-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QVqT+jJNYJlNkywE1w3mGsed49hA842VC2BOGmieYM0oBwX6MexuLQRwOB5JlfUX 3rgGmhfcwPgfJGfLOfh+Gg== 0000950131-00-500031.txt : 20001204 0000950131-00-500031.hdr.sgml : 20001204 ACCESSION NUMBER: 0000950131-00-500031 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20001130 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAREER EDUCATION CORP CENTRAL INDEX KEY: 0001046568 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 393932190 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-23245 FILM NUMBER: 782364 BUSINESS ADDRESS: STREET 1: 2895 GREENSPOINT STREET 2: SUITE 600 CITY: HOFFMAN ESTATES STATE: IL ZIP: 60195 BUSINESS PHONE: 8477813600 MAIL ADDRESS: STREET 1: 2800 WEST HIGGINS ROAD STREET 2: SUITE 790 CITY: HOFFMAN ESTATES STATE: IL ZIP: 60195 8-K 1 d8k.txt FORM UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): November 30, 2000 ------------------ Career Education Corporation ---------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-23245 36-3932190 -------- ------- ---------- (State or Other Jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 2895 Greenspoint Parkway, Suite 600, Hoffman Estates, IL 60195 -------------------------------------------------------- ----- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (847) 781-3600 -------------- 1 Item 5. Other Events. On October 24, 2000 EduTrek International, Inc. and the Registrant entered into a merger agreement. On November 30, 2000, EduTrek and the Registrant signed a Ninth Amendment to the Credit Agreement with First Union National Bank, attached as Exhibit 99.1, which extends the maturity of all obligations under the credit facility (previously totaling approximately $14.35 million) to April 30, 2001. In addition First Union will provide an additional $1.5 million in availability to be used for marketing and other approved expenses. The repayment of the additional $1.5 million is guaranteed by the Registrant and secured by a letter of credit in the same amount posted by the Registrant. Draws under this loan require the Registrant's consent. One of EduTrek's lenders assigned its $5.0 million promissory note to the Registrant in exchange for $5.0 million plus accrued interest. This promissory note was due November 30, 2000 and was has now been extended to April 30, 2001. In connection with the purchase and modification of this note, the Registrant received an Amended and Restated Promissory Note, attached as Exhibit 99.2, entered into an Assignment Agreement, attached as Exhibit 99.3, and a Note Modification Agreement, attached as Exhibit 99.4. The information contained in Exhibits 99.1, 99.2, 99.3 and 99.4 are incorporated herein by reference. Item 7. Financial Statements and Exhibits. (c) Exhibits. 99.1 Ninth Amendment to Credit Agreement and Waver dated November 30, 2000 between First Union National Bank, EduTrek and EduTrek's guarantors 99.2 Amended and Restated Promissory Note dated November 30, 2000 payable by EduTrek to the Registrant 99.3 Assignment Agreement dated November 30, 2000 between Sylvan Learning Systems, Inc. and the Registrant 99.4 Note Modification Agreement dated November 30, 2000 between the Registrant, EduTrek and EduTrek's subsidiaries 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CAREER EDUCATION CORPORATION By: /s/ John M. Larson ---------------------------------------- John M. Larson Chairman of the Board, President and Chief Executive Officer Dated: December 1, 2000 EX-99.1 2 dex991.txt NINTH AMENDMENT TO CREDIT AGREEMENT Exhibit 99.1 NINTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER THIS NINTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment") is made and entered into as of the 30th day of November, 2000, by and between EDUTREK INTERNATIONAL, INC., a Georgia corporation ("Borrower"), the undersigned Guarantors party hereto (the "Guarantors"; Borrower and the Guarantors (other than CEC (as defined herein)) are individually a "Credit Party" and collectively the "Credit Parties"), and FIRST UNION NATIONAL BANK ("Lender"). W I T N E S S E T H: - - - - - - - - - - WHEREAS, Borrower and Lender are a party to that certain Credit Agreement, dated as of March 25, 1999, as amended by a First Amendment to Credit Agreement dated May 27, 1999, by a Second Amendment to Credit Agreement and Waiver dated August 16, 1999, by a Third Amendment to Credit Agreement dated August 27, 1999, by a Fourth Amendment to Credit Agreement and Waiver dated November 11, 1999, by a Fifth Amendment to Credit Agreement and Waiver dated December 23, 1999, by a Sixth Amendment to Credit Agreement dated as of February 9, 2000, by a Seventh Amendment to Credit Agreement and Waiver dated as of May 30, 2000, and by a Eighth Amendment to Credit Agreement and Waiver (the "Eighth Amendment") dated as of September 11, 2000 (as amended, the "Credit Agreement"), pursuant to which Lender made available to Borrower a $10,000,000 revolving line of credit pursuant to the Facility A Commitment and a line of credit providing a maximum availability of $4,350,000 pursuant to the Facility B Commitment; WHEREAS, Lender granted to Borrower a waiver of certain financial covenants violations in the Eighth Amendment, and Borrower seeks a continuation of such waiver; WHEREAS, Borrower is in violation of Section 2.1 of the Credit Agreement in that the aggregate principal amount of all outstanding Facility A Loans, when aggregated with the outstanding principal amount of the L/C Obligations, exceeds the Facility A Commitment, and Borrower seeks a waiver of such violation; WHEREAS, Borrower also seeks an extension of the maturity date of the Facility B Loans so that such Loans mature coterminous with the Facility A Loans, an increase in the Facility B Commitment, and an extension of credit in the amount of $1,500,000 pursuant to a new Facility C Commitment; WHEREAS, Borrower has requested that Lender enter into this Amendment to waive such violations, to extend the maturity date of the Facility B Loans, to increase the Facility B Commitment, and to implement the Facility C Commitment; and WHEREAS, Lender is willing to agree to such amendments and waiver upon the terms set forth herein; NOW, THEREFORE, for and in consideration of the foregoing premises, the mutual promises, covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Definitions. All capitalized terms used herein and not expressly defined herein shall have the same respective meanings given to such terms in the Credit Agreement. 2. Amendments. Subject to the conditions contained herein, the Credit Agreement is hereby amended as follows: 2.1. New Definitions. Section 1.1 of the Credit Agreement is hereby amended by adding thereto in appropriate alphabetical order the following new definitions: "CEC" means Career Education Corporation, a Delaware corporation. "CEC Guaranty" means that certain Guaranty executed and delivered by CEC in favor of Lender guaranteeing the payment and performance of the Facility C Loans, as amended or restated from time to time. "Facility C" means the Credit Facility established pursuant to Section 2.1(c) hereof. "Facility C Commitment" means the obligation of the Lender to make Loans to the Borrower pursuant to Section 2.1(c) hereof in an aggregate principal amount at any time outstanding not to exceed One Million Five Hundred Thousand Dollars ($1,500,000). "Facility C Loan" means any revolving loan made to the Borrower pursuant to Section 2.1(c), and all such Loans collectively as the context requires. "Facility C Note" means the Revolving Credit Note made by the Borrower payable to the order of the Lender, substantially in the form of Exhibit A-3 hereto, evidencing the Facility C Credit Facility, and any amendments and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part. 2 "Ninth Amendment" shall mean that certain Ninth Amendment to Credit Agreement and Waiver, dated as of November 30, 2000, between Borrower and Lender. "Ninth Amendment Effective Date" shall mean that date on which all of the conditions precedent set forth in Section 4 of the Ninth Amendment have been satisfied and the Ninth Amendment has become effective. 