff Blvd., Clinton, IA 52732
|
Limited Liability Company
|
Iowa
|
20-2320084
|
University of the Rockies, LLC
|
555 East Pikes Peak Ave., Colorado Springs, CO 80903-3612
|
Limited Liability Company
|
Colorado
|
83-0492885
|
Ashford University, LLC
|
400 North Bluff Blvd., Clinton, IA 52732
|
Limited Liability Company
|
Iowa
|
20-2076985
|
Waypoint Outcomes, LLC
|
Two Bala Plaza, Bala Cynwyd, PA 19004
|
Limited Liability Company
|
Delaware
|
26-4646154
|
Site
|
Street Address
|
City
|
State
|
Zip
|
Size (sqft)
|
Lease End
|
BPE at Kilroy Sabre Springs
|
13480 Evening Creek Dr N
|
San Diego
|
CA
|
92128
|
149,817
|
9/3/2018
|
AU at Kilroy Sabre Springs
|
13500 Evening Creek Dr N
|
San Diego
|
CA
|
92128
|
147,533
|
7/31/2018
|
UoR at Kilroy Sabre Springs
|
13520 Evening Creek Dr N
|
San Diego
|
CA
|
92128
|
25,644
|
2/28/2017
|
Sunroad Centrum 1
|
8620 Spectrum Center Blvd
|
San Diego
|
CA
|
92123
|
248,051
|
2/29/2020
|
Sunroad Centrum 1 - 9F
|
8620 Spectrum Center Blvd
|
San Diego
|
CA
|
92123
|
25,713
|
2/29/2020
|
Sunroad Centrum 2
|
TBD Spectrum Center Blvd
|
San Diego
|
CA
|
92123
|
193,000
|
10/31/2024
|
Downtown
|
600 B St
|
San Diego
|
CA
|
92101
|
28,354
|
4/30/2020
|
Copley Drive Direct
|
5855 Copley Dr
|
San Diego
|
CA
|
92111
|
80,281
|
5/31/2013
|
|
|
|
|
|
|
|
Iowa Online Center
|
1310 19th Ave NW
|
Clinton
|
IA
|
52732
|
36,720
|
6/30/2014
|
AU Main Campus
|
400 N Bluff Blvd
|
Clinton
|
IA
|
52732
|
364,948
|
N/A*
|
AU Main Campus Red House
|
610 N Bluff Blvd
|
Clinton
|
IA
|
52732
|
2,000
|
N/A*
|
AU Additional Parking Lot (Springdale Cemetery)
|
Springdale Drive
|
Clinton
|
IA
|
52732
|
33,000
|
4/14/2018
|
AU Tennis Center
|
321 4th Ave S
|
Clinton
|
IA
|
52732
|
26,662
|
N/A*
|
AU Off-Campus Residence Hall
|
2300 Lincoln Way
|
Clinton
|
IA
|
52732
|
82,537
|
N/A*
|
AU South Campus
|
1650 S 14th St
|
Clinton
|
IA
|
52732
|
|
N/A*
|
|
|
|
|
|
|
|
UoR Campus
|
545 E Pikes Peak Ave
|
Colorado Springs
|
CO
|
80903
|
5,520
|
5/31/2012
|
UoR Campus
|
555 E Pikes Peak Ave
|
Colorado Springs
|
CO
|
80903
|
33,601
|
3/31/2015
|
|
|
|
|
|
|
|
Denver Operations Center
|
1515 Arapahoe St
|
Denver
|
CO
|
80202
|
179,175
|
7/31/2021
|
Denver/UoR Operations Center at the Tabor Center
|
1200 17th St, 1201 16th St
|
Denver
|
CO
|
80202
|
79,677
|
3/31/2023
|
|
|
|
|
|
|
|
Waypoint Outcomes
|
2 Bala PLZ STE 300
|
Bala Cynwyd
|
PA
|
19004
|
2,000
|
3MTM
|
1.
|
Nominating Agreement dated February 17, 2009, between Warburg Pincus and Parent.
|
2.
|
Office Lease dated January 31, 2008, between Kilroy Realty, L.P. (“Kilroy”) and Parent, related to the premises located at 13480 Evening Creek Drive North, San Diego, California (“13480 Evening Creek”).
|
3.
