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EXHIBIT 10.76
REVOLVING CREDIT AGREEMENT
AMONG
NATIONSBANK, N.A. (THE SUCCESSOR TO
BANK OF AMERICA, FSB), AS AGENT,
THE LENDERS FROM TIME TO TIME PARTY HERETO, AS LENDERS
AND
QUEST EDUCATION CORPORATION
AND ALL SUBSIDIARIES OF QUEST EDUCATION CORPORATION, AS
BORROWERS
DATED: NOVEMBER 30, 1998
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TABLE OF CONTENTS
1. DEFINITIONS..................................................................................................1
1.1. "Advances".............................................................................1
1.2. "Commitment"...........................................................................1
1.3. "Federal Funds Rate"...................................................................1
1.4. "Letter of Credit".....................................................................2
1.5. "Letter of Credit Obligations".........................................................2
1.6. "Obligations"..........................................................................2
1.7. "Reimbursement Obligations"............................................................2
1.8. "Required Lenders".....................................................................2
1.9. "Termination Date".....................................................................2
2. THE FACILITY AMOUNT AND TERMS................................................................................2
2.1. Revolving Line of Credit Amount........................................................2
2.2. Availability Period....................................................................3
2.3. Conditions to Each Advance.............................................................3
2.4. Funding................................................................................3
2.5. Repayment Terms........................................................................4
2.6. Letters of Credit......................................................................5
3. INTEREST.....................................................................................................9
3.1. Interest Rate..........................................................................9
3.2. Optional Interest Rate.................................................................9
4. COLLATERAL..................................................................................................11
4.1. Personal Property.....................................................................11
5. DISBURSEMENTS, PAYMENTS AND COSTS...........................................................................11
5.1. Requests for Credit...................................................................11
5.2. Disbursements and Payments............................................................11
5.3. Direct Debit..........................................................................11
5.4. Banking Days..........................................................................11
5.5. Taxes.................................................................................12
5.6. Additional Costs......................................................................12
5.7. Interest Calculation..................................................................12
5.8. Default Rate..........................................................................12
5.9. Overdrafts............................................................................13
5.10. Payments in Kind......................................................................13
6. CONDITIONS..................................................................................................13
6.1. Authorizations........................................................................13
6.2. Governing Documents...................................................................13
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Defined Term Location in Text
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6.3. Security Agreements...................................................................13
6.4. Evidence of Priority..................................................................13
6.5. Insurance.............................................................................14
6.6. Legal Opinion.........................................................................14
6.7. Good Standing.........................................................................14
6.8. Payment Closing Fee...................................................................14
6.9. Payment of Expenses and Fees..........................................................14
6.10. Representations of Corporate Officers.................................................14
6.11. Other Items...........................................................................14
7. REPRESENTATIONS AND WARRANTIES..............................................................................14
7.1. Organization of Each Borrower.........................................................14
7.2. Authorization.........................................................................14
7.3. Enforceable Agreement.................................................................14
7.4. Good Standing.........................................................................14
7.5. No Conflicts..........................................................................14
7.6. Financial Information.................................................................14
7.7. Lawsuits..............................................................................15
7.8. Collateral............................................................................15
7.9. Permits. Franchises..................................................................15
7.10. Other Obligations.....................................................................15
7.11. Income Tax Returns....................................................................15
7.12. No Tax Avoidance Plan.................................................................15
7.13. No Event of Default...................................................................15
7.14. ERISA Plans...........................................................................15
7.15. Locations of Borrowers................................................................16
7.16. Subsidiaries..........................................................................16
7.17. Year 2000 Compliance..................................................................16
8. COVENANTS...................................................................................................16
8.1. Use of Proceeds.......................................................................16
8.2. Financial Information.................................................................17
8.3. Fixed Charge Coverage Ratio...........................................................18
8.4. Total Funded Debt/Adjusted Cash Flow Ratio............................................19
8.5. Senior Funded Debt/Adjusted Cash Flow Ratio...........................................19
8.6. Minimum EBITDA........................................................................19
8.7. Other Debts...........................................................................20
8.8. Other Liens...........................................................................20
8.9. Capital Expenditures..................................................................21
8.10. Dividends.............................................................................21
8.11. Loans and Investments.................................................................21
8.12. Change of Ownership...................................................................21
8.13. Notices to the Agent and Lenders......................................................21
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Defined Term Location in Text
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8.14. Books and Records.....................................................................22
8.15. Audits................................................................................22
8.16. Compliance with Laws..................................................................22
8.17. Preservation of Rights................................................................22
8.18. Maintenance of Properties.............................................................22
8.19. Perfection of Liens...................................................................22
8.20. Cooperation...........................................................................22
8.21. Insurance.............................................................................23
8.22. Additional Negative Covenants.........................................................23
8.23. ERISA Plans...........................................................................24
8.24. Title IV Program Requirements.........................................................25
8.25. Subsidiaries..........................................................................25
9. HAZARDOUS WASTE INDEMNIFICATION.............................................................................25
10. DEFAULT.....................................................................................................26
10.1. Failure to Pay........................................................................26
10.2. Lien Priority.........................................................................26
10.3. False Information.....................................................................26
10.4. Bankruptcy............................................................................26
10.5. Receivers.............................................................................26
10.6. Lawsuits..............................................................................26
10.7. Judgments.............................................................................26
10.8. Government Action.....................................................................27
10.9. Material Adverse Change...............................................................27
10.10. Cross-Default.........................................................................27
10.11. Default under Related Documents.......................................................27
10.12. Other NationsBank Agreements..........................................................27
10.13. ERISA Plans...........................................................................27
10.14. Delisting.............................................................................27
10.15. Other Breach Under Agreement..........................................................27
11. THE AGENT AND THE LENDERS...................................................................................28
11.1. Appointment: Powers and Immunities....................................................28
11.2. Reliance by Agent.....................................................................29
11.3. Defaults..............................................................................29
11.4. Rights of Agent and its Affiliates as a Lender........................................29
11.5. Indemnification.......................................................................30
11.6. Payee of Note Treated as Owner........................................................30
11.7. Nonreliance on Agent and Other Lenders................................................30
11.8. Failure to Act........................................................................31
11.9. Resignation of Agent..................................................................31
11.10. Joinder of Lenders....................................................................31
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Defined Term Location in Text
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11.11. Agreements Regarding Collateral.......................................................31
11.12. Agent Field Audits....................................................................32
11.13. Designation of Co-Agent...............................................................32
11.14. Settlement Procedures.................................................................33
12. ENFORCING THIS AGREEMENT; MISCELLANEOUS.....................................................................34
12.1. GAAP..................................................................................34
12.2. Georgia Law...........................................................................34
12.3. Successors and Assigns................................................................35
12.4. Arbitration...........................................................................35
12.5. Severability; Waivers.................................................................36
12.6. Reimbursement Costs...................................................................37
12.7. Administration Costs..................................................................37
12.8. Attorneys' Fees.......................................................................37
12.9. Joint and Several Liability...........................................................37
12.10. One Agreement.........................................................................38
12.11. Disposition of Schedules..............................................................38
12.12. Credit Adjustments....................................................................38
12.13. Verification of Receivables...........................................................39
12.14. Indemnification.......................................................................39
12.15. Notices...............................................................................39
12.16. Headings..............................................................................39
12.17. Counterparts..........................................................................39
12.18. Amendment and Restatement.............................................................39
12.19. Setoff: Sharing of Setoffs............................................................39
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List of Certain Defined Terms
Defined Term Location in Text
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Advances Para. 1.1
Assignment and Acceptance Para. 12.3
banking day Para. S.4
Borrower, Borrowers Page 1, First Paragraph
Closing Date Page 1, First Paragraph
Commitment, Commitments Para. 1.2
Xxxxxxx Xxxx. 0X
XXXXXX Xxxx. 8.4
ERISA Para. 7.14(e)
event of default Para. 1O
Facility Para. 2.1(a)
Federal Funds Rate Para. 1.3
First Restated Loan Agreement Para. 12.18
GAAP Para. 12.1
L/C Issuer Para. 2.6
Letter of Credit Para. 1.4
Letter of Credit obligations Para. 1.S
LIBOR Banking Day Para. 3.2(a)
LIBOR Rate Para. 3.2(c)
LIBOR Rate Portion Para. 3.2
Loan Documents Para. 2.6 (h)
obligations Para. 1.6
original Loan Agreement Para. 12.18
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Defined Term Location in Text
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PBGC Para. 7.14(e)
Plan Para. 7.14(e)
Quest Page 1, First Paragraph
Reference Rate Para. 3.1
Reimbursement obligations Para. 1.7
Required Lenders Para. 1.8
schools Para. 8.22(e)
Termination Date Para. 1.9
Test Ratio Para. 2.S(a)
Title IV Program Requirements Para. 8.24
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REVOLVING CREDIT AGREEMENT
This Agreement, dated as of November SO, 1998 ("Closing Date"), is made
among NATIONSBANK, N.A., as successor to Bank of America, FSB ("NationsBank"),
individually and as agent for itself and the other "Lenders" (hereinafter
defined) from time to time party hereto (NationsBank, in such capacity, the
"Agent"), the other lenders from time to time party hereto (NationsBank and each
other such lender each, individually, a "Lender" and, collectively, the
"Lenders"), QUEST EDUCATION CORPORATION, formerly known as Educational Medical,
Inc., a Delaware corporation ("Quest"), and all those subsidiaries of Quest
listed on the signature pages to this Agreement (Quest and such subsidiaries
hereinafter called collectively the "Borrowers" and individually called a
"Borrower").