2.2. Existing Definitions. Section 1.1 of the Credit Agreement is hereby further amended by deleting the definitions of "Commitment", "Facility B Commitment", "Guarantors", "Loan", "Loan Documents", "Note" and "Termination Date" and by substituting in lieu thereof the following new definitions of such terms: "Commitment" means collectively, the Facility A Commitment, the Facility B Commitment and the Facility C Commitment. "Facility B Commitment" means the obligation of the Lender to make Loans to the Borrower pursuant to Section 2.1(b) hereof in an aggregate principal amount at any time outstanding not to exceed Five Million Seven Hundred Fifty Thousand Dollars ($5,750,000). "Guarantors" means CEC and each of Borrower's Subsidiaries which is organized or formed under the laws of the United States or of any political subdivision thereof or any territory thereof. "Loan" means any revolving loan made to the Borrower pursuant to Section 2.1, whether a Facility A Loan, Facility B Loan or a Facility C Loan, and all such Loans collectively as the context requires. "Loan Documents" means, collectively, this Agreement, the Facility A Note, the Facility B Note, the Facility C Note, any Hedging Agreement executed by Lender or any of its Affiliates, the Applications, the Security Documents, the Guaranty, the CEC Guaranty and each other document, instrument and agreement executed and delivered by the Borrower, its Subsidiaries, CEC, or their counsel in connection with this Agreement or otherwise referred to herein or contemplated hereby, all as may be amended, restated or otherwise modified. "Note" means, collectively, the Facility A Note, the Facility B Note and the Facility C Note. "Termination Date" means the earliest of (a) April 30, 2001, or, if the Stated Termination Date is extended in accordance with and as such term is defined in Section 2.3(d) hereof, May 30, 2001, (b) thirty (30) days 3 after demand for payment is made by Lender pursuant to Section 2.3(a) hereof, (c) the date of termination by the Borrower pursuant to Section 2.5(a), and (d) the date of termination by the Lender pursuant to Section 11.2(a). 2.3. Deleted Definition. Section 1.1 of the Credit Agreement is hereby further amended by deleting the definition of "Facility B Termination Date". 2.4. Revolving Loans. Section 2.1 of the Credit Agreement is hereby amended by deleting such section in its entirety, and substituting in lieu thereof a new Section 2.1, to read as follows: SECTION 2.1. Revolving Credit Loans. (a) Facility A Loans. Subject to the terms and conditions of this Agreement, Lender agrees to make Facility A Loans to the Borrower from time to time from the Closing Date through the Termination Date as requested by the Borrower in accordance with the terms of Section 2.2 provided, that (i) the aggregate principal amount of all outstanding Facility A Loans (after giving effect to any amount requested), when aggregated with the outstanding principal amount of the L/C Obligations, shall not exceed the Facility A Commitment and (ii) the aggregate principal amount of all outstanding Loans (after giving effect to any amount requested), when aggregated with the outstanding principal amount of the L/C Obligations, shall not exceed the aggregate amount of the Commitments. Subject to the terms and conditions hereof, the Borrower may borrow, repay and reborrow Facility A Loans hereunder until the Termination Date. (b) Facility B Loans. Subject to the terms and conditions of this Agreement, Lender agrees to make Facility B Loans to the Borrower from time to time from the First Amendment Effective Date through the Termination Date as requested by the Borrower in accordance with the terms of Section 2.2 provided, that (i) the aggregate principal amount of all outstanding Facility B Loans (after giving effect to any amount requested) shall not exceed the Facility B Commitment as then in effect and (ii) the aggregate principal amount of all outstanding Loans (after giving effect to any amount requested), when aggregated with the outstanding principal amount of the L/C Obligations, shall not exceed the aggregate amount of the Commitments. Subject to the terms and conditions hereof, the Borrower may borrow, repay and reborrow Facility B Loans hereunder until the Termination Date. The Borrower may not borrow any Facility B Loans unless and until Facility A has been fully drawn. The $1,400,000 advance made under Facility B on the Ninth Amendment Effective Date 4 shall be used solely to pay to Lender on such date the arrangement fees due to Lender in the aggregate amount of $1,400,000. (c) Facility C Loans. Subject to the terms and conditions of this Agreement, Lender agrees to make Facility C Loans to the Borrower from time to time from the date on which CEC delivers to Lender the Standby Letter of Credit referred to in Section 5 of the Ninth Amendment through the Termination Date as requested by the Borrower in accordance with the terms of Section 2.2 provided, that (i) the aggregate principal amount of all outstanding Facility C Loans (after giving effect to any amount requested) shall not exceed the Facility C Commitment as then in effect and (ii) the aggregate principal amount of all outstanding Loans (after giving effect to any amount requested), when aggregated with the outstanding principal amount of the L/C Obligations, shall not exceed the aggregate amount of the Commitments. Subject to the terms and conditions hereof, the Borrower may borrow, repay and reborrow Facility C Loans hereunder until the Termination Date. The Borrower may not borrow any Facility C Loans unless and until each of Facility A and Facility B has been fully drawn. 2.5. Repayment of Loans. The Credit Agreement is hereby further amended by deleting Section 2.3 thereof in its entirety and substituting in lieu thereof a new Section 2.3 to read as follows: SECTION 2.3 Repayment of Loans. (a) Repayment of Facility A Loans. The Borrower shall repay the outstanding principal amount of all Facility A Loans in full, together with all accrued but unpaid interest thereon, on the earlier to occur of (i) the Termination Date and (ii) that date which is thirty (30) days after Lender delivers to Borrower a demand for payment so long as such demand is delivered on or after September 30, 2000; provided, however, that, so long as no Default or Event of Default has occurred on or after the Ninth Amendment Effective Date, Lender will not exercise its right to demand payment set forth in (ii) above if Lender determines in its sole discretion that Borrower continues to diligently pursue its proposed merger with CEC contemplated under that certain Agreement and Plan of Merger dated as of October 24, 2000, among CEC, EI Acquisition, Inc. and Borrower. (b) Repayment of Facility B Loans and Facility C Loans. The Borrower shall repay the outstanding principal amount of all Facility B Loans and all Facility C Loans in full, together with all accrued but unpaid interest thereon, on the Termination Date. 5 (c) Optional Repayments. The Borrower may at any time and from time to time repay the Loans, in whole or in part, upon delivery of notice, in the form attached hereto as Exhibit D (a "Notice of Prepayment") specifying the date and amount of repayment. If any such notice is given, the amount specified in such notice shall be due and payable on the date set forth in such notice. Partial repayments shall be in an aggregate amount of at least $100,000 or a whole multiple of $10,000 in excess thereof. (d) Option to Extend Stated Termination Date. On or before March 31, 2001, and provided that the Loans have not been accelerated prior to such date, Borrower may request in writing that Lender extend the April 30, 2001 date set forth in the Termination Date definition (the "Stated Termination Date") to May 30, 2001. Lender agrees to extend the Stated Termination Date provided that, at the time of such extension, no Default or Event of Default has occurred or is continuing and Borrower pays to Lender a renewal fee in the amount of Five Hundred Thousand Dollars ($500,000). Lender agrees to apply such renewal fee to the principal balance of the Loans should the Borrower pay the Obligations in full on or before May 30, 2001. 2.6. Notes. The Credit Agreement is hereby further amended by adding a new subsection (c) to Section 2.4 to read as follows: (c) The Facility C Loans and the obligation of the Borrower to repay the Facility C Loans shall be evidenced by a Facility C Note executed by the Borrower payable to the order of the Lender representing the Borrower's obligation to pay the Facility C Commitment or, if less, the aggregate unpaid principal amount of all Facility C Loans made and to be made to the Borrower hereunder, plus interest and all other fees, charges and other amounts due thereon. The Facility C Note shall be dated the Ninth Amendment Effective Date and shall bear interest on the unpaid principal amount thereof at the applicable interest rate per annum specified in Section 4.1. 