|
First Amendment to Office Lease dated December 1, 2008, between Kilroy and Parent, related to 13480 Evening Creek.
|
4.
|
Second Amendment to Office Lease dated June 3, 2009, between Kilroy and Parent, related to 13480 Evening Creek.
|
5.
|
Office Lease dated January 31, 2008, between Kilroy and Parent, related to the premises located at 13500 Evening Creek Drive North, San Diego, California (“13500 Evening Creek”).
|
6.
|
Letter Agreement dated October 1, 2009, among Kilroy, Parent and Countrywide Home Loans, Inc., related to 13500 Evening Creek.
|
7.
|
First Amendment to Office Lease dated March 12, 2010, between Kilroy and Parent, related to 13500 Evening Creek.
|
8.
|
Office Lease dated May 7, 2009, between Kilroy and Parent, related to the premises located at 13520 Evening Creek Drive North, San Diego, California.
|
9.
|
Standard Form Modified Gross Office Lease dated October 22, 2008, between Parent and Sunroad Centrum Office I, L.P. (“Sunroad”) related to the premises located at 8620 Spectrum Center Lane, San Diego, California (“8620 Spectrum Center”).
|
10.
|
Addendum to Standard Form Modified Gross Office Lease dated October 22, 2008, between Parent and Sunroad, related to 8620 Spectrum Center.
|
11.
|
First Amendment to Standard Form Modified Gross Office Lease dated September 16, 2011, between Parent and Sunroad, related to 8620 Spectrum Center.
|
12.
|
Office Lease dated February 28, 2011, among Parent, Ashford University, LLC (“Ashford”) University of the Rockies, LLC (“UoR”) and WSC 1515 Arapahoe Investors
|
13.
|
Commencement Date Memorandum and First Amendment to Office Lease dated November 18, 2011, among Parent, Ashford, UoR and WSC, related to 1515 Arapahoe.
|
14.
|
Lease dated August 8, 2011, between Parent and CCP/MS SSIII Denver Tabor Center I Property Owner LLC, related to the premises located at 1200 17th Street and 1201 16th Street, Denver, Colorado.
|
15.
|
Blackboard License and Services Agreement dated December 23, 2003, and amendments thereto, between Ashford and Blackboard, Inc.
|
16.
|
Amendment to Blackboard License and Services Agreement dated December 8, 2009, between Ashford and Blackboard, Inc.
|
17.
|
Master Services and License Agreement dated September 29, 2009, between Parent and eCollege.com (“eCollege”).
|
18.
|
First Addendum to Master Services and License Agreement dated November 9, 2009, between Parent and eCollege.
|
19.
|
Second Addendum to Master Services and License Agreement dated December 15, 2009, between Parent and eCollege.
|
20.
|
Third Addendum to Master Services and License Agreement dated January 12, 2010, between Parent and eCollege.
|
21.
|
Fourth Addendum to Master Services and License Agreement dated October 14, 2010, between Parent and eCollege.
|
22.
|
Software License Agreement dated April 6, 2004, between Parent and Campus Management Corp. (“CMC”).
|
23.
|
CampusCare Support Agreement dated February 15, 2005, between Parent and CMC.
|
24.
|
Addenda to Software License Agreement dated June 29, 2009, between Parent and CMC.
|
25.
|
Addendum to CampusCare Maintenance and Support Agreement dated February 11, 2011, between Parent and CMC.
|
26.
|
CampusCare Maintenance and Support Renewal dated December 28, 2011, between Parent and CMC.
|
27.
|
General Services Agreement and Task Order One dated January 1, 2009, between Ashford and Affiliated Computer Services, Inc. (“ACS”).
|
28.
|
Amendment One to Task Order One (Central Financial Aid Processing) dated January 12, 2009, between Ashford and ACS.
|
29.
|
Amendment One to General Services Agreement dated July 14, 2011, between Ashford and ACS.
|
30.
|
General Services Agreement and Task Order One dated January 1, 2009, between UoR and ACS.
|
31.
|
Amendment One to Task Order One (Central Financial Aid Processing) dated January 12, 2009 between UoR and ACS.
|
32.
|
Amendment One to General Services Agreement dated July 15, 2011, between UoR and ACS.
|
Name
|
Sole Member
|
Ashford University, LLC
|
Bridgepoint Education, Inc.
|
University of the Rockies, LLC
|
Bridgepoint Education, Inc.