PREAMBLE. Quest and its subsidiaries are engaged in a common business
enterprise and, in connection therewith, have determined it to be in their
mutual economic interests to apply to Lenders on a collective basis for
extensions of credit for working capital and to finance continued expansion,
with Quest acting as agent for all Borrowers in connection with any requests
for, the receipt, disbursement, allocation and administration of, and the
repayment of, the extensions of credit to be made hereunder. Accordingly, the
Borrowers hereby covenant to and agree with the Agent and Lenders as follows:
1. DEFINITIONS
In addition to the terms which are defined elsewhere in this Agreement, the
following terms have the meanings indicated for the purposes of this Agreement:
1.1. "Advances" means advances made by Lenders to Borrowers from
time to time under the Facility.
1.2. "Commitment" means, with respect to each Lender, the amount set
forth opposite its name as its "Commitment" on its signature page hereto; and as
to any Lender which enters into an Assignment and Acceptance (whether as
transferor Lender or assignee thereunder), the amount of such Lender's
Commitment after giving effect to such Assignment and Acceptance; in each case,
as such amount may be reduced from time to time pursuant to Paragraph 2.1(c).
"Commitments" means the aggregate amount of all Commitments as in effect from
time to time. on the Closing Date the aggregate amount of the Commitments shall
be $40,000,000.
1.3. "Federal Funds Rate" means, for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the banking day
next succeeding such day, provided that (i) if the day for which such rate is to
be determined is not a banking day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding banking day as so published
on the next succeeding banking day, and (ii) if such rate is not so published
for any day, the Federal Funds Rate for such day shall be the average rate
charged to the Agent on such day on such transactions, as determined in good
faith by the Agent.
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1.4. "Letter of Credit" means any letter of credit issued by the
L/C Issuer for the account of any Borrower pursuant to Paragraph 2.6 hereof.
1.5. "Letter of Credit Obligations" means, at any particular time,
the sum of (a) the Reimbursement obligations at such time, (b) the aggregate
maximum amount available for drawing under Letters of Credit at such time and
(c) the aggregate maximum amount available for drawing under Letters of Credit
the issuance of which has been authorized by the L/C Issuer but which have not
yet been issued at such time.
1.6. "Obligations" shall mean any and all debts of each Borrower to
Agent and Lenders arising hereunder or as a result hereof, whether constituting
Advances, or arising pursuant to a Letter of Credit or otherwise, including,
without limitation, the Reimbursement obligations, together with all extensions
or renewals of any of the foregoing, in whole or in part.
1.7. "Reimbursement Obligations" means all reimbursement or
repayment obligations of Borrowers to the L/C Issuer with respect to Letters of
Credit issued pursuant hereto.
1.8. "Required Lenders" shall mean, at any time, Lenders having at
least fifty-one percent (51%) of the aggregate amount of the Commitments or, if
the Commitments eke no longer in effect, Lenders holding at least fifty-one
percent (51%) of the aggregate outstanding principal amount of the sum of the
obligations; provided, however, that such calculation shall be made without
including the Commitment of, or principal amount of obligations held by, any
Lender which is in default with respect to its obligations to the Agent, the
Borrowers or any Lender.
1.9. "Termination Date" shall mean November 30,2001; provided,
however, that the Lenders, in their sole discretion, upon the Borrowers'
request, may elect, by giving written notice to the Borrowers to such effect,
beginning on or after November 30, 1999, but not later than 120 days before any
then effective Termination Date, to extend such "Termination Date" for up to two
(2) additional periods of up to one (1) year each on such terms and conditions
(which may differ from those set forth herein) as the Lenders may offer and the
Borrowers may accept.
2. THE FACILITY AMOUNT AND TERMS
2.1. Revolving Line of Credit Amount.
(a) During the availability period described below,
Lenders will provide a revolving line of credit (the "Facility") to the
Borrowers. The amount of the Facility is equal to the aggregate amount of the
Commitments; provided, however, that no Advance will be made hereunder or Letter
of Credit issued pursuant hereto unless, after giving effect thereto, Borrowers
will be in compliance with the requirements of Paragraphs 8.4 and 8.5.
(b) The Facility is a revolving line of credit for
Advances with a within line facility for Letters of Credit as provided below.
Each Lender severally agrees to extend its pro rata share of Advances and to
purchase its pro rata share of participations in Letters of Credit based on the
proportion which each Lender's Commitment bears to the aggregate Commitments;
provided that no Lender shall be required to extend credit hereunder in an
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amount in excess of its Commitment. During the availability period, the
Borrowers may repay principal amounts and reborrow them.
(c) On November 30, 1999, the amount of the Commitments
shall be reduced by $5,000,000. Such reduction (i) shall be made pro rata among
Lenders based on the proportion which each Lender's Commitment bears to the
aggregate Commitments and (ii) shall be accompanied by Borrowers' payment in
full of any amount of the Advances then outstanding which, if not then paid in
full, would cause total Advances, Letters of Credit and Reimbursement
obligations then outstanding under the Facility to exceed the Commitments, after
giving effect to such reduction.
(d) Each Advance under the Facility must be for at least
$250,000 or for the amount of the remaining available line of credit, if less.
(e) The Borrowers agree not to permit the sum of the
outstanding principal amount of Advances obtained under the Facility Dab the
outstanding amounts of any Letters of Credit under Paragraph 2.6 plus all
Reimbursement obligations to exceed the lesser of (i) the amount of the
Commitments or (ii) that amount which would not result in a violation of the
provisions of Paragraphs 8.4 or 8.5 hereof, determined on a pro forma basis as
of the most recently ended fiscal quarter of Quest after giving effect to all
outstanding Advances, Letters of Credit and Reimbursement obligations. If the
Borrowers exceed these limits, the Borrowers will immediately pay the excess to
the Agent upon the Agent's or any Lender's demand. Unless and until an Event of
Default has occurred and is continuing, the Borrowers shall have the right to
direct the manner or order in which payments received from the Borrowers under
this Paragraph shall be applied to the Advances. From and after the occurrence
of an Event of Default and during its continuance, the Agent may apply payments
received from the Borrowers under this Paragraph to the obligations of the
Borrowers to the Agent and Lenders in the order and the manner as the Required
Lenders, in their discretion, may determine (but such application must be on a
pro rata basis among Lenders).
2.2. Availability Period. The Facility is available between the
date of this Agreement and the Termination Date, unless the Borrowers are in
default.
2.3. Conditions to Each Advance. Before each Advance under the
Facility, including the first, the Borrowers will deliver to the Agent (i) a
notice of borrowing, in form and detail satisfactory to the Required Lenders,
issued by Quest, as agent for and on behalf of the Borrowers, specifying the
amount of the requested Advance, the intended use of the proceeds thereof, the
requested disbursement date and the desired interest rate to be applicable,
initially, thereto; and (ii) a certificate, in form and detail satisfactory to
the Required Lenders, issued by Quest, as agent for and on behalf of the
Borrowers, setting forth calculations demonstrating the Borrowers' compliance
with the requirements of Paragraphs 8.4 and 8.S after giving effect to such
Advance.
2.4. Funding. Subject to any overriding provisions of Paragraph
11 .14, the Agent shall promptly notify each Lender of each Advance to be made
under the Facility on the date of the making thereof, and such Lender's pro rata
share thereof Not later than 2:00 p.m. (Atlanta, Georgia time) on the date of
each such Advance, each Lender shall make available to the Agent its pro rata
share of such Advance, in federal or other funds immediately available to the
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Agent in Atlanta, Georgia. Unless the Agent has received contrary written notice
from a Lender not later than 4:00 p.m. (Atlanta, Georgia time) on the banking
day preceding the date of any such Advance, the Agent shall be entitled to
assume that such Lender will timely make its pro rata share of such Advance
available to the Agent and, in reliance on such assumption, the Agent may (but
need not) make available such Lender's pro rata share of such Advance to
Borrower from the Agent's own funds. In such event, if Agent does not receive
such Lender's pro rata share of such Advance by 2:00 p.m. (Atlanta, Georgia
time) on the date of such Advance, the Agent shall be entitled (i) to require
Borrowers to return such share to the Agent, together with interest thereon at
the applicable rate specified in Paragraph 3.1, or (ii) to receive such share
from such Lender, together with interest thereon for each day from the date such
payment was first due until the date such amount is paid in full at the Federal
Funds Rate for the first three (3) days and at the Reference Rate thereafter.
The failure of any Lender to make available its pro rata share of any Advance
shall neither relieve nor increase the obligation of any other Lender hereunder
to make available its pro rata share of such Advance.
2.5. Repayment Terms
(a) The Borrowers will pay interest, in arrears, at the
then applicable interest rate described below on outstanding Advances under the
Facility on the first day of the calendar month following the disbursement of
any Advance under the Facility and then on a monthly basis thereafter until
payment in full of such advance. The interest rate payable on outstanding
Advances under the Facility shall be determined as follows:
INTEREST RATE SHALL BE -OR- INTEREST RATE SHALL BE
IF THE TEST RATIO IS: REFERENCE RATE PLUS LIBOR RATE PLUS
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3.0:1 or greater .75% 2.375%
2.50:1 or greater, but less than 3.0:1 .50% 2.125%
2.0:1 or greater, but less than 2.50:1 .25% 1.875%
less than 2.0:1.0 0% 1.500%
As used herein, (i) "Reference Rate" is defined in Paragraph 3.1, (ii) "LIBOR
Rate" is defined in Paragraph 3.2, and (iii) the "Test Ratio" shall be the Total
Funded Debt/Adjusted Cash Flow Ratio, as defined in Paragraph 8.4. The Test
Ratio shall be calculated on a quarterly basis by the Agent from the Borrowers'
quarterly or, as the case may be, annual financial statements then most recently
delivered to the Agent and Lenders pursuant to Paragraphs 8.2(a) and 8.2(b), and
the interest rate(s) described above shall be adjusted by the Agent, as
appropriate, effective as of the first day of the month following the month in
which such financial statements are delivered to the Agent and Lenders, (i) as
to all Advances then outstanding and any made on or after such date, for all
Advances which bear interest determined by reference to the Reference Rate and
(ii) as to all Advances made on or after such date (including any "rollover" of
existing LIBOR Rate portions during such period), for LIBOR Rate portions; in
each case, until the next such determination by the Agent becomes effective. If,
however, the Borrowers fail to timely deliver their quarterly or, as the case
may be, annual financial statements to the Agent and Lenders pursuant to
Paragraphs 8.2(a) or 8.2(b) for any fiscal quarter, the Agent shall use an
assumed Test Ratio of 3.0:1 to make its calculations.