2.7. Permanent Reduction of the Commitment. The Credit Agreement is hereby further amended by deleting Section 2.5 thereof in its entirety and substituting in lieu thereof a new Section 2.5 to read as follows: SECTION 2.5 Permanent Reduction of the Commitment. (a) The Borrower shall have the right at any time and from time to time, upon at least five (5) Business Days prior written notice to the Lender, to permanently reduce, in whole at any time or in part from time to time, without premium or penalty, either the Facility A Commitment, the 6 Facility B Commitment or the Facility C Commitment in an aggregate principal amount not less than $100,000 or any whole multiple of $10,000 in excess thereof. (b) The Facility A Commitment shall (i) immediately upon any demand for payment made by Lender pursuant to Section 2.3(a) hereof, reduce to the amount of the outstanding principal balance of the Facility A Loans and (ii) thirty (30) days after such demand for payment, reduce to zero. (c) Each of the Facility B Commitment and the Facility C Commitment shall reduce to zero on the Termination Date. (d) Each permanent reduction permitted or required pursuant to this Section 2.5 shall be accompanied by a payment of principal sufficient to reduce the sum of the aggregate outstanding Facility A Loans plus the outstanding L/C Obligations after such reduction to the Facility A Commitment as so reduced and/or to reduce the sum of the aggregate outstanding Facility B Loans after such reduction to the Facility B Commitment as so reduced and/or to reduce the sum of the aggregate outstanding Facility C Loans after such reduction to the Facility C Commitment as so reduced. Any reduction of the Commitment to zero shall be accompanied by payment of all outstanding Obligations (and furnishing of cash collateral satisfactory to the Lender for all L/C Obligations). 2.8. Interest. The Credit Agreement is hereby further amended by deleting subsection 4.1(a) thereof in its entirety and substituting in lieu thereof a new subsection 4.1(a) to read as follows: (a) Interest Rate. Subject to the provisions of this Section 4.1, (i) the aggregate principal amount of the Facility A Loans or any portion thereof shall bear interest at the LIBOR Market Index Rate plus 2.75%, as that rate may change from day to day in accordance with changes in the LIBOR Market Index Rate and (ii) the aggregate principal amounts of the Facility B Loans and the Facility C Loans shall bear interest at the Base Rate plus 2.50%, as that rate may change from day to day in accordance with changes in the Prime Rate or the Federal Funds Rate. 2.9. Facility B Termination Date. The Credit Agreement is hereby further amended by globally deleting all references to the term "Facility B Termination Date" and replacing such references with "Termination Date". 2.10. Form of Facility C Note. The Credit Agreement is hereby further amended by adding a new Exhibit A-3 thereto in the form of Exhibit A-3 attached hereto. 7 3. Waiver. Effective on the Ninth Amendment Effective Date and provided no Default or Event of Default occurs after the Ninth Amendment Effective Date, Lender hereby waives the Default or Event of Default created by the Borrower's failure to comply with the following financial covenants for the period from November 30, 2000 to the Termination Date: (a) Net Worth covenant set forth in Section 9.1 of the Credit Agreement; (b) Ratio of Actual to Budgeted Revenues covenant set forth in Section 9.5 of the Credit Agreement, and (c) Accounts Payable covenant set forth in Section 9.8 of the Credit Agreement. Also effective on the Ninth Amendment Effective Date, Lender hereby waives any Default or Event of Default under Section 2.1(a) of the Credit Agreement due to the fact that the aggregate principal amount of all outstanding Facility A Loans, when aggregated with the outstanding principal amount of the L/C Obligations, exceeds the Facility A Commitment. 4. Conditions Precedent. The amendments contained herein shall not become effective unless and until the Lender shall have received each of the following instruments, documents and agreements, in each case in form and content acceptable to Lender: (a) this Amendment, duly executed and delivered by the Borrower and each Guarantor; (b) evidence that the SLS obligations have been refinanced pursuant to an Assignment of such obligations by SLS to CEC in form and content acceptable to Lender; (c) the Facility C Note; (d) a Guaranty of the Facility C Loans duly executed and delivered by CEC in favor of Lender; (e) an Amendment to Intercreditor Agreement executed by CEC in form and content acceptable to Lender; (f) a legal opinion of counsel to the Credit Parties (other than CEC); (g) a legal opinion of counsel to CEC; (h) a certificate from the chief executive officer or chief financial officer of the Borrower, in form and substance satisfactory to the Lender, to the effect that all representations and warranties of the Borrower contained in the Credit Agreement, this Amendment and the other Loan Documents are true, correct and complete; that giving effect to this Amendment the Borrower is not in violation of any of the covenants contained 8 in the Credit Agreement and the other Loan Documents; and that, after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing; (i) a certificate of the secretary or assistant secretary of each Credit Party (other than CEC) certifying that (i) the certificate or articles of incorporation and by-laws of such Credit Party, or the comparable organizational documents of such Credit Party, have not been amended, modified or supplemented since the Closing Date and (ii) attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of such Credit Party authorizing the execution, delivery and performance of this Amendment and the all other instruments, documents and agreements executed and delivered pursuant hereto or in connection herewith to which it is a party (collectively, the "Amendment Documents"), and ratifying the execution and delivery of this Amendment; and as to the incumbency and genuineness of the signature of each officer of such Credit Party executing the Amendment Documents to which it is a party; (j) a certificate of the secretary or assistant secretary of CEC certifying that (i) attached thereto is a true and complete copy of both the certificate of incorporation and the by-laws of CEC, and (ii) attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of CEC authorizing the execution, delivery and performance of the Amendment Documents to which it is a party and ratifying the execution and delivery of such Amendment Documents; and as to the incumbency and genuineness of the signature of each officer of CEC executing the Amendment Documents to which it is a party; (k) Lender's attorneys' fees and expenses incurred in connection with this Amendment; and (l) such other instruments, documents and agreements as the Lender may reasonably request. 1. Condition Precedent for Facility C Loans. Borrower and Lender agree that Borrower may not obtain any Loans under Facility C until CEC shall have delivered to Lender a Standby Letter of Credit in favor of Lender in the amount of $1,500,000 for the guaranty by CEC of the Facility C Obligations of Borrower issued by a bank satisfactory to Lender. 2. Representations and Warranties; No Default. Each Credit Party hereby jointly and severally represent and warrant to the Lender that (a) all of Credit Parties' representations and warranties contained in the Credit Agreement, the other Loan Documents and this Amendment are true and correct on and as of the date of this Amendment (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date) except, in the case of the representation set forth in Section 6.1(q) of the Credit Agreement, as reflected in the Borrower's interim financial statements for the period ending September 30, 2000; (b) no Default or Event of Default has occurred and is continuing as of such date under any Loan Document, except any Default or Event of Default waived under Section 3 of this Agreement; (c) each Credit Party has the power and authority to enter into this Amendment and the other Amendment 9 Documents to which it is a party and to perform all of its obligations hereunder and thereunder; (d) the execution, delivery and performance of this Amendment and the Amendment Documents have been duly authorized by all necessary corporate or partnership action on the part of each Credit Party; (e) this Amendment and the Amendment Documents are the legal, valid and binding obligations of the Credit Parties party thereto, enforceable in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors' rights in general and the availability of equitable remedies; and (f) the execution and delivery of this Amendment and the Amendment Documents and performance thereof by the Credit Parties do not and will not violate the Certificate or Articles of Incorporation, By-laws or other organizational documents of any Credit Party and do not and will not violate or conflict with any law, order, writ, injunction, or decree of any court, administrative agency or other governmental authority applicable to any Credit Party or its properties. 3. Reaffirmation of Loan Documents. Each Credit Party hereby reaffirms its obligations under the Loan Documents, and acknowledges and agrees that each of the Loan Documents to which such Credit Party is a party, and the obligations of such Credit Party thereunder, remain in full force and effect, without release, diminution or impairment, notwithstanding the execution and delivery of this Amendment or of any prior amendment to the Credit Agreement or any other Loan Document. 