|
Waypoint Outcomes, LLC
|
Bridgepoint Education, Inc.
|
Bridgepoint Education Real Estate Holdings, LLC
|
Bridgepoint Education, Inc.
|
Center Leaf Partners, LLC
|
Ashford University, LLC
|
1.
|
Bridgepoint Education, Inc.
|
Debtor(s)
|
Secured Party(s)
|
UCC File No.
|
Original Filing Date
|
Date of
Amendment (A), Termination (T), Partial Release (PR), Assignment (AS), or Continuation (C)
|
Collateral
|
Bridgepoint Education, Inc.
|
CIT Technology Financing Services, Inc.
|
20082579819
|
7/28/2008
|
|
Specific equipment leased by Debtor including future attachments, parts, accessories, and add-ons and all proceeds and products thereof.
|
Bridgepoint Education, Inc.
|
Ikon Financial SVCS
|
20092941778
|
9/15/2009
|
|
Specific equipment leased by Debtor including all additions, improvements, attachments, accessories, accessions, upgrades and replacements and all substitutions or exchanges, and all products, insurance and other proceeds.
|
Bridgepoint Education, Inc.
|
Ikon Financial SVCS
|
20093118145
|
9/30/2009
|
|
Specific equipment leased by Debtor including all additions, improvements, attachments, accessories, accessions, upgrades and replacements and all substitutions or exchanges, and all products, insurance and other proceeds.
|
Bridgepoint Education, Inc.
|
North American Communications Resource, Inc.
|
20110993066
|
3/17/2011
|
|
Specific equipment
|
Bridgepoint Education, Inc.
|
Interstate Power and Light Company
|
20111888141
|
5/18/2011
|
|
A purchase money security interest in specific equipment.
|
2.
|
Ashford University, LLC
|
Debtor(s)
|
Secured Party(s)
|
UCC File No.
|
Original Filing Date
|
Date of
Amendment (A), Termination (T), Partial Release (PR), Assignment (AS), or Continuation (C)
|
Collateral
|
Ashford University, LLC
|
GreatAmerica Leasing Corporation
|
X091394-0
|
4/5/2007
|
|
Specific equipment leased by Debtor.
|
Ashford University, LLC
|
GreatAmerica Leasing Corporation
|
X103856-1
|
8/29/2007
|
|
Specific equipment leased by Debtor.
|
Ashford University, LLC
|
GreatAmerica Leasing Corporation
|
X103918-3
|
8/30/2007
|
|
Specific equipment leased by Debtor.
|
Ashford University, LLC
|
Interstate Power and Light Company
|
E868709-4
|
10/19/2007
|
|
A Purchase Money Security Interest in specific equipment.
|
Ashford University, LLC
|
CIT Technology Financing Services I LLC
|
P560253-1
|
10/28/2007
|
|
Specific equipment leased by Debtor.
|
Ashford University, LLC
|
Interstate Power and Light Company
|
E10016503-9
|
3/9/2010
|
|
A Purchase Money Security Interest in specific equipment.
|
3.
|
University of the Rockies, LLC
|
Debtor(s)
|
Secured Party(s)
|
UCC File No.
|
Original Filing Date
|
Date of
Amendment (A), Termination (T), Partial Release (PR), Assignment (AS), or Continuation (C)
|
Collateral
|
University of the Rockies
|
Sensormatic Electronics Corporation
ADT Security Services, Inc. - Sensormatic Division
(per amendment)
|
2009F084453
|
10/6/2009
|
1/12/2010 (A)
2010F003696
|
Specific equipment and proceeds thereof.
Amendment changing the Secured Party's name to: “ADT Security Services, Inc. - Sensormatic Division”
|
A.
|
Landlord and Tenant are parties to that certain lease dated August 8, 2011 (the "
Lease
"). Pursuant to the Lease, Landlord has leased to Tenant space currently containing approximately 79,677 rentable square feet (the "
Original Premises
") described as Suite Nos. 110, 200 and 350 on the first, second and third floors in the building located at 1201 16
th
Street and commonly known as Tabor Center Mall, and Suite 500 on the fifth floor in the building located at 1200 17
th
Street and commonly known as Tabor Center Tower (collectively, the "
Buildings
").
|
B.