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(b) The Borrowers agree to pay to the Agent, for the
account of Lenders, a commitment fee, determined by multiplying (i) the
difference between (A) the full amount of the Lenders' Commitments as then in
effect and (B) the amount of credit which the Borrowers actually use of the
Facility, based on the weighted average credit outstanding under the Facility
during the specified period, by (ii) the per annum commitment fee described
below, computed as follows:
THE PER ANNUM
IF THE TEST RATIO IS COMMITMENT FEE SHALL BE
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3.0:1 or greater .500%
greater than 2.5:1 but less than 3.0:1 .450%
greater than 2.0:1 but less than 2.5:1 .425%
less than 2.0:1 .375%
with the Test Ratio being computed by the Agent in the same manner, and to take
effect at the same time, as is provided in subparagraph (a) above. The
calculation of credit outstanding under the Facility shall include the undrawn
amount of Letters of Credit. This commitment fee shall be due and payable
monthly in arrears on the first day of each calendar month until the expiration
of the availability period for the Facility, commencing on the first day of the
first calendar month following the date of this Agreement. The Agent shall
promptly remit such commitment fees, when paid, to the Lenders in accordance
with their pro rata shares thereof, based on the Commitments then outstanding.
(c) The Borrowers will repay in full all principal and
any unpaid interest or other charges outstanding under the Facility no later
than the Termination Date.
2.6. Letters of Credit. The Facility may also be used for financing
standby letters of credit with a maximum maturity not to extend for more than
one (1) year or, in any event, beyond the Termination Date. The standby letters
of credit will be issued by NationsBank or its designated affiliate bank
(herein, an "L/C Issuer") subject to a reimbursement obligation on the part of
the Lenders as provided below (which, in turn, will be reimbursed by the
Borrowers). The amount of such Letters of Credit outstanding at any one time
plus all outstanding Reimbursement obligations may not exceed $16,000,000.
(a) Conditions. No Letters of Credit shall be issued
except upon satisfaction in full of the following conditions:
(i) Quest, as agent for the Borrowers, shall have
delivered to the Agent at such times and in such manner as the Agent
may prescribe, the L/C Issuer's form application and agreement for
standby letters of credit and such other documents and materials as may
be required pursuant to the terms thereof, all satisfactory in form and
substance to the L/C Issuer and the Agent, and the terms of the
proposed Letter of Credit shall be satisfactory in form and substance
to the L/C Issuer and the Agent;
(ii) the unused portion of the Commitments shall not
be less than the amount of the requested Letter of Credit; and
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(iii) the issuance of such Letter of Credit shall not
cause a violation of the requirements of Paragraph 8.4 or 8.5 hereof.
(b) Issuance of Letters of Credit. At least three (3)
banking days before the effective date for any Letter of Credit, Quest, as agent
for the Borrowers, shall give the Agent written notice of its request for the
issuance of a Letter of Credit. Such notice shall be irrevocable and shall
specify the original face amount of the Letter of Credit requested, the
effective date (which day shall be a banking day) of issuance of such requested
Letter of Credit, the date on which such requested Letter of Credit is to
expire, the amount of then outstanding Letter of Credit obligations, the purpose
for which such Letter of Credit is to be issued, whether such Letter of Credit
may be drawn in single or partial draws and the person for whose benefit the
requested Letter of Credit is to be issued and shall contain a calculation,
demonstrating that after giving effect to such issuance Borrowers will not be in
violation of the requirements of Paragraphs 8.4 and 8.5 hereof. If the
applicable conditions set forth in this Agreement are satisfied (including,
without limitation, those conditions set forth in clause (a) above), the Agent
shall cause the L/C Issuer to issue the requested Letter of Credit. The Agent
shall give each Lender written notice, or telephonic notice confirmed promptly
thereafter in writing, of the issuance of a Letter of Credit and shall deliver
to each Lender in connection with such notice a copy of the Letter of Credit
issued by the L/C Issuer, if then requested to do so by any Lender.
(c) Reimbursement. (i) the Borrowers shall reimburse the
L/C Issuer for drawings under a Letter of Credit issued by it no later than the
earlier of (A) the time specified in the application and agreement applicable
thereto, or (B) one (1) banking day after the payment by the L/C Issuer; (ii)
any Reimbursement obligation with respect to any Letter of Credit shall bear
interest from the date of the relevant drawing under the pertinent Letter of
Credit until the date of payment in full thereof at a rate per annum equal to
the default rate specified in Paragraph 5.8 hereof; and (iii) in order to
implement the foregoing, upon the occurrence of a drawing under any Letter of
Credit, unless L/C Issuer is reimbursed in accordance with subsection (i) above,
Borrowers irrevocably authorize the Agent to treat such nonpayment as a request
for advance in the amount of such Reimbursement obligation and to make an
Advance, on Borrowers' behalf, under the Facility in such amount regardless of
whether the conditions precedent to the making of Advances thereunder otherwise
have been met. Borrowers further authorize the Agent to credit the proceeds of
such Advance so as to immediately eliminate the liability of Borrowers for such
Reimbursement obligations under such Letter of Credit.
(d) Duties of L/C Issuer. Any action taken or omitted to
be taken by L/C Issuer in connection with any Letter of Credit, if taken or
omitted in the absence of willful misconduct or gross negligence, shall not put
L/C Issuer under any resulting liability to any Lender, or assuming that L/C
Issuer has complied with the procedures specified in this Section for the
issuance of such Letter of Credit, relieve that Lender of its obligations
hereunder to L/C Issuer. In determining whether to pay under any Letter of
Credit, L/C Issuer shall have no obligation relative to the Agent or the Lenders
other than to confirm that any documents required to have been delivered under
such Letter of Credit appear to comply on their face with the requirements of
such Letter of Credit.
(e) Purchase of Participations. Immediately upon issuance
by L/C Issuer of any Letter of Credit in accordance with the procedures set
forth in this Section, without necessity of further act or deed, each Lender
shall be deemed to have irrevocably and
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unconditionally purchased and received from L/C Issuer, without recourse or
warranty, an undivided interest and participation, to the extent of such
Lender's pro rata share, in such Letter of Credit.
(f) Sharing of Letter of Credit Payments. In the event
that L/C Issuer makes any payment under any Letter of Credit for which the
Borrowers shall not have repaid such amount to L/C Issuer pursuant hereto or
which cannot be paid by an Advance, L/C Issuer shall notify the Agent and the
Agent shall promptly notify each Lender of such failure, and each Lender shall
promptly and unconditionally pay to L/C Issuer such Lender's pro rata share of
the amount of such payment in United States dollars and in same day funds. If
the Agent so notifies such Lender prior to 10:00 A.M. (Atlanta, Georgia time) on
any banking day, such Lender shall make available to L/C Issuer its pro rata
share of the amount of such payment on such banking day in same day funds. If
and to the extent such Lender shall not have so made its pro rata share of the
amount of such payment available to L/C Issuer, such Lender agrees to pay to L/C
Issuer forthwith on demand such amount together with interest thereon, for each
day from the date such payment was first due until the date such amount is paid
to L/C Issuer at the Federal Funds Rate for the first three (3) days and
thereafter at the Reference Rate. The failure of any Lender to make available to
L/C Issuer its pro rata share of any such payment shall neither relieve nor
increase the obligation of any other Lender hereunder to make available to L/C
Issuer its pro rata share of any payment on the date such payment is to be made.
(g) Sharing of Reimbursement Obligation Payments.
Whenever L/C Issuer receives a payment on account of a Reimbursement obligation,
including any interest thereon, as to which L/C Issuer has received any payments
from the Lenders pursuant to this Section, it shall promptly pay to each Lender
which has funded its participating interest therein, in United States dollars
and in the kind of funds so received, an amount equal to such Lender's pro rata
share thereof. Each such payment shall be made by L/C Issuer on the banking day
on which the funds are paid to such Person, if received prior to 10:00 am.
(Atlanta, Georgia time) on such banking day, and otherwise on the next
succeeding banking day.
(h) Obligations Irrevocable. The obligations of
Borrowers, initially, and, upon Borrowers' failure to do so on a timely basis,
the Lenders to make payments to L/C Issuer with respect to drawings made under a
Letter of Credit shall be irrevocable, not subject to any qualification or
exception whatsoever and shall be made in accordance with, but not subject to,
the terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances: (i) any lack of validity
or enforceability of this Agreement or any of the other documents, instruments
or agreements executed in connection herewith or pursuant hereto, (this
Agreement and all such other documents, instruments and agreements, together
with all amendments and modifications thereto, collectively, the "Loan
Documents"); (ii) the existence of any claim, set-off, defense or other right
which any Borrower may have at any time against a beneficiary named in a Letter
of Credit or any transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), L/C Issuer, any Lender or any other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions; (iii) any draft,
certificate or any other document presented under the Letter of Credit proves to
be forged, fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect; (iv) the surrender or
impairment of any security for the performance or observance of any of the
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terms of any of the this Agreement or any other loan document; (v) payment by
the L/C Issuer 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; (vi) payment by the L/C Issuer under any Letter of
Credit against presentation of any draft or certificate that does not comply
with the terms of such Letter of Credit, except payment resulting from the gross
negligence or willful misconduct of the L/C Issuer; or (vii) any other
circumstances or happenings whatsoever, whether or not similar to any of the
foregoing, except circumstances or happenings resulting from the gross
negligence or willful misconduct of the L/C Issuer.