4. References. All references in the Credit Agreement and the Loan Documents to the Credit Agreement shall hereafter be deemed to be references to the Credit Agreement as amended hereby and as the same may hereafter be amended from time to time. 5. Limitation of Agreement. Except as especially set forth herein, this Amendment shall not be deemed to waive, amend or modify any term or condition of the Credit Agreement, each of which is hereby ratified and reaffirmed and which shall remain in full force and effect, nor to serve as a consent to any matter prohibited by the terms and conditions thereof. 6. Counterparts. This Amendment may be executed in any number of counterparts, and any party hereto may execute any counterpart, each of which, when executed and delivered, will be deemed to be an original and all of which, taken together will be deemed to be but one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed to be an original signature hereto. 7. Further Assurances. Each Credit Party agrees to take such further action as the Lender shall reasonably request in connection herewith to evidence the amendments herein contained to the Credit Agreement or the matters contemplated hereby. 8. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto. 9. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia, without regard to principles of conflicts of law. 10 10. No Claim. Each Credit Party hereby represents, warrants, acknowledges and agrees to and with the Lender that as of the date hereof (a) such Credit Party neither holds nor claims any right of action, claim, cause of action or damages, either at law or in equity, against the Lender, its officers, directors, agents, employees or Affiliates, or any of them, which arises from, may arise from, allegedly arise from, are based upon or are related in any manner whatsoever to the Credit Agreement and the Loan Documents or which are based upon acts or omissions of the Lender, any such officer, director, agent, employee or Affiliate of Lender, or any of them, in connection therewith and (b) the Obligations are absolutely owed to the Lender, without offset, deduction or counterclaim. [Remainder of page intentionally left blank] 11 IN WITNESS WHEREOF, the parties hereto have executed this Amendment under seal as of the date first written above. CREDIT PARTIES: BORROWER: EDUTREK INTERNATIONAL, INC. By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic Chairman of the Board and Chief Executive Officer Attest: /s/ David J. Horn ------------------------------------- David J. Horn Secretary and Chief Financial Officer [CORPORATE SEAL] GUARANTORS: [CORPORATE SEAL] EDUTREK SYSTEMS, INC. By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic Chief Executive Officer [CORPORATE SEAL] AMERICAN INTERCONTINENTIAL UNIVERSITY, INC. By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic Chief Executive Officer [CORPORATE SEAL] CAREER EDUCATION CORPORATION By: /s/ Patrick K. Pesch ----------------------------------------- Name: Patrick K. Pesch Title: Chief Financial Officer [CORPORATE SEAL] AMERICAN INTERCONTINENTAL UNIVERSITY- LONDON, LTD. U.S. By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic Chief Executive Officer [CORPORATE SEAL] AMERICAN EUROPEAN MIDDLE EAST CORPORATION, LLC By: American InterContinental University- London, LTD. U.S. By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic Chief Executive Officer LENDER: FIRST UNION NATIONAL BANK By: /s/ Frank Darrow ----------------------------------------- Frank Darrow Vice President Exhibit A-3 To Ninth Amendment to Credit Agreement FORM OF FACILITY C REVOLVING CREDIT NOTE $1,500,000 Atlanta, Georgia 30th of November, 2000 FOR VALUE RECEIVED, the undersigned (the "Borrower") HEREBY PROMISES TO PAY to the order of FIRST UNION NATIONAL BANK (the "Lender"), the principal amount of One Million Five Hundred Thousand Dollars ($1,500,000), or, if less, the aggregate unpaid principal amount of all "Facility C Loans" disbursed to the Borrower by the Lender under, and as such term is defined in, the Credit Agreement referred to below. The Borrower promise to pay interest on the unpaid principal amount hereof until such principal amount is paid in full, at such interest rates, and payable at such times, as are specified in the Credit Agreement. Nothing in this Note shall be deemed to establish or require the payment of a rate of interest in excess of the maximum rate permitted by any Applicable Law. In the event that any rate of interest required to be paid hereunder exceeds the maximum rate permitted by Applicable Law, the provisions of the Credit Agreement relating to the payment of interest under such circumstances shall control. Both principal and interest are payable in lawful money of the United States of America to First Union National Bank in federal or other immediately available funds. This Note is the Facility C Note referred to in, and is entitled to the benefits of, the Credit Agreement dated as of March 25, 1999 (together with all amendments and other modifications from time to time made thereto, the "Credit Agreement"), among the Borrower and First Union National Bank, as amended through and including the date hereof. Capitalized terms not defined herein are to have the meanings provided to them in the Credit Agreement. The Credit Agreement contains, among other things, provisions for the time, place and manner of payment of this Note, the determination of the interest rate borne by and fees payable in respect of this Note, acceleration of the payment of this Note upon the happening of certain stated events and the mandatory repayment of this Note under certain circumstances. The Borrower hereby agrees to pay on demand all reasonable costs and expenses actually incurred by the Lender in collecting the Borrower's obligations hereunder or in enforcing or attempting to enforce any of the Lender's rights hereunder, including, but not limited to, reasonable attorneys' fees and expenses actually incurred by the Lender if collected by or through an attorney, whether or not suit is filed. Exhibit A-3 To Ninth Amendment to Credit Agreement Presentment for payment, notice of dishonor, protest and notice of protest are hereby waived. THIS NOTE IS MADE AND DELIVERED IN THE STATE OF GEORGIA AND SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF. [Remainder of page intentionally left blank] 2 Exhibit A-3 To Ninth Amendment to Credit Agreement IN WITNESS WHEREOF, the Borrower has caused this Note to be executed under seal by a duly authorized officer as of the day and year first above written. [CORPORATE SEAL] EDUTREK INTERNATIONAL, INC. ATTEST: By:_______________________________ By:_________________________________ David J. Horn R. Steven Bostic Secretary and Chief Financial Officer Chairman of the Board and Chief Executive Officer Facility C Note Signature Page EX-99.2 3 dex992.txt AMENDED AND RESTATED PROMISSORY NOTE Exhibit 99.2 THIS NOTE HAS BEEN ISSUED AND SOLD WITHOUT REGISTRATION UNDER THE FEDERAL SECURITIES ACT OF 1933 (THE "FEDERAL ACT") OR THE SECURITIES LAWS OF ANY STATE, IN RELIANCE UPON CERTAIN EXEMPTIVE PROVISIONS OF SAID ACTS, INCLUDING PARAGRAPH (13) OF THE CODE SECTION 10-5-9 OF THE GEORGIA SECURITIES ACT OF 1973 (THE "GEORGIA ACT"). THIS NOTE CANNOT BE SOLD OR TRANSFERRED EXCEPT IF, IN THE OPINION OF COUNSEL TO THE ISSUER, SUCH SALE OR TRANSFER WOULD BE (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE FEDERAL ACT OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION; AND (2) IN A TRANSACTION WHICH IS EXEMPT UNDER APPLICABLE STATE SECURITIES LAWS, INCLUDING THE GEORGIA ACT, OR PURSUANT TO EFFECTIVE REGISTRATION STATEMENTS UNDER SUCH LAWS, OR IN A TRANSACTION WHICH IS OTHERWISE IN COMPLIANCE WITH SUCH LAWS. AMENDED AND RESTATED PROMISSORY NOTE $5,000,000.00 November 30, 2000 Atlanta, Georgia FOR VALUE RECEIVED, the undersigned, EDUTREK INTERNATIONAL, INC., a corporation organized and existing under the laws of the State of Georgia (the "Company"), hereby promises to pay to the order of CAREER EDUCATION CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Holder"), at the Holder's address at 2895 Greenspoint Parkway, Suite 600, Hoffman Estates, Illinois 60195, or at such other place as the Holder may designate, a principal sum equal to FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00), together with interest at the rate set forth below and calculated and paid as described below on the unpaid balance of such principal amount from the date hereof until the unpaid principal balance shall have been paid in full. ARTICLE I. PAYMENT PROVISIONS Section 1.01. Interest and Maturity. This Note shall bear simple interest on the outstanding principal amount at a floating rate per annum equal to the then current prime rate of interest, which rate, as of the date hereof, is nine and one-half percent (9.50%), as published from time to time in the "Money Rates" section of the Midwest Edition of The Wall Street Journal (or, if the prime rate of interest is no longer published in such publication, the Holder may, in its reasonable discretion, designate an alternative reference rate for calculation of interest under this Note, which rate shall be the substantial equivalent of the prime rate), computed on the basis of a year of 365 days against actual days