|
Tenant desires to surrender a portion of the Premises to Landlord containing approximately 955 rentable square feet described as a portion of Suite No. 110 on the first floor of the Tabor Center Mall as shown on
Exhibit A
hereto (the "
Reduction Space
").
|
C.
|
Tenant desires to include a secondary stair exit in Suite No. 110 as part of the Landlord Work and to reduce the scope of Landlord's Base Building Work in exchange for an increase to the Allowance.
|
D.
|
Landlord and Tenant desire to acknowledge and establish the Commencement Date of the Lease.
|
E.
|
Landlord is willing to agree to such modifications on the following terms and conditions.
|
1.
|
Reduction
.
|
1.01
|
Effective as of the Commencement Date, as set forth in Section 6 below, the Premises is decreased by reducing the rentable square feet of Suite 110 on the first floor of the Tabor Center Mall from 8,037 to 7,082 rentable square feet by the elimination of the Reduction Space. As of the Commencement Date, the Reduction Space shall be deemed surrendered by Tenant to Landlord, the Lease shall be deemed terminated with respect to the Reduction Space, and the "
Premises
", as defined in the Lease, shall be deemed to mean the Original Premises, less the Reduction Space.
|
1.02
|
Exhibit A-1 of the Lease depicting Suite 110 shall be replaced by Exhibit A-1 attached to this Amendment.
|
1.03
|
The chart in Section 1.1(a) of the Lease is deleted in its entirety and replaced with the following:
|
BUILDING
|
SUITE NUMBER
|
RENTABLE
SQUARE FEET |
Tabor Center Mall
|
110
|
7,082
|
Tabor Center Mall
|
200
|
20,763
|
Tabor Center Mall
|
350
|
29,685
|
Tabor Center Tower
|
500
|
21,192
|
|
TOTAL
:
|
78,722
|
1.04
|
The first sentence of Section 1.4 of the Lease is deleted in its entirety and replaced with the following:
|
2.
|
Base Rent
. As of the Commencement Date, the schedule of Base Rent contained in Section 3.1 of the Lease with respect to Phase 1 only is deleted, and the following is substituted therefor:
|
Months of the Lease Term
|
Annual Rate
per Rentable Square Foot for Phase 1 ("Phase 1 Mall Premises Base Rental Rates")
|
Annual
Base Rent
|
Monthly Installment of
Base Rent
|
Commencement Date – the last day of the 6
th
full calendar month following Commencement Date**
|
[***]**
|
[***]
|
[***]
|
7-9
|
[***]
|
[***]
|
[***]
|
10-21
|
[***]
|
[***]
|
[***]
|
22-33
|
[***]
|
[***]
|
[***]
|
34-45
|
[***]
|
[***]
|
[***]
|
46-57
|
[***]
|
[***]
|
[***]
|
58-69
|
[***]
|
[***]
|
[***]
|
70-81
|
[***]
|
[***]
|
[***]
|
82-93
|
[***]
|
[***]
|
[***]
|
94-105
|
[***]
|
[***]
|
[***]
|
106-117
|
[***]
|
[***]
|
[***]
|
118-129
|
[***]
|
[***]
|
[***]
|
130-Expiration Date
|
[***]
|
[***]
|
[***]
|
3.
|
Tenant's Pro Rata Share
. Tenant's Pro Rata Share with respect to the Mall Premises is hereby revised as follows: (a)
21.7569%
from and after the Commencement Date but prior to the Phase 2 Commencement Date, and (b)
34.0434%
from and after the Phase 2 Commencement Date.
|
4.
|
Landlord's Base Building Work
. Landlord shall not be required to construct, as part of Landlord's Base Building Work or otherwise, either the additional exit stair or the additional emergency egress route identified in item (d) of Exhibit B-1. Without limiting the foregoing, Exhibit B-1 is hereby revised by the deletion of item (d).
|
5.
|
Allowance
. The Allowance provided for under the Lease with respect to the Mall Premises is hereby increased from [***] to [***] and, without limiting the foregoing, Section 8(a) of the Work Letter is hereby appropriately revised. The forgoing net increase to the Allowance reflects the following: (a) a reduction in the rentable square footage of the Mall Premises due to the deletion of the Reduction Space; and (b) an increase reflecting Landlord's contribution of an additional [***] in exchange for the reduction of the scope of Landlord's Base Building Work as provided for in Section 4 above.