(i) Recovery or Avoidance of Payments. In the event any
payment by or on behalf of Borrowers received by the L/C Issuer with respect to
a Letter of Credit and distributed by the L/C Issuer to the Lenders on account
of their participations is thereafter set aside, avoided or recovered from the
L/C Issuer in connection with any receivership, liquidation or bankruptcy
proceeding, each Lender that received such distribution shall, upon demand by
the L/C Issuer, contribute such Lender's pro rata share of the amount set aside,
avoided or recovered together with interest at the rate required to be paid by
the L/C Issuer upon the amount required to be repaid by it.
(j) Letter of Credit Fees. Borrowers shall pay to the
Agent with respect to each Letter of Credit issued hereunder a letter of credit
fee equal to (i) one and one-half percent (1-1/2%) per annum multiplied by (ii)
the undrawn face amount of such Letter of Credit, payable monthly in arrears.
Letter of Credit Fees payable hereunder shall be computed on the basis of a year
of 36O days and paid for the actual number of days elapsed (including the first
day but excluding the last day). If there is a default under this Agreement, at
the Required Lenders' option, the amount of such fee shall be increased by 2%
per annum, effective starting on the day the Agent provides notice of the
increase to Borrowers. The Agent shall promptly remit such Letter of Credit
Fees, when paid, to the Menders in accordance with their pro rata shares
thereof, based on the Letter of Credit obligations then outstanding.
(k) Other Charges. The Borrowers shall pay to L/C Issuer,
solely for its own account, the standard charges assessed by L/C Issuer in
connection with the issuance, administration, amendment and payment or
cancellation of Letters of Credit issued hereunder.
(l) Indemnification. Borrowers, jointly and severally,
shall protect, indemnify, pay and save the L/C Issuer, the Agent and each Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) which
the L/C Issuer, the Agent or any Lender may incur or be subject to as a
consequence of the issuance of any Letter of Credit for Borrowers' account other
than as a result of its gross negligence or willful misconduct, as determined by
a court of competent jurisdiction. As among Borrowers, L/C Issuer, the Agent and
the Lenders, Borrowers assume all risks of the acts and omissions of, or misuse
of the Letters of Credit issued for Borrowers' account by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, L/C Issuer, the Agent and the Lenders shall not be responsible
for (i) the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the application for
and issuance of the Letters of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged,
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
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thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason, (iii) failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order to draw upon
such Letter of Credit, (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher, for errors in interpretation of
technical terms, (v) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof, (vi) the misapplication by the beneficiary of a Letter of
Credit of the proceeds of any drawing under such Letter of Credit; and (vii) any
consequences arising from causes beyond the control of the L/C Issuer, the Agent
and the Lenders. In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by L/C
Issuer under or in connection with the Letters of Credit or any related
certificates if taken or omitted in good faith and with reasonable care, shall
not put L/C Issuer or any Lender under any resulting liability to Borrowers or
relieve Borrowers of any of their obligations hereunder to any such Person.
3. INTEREST
3.1. Interest Rate
(a) Unless the Borrowers elect the optional interest rate
described below, the interest rate payable on Advances outstanding under the
Facility shall be based on NationsBank's Reference Rate (described below), plus
the addition of a spread, as described more particularly in Paragraph 2.5(a).
(b) The "Reference Rate" is the rate of interest publicly
announced from time to time by NationsBank in Charlotte, North Carolina, as its
Reference Rate. The Reference Rate is set by NationsBank based on various
factors, including its costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans.
NationsBank may price loans to its customers at, above, or below the Reference
Rate. Any change in the Reference Rate shall take effect at the opening of
business on the day specified in the public announcement of a change in
NationsBank's Reference Rate.
3.2. Optional Interest Rate. Instead of an interest rate based on the
Reference Rate, the Borrowers may elect to have all or portions of their
outstanding Advances (herein called a "LIBOR Rate Portion") bear interest based
on the "LIBOR Rate" (described below), plus the addition of a spread, as
described more particularly in Paragraph 2.5(a). Designation of a LIBOR Rate
Portion is subject to the following requirements:
(a) The interest period during which the LIBOR Rate will
be in effect will be one, two, three or six months. The first day of the
interest period must be a day other than a Saturday or a Sunday on which
NationsBank is open for business in North Carolina and Georgia and that is also
a day for trading by and between banks in dollar deposits in the applicable
interbank LIBOR market (a "LIBOR Banking Day"). The last day of the interest
period and the actual number of days during the interest period will be
determined by the Agent using the practices of the London interbank market. No
interest period may extend beyond the Termination Date, however.
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(b) Each LIBOR Rate Portion will be for an amount not
less than $500,000, and there shall be no more than four (4) LIBOR Rate
Portions, in total.
(c) "LIBOR Rate" means for any interest period, the rate
per annum (rounded upwards to the nearest 1/16th of one percentage point, if
necessary) equal to the quotient obtained by dividing (i) the offered rate for
United States dollar deposits for a period comparable to such interest period
appearing on the Reuters Screen LIBO Page (or as quoted or published by such
other recognized independent quote service as may be selected by Agent from time
to time) as of 11:00 a.m., London time, on the day that is two (2) LIBOR Banking
Days prior to the beginning of such interest period (but if at least two such
rates appear on such screen or are so quoted at such time, the offered rate for
such interest period shall be the arithmetic mean of such rates) by (ii) a
percentage equal to one (1) minus the then average stated maximum amount (stated
as a decimal) of all reserve requirements applicable to any member of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor categories for such liabilities under such Regulation D).
(d) The Borrowers shall irrevocably request a LIBOR Rate
Portion no later than 9:00 a.m. Atlanta time on the LIBOR Banking Day preceding
the day on which the London Inter-Bank offered Rate will be set, as specified
above; that is, three (3) LIBOR Banking Days before the date on which the
requested advance is to be made.
(e) The Borrowers may not elect a LIBOR Rate with respect
to any principal amount which is scheduled to be repaid before the last day of
the applicable interest period.
(f) Any portion of an Advance already bearing interest
at the LIBOR Rate will not be converted to a different rate during its interest
period.
(g) Each prepayment of a LIBOR Rate Portion, whether
voluntary, by reason of acceleration or otherwise, will be accompanied by the
amount of accrued interest on the amount prepaid and by a prepayment fee (to be
paid to the Agent for disbursement to Lenders on a pro rata basis), which shall
be equal to the amount (if any) by which:
(i) the additional interest which would have been
payable at the LIBOR Rate, without the addition of any spread; he,
add-on, during the Reinvestment Period (as defined below) on the amount
prepaid had it not been prepaid, exceeds
(ii) the interest which would have been recoverable
by the Lenders by relending the amount prepaid at the Reinvestment
Rate, for a period starting on the date on which it was prepaid and
ending on the last day of the interest period for such portion (or the
scheduled payment date for the amount prepaid, if earlier) (the
"Reinvestment Period"). The "Reinvestment Rate" shall be the LIBOR
Rate, without the addition of any spread, determined as of the date of
the prepayment, for the entire Reinvestment Period.
(h) The Agent will not accept an election for a LIBOR
Rate Portion if any of the following described events has occurred and is
continuing:
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(i) Dollar deposits in the principal amount, and
for periods equal to the interest period, of a LIBOR Rate Portion are
not available in the London inter-bank market;
(ii) the LIBOR Rate does not accurately reflect the
cost of a LIBOR Rate Portion; or
(iii) the Borrowers are in default.
4. COLLATERAL
4.1. Personal Property. The Borrowers' obligations to the Agent and
Lenders under this Agreement will be secured by security interest in favor of
the Agent, for its benefit and the ratable benefit of Lenders, in all personal
property which the Borrowers now own or will own in the future and, at the
Required Lenders' or the Agent's option, all or portions of any real property
(or interests in real property) owned or acquired by the Borrowers from time to
time. Collateral shall specifically include, but not be limited to, all accounts
receivables and general intangibles of each Borrower, all equipment of each
Borrower and the capital stock of each Borrower (other than the capital stock of
Quest, and except for any capital stock which, now or hereafter, is encumbered
in accordance with Paragraph 8.8(e)).
5. DISBURSEMENTS, PAYMENTS AND COSTS
5.1. Requests for Credit. Each request for an extension of credit will
be made in writing in a manner acceptable to the Agent, or by another means
acceptable to the Agent, to be issued by Quest, as agent for and on behalf of
all the Borrowers.
5.2. Disbursements and Payments. Each disbursement by the Agent on
behalf of Lenders and each payment by the Borrowers will be: (a) made at the
Agent's branch (or other location) selected by the Agent from time to time; (b)
made for the account of the Agent's branch selected by the Agent from time to
time; (c) made in immediately available funds, or such other type of funds
selected by the Agent; and (d) evidenced by records kept by the Agent. In
addition, the Agent may, at its discretion, require the Borrowers to sign one or
more promissory notes to evidence the debt arising from such disbursements.
5.3. Direct Debit. The Borrowers agree that after their default in the
payment of any such obligation, the Agent may create Advances under the Facility
to pay interest, principal payments, and any fees that are due under this
Agreement. The Agent will create such Advances on the dates the payments become
due. If a due date does not fall on a banking day, the Agent will create the
Advance on the first banking day following the due date. If the creation of an
Advance under the Facility causes the total amount of credit outstanding under
the Facility to exceed the limitations set forth in this Agreement, the
Borrowers will immediately pay the excess to the Agent, for application to the
outstanding Advances of Lenders on a pro rata basis, upon the Agent's demand.
The foregoing shall not constitute a waiver by the Agent or Lenders of any such
default.
5.4. Banking Days. Unless otherwise provided in this Agreement, a
"banking day" is a day other than a Saturday or a Sunday on which NationsBank is
open for business in the
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States of North Carolina and Georgia. All payments and disbursements which would
be due on a day which is not a banking day will be due on the next banking day.