elapsed and changing when and as changes in the prime rate occur. All accrued but unpaid interest at the aforesaid rate shall be due and payable quarterly, commencing on February 28, 2001, and continuing on the last day of each and every May, August, November and February thereafter, until the entire principal balance hereof, together with all accrued but unpaid interest thereon, has been paid in full. The entire principal amount of this Note, together with any accrued but unpaid interest thereon, shall be due and payable on the earliest to occur of (a) April 30, 2001, or (b) the Business Day (as hereinafter defined) upon which the Holder shall have acquired all of the issued and outstanding common shares or other equity securities or ownership interests of the Company pursuant to the Merger Agreement (as 1 hereinafter defined), or (c) the date upon which the entire indebtedness of the Company under the Credit Agreement (as hereinafter defined) is declared to be due and payable (the "Maturity Date"). Section 1.02. Payments. All payments under this Note shall be made in lawful money of the United States of America. Payments shall be credited, first, to unpaid interest accrued through the date of such payment and, then, to principal. Section 1.03. Limitation on Interest Rate and Payments. Notwithstanding any other provision of this Note or of any other agreement or instrument to which the Company and the Holder are parties, nothing herein contained or therein contained shall require the payment of any interest, expense or other charge by the Company which, when aggregated with all other interest, expenses and charges directly or indirectly paid by the Company or imposed by the Holder as a condition to extension of the loan evidenced by this Note, shall exceed the highest lawful rate permissible under any law applicable thereto. If, but for this provision, this Note or any other such agreement or instrument would require any such payment in excess of any such highest lawful rate, this Note and such other agreement or instrument shall automatically be deemed amended so that all interest, charges, expenses and other payments required hereunder or thereunder or so imposed, individually and in the aggregate, shall be equal to, but no greater than, the highest lawful rate therefor. If from any circumstances the Holder should ever receive an amount which, but for this provision, would constitute an unlawful payment hereunder or thereunder, then, ipso facto, such amount shall be applied to the reduction of the outstanding principal balance of this Note and not to the payment of interest, expenses and charges. Section 1.04. Prepayment. The Company may, at any time prior to the Maturity Date, prepay all or any part of the outstanding principal balance of this Note. ARTICLE II. DEFINITIONS As used herein, the following terms shall have the respective meanings set forth below: Section 2.01. "ACIL" shall mean American College in London, Ltd., a United Kingdom company and a wholly-owned subsidiary of the Company. Section 2.02. "ACIL-US" shall mean American College in London, Ltd., U.S., a District of Columbia corporation and a wholly-owned subsidiary of the Company. Section 2.03. "AEMEC" shall mean American European Middle East Corporation, LLC, a Georgia limited liability company. Section 2.04. "AIU" shall mean American Intercontinental University, a Georgia corporation and a wholly-owned subsidiary of the Company. Section 2.05. "Business Day" shall mean any day that is not a Saturday, a Sunday, or a day on which banks are required or permitted to be closed in the State of Georgia. 2 Section 2.06. "Credit Agreement" shall mean that certain Credit Agreement, dated March 25, 1999, as amended through the date hereof, between the Company, as Borrower, and First Union National Bank, as Lender. Section 2.07. "Edutrek Systems" shall mean Edutrek Systems, Inc., a Georgia corporation and a wholly-owned subsidiary of the Company. Section 2.08. "Guaranty" shall mean that certain Guaranty, dated as of May 30, 2000, executed by ACIL-US, AEMEC, AIU and Edutrek Systems in favor of the Holder. Section 2.09. "Merger Agreement" shall mean that certain Agreement and Plan of Merger among the Holder, EI Acquisition, Inc., and the Company dated as of October 24, 2000. Section 2.10. "Note Modification Agreement" shall mean that certain Note Modification Agreement dated as of November 30, 2000 among the Company, the Holder, ACIL-US, AEMEC, AIU and Edutek Systems. Section 2.11. "Person" or "person" shall mean an individual, partnership, corporation, trust, unincorporated organization, joint venture, government or agency, political subdivision thereof, or any other entity of any kind. Section 2.12. "Pledge Agreement" shall mean that certain Pledge Agreement, dated as of May 30, 2000, executed by the Company, ACIL-US, AEMEC, AIU and Edutrek Systems in favor of the Holder, as amended, modified, restated or replaced. Section 2.13. "Security Agreement" shall mean the Security Agreement dated as of May 30, 2000 by and among the Company, Edutrek Systems, AIU, ACIL-US, AMEMEC and the Holder, as amended, modified or replaced. Section 2.14. "Trademark Security Agreements" shall mean those certain Conditional Assignment and Trademark Security Agreements each dated as of May 30, 2000 executed by AIU and Edutrek Systems in favor of the Holder, as amended, modified, restated or replaced. ARTICLE III. SECURITY This Note is secured by the terms of each of the Guaranty, the Pledge Agreement, Trademark Security Agreements and the Security Agreement (collectively, the "Security Documents"). ARTICLE IV. USE OF PROCEEDS Monies loaned by the Holder to the Company evidenced by this Note may be used for the purposes of financing the working capital needs of the Company and its subsidiaries and for general corporate purposes, but not for the purposes of repaying or prepaying principal amounts 3 owed pursuant to the Credit Agreement or prepaying principal amounts owed to any other debtor of the Company or its subsidiaries. ARTICLE V. DEFAULT A default shall occur under this Note upon (a) the failure of the Company to (i) pay any monetary obligations when due under this Note, or (ii) perform any of its binding obligations under the Merger Agreement, or (iii) adhere to the restrictions set forth in Article IV of this Note; or (b) the failure of the Company, ACIL-US, AEMEC, AIU, Edutrek Systems or any other subsidiary of the Company that becomes a party to any such agreement after the date hereof to (i) perform any of their respective obligations under any of the Security Documents or Note Modification Agreement, or to (ii) perform any of their respective obligations under the Credit Agreement or any other agreement executed by the Company, ACIL-US, AEMEC, AIU, Edutrek Systems or any other subsidiary of the Company in favor of First Union National Bank in connection therewith (a "Default"). Upon the occurrence of a Default, the Holder shall be entitled to, at its sole option, declare the entire unpaid principal and interest amounts under this Note as immediately due and payable regardless of the stipulated date of maturity, and the Holder may proceed to collect such obligations forthwith, and enforce its remedies under the Security Documents, plus all out-of-pocket costs of collection, including reasonable attorneys' fees actually incurred if collected by and through an attorney. The failure of the Holder to exercise this option or indulgence granted from time to time shall in no event be considered a waiver of such option or estop the Holder from exercising such option. ARTICLE VI. NOTICES All notices and other communications hereunder shall be in writing and shall be deemed to have been given only (i) when personally delivered, or (ii) three (3) business days after mailing, postage prepaid, by certified mail, or (iii) when delivered (and receipted for) by an overnight delivery service, or (iv) when first sent by telex, telecopier or other means of instantaneous communication, provided such communication is promptly confirmed by personal delivery, mail or an overnight delivery service as provided above, addressed in each case as follows: If to the Company, to: Edutrek International, Inc. 6600 Peachtree-Dunwoody Road 500 Embassy Row Atlanta, Georgia 30328 Telecopier: 404/965-8001 Attention: David J. Horn, Chief Financial Officer with a copy in like manner to: Smith, Gambrell & Russell, LLP 1230 Peachtree Road, NE Promenade II, Suite 3100 Atlanta, Georgia 30309-3592 4 Telecopier: 404/684-6932 Attention: A. Jay Schwartz, Esq. If to the Holder, to: Career Education Corporation 2895 Greenspoint Parkway, Suite 600 Hoffman Estates, Illinois 60195 Telecopier: 847/585-3610 Attention: Chief Financial Officer with a copy in like manner to: Katten Muchin Zavis 525 West Monroe Street, Suite 1600 Chicago, Illinois 60661-3693 Telecopier: 312/577-4676 Attention: Jeffrey L. Elegant, Esq. Each party may change its address for the giving of notices and communications to it, and/or copies thereof, by