|
6.
|
Commencement Date
. Landlord and Tenant hereby agree that the Commencement Date for the Lease is established as
February 1, 2012
and that Landlord is deemed to have achieved Substantial Completion of the Landlord's Base Building Work and the Landlord Work with respect to Phase 1 as of such date. Landlord and Tenant agree that the Commencement Date shall be duly established by this Amendment without the necessity of a separate Commencement Date Letter.
|
7.
|
Representations
. Each party represents to the other that it has full power and authority to execute this Amendment. Tenant represents that it has not made any assignment, sublease, transfer, conveyance of the Lease or any interest therein or in the Reduction Space and further represents that there is not and will not hereafter be any claim, demand, obligation, liability, action or cause of action by any other party respecting, relating to or arising out of the Reduction Space, and Tenant agrees to indemnify and hold harmless Landlord and the Landlord Parties from all liabilities, expenses, claims, demands, judgments, damages or costs arising from any of the same, including without limitation, attorneys' fees.
|
8.
|
Brokerage
.
|
8.01
|
Landlord shall not be bound by this Amendment unless and until Landlord's Broker and Tenant's Broker have executed amendments to their respective brokerage agreements with respect to the Lease, in a form acceptable to Landlord in its sole discretion, effecting an equitable reduction in the commissions payable thereunder to reflect the deletion of the Reduction Space from the Premises.
|
8.02
|
Tenant and Landlord hereby represent and warrant to each other that it has dealt with no broker in connection with this Amendment other than the Brokers. Landlord will pay all fees, commissions or other compensation payable to Brokers, if any, pursuant to the terms of separate agreements. Tenant agrees to indemnify and hold the Landlord Parties harmless from all claims of any brokers claiming to have represented Tenant in connection with this Amendment.
|
9.
|
Miscellaneous
.
|
9.01
|
This Amendment sets forth the entire agreement between the parties with respect to the matters set forth herein. There have been no additional oral or written representations or agreements. Under no circumstances shall Tenant be entitled to any Rent abatement, improvement allowance, leasehold improvements, or other work to the Premises, or any similar economic incentives that may have been provided Tenant in connection with entering into the Lease, unless specifically set forth in this Amendment. Tenant agrees that it shall not disclose any matters set forth in this Amendment or disseminate or distribute any information concerning the terms, details or conditions hereof to any person, firm or entity without obtaining the express written consent of Landlord.
|
9.02
|
Except as herein modified or amended, the provisions, conditions and terms of the Lease shall remain unchanged and in full force and effect.
|
9.03
|
In the case of any inconsistency between the provisions of the Lease and this Amendment, the provisions of this Amendment shall govern and control.
|
9.04
|
Submission of this Amendment by Landlord is not an offer to enter into this Amendment but rather is a solicitation for such an offer by Tenant. Landlord shall not be bound by this Amendment until Landlord has executed and delivered the same to Tenant.
|
9.05
|
The capitalized terms used in this Amendment shall have the same definitions as set forth in the Lease to the extent that such capitalized terms are defined therein and not redefined in this Amendment.
|
9.06
|
Each signatory of this Amendment represents hereby that he or she has the authority to execute and deliver the same on behalf of the party hereto for which such signatory is acting.
|
LANDLORD:
|
|
CCP/MS SSIII DENVER TABOR CENTER 1 PROPERTY OWNER LLC,
a Delaware limited liability company
By:
/s/ Todd W. Hartman
Name: Todd W. Hartman
Its: Vice President
|
|
|
|
TENANT:
|
BRIDGEPOINT EDUCATION, INC.,
a Delaware corporation
By:
/s/ Andrew S. Clark
Name:
Andrew S. Clark
Its:
President and CEO
By:
/s/ Diane L. Thompson
Name:
Diane L. Thompson
Its:
Senior Vice President, Secretary and General Counsel
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Bridgepoint Education, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ ANDREW S. CLARK
|
|
|
Andrew S. Clark
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Bridgepoint Education, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ DANIEL J. DEVINE
|
|
|
Daniel J. Devine
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ ANDREW S. CLARK
|
|
|
Andrew S. Clark,
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
/s/ DANIEL J. DEVINE
|
|
|
Daniel J. Devine,
Chief Financial Officer
(Principal Financial Officer)
|
|
|