All payments received on a day which is not a banking day will be applied to the
credit on the next banking day.
5.5. Taxes.
(a) If any payments to the Agent, for the account of
Lenders, under this Agreement are made from outside the United States, the
Borrowers will not deduct any foreign taxes from any payments it makes to the
Agent. If any such taxes are imposed on any payments made by the Borrowers
(including payments under this paragraph), the Borrowers will pay the taxes and
will also pay to the Agent, for the account of the applicable Lender, at the
time interest is paid, any additional amount as to which any Lender specifies to
Quest, as agent for the Borrowers, in writing (with a copy to the Agent) as
necessary to preserve the after-tax yield such Lender would have received if
such taxes had not been imposed. The Borrowers will concern that they have paid
any such taxes by giving the Agent official tax receipts (or notarized copies)
within 30 days after the due date.
(b) Payments made by the Borrowers to the Agent for the
account of Lenders will be made without deduction of United States withholding
or similar taxes. If the Borrowers are required to pay U.S. withholding taxes,
the Borrowers will pay such taxes in addition to the amounts due to the Lenders
under this Agreement. If the Borrowers fail to make such tax payments when due,
each of the Borrowers indemnifies the Agent and each Lender against any
liability for such taxes, as well as for any related interest, expenses,
additions to tax, or penalties asserted against or suffered by the Agent or any
Lender with respect to such taxes.
5.6. Additional Costs. The Borrowers will pay each Lender, upon
written demand by such Lender to Quest, as agent for the Borrowers (with a copy
to the Agent), for such Lender's costs or losses arising from any statute or
regulation, or any request or requirement of a regulatory agency which is
applicable to such Lender. The costs and losses will be allocated to the
Advances of such Lender in a manner determined by such Lender, using any
reasonable method. The costs include the following: (a) any reserve or deposit
requirements; and (b) any capital requirements relating to a Lender's assets and
commitments for credit.
5.7. Interest Calculation. Except as otherwise stated in this
Agreement, all interest and fees, if any, will be computed on the basis of a
36O-day year and the actual number of days elapsed. This results in more
interest or a higher fee than if a 365-day year is used.
5.8. Default Rate. Upon the occurrence and during the continuation
of any default under this Agreement, principal amounts outstanding under this
Agreement will at the option of the Required Lenders bear interest at a rate
which is two percent (2%) per annum higher than the rate of interest otherwise
provided under this Agreement. This will not constitute a waiver of any default.
Installments of principal which are not paid when due under this Agreement shall
continue to bear interest until paid. Any interest, fees or costs which are not
paid when due shall bear interest at the Reference Rate plus two percent (2%)
per annum. This may result in compounding of interest.
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5.9. Overdrafts. At the Agent's sole option in each instance, the
Agent may do one of the following:
(a) The Agent may cause Advances to be made under this
Agreement to prevent or cover an overdraft on any account of the Borrowers with
NationsBank. Each such Advance will accrue interest from the date of the Advance
or the date on which the account is overdrawn, whichever occurs first, at the
Reference Rate plus two percent (2%) per annum. Each such Advance shall be
deemed to be made by all Menders on a pro rata basis.
(b) The Agent may reduce the amount of credit otherwise
available under this Agreement by the amount of any overdraft on any account of
the Borrowers with NationsBank.
This paragraph shall not be deemed to authorize the Borrowers to create
overdrafts on any of the Borrowers' accounts with NationsBank.
5.10. Payments in Kind. If the Agent or the Required Lenders require
delivery in kind of the proceeds of collection of any Borrower's accounts
receivable, such proceeds shall be credited first to accrued interest, then to
fees, then to principal due and, then to any other obligations then owing (on a
pro rata basis, as among the Lenders). Any remaining funds shall be applied to
the further reduction of principal. Notwithstanding the foregoing, upon the
occurrence of a default, or event which with notice or the passage of time would
constitute a default, such amounts shall be credited to the obligations in such
order as Required Lenders, in their sole discretion, may elect. All such credits
will be conditioned on collection and any returned items will be charged to
Borrowers.
6. CONDITIONS
The Agent must receive the following items, in form and content acceptable to
the Lenders, before the Lenders are required to extend any credit to the
Borrowers under this Agreement:
6.1. Authorizations. Evidence that the execution, delivery and
performance by the Borrowers of this Agreement and any instrument or agreement
required under this Agreement have been duly authorized.
6.2. Governing Documents. A copy of each Borrower's articles of
incorporation and bylaws.
6.3. Security Agreements. Signed original security agreements (or
amendments to existing security agreements made by the Borrowers in favor of
NationsBank pursuant to the original Loan Agreement and the First Restated Loan
Agreement), assignments, financing statements and fixture filings (together with
collateral in which the Lenders require a possessory security interest), which
the Lenders may require from any Borrower.
6.4. Evidence of Priority. Evidence that security interests and
liens in favor of the Agent are valid, enforceable, and prior to all others'
rights and interests, except as provided in Paragraph 8.8.
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6.5. Insurance. Evidence of insurance coverage, as required in
Paragraph 8.21.
6.6. Legal Opinion. A written opinion from the Borrowers' legal
counsel, covering such matters as the Lenders may require. The legal counsel and
the terms of the opinion must be acceptable to the Lenders.
6.7. Good Standing. Certificates of good standing for each Borrower
from its state of formation and from any other state in which each Borrower is
required to qualify to conduct its business.
6.8. Payment Closing Fee. Payment to the Lenders upon execution
of this Agreement of a non-refundable closing fee in the amount of $15,000.
6.9. Payment of Expenses and Fees. Payment of all accrued and
unpaid expenses incurred by the Agent as required by Paragraph 12.6.
6.10. Representations of Corporate Officers. A completed original of
the NationsBank's form of Representations and Warranties of Corporate of fleers
executed by the principal officers of each Borrower.
6.11. Other Items. Any other items that the Agent or Lenders
reasonably require.
7. REPRESENTATIONS AND WARRANTIES
When the Borrowers sign this Agreement, and until the Facility is terminated the
obligations are repaid in full, the Borrowers make the following representations
and warranties. Each request for an extension of credit (including any Letter of
Credit) constitutes a renewed representation:
7.1. Organization of Each Borrower. Each Borrower is a corporation
duly formed and existing under the laws of the state where organized.
7.2. Authorization. This Agreement, and any instrument or agreement
required hereunder, are within the Borrowers' powers, have been duly authorized,
and do not conflict with any of their organizational papers.
7.3. Enforceable Agreement. This Agreement is a legal, valid and
binding agreement of the Borrowers, enforceable against the Borrowers in
accordance with its terms, and any instrument or agreement required hereunder,
when executed and delivered, will be similarly legal, valid, binding and
enforceable.
7.4. Good Standing. In each state in which a Borrower does
business, it is properly licensed, in good standing, and, where required. in
compliance with fictitious name statutes.
7.5. No Conflicts. This Agreement does not conflict with any law,
agreement, or obligation by which any Borrower is bound.
7.6. Financial Information. All financial and other information
that has been or will be supplied to the Agent and Lenders, including the
Borrowers' financial statements as of and for
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the most recently completed fiscal quarter of the Borrowers for which financial
statements are available, is:
(a) sufficiently complete to give the Agent and Lenders
accurate knowledge of the Borrowers' financial condition.
(b) in compliance with all government regulations that
apply.
Since the date of the financial statements specified above, there has been no
material adverse change in the business condition (financial or otherwise),
operations, properties or prospects of the Borrowers.
7.7. Lawsuits. There is no lawsuit, tax claim or other dispute
pending or threatened against any Borrower which, if lost, would impair such
Borrower's financial condition or ability to repay the Advances made pursuant
hereto, except as have been disclosed in writing to the Agent and Lenders.
7.8. Collateral. All collateral required in this Agreement is owned
by the grantor of the security interest free of any title defects or any liens
or interests of others, except for those title defects, liens or interests of
others, as applicable thereto, specified in Paragraph 8.8.
7.9. Permits. Franchises. The Borrowers possess all permits,
memberships, franchises, contracts and licenses required and all trademark
rights, trade name rights, patent rights and fictitious name rights necessary to
enable them to conduct the business in which they are now engaged.
7.10. Other Obligations. The Borrowers are not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.
7.11. Income Tax Returns. The Borrowers have no knowledge of any
pending assessments or adjustments of their income tax liabilities for any year.
7.12. No Tax Avoidance Plan. The Borrowers' obtaining of credit from
the Lenders under this Agreement does not have as a principal purpose the
avoidance of U.S. withholding taxes.
7.13. No Event of Default. There is no event which is, or with
notice or lapse of time or both would be, a default under this Agreement.
7.14. ERISA Plans.
(a) The Borrowers have fulfilled their obligations, if
any, under the minimum funding standards of ERISA and the Code with respect to
each Plan and are in compliance in all material respects with the presently
applicable provisions of ERISA and the Code, and have not incurred any liability
with respect to any Plan under Title IV of ERISA.
(b) No reportable event has occurred under Section 4043(b)
of ERISA for which the PBGC requires 30 day notice.
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(c) No action by the Borrowers to terminate or withdraw
from any Plan has been taken and no notice of intent to terminate a Plan has
been filed under Section 4041 of ERISA.
(d) No proceeding has been commenced with respect to a
Plan under Section 4042 of ERISA, and no event has occurred or condition exists
which might constitute grounds for the commencement of such a proceeding.
(e) The following terms have the meanings indicated for
purposes of this Agreement:
(i) "Code" means the Internal Revenue Code of 1986,
as amended from time to time.
(ii) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time.
(iii) "PBGC" means the Pension Benefit Guaranty
Corporation established pursuant to Subtitle A of Title IV of ERISA.