written notice to the other parties in conformity with the foregoing. ARTICLE VII. NEGOTIABILITY; ASSIGNMENT. This Note may be assigned, conveyed or otherwise transferred at any time without the consent of the Company; provided, however, that this Note may not be assigned to any person or entity engaged in the business of providing post- secondary education services similar to or competitive with those services provided by the Company without the express written consent of the Company. ARTICLE VIII. BINDING EFFECT This Note shall be binding upon the Company and its successors and permitted assigns and shall inure to the benefit of the Holder and its successors and permitted assigns. ARTICLE IX. HEADINGS The paragraph headings contained in this Note are for reference purposes only and shall not affect in any way the meaning or interpretation of this Note. ARTICLE X. TIME OF THE ESSENCE Time is of the essence under this Note. 5 ARTICLE XI. WIAVER OF PRESENTMENT EXCEPT AS OTHERWISE PROVIDED IN THIS NOTE, THE COMPANY, ITS SUCCESSORS OR ASSIGNS, AND ALL OTHER PERSONS LIABLE FOR THE PAYMENT OF THIS NOTE, WAIVE PRESENTMENT FOR PAYMENT, DEMAND, PROTEST, AND NOTICE OF DEMAND, DISHONOR, PROTEST, AND NONPAYMENT, AND CONSENT TO ANY AND ALL RENEWALS, EXTENSIONS OR MODIFICATIONS THAT MIGHT BE MADE BY THE HOLDER AS TO THE TIME OF PAYMENT OF THIS NOTE FROM TIME TO TIME. ARTICLE XII. GOVERNING LAW This Note has been delivered in Atlanta, Georgia and shall be governed by and construed in accordance with the internal laws of the State of Georgia without regard to its conflicts of laws principles. ARTICLE XIII. AMENDMENT AND RESTATEMENT This Note is an amendment and restatement of, and is in substitution and replacement for, that certain Promissory Note dated as of May 30, 2000, by the Company in favor of Sylvan Learning Systems, Inc. in the original principal amount of $5,000,000.00 (the "Original Note"), which Original Note was assigned to the Holder. Nothing contained herein shall be deemed to constitute a payment or novation of the Original Note or a release of any guarantor or other accommodation party or any collateral or security for the Company's obligations to Holder under the Original Note. IN WITNESS WHEREOF, the Company has caused this Note to be duly executed under seal as of the day and year above first written. "COMPANY" EDUTREK INTERNATIONAL, INC. By: /s/ R. Steven Bostic ------------------------------------ Name: R. Steven Bostic Title: Chief Executive Officer (corporate seal) 6 EX-99.3 4 dex993.txt ASSIGNMENT AGREEMENT DATED NOVEMBER 30, 2000 Exhibit 99.3 ASSIGNMENT AGREEMENT This Assignment Agreement ("Agreement"), dated as of the 30th day of November, 2000 is by and between Sylvan Learning Systems, Inc., a Maryland corporation ("Assignor"), with its principal place of business at 1000 Lancaster Street, Baltimore, Maryland 21202, and Career Education Corporation, a Delaware corporation ("Assignee") with its principal place of business located at 2895 Greens Point Parkway, Suite 600, Hoffman Estates, Illinois 60195. R E C I T A L S: --------------- A. Assignor has previously made a Loan to Edutrek International, Inc. (the "Company") in the original principal sum of $5,000,000 (the "Loan"), as evidenced by a Promissory Note in the original principal amount of $5,000,000 dated May 30, 2000 (the "Note"), which Loan is secured by a security interest in and to certain tangible and intangible assets of the Company pursuant to a Security Agreement, a Pledge Agreement, Guaranty, and related documents, all of which are subject to an Intercreditor Agreement dated as of May 30, 2000 between Assignor and First Union National Bank ("Intercreditor Agreement"). B. Assignee desires to purchase from Assignor and Assignor desires to sell and assign to Assignee all Assignor's rights, title and interest in and to the Loan, all collateral and security therefor (the "Collateral"), and all documents evidencing the Loan and any collateral and security therefor, subject to the Intercreditor Agreement (the "Loan Documents"). NOW, THEREFORE, in consideration of the foregoing and of the mutual understandings and agreements of the parties contained herein and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Initial capitalized terms used herein which are not otherwise defined herein shall have the meaning provided therefor in the Note. 2. Assignor hereby sells, assigns and transfers to Assignee, WITHOUT RECOURSE, AND WITHOUT REPRESENTATION OR WARRANTY, except as expressly provided herein, all of Assignor's rights, title and interest in and to the Loan, all Loan Documents and all Collateral and guaranties for the Loan. 3. In consideration of the assignment, Assignee hereby agrees to pay to Assignor, upon the execution of this Agreement, the sum of $5,079,383.56 (the "Purchase Price"), by wire transfer as follows: Bank of America, NA Baltimore, Maryland ABA # 052001633 For the Account of Sylvan Learning Systems, Inc. 1 Account #3933614751 4. As a condition to payment of the Purchase Price, Assignor shall execute and/or deliver to Assignee the following: A. A duly executed counterpart of this Agreement; B. UCC-3 Assignments of all UCC-1 Financing Statements recorded by Assignor against the Company, including without limitation, those UCC-1 Financing Statements listed and described on Exhibit B attached hereto; C. The original executed Loan Documents; and D. Such other assignments, instruments or documents, in recordable form, as may be required by law or requested by Assignee to evidence the Assignment of Assignor's interest in the Loan and the Collateral. 5. In consideration of Assignee's purchase of the Loan, Assignor hereby represents and warrants to Assignee that: A. The outstanding balance of the Loan is $5,079,383.56, consisting of outstanding principal in the amount of $5,000,000 and accrued and unpaid interest in the amount of $79,383.56; B. Assignor is the owner of and has absolute title to the Loan, and the Loan Documents, free and clear of all claims, liens and encumbrances, and has not previously sold, transferred, assigned, conveyed or otherwise encumbered its interest in the Loan or the Collateral; C. Assignor is not aware of any claims or defenses that the Company may have to (i) payment of the Loan or, (ii) to the validity of the security interest of Assignor in the Collateral; 2 D. Exhibit A attached hereto contains a list of all Loan Documents evidencing the Loan, all guaranties, and Assignor's interest in the Collateral. E. All acts, proceedings and consents necessary or required by law, the articles of incorporation or by-laws of Assignor or any agreement by which Assignor is bound, required to make the assignment hereunder a valid, binding and legal obligation of Assignor, have been done, taken, occurred, or been received and this Agreement shall constitute Assignor's legal, valid and binding obligation, enforceable in accordance with its terms. 6. This Agreement shall be construed in accordance with and governed by the laws of the State of Illinois and shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. (remainder of page intentionally left blank) 3 IN WITNESS WHEREOF, the Assignor and Assignee have entered into this Agreement as of the date first above written. SYLVAN LEARNING SYSTEMS, INC. By: /s/ Robert Zentz ------------------------------------- Title: Senior Vice President ------------------------------------- CAREER EDUCATION CORPORATION By: /s/ Patrick K. Pesch ------------------------------------- Title: Chief Financial Officer ------------------------------------- 4 ACKNOWLEDGEMENT AND AGREEMENT Each of the undersigned hereby accepts and acknowledges receipt of a copy of the foregoing Assignment Agreement and consents to and agrees to be bound by all provisions thereof, and to make all future payments under the Loan to Assignee. Each of the undersigned further acknowledges and agrees that the Loan is assignable by Assignor to Assignee, it has no defense to payment of its obligations under the Loan Documents and the outstanding balance of the Loan is as set forth in the Assignment Agreement. Capitalized terms used in this Acknowledgement and Agreement without definition have the meanings specified in the foregoing Assignment Agreement unless the context otherwise requires. November 30, 2000 EDUTREK INTERNATIONAL, INC. By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic, Chairman of the Board and Chief Executive Officer EDUTREK SYSTEMS, INC. By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic, Chief Executive Officer AMERICAN INTERCONTINENTAL UNIVERSITY, INC. By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic, Chief Executive Officer AMERICAN INTERCONTINENTAL UNIVERSITY-LONDON, LTD. U.S. By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic, Chief Executive Officer AMERICAN EUROPEAN MIDDLE EAST CORPORATION, LLC By: /s/ R. Steven Bostic ----------------------------------------- R. Steven Bostic, Chief Executive Officer 5 EXHIBIT A --------- Loan Documents -------------- 1. Promissory Note dated May 30, 2000 in the original principal amount of $5,000,000 executed by Edutrek International, Inc. in favor of Sylvan Learning Systems, Inc. 2. Guaranty dated as of May 30, 2000 by Edutrek Systems, Inc., American Intercontinental University, Inc., American Intercontinental University-London, Ltd. U.S., and American European Middle East Corporation, LLC, in favor of Sylvan Learning Systems, Inc. 3. Security Agreement dated as of May 30, 2000 by and among Edutrek International, Inc., Edutrek Systems, Inc., American Intercontinental University, Inc., American Intercontinental University-London, Ltd. U.S., American European Middle East Corporation, LLC and Sylvan Learning Systems, Inc. 4. Pledge and Security Agreement dated as of May 30, 2000 by and among Edutrek International, Inc., American Intercontinental University-London, Ltd. U.S., American Intercontinental University European Middle East Corporation, LLC and Sylvan Learning Systems, Inc. 5. Conditional Assignment and Trademark Security Agreement dated as of May 30, 2000, between American Intercontinental University, Inc. and Sylvan Learning Systems, Inc. 6. Conditional Assignment and Trademark Security Agreement dated as of May 30, 2000, between Edutrek Systems, Inc. and Sylvan Learning Systems, Inc. 7. Intercreditor Agreement dated as of May 30, 2000, between First Union National Bank and Sylvan Learning Systems, Inc. 6 EXHIBIT B --------- UCC Financing Statements ------------------------
- --------------------------------------------------------------------------------------------------- Debtor Jurisdiction File Number File Date - --------------------------------------------------------------------------------------------------- EduTrek International, Inc. Secretary of State, California 0016160021 6/6/00 - --------------------------------------------------------------------------------------------------- EduTrek International, Inc. District of Columbia 2000053693 6/7/00 - --------------------------------------------------------------------------------------------------- EduTrek International, Inc. Secretary of State, Florida 200000131808 6/6/00 - --------------------------------------------------------------------------------------------------- EduTrek International, Inc. Fulton County, Georgia 060200010695 6/7/00 - --------------------------------------------------------------------------------------------------- EduTrek Systems, Inc. Secretary of State, California 0016160028 6/6/00 - --------------------------------------------------------------------------------------------------- EduTrek Systems, Inc. District of Columbia 2000053700 6/7/00 - --------------------------------------------------------------------------------------------------- EduTrek Systems, Inc. Secretary of State, Florida 200000131811 6/6/00 - --------------------------------------------------------------------------------------------------- American InterContinental Secretary of State, California 0016160075 6/7/00 University, Inc. - --------------------------------------------------------------------------------------------------- American InterContinental District of Columbia 2000053712 6/7/00 University, Inc. - --------------------------------------------------------------------------------------------------- American InterContinental Secretary of State, Florida 200000131814 6/6/00 University, Inc. - --------------------------------------------------------------------------------------------------- American InterContinental Fulton County, Georgia 060200010696 6/7/00 University, Inc. - --------------------------------------------------------------------------------------------------- American InterContinental State Corporate Commission, 0006066075 6/6/00 University, Inc. Virginia - --------------------------------------------------------------------------------------------------- American InterContinental Loudoun County, Virginia 1703-00 6/6/00 University, Inc. - --------------------------------------------------------------------------------------------------- American European Middle East Secretary of State, California 0016160059 6/6/00 Corporation, LLC - --------------------------------------------------------------------------------------------------- American European Middle East District of Columbia 2000053706 6/7/00 Corporation, LLC - --------------------------------------------------------------------------------------------------- American European Middle East Secretary of State, Florida 200000131812 6/6/00 Corporation, LLC - ---------------------------------------------------------------------------------------------------
7
- --------------------------------------------------------------------------------------------------- Debtor Jurisdiction File Number File Date - --------------------------------------------------------------------------------------------------- American European Middle East Fulton County, Georgia 060200010699 6/7/00 Corporation, LLC - --------------------------------------------------------------------------------------------------- American InterContinental Secretary of State, California 0016160036 6/6/00 University-London, Ltd. U.S. - --------------------------------------------------------------------------------------------------- American InterContinental District of Columbia 2000053704 6/7/00 University-London, Ltd. U.S. - --------------------------------------------------------------------------------------------------- American InterContinental Secretary of State, Florida 200000131809 6/6/00 University-London, Ltd. U.S. - --------------------------------------------------------------------------------------------------- American InterContinental Fulton County, Georgia 060200010698 6/7/00 University-London, Ltd. U.S. - --------------------------------------------------------------------------------------------------- American College in London, Secretary of State, California 0016160048 6/6/00 Ltd. U.S. (n/k/a American InterContinental University-London, Ltd. U.S.) - --------------------------------------------------------------------------------------------------- American College in London, District of Colombia 2000053705 6/7/00 Ltd. U.S. (n/k/a American InterContinental University-London, Ltd. U.S.) - --------------------------------------------------------------------------------------------------- American College in London, Secretary of State, Florida 200000131807 6/6/00 Ltd. U.S. (n/k/a American InterContinental University-London, Ltd. U.S.) - --------------------------------------------------------------------------------------------------- American College in London, Fulton County, Georgia 060200010693 6/7/00 Ltd. U.S. (n/k/a American InterContinental University-London, Ltd. U.S) - ---------------------------------------------------------------------------------------------------
8 EX-99.4 5 dex994.txt NOTE MODIFICATION AGREEMENT Exhibit 99.4 NOTE MODIFICATION AGREEMENT This Note Modification Agreement ("Agreement"), dated as of November 30, 2000, is by and among EDUTREK INTERNATIONAL, INC. (the "Company"), CAREER EDUCATION CORPORATION, a Delaware corporation ("Career"), EDUTREK SYSTEMS, INC., a Georgia corporation ("EduTrek"), AMERICAN INTERCONTINENTAL UNIVERSITY, INC., a Georgia Corporation ("AIU") AMERICAN INTERCONTINENTAL UNIVERSITY-LONDON, LTD. U.S., a Washington D.C. corporation ("American College"), and AMERICAN EUROPEAN MIDDLE EAST CORPORATION, LLC, A Georgia limited liability company ("American European"; each of EduTrek, AIU, American College and American European is sometimes hereinafter referred to as a "Guarantor" and collectively as the "Guarantors"). R E C I T A L S --------------- A. Sylvan Learning Systems, Inc. ("Sylvan") previously made a loan to the Company in the original principal sum of Five Million Dollars ($5,000,000) (the "Loan'), as evidenced by a promissory note dated May 30, 2000 (the "Note"), which loan is secured by a security interest in and to certain tangible and intangible assets of the company pursuant to the Security Documents; B. Pursuant to an Assignment Agreement of even date herewith ("Assignment Agreement"), Sylvan sold, assigned and transferred to Career, all of Sylvan's rights, title and interest in and to the Loan, all collateral and security therefor, and all documents evidencing the Loan and any collateral and security therefor; and C. The Note, by its terms, matures on November 30, 2000 and the parties desire to amend and restate the Note in its entirety to extend the maturity thereof and make certain other modifications thereto, all on the terms and conditions contained herein. NOW, THEREFORE, in consideration of the foregoing and the mutual understandings and agreements of the parties contained herein, and for other good and valued consideration the receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. The Company shall, upon execution of this Agreement, execute and deliver to Career an amended and restated promissory note in the form of Exhibit A attached hereto (the "New Note") and shall be in substitution for the Note. The Loan shall be evidenced by and repayable in accordance with the terms of the New Note. 2. In consideration of the extension of the maturity of the Loan, the Company hereby agrees to pay to Career, upon execution of this Agreement, accrued and unpaid interest advanced by Career on behalf of the Company to Sylvan in connection with the Assignment Agreement in the amount of $79,383.56. 