(iv) "Plan" means any employee pension benefit plan
maintained or contributed to by the Borrowers and insured by the
Pension Benefit Guaranty Corporation under Title IV of ERISA.
7.15. Locations of Borrowers. Each Borrower's place of business (or,
if such Borrower has more than one place of business, its chief executive
office) is located at the address listed under such Borrower's signature on this
Agreement.
7.16. Subsidiaries. No Borrower has any subsidiaries, except as
disclosed on Schedule 7.16 attached hereto. All subsidiaries of Quest are
Borrowers under this Agreement, other than Iowa College Acquisition Corp. which
will be joined as a Borrower within ten (10) days after the Closing Date in
accordance with the requirements of Paragraph 8.25.
7.17. Year 2000 Compliance. The Borrowers have conducted a
comprehensive review and assessment of their computer applications and made
inquiry of the Borrowers' key suppliers, vendors and customers as they have
determined to be appropriate with respect to the "year 2000 problem" (that is,
the risk that computer applications may not be able to properly perform
date-sensitive functions after December 31, 1999) and, based on that review and
inquiry, the Borrowers do not believe the year 2000 problem will result in a
material adverse change in their business condition (financial or otherwise),
operations, properties or prospects, or ability to repay the credit.
8. COVENANTS
The Borrowers agree, so long as the Facility is available under this Agreement
and until the obligations are repaid in full:
8.1. Use of Proceeds. To use the proceeds of the initial Advance
under the Facility to repay all amounts outstanding under the "Facilities" (as
that term is defined in the Exiting Loan
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Agreement) and to use the proceeds of all subsequent Advances only for working
capital, general operating needs and permitted acquisitions.
8.2. Financial Information. To provide the following financial
information and statements in form and content acceptable to the Agent and
Lenders, and such additional information as requested by the Agent and Lenders
from time to time:
(a) Within 120 days following the end of Quest's fiscal
year (1) consolidated financial statements meeting the requirements of
regulation S-X ("Regulation S-X") promulgated by the Securities Exchange
Commission ("SEC") for financial statements to be included in Quest's Annual
Report on Form 10-K to be filed with the SEC pursuant to the provisions of the
Securities Exchange Act of 1934 (the "34 Act") audited (with an unqualified
opinion) by a firm of certified public accountants acceptable to the Required
Lenders; (2) unaudited annual consolidating statements of operations; and (3)
unaudited balance sheets and statements of operations for the individual schools
operated by Quest, likewise accompanied by the unqualified opinion of such
certified public accountants.
(b) Within 45 days of Quest's first, second and third
fiscal quarter (i) unaudited consolidated financial statements meeting the
requirements of regulation S-X for financial statements to be included in
Quest's Quarterly Report on Form 10-Q to be filed with the SEC pursuant to the
provisions of the "34 Act," (ii) unaudited quarterly consolidating statements of
operations for the applicable quarter, and (iii) unaudited statements of
operations for the individual schools operated by Quest.
(c) Within 30 days of the period's end, Quest's monthly
(i) unaudited consolidated statements of operations for the applicable period,
(ii) unaudited monthly consolidating statements of operations for the applicable
period, and (iii) unaudited statements of operations for the individual schools
operated by Quest for the applicable period.
(d) Copies of Quest's Form 10-K Annual Report and Form
10-Q Quarterly Report within 5 days after the date of filing with the Securities
and Exchange Commission, copies of Quest's Form 8-K Current Report within 1
business day after the date of its filing with the Securities and Exchange
Commission and copies of any news releases within one (1) business day after
their publication.
(e) Within the period(s) provided in (a) and (b) above, a
compliance certificate of the Borrowers signed by an authorized financial
officer of Quest, as agent for the Borrowers, setting forth (i) the information
and computations (in sufficient detail) to establish that the Borrowers are in
compliance with all financial covenants contained herein at the end of the
period covered by the financial statements then being furnished and (ii) whether
there existed as of the date of such financial statements and whether there
exists as of the date of the certificate, any default under this Agreement and,
if any such default exists, specifying the nature thereof and the action the
Borrowers are taking and propose to take with respect thereto.
(f) A certificate, signed by Quest, as agent for the
Borrowers, setting forth the calculation of Borrowers' compliance with the
requirements of Paragraphs 8.4 and 8.5, after giving effect to all outstanding
Advances, Letters of Credit and Reimbursement obligations, as
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of the last day of each fiscal month as to which average daily Advance Letters
of Credit and Reimbursement obligations under the Facility equaled or exceeded
$15,000,000, within 30 days after each month end, and as of the last day of each
fiscal quarter, within 45 days after each quarter end.
(g) Statements showing an aging and reconciliation of the
Borrowers' receivables upon the Agent's or any Lender's request.
(h) A statement showing an aging of accounts payable of
the Borrowers upon the Agent's or any Lender's request.
(i) A listing of the names and addresses of all debtors
obligated upon the Borrowers' accounts receivable upon the Agent's or any
Lender's request.
(j) Promptly upon the Agent's or any Lender's request,
such other statements, lists of property and accounts, budgets, forecasts,
reports or information as to the Borrowers, any school, or group of schools, and
as to each guarantor of the Borrowers' obligations to the Lenders as the Agent
or any Lender may request from time to time.
(k) a report of continuing compliance and eligibility in
respect of all Title IV Program Requirements within 120 days after each fiscal
year end of Quest, such report to demonstrate, among other things, each school's
continuing maintenance of prescribed financial responsibility standards which
are part of the Title IV Program Requirements, to include calculations
demonstrating maintenance of at least the following: (i) a 1:1 "acid test;" (ii)
a positive tangible net worth; and (iii) net operating results (two years) which
do not show an aggregate net loss of 10% of tangible net worth.
8.3. Fixed Charge Coverage Ratio. To maintain on a consolidated
basis a Fixed Charge Coverage Ratio of at least the ratio set forth below for
each fiscal quarter end occurring within each "Applicable Period" set forth
below:
APPLICABLE PERIOD RATIO
----------------- -----
Fiscal year ending March 31, 1999 1.10:1.0
Fiscal year ending March 31, 2000 1.15:1.0
Fiscal year ending March 31, 2001 and 1.20:1.0
thereafter
"Fixed Charge Coverage Ratio" means the ratio of (1 ) Adjusted EBIRTDA to (2)
the sum of interest expense, lease expense and rent expense plus scheduled debt
repayments capital expenditures of Quest and its subsidiaries (excluding
therefrom any payment made in respect of permitted school acquisitions), on a
consolidated basis, in the preceding four fiscal quarters. "Adjusted EBIRTDA"
means the sum of net income after taxes (considered without regard to any
extraordinary items of gain or loss unless otherwise approved by the Required
Lenders after consultation with Quest), plus interest expense, lease expense and
rent expense, plus tax expense, plus depreciation and amortization expense, on a
consolidated basis. This ratio will be calculated at the end of each fiscal
quarter of Quest, using the results of that quarter and each of the three
immediately preceding quarters.
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8.4. Total Funded Debt/Adjusted Cash Flow Ratio. To maintain on a
consolidated basis a Total Funded Debt/Adjusted Cash Flow Ratio of not more than
3.25:1.0 during the fiscal year of Quest and its consolidated subsidiaries
ending March 31, 1999 and 3.00:1.0 during each fiscal year of Quest and its
consolidated subsidiaries ending thereafter.
"Total Funded Debt/Adjusted Cash Flow Ratio" means the ratio of Total Funded
Debt to Adjusted Cash Flow. "Total Funded Debt" means purchase money debt
(including, without limitation, any such debts to sellers of schools, but
excluding trade payables) and indebtedness for money borrowed and guarantees of
such debts, including, without limitation, any debts represented by notes
payable, bonds, debentures, capitalized lease Obligations and letters of credit
and any subordinated debt, of Quest and its subsidiaries, on a consolidated
basis, less cash on hand of Borrowers in excess of $2,500,000. "Adjusted Cash
Flow" means the sum of (a) "EBITDA" (as defined below) of Quest and its
consolidated subsidiaries less dividends, withdrawals, loans, advances, and
other distributions to any stockholders, of Quest and its subsidiaries on a
consolidated basis and (b) 75% of EBITDA for all schools acquired by Quest
during the measurement period (to the extent that the operating results of such
schools would not otherwise be included in the calculation set forth in the
preceding clause (a)). For purposes hereof "EBITDA" for any entity shall mean
net income after taxes of such entity (considered without regard to any
extraordinary items of gain or loss unless otherwise approved by the Required
Lenders after consultation with Quest), and, in the case of Quest, its
consolidated subsidiaries, after adjustment to reflect the following, as
applicable: plus in the case of any newly-acquired school, any non-recurring
charges or expenses; plus interest expense; plus tax expense; depreciation and
amortization expense, each for the same said entities and period. This ratio
will be calculated (a) at the end of each fiscal quarter of Quest, using the
results of that quarter and each of the three immediately preceding quarters and
(b) prior to the making of any Advance or issuance of any Letter of Credit under
the Facility, on a pro forma basis, as of the most recently ended fiscal quarter
of Quest, after giving effect to such Advance or Letter of Credit.
8.5. Senior Funded Debt/Adjusted Cash Flow Ratio. To maintain a
Senior Funded Debt/Adjusted Cash Flow Ratio of not more than 2.75:1 at all
times.
"Senior Funded Debt/Adjusted Cash Flow Ratio" means the ratio of "Senior Funded
Debt" to "Adjusted Cash Flow." Senior Funded Debt is equal to Total Funded Debt
(as defined above) less any such debt which has been subordinated, in a form,
manner and substance acceptable to the Required Lenders, to all of the
obligations, and less cash on hand of Borrowers in excess of $2,500,000.