3. The Company agrees (i) not to draw upon the Facility C Commitment under the Credit Agreement without prior written notice to Career stating the intended use of such funds and the consent of Career, and (ii) to use all loan proceeds under the Facility C Commitment solely for reasonable and necessary marketing and other expenses in the ordinary course of its business. 4. The effectiveness of this Agreement is expressly subject to the following conditions precedent or concurrent (unless specifically waived in writing by Career): a. All proceedings taken in connection with the transaction contemplated by this Agreement and all documents, instruments and other legal matters incident thereto shall be satisfactory to Career and its legal counsel; b. No Default shall have occurred and be continuing; c. The Company shall have provided Career with a certified copy of the fully executed Ninth Amendment to Credit Agreement and Waiver between the Company and First Union National Bank, in form and substance reasonably satisfactory to Career ("Ninth Amendment"); d. The Company shall have delivered or caused to be delivered to Career all of the following, each duly executed and dated the date hereof or such other date as satisfactory to Career, in form and substance reasonably satisfactory to Career:: i. a fully and duly executed counterparts of this Agreement; ii. a fully and duly executed original of the New Note; iii. a copy, duly certified by the Secretary or Assistant Secretary of the Company of (A) resolutions of the Company's Board of Directors authorizing or ratifying the execution and delivery of this Agreement and the transactions contemplated hereunder, (B) all documents evidencing other necessary corporate action, if any, and (C) all required approvals or consents, if any, with respect to this Agreement; iv. a Certificate of the Secretary of the Company certifying (A) the names of the Company's officers authorized to sign this Agreement and all other documents or certificates to be delivered hereunder, together with the true signatures of such officers, and (B) that it's organizational and governance documents have not been amended, rescinded, supplemented, modified or otherwise changed since the date of the Note; v. a duly executed counterpart of an Amendment to Intercreditor Agreement among First Union National Bank, Career and the Company in the form of Exhibit B attached hereto; vi. such other documents as the Company may reasonably require in connection with the Assignment Agreement and the continued perfection of the Company's liens in and to the assets of the Company and the Guarantors securing the Loan. 2 5. To induce the Company to enter into this Agreement, Borrower and each Guarantor represent and warrant to the Company that: a. the execution, delivery and performance of this Agreement has been duly authorized by all requisite corporate or limited liability company action on the part of the Company and each Guarantor, and that this Agreement has been duly executed and delivered by the Company and each Guarantor; b. each of the representations and warranties set forth in the Note, Security Documents and all other documents executed in connection therewith (other than those which, by their terms, specifically are made as of a certain date prior to the date hereof) are true and correct in all material respects as of the date hereof. c. the Company and the Guarantors have satisfied all of the conditions precedent to the effectiveness of the Ninth Amendment. d. the execution and delivery of this Agreement and the performance by each party of its obligations hereunder and under any other instruments, documents or agreements executed and/or delivered by or on behalf of the Company or Guarantors to Career, each as amended from time to time, do not and will not conflict with any provision of law or of the charter, articles of incorporation, operating agreement or bylaws of any of them or contravene, conflict with, violate or constitute a default under any applicable law, rule, regulation or judgment, decree or order or any agreement, indenture, or instrument to which the Company or any Guarantor is a party or is bound. 6. Borrower and Guarantors, as debtors, guarantors, grantors, pledgors, assignors, or in other similar capacities in which such parties are obligated on, guaranty the Loan, grant liens or security interests in their properties or otherwise act as accommodation parties, as the case may be, in any case under the Security Documents, hereby each ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, affirmative or negative, under each of such existing Security Documents to which it is a party and, to the extent such party granted liens on or security interest in any of its properties pursuant to any such Security Documents as security for the Company's obligations under or with respect to the Loan, or any guaranty thereof, each hereby ratifies and reaffirms such grants of liens and security interests and confirms and agrees that such liens and security interests hereafter secure all such obligations and indebtedness, in each case as if each reference in such existing Security Documents to the obligations secured thereby are construed to the hereafter mean, and refer to such obligations as hereby amended and as evidenced by the New Note. Each of the foregoing hereby acknowledges that each of the Security Documents remains in full force and effect and is hereby ratified and confirmed. The execution of this Agreement shall not operate as a novation, waiver of any right, power or remedy of Career nor constitute a waiver of any provision of any the Security Documents, except as expressly set forth herein and shall be limited to the particular instance expressly set forth. Each Guarantor confirms and agrees that the Guaranty and all other Security Documents executed and delivered by them and each and every covenant, condition, obligation, representation (except those representations which relate only to a specific date, which are confirmed as of such date only), warranty and provision set forth therein are, and shall continue to be, in full force and effect and are hereby confirmed, reaffirmed and ratified in all respects. 3 7. Any provision of this Agreement held by a court of competent jurisdiction to be invalid or unenforceable, shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. 8. This Agreement may be executed in one or more counterparts, each of which shall constitute an original, but all of which taken together shall be one in the same instrument. 9. This Agreement shall be construed in accordance with and governed by the internal laws of the State of Georgia, without regard for its choice of law principles. 10. The Recitals set forth above are incorporated herein by this reference thereto as though fully set forth below. The capitalized terms used in this Agreement, unless otherwise defined herein, shall have the meaning ascribed to such terms in the New Note. 11. From and after the date hereof, all references in the Security Documents to Sylvan shall be deemed to be a reference to Career and all references to the Note shall be deemed to be a reference to the New Note, as it may be amended, restated, modified or supplemented from time to time. (remainder of page intentionally left blank) 4 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their respective duly authorized representatives on the date first above written. EDUTREK INTERNATIONAL, INC. By: /s/ R. Steven Bostic ------------------------------------------------------------ R. Steven Bostic, Chief Executive Officer AMERICAN INTERCONTINENTAL UNIVERSITY, INC. By: /s/ R. Steven Bostic ------------------------------------------------------------ R. Steven Bostic, Chief Executive Officer AMERICAN INTERCONTINENTAL UNIVERSITY-LONDON, LTD. U.S. By: /s/ R. Steven Bostic ------------------------------------------------------------ R. Steven Bostic, Chief Executive Officer AMERICAN EUROPEAN MIDDLE EAST CORPORATION, LLC By: AMERICAN INTERCONTINENTAL UNIVERSITY-LONDON, LTD. U.S. By: /s/ R. Steven Bostic ------------------------------------------------------------ R. Steven Bostic, Chief Executive Officer EDUTREK SYSTEMS, INC. By: /s/ R. Steven Bostic ------------------------------------------------------------ R. Steven Bostic, Chief Executive Officer CAREER EDUCATION CORPORATION By: /s/ Patrick K. Pesch -------------------------------------------------------------- Title: Patrick K. Pesch, Chief Financial Officer ----------------------------------------------------------- 5 -----END PRIVACY-ENHANCED MESSAGE-----