"Adjusted Cash Flow" has the meaning described in Paragraph 8.4 above. This
ratio will be calculated (a) at the end of each fiscal quarter, using the
results of that quarter and each of the three immediately preceding quarters and
(b) prior to the making of any Advance or the issuance of any Letter of Credit
under the Facility, on a pro forma basis, as of the most recently ended fiscal
quarter of Quest, after giving effect to such Advance or Letter of Credit.
8.6. Minimum EBITDA. To achieve EBITDA (as defined in Paragraph 8.4
above) of at least $3,000,000 for its fiscal quarters ending on March 31 and
December 31 in each fiscal year and $1,000,000 for its fiscal quarters ending on
June 30 and September 30 in each fiscal year.
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8.7. Other Debts. Not to have outstanding or incur any direct or
contingent inabilities or lease obligations (other than those to the Agent, the
Lenders or any L/C Issuer arising pursuant hereto), or become liable for the
liabilities of others (other than those to the Agent, the Lenders or any L/C
Issuer arising pursuant hereto) without the Required Lenders' written consent.
This does not prohibit:
(a) Acquiring goods, supplies, or merchandise on normal
trade credit.
(b) Endorsing negotiable instruments received in the usual
course of business.
(c) obtaining surety bonds in the usual course of
business.
(d) Liabilities in existence on the date of this Agreement
disclosed in the Borrowers' financial statements described in Paragraph 7.6.
(e) Additional debts and lease obligations for the
acquisition of fixed or capital assets, to the extent permitted elsewhere in
this Agreement.
(f) unsecured (except for permitted liens, as described
below) debt to sellers of schools provided that (i) such indebtedness is on
terms and conditions satisfactory to the Required Lenders and (ii) except to the
extent that such debt has been subordinated, in a form, manner and substance
acceptable to the Required Lenders, to all of the obligations, the maximum
amount of such indebtedness does not exceed $ 10,000,000.
(g) Additional debts and lease obligations incurred for
business purposes not otherwise described in, and permitted by, subparagraphs
(a) through (g) above, which, in aggregate amount, do not exceed a total
principal amount of $2,000,000 outstanding at any one time.
8.8. Other Liens. Not to create, assume, or allow any security
interest or lien (including judicial liens) on property the Borrowers now or
later own, except:
(a) Deeds of trust and security agreements in favor of the
Agent, for its benefit and the ratable benefit of Lenders, arising pursuant
hereto.
(b) Liens for taxes not yet due.
(c) Liens outstanding on the date of this Agreement and
disclosed in writing to the Lenders on Schedule 8.8 attached hereto.
(d) Additional purchase money security interests in
personal or real property acquired after the date of this Agreement, if the
total principal amount of all debts secured by such liens does not exceed
$2,500,000 at any one time.
(e) Pledges of a school's capital stock given to support
the payment of permitted purchase money debt to the seller of a school pursuant
to an acquisition permitted in Paragraph 8.22(e).
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(f) Liens which the DOE may claim in respect of certain
deposit accounts which the schools may be required to maintain for the receipt
of funds under Title IV Programs as part of the Title IV Program Requirements.
8.9. Capital Expenditures. Not to spend more than the following
amounts in any specified fiscal year to acquire fixed or capital assets (except
any made for permitted school acquisitions under Paragraph 8.22(e)):
Fiscal Year
Ending Amount
------ ------
March 31, 1999 $4,000,000
March 31, 2000 $5,000,000
March 31, 2001 $6,000,000
8.10. Dividends. Not to declare or pay any dividends on any of its
shares except dividends payable to Quest by its subsidiaries and dividends
payable in capital stock of a Borrower; and not to purchase, redeem or otherwise
acquire for value any of its shares, or create any sinking fund in relation
thereto.
8.11. Loans and Investments. Not to make any loans or other
extensions of credit to, or make any investments in, or make any capital
contributions or other transfers of assets to, any individual or entity, except
for:
(a) extensions of credit in the nature of accounts
receivable or notes receivable arising from the sale or lease of goods or
services in the ordinary course of business.
(b) investments in any of the following: (i) marketable,
direct obligations of the United States of America and its agencies maturing
within three hundred sixty-five (36S) days of the date of purchase, (ii)
commercial paper issued by corporations maturing 18O days from the date of
original issue which is rated "P-1" or better by Xxxxx'x or "A-1 " or better by
S&P, (iii) certificates of deposit maturing within 1 year of the date of
purchase issued by a United States national or state bank having deposits
totaling more than $250,000,000, and whose short-term debt is rated "P-1" or
better by Xxxxx'x or "A-1" or better by S&P, and (iv) investments made with, or
through, any Lender.
(c) extensions of credit to and investments in other
Borrowers.
(d) acquisitions of schools permitted under Paragraph
8.22(e).
8.12. Change of Ownership. Not to cause, permit, or suffer any
change, direct or indirect, in (i) the capital ownership by Quest of its
subsidiaries; or (ii) the capital ownership of Quest, to the extent that a
report on Form 8-K is required to be filed with the Securities and Exchange
Commission disclosing a change in control.
8.13. Notices to the Agent and Lenders. To promptly notify the Agent
and Lenders in writing of:
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(a) any lawsuit claiming damages over $100,000 against a
Borrower.
(b) any dispute between a Borrower and any government
authority which the Borrower determines, if resolved adversely to such Borrower,
would materially interfere with the conduct of such Borrower's business as then
being conducted by it.
(c) any failure to comply with this Agreement.
(d) any material adverse change in a Borrower's (or any
guarantor's) business, condition (financial or otherwise), operations,
properties or prospects, or ability to repay the credit.
(e) any change in a Borrower's name, legal structure,
place of business, or chief executive of rice if such Borrower has more than one
place of business.
(f) any default or event of default under Paragraph 10.
8.14. Books and Records. To maintain adequate books and records.
8.15. Audits. To allow the Agent and each Lender and their
respective agents to inspect Borrowers' properties and examine, audit and make
copies of books and records at any reasonable time. If any of the Borrowers'
properties, books or records are in the possession of a third party, the
Borrowers authorize that third party to permit the Agent and each Lender and
their respective agents to have access to perform inspections or audits and to
respond to the Agent's or any Lender's requests for information concerning such
properties, books and records.
8.16. Compliance with Laws. To comply with the laws (including any
fictitious name statute), regulations, and orders of any government body with
authority over each Borrower's business (excepting therefrom, however, instances
of incidental noncompliance occurring from time to time in the ordinary course
of a Borrower's business without actual knowledge of a Borrower, which the
Required Lenders determine are immaterial to the operation of its business and
are capable of being cured without any significant disruption to such business).
The foregoing shall include, specifically, but without limitation, compliance
with all Title IV Program Requirements, as prescribed with more particularity in
Paragraph 8.24.
8.17. Preservation of Rights. To maintain and preserve all rights,
privileges, and franchises the Borrowers now have.
8.18. Maintenance of Properties. To make any repairs, renewals, or
replacements to keep the Borrowers' properties in good working condition.
8.19. Perfection of Liens. To help the Agent perfect and protect its
security interests and liens, and reimburse it for related costs it incurs to
protect its security interests and liens.
8.20. Cooperation. To take any action reasonably requested by the
Agent or Lenders to carry out the intent of this Agreement.
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8.21. Insurance.
(a) Insurance Covering Collateral. To maintain all risk
property damage insurance policies covering the tangible property comprising the
collateral. Each insurance policy must be in an amount acceptable to the Agent.
The insurance must be Issued by an insurance company acceptable to the Agent and
must include a lender's loss payable endorsement in favor of the Agent in a form
acceptable to the Agent.
(b) General Business Insurance. To maintain insurance
satisfactory to the Agent as to amount, nature and carrier covering property
damage (including loss of use and occupancy) to any Borrower's properties,
public liability insurance including coverage for contractual liability, product
liability and workers' compensation, and any other insurance which is usual for
the Borrowers' businesses.
(c) Evidence of Insurance. Upon the request of the Agent,
to deliver to the Agent a copy of each insurance policy, or, if permitted by the
Agent, a certificate of insurance listing all insurance in force.
8.22. Additional Negative Covenants. Not to, without the Required
Lenders' written consent:
(a) engage in any business activities substantially
different from the Borrowers' present businesses.
(b) liquidate or dissolve any of the Borrowers'
businesses.
(c) enter into any consolidation, merger, or other
combination, or become a partner in a partnership, a member of a joint venture,
or a member of a limited liability company, except (i) in connection with any
acquisition permitted under subparagraph (e) and (ii) that Subsidiaries of Quest
may merge, combine or consolidate with each other or with Quest (so long as, in
the case of any merger, combination or consolidation with Quest, Quest is the
survivor).
(d) sell, lease, transfer or dispose of all or a
substantial part of a Borrower's business or a Borrower's assets, except, in the
case of any Borrower, to any other Borrower.
(e) acquire or purchase a business or its assets;
provided, however, that, acquisitions of all, or substantially all, of the
assets of, or of all or a controlling interest in the shares of capital stock
of, any business engaged in the provision of career-oriented, postsecondary
education within the United States (herein, a "school"), shall be permitted, if,
but only if: (i) no default then exists under this Agreement, or would be caused
by, or would result from, such proposed acquisition (after giving pro forma
effect to such acquisition, in respect of the financial covenants set forth at
Paragraphs 8.3 through 8.6); (ii) both (A) the cash consideration payable in
respect of such acquisition does not exceed $5,000,000, and (B) the cash
consideration payable in respect of such acquisition (subject to the foregoing
limitation) plus the amount of any assumed liabilities plus the amount of any
seller debt does not exceed $10,000,000; (iii) the incremental amount which the
Borrower then may borrow under the Facility (after giving pro forma effect to
the proposed acquisition), determined under
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subparagraphs (a) and (d) of Paragraph 2.1, is at least $7,000,000; (iv) the
school being acquired has a positive EBITDA (computed in the same manner as is
defined in Paragraph 8.4 in respect of Quest, after adjustments by the Agent as
necessary for excessive compensation amounts and like items) for its most
recently concluded period of twelve (12) fiscal months; (v) the acquisition is
not opposed by the board of directors of the school proposed to be acquired;
ret, it is not a "hostile" acquisition; and (vi) after giving effect to such
acquisition, the aggregate amount of the cash consideration paid by Borrowers,
seller debt incurred by Borrowers and the liabilities assumed by Borrowers in
respect of all such acquisitions consummated in the then current fiscal year
does not exceed $15,000,000. Quest, as agent on behalf of the Borrowers, shall
certify the foregoing to the Agent and Lenders at the time of such acquisition.
Such certification shall include calculations of pro forma compliance with
Paragraphs 8.3 through 8.6 on both a consolidated basis (including the school
being acquired) and on a stand alone basis for such school. The Required Lenders
have reserved to themselves the right, in their sole discretion, to consent in
writing to any such acquisition notwithstanding the Borrowers' non-compliance
with one or more of the foregoing conditions, but any such consent may be made
subject to such other terms and conditions as the Required Lenders, in their
sole discretion, then may elect.
(f) sell, assign, lease, transfer or otherwise dispose of
any assets, or enter into any agreement to do so, except:
(i) dispositions of inventory, or used, worn-out or
surplus equipment, all in the ordinary course of business;
(ii) the sale of equipment to the extent that such
equipment is exchanged for credit against the purchase price of similar
replacement equipment, or the proceeds of such sale are reasonably
promptly applied to the purchase price of such replacement equipment;
and
(iii) dispositions not otherwise permitted hereunder
which are made for fair market value; provided, that (A) at the time of
any disposition, no event of default shall exist or shall result from
such disposition, (B) the aggregate sales price from such disposition
shall be paid in cash, and (C) the aggregate value of all assets so
sold by the Borrowers shall not exceed in any fiscal year $250,000.
(g) enter into any sale and leaseback agreement covering
any of its fixed or capital assets.
(h) close, or voluntarily suspend the business of any
school (other than for the purpose of consolidating the operations of one school
with one or more other schools) for more than 30 days, if that school's
contribution (computed as defined in Paragraph 8.24) then represents 5% or more
of the total school contributions for the most recently concluded period of four
fiscal quarters.
8.23. ERISA Plans. To give prompt written notice to the Agent and
Lenders of:
(a) The occurrence of any reportable event under Section
4O43(b) of ERISA for which the PBGC requires 30 day notice.
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(b) Any action by a Borrower to terminate or withdraw
from a Plan or the filing of any notice of intent to terminate under Section 4O4
1 of ERISA.
(c) Any notice of noncompliance made with respect to a
Plan under Section 4O41(b) of ERISA.
(d) The commencement of any proceeding with respect to a
Plan under Section 4O42 of ERISA.
8.24. Title IV Program Requirements. To maintain at all times all
Title IV Program Requirements for schools representing, in the aggregate, not
less than 80% of the total school contributions of all schools operated by the
Borrowers. For purposes hereof, "school contributions" for each school shall be
computed on a quarterly basis, for the most recently completed period of four
fiscal quarters, and shall be equal to each school's total revenue minus all
school operating costs (to include training expense, facility expense,
advertising expense, sales expense, administrative expense and bad debt
expense). "Total school contributions" of all schools shall be the aggregate of
each school's contribution.
"Title IV Program Requirements" shall mean and include all eligibility,
program and general requirements imposed upon schools under Title IV programs
Administered by the U.S. Department of Education ("DOE") under the Higher
Education Act of 196S, as amended, and the regulations thereunder ("Title IV
Programs"), including, without limitation, for each of the schools operated by
Borrowers (i) its continuing certification by the DOE as an "eligible
institution;" (ii) its continuing authorization to offer its programs by the
relevant state agency where it is located; (iii) its continuing accreditation by
a nationally recognized accrediting agency; (iv) its continuing compliance with
respect to maximum rates of default by its students with respect to federally
guaranteed or funded student loans; he, cohort default rates; (v) its continuing
satisfaction of certain financial responsibility standards; (vi) its continuing
compliance with standards for maximum acceptable proportions of school revenues
derived from Title IV programs, i.e., "85/15" rule; and (vii) its continuing
compliance in respect of changes in curriculum, location and control. Without
limitation of the foregoing, to the extent that any school is at any time
required by the DOE to post a letter of credit, bond or other, similar evidence
of financial assurance as a condition to its remaining an "eligible
institution," the Required Lenders, in their sole discretion, shall have the
right to declare that such school shall not be considered as maintaining all
Title IV Program Requirements for purposes of this Paragraph.
8.25. Subsidiaries. Promptly upon its creation or acquisition, to
cause all subsidiaries of Borrowers hereafter created or acquired (including any
acquired as schools) to execute a joinder to this Agreement in form and
substance acceptable to the Agent whereby such subsidiary shall become a
Borrower hereunder.
9. HAZARDOUS WASTE INDEMNIFICATION
The Borrowers, jointly and severally, will indemnify and hold harmless
the Agent and each Lender from any loss or liability directly or indirectly
arising out of the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence of a hazardous substance.
This indemnity will apply whether the hazardous substance is on,
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under or about any Borrower's property or operations or property leased to any
Borrower. The indemnity includes but is not limited to attorneys' fees
(including the reasonable estimate of the allocated cost of in-house counsel and
staff). The indemnity extends to the Agent and each Lender and their respective
parents, their and their respective parents' subsidiaries and all of their
directors, officers, employees, agents, successors, attorneys and assigns. For
these purposes, the term "hazardous substances" means any substance which is or
becomes designated as "hazardous" or "toxic" under any federal, state or local
law. This indemnity will survive repayment of the Borrowers' obligations to the
Agent and Lenders and this Agreement's termination.
10. DEFAULT
If any of the following events occurs (called in this Agreement a
"default" or "event of default"), with the consent of the Required Lenders, the
Agent may, and, at the direction of the Required Lenders, the Agent shall, do
one or more of the following: declare the Borrowers in default, stop making any
additional credit available to the Borrowers, and require the Borrowers to repay
the entire obligations immediately and without prior notice. If an event of
default occurs under the paragraph entitled "Bankruptcy," below, with respect to
the Borrowers, then, the entire obligations outstanding under this Agreement
will automatically be due immediately.
10.1. Failure to Pay. A Borrower fails to make a payment under this
Agreement when due.
10.2. Lien Priority. The Agent fails to have an enforceable first
lien (except for any prior liens which are expressly permitted to exist under
this Agreement or as to which the Required Lenders have consented in writing) on
or security interest in any property given as security for the advances.
10.3. False Information. A Borrower (or any guarantor) has given the
Agent or any Lender false or misleading information or representations in
respect of any matter, event or occurrence which the Agent or the Required
Lenders determine to be material.
10.4. Bankruptcy. A Borrower (or any guarantor) files a bankruptcy
petition, a bankruptcy petition is filed against a Borrower (or any guarantor)
or a Borrower (or any guarantor) makes a general assignment for the benefit of
creditors. The default will be deemed cured if any bankruptcy petition filed
against a Borrower (or any guarantor) is dismissed within a period of 60 days
after the filing; provided, however, that the Lenders will not be obligated to
extend any additional credit to the Borrowers during that period.
10.5. Receivers. A receiver or similar official is appointed for
any Borrower's business, or the business is terminated.
10.6. Lawsuits. Any lawsuit or lawsuits are filed on behalf of one
or more creditors against a Borrower in an aggregate amount of $100,000 or more
in excess of any insurance coverage.
10.7. Judgments. Any judgments or arbitration awards are entered
against any Borrower (or any guarantor), or any Borrower (or any guarantor)
enters into any settlement
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agreements with respect to any litigation or arbitration, in an aggregate amount
of $100,000 or more in excess of any insurance coverage.
10.8. Government Action. Any government authority takes action that
the Required Lenders believe materially adversely affects any Borrower's (or any
guarantor's) financial condition or ability to repay the advances.
10.9. Material Adverse Change. A material adverse change occurs in
any Borrower's (or any guarantor's) business, condition (financial or
otherwise), operations, properties or prospects, or ability to repay the
advances.
10.10. Cross-Default. Any default occurs under any agreement in
connection with any credit which any Borrower (or any guarantor) or any
Borrower's related entities or affiliates has obtained from another lender or
which any Borrower (or any guarantor) or any Borrower's related entities or
affiliates has guaranteed in the amount of $100,000 or more in the aggregate if
the default consists of failing to make a payment when due or gives the other
lender the right to accelerate the obligation.
10.11. Default under Related Documents. Any guaranty, subordination
agreement, security agreement, deed of trust, or other document required by this
Agreement is violated or no longer in effect.
10.12. Other NationsBank Agreements. A Borrower (or any guarantor)
fails to meet the conditions of, or fails to perform any obligation under any
other agreement which a Borrower (or any guarantor) has with NationsBank, any
L/C Issuer or any other affiliate of NationsBank. If, in NationsBank's opinion,
the breach is capable of being remedied, the breach will not be considered an
event of default under this Agreement for a period of 10 days after the date on
which the Agent gives written notice of the breach to the Borrowers; provided,
however, that Lenders will not be obligated to extend any additional credit to
the Borrowers during that period.
10.13. ERISA Plans. The occurrence of any one or more of the
following events with respect to any Borrower, provided such event or events
could reasonably be expected, in the judgment of the Required Lenders, to
subject any Borrower to any tax, penalty or liability (or any combination of the
foregoing) which, in the aggregate, could heave a material adverse effect on the
financial condition of any Borrower with respect to a Plan:
(a) A reportable event shall occur with respect to a Plan
which is, in the reasonable judgment of the Required Lenders likely to result in
the termination of such Plan for purposes of Title IV of ERISA.
(b) Any Plan termination (or commencement of proceedings
to terminate a Plan) or a Borrower's full or partial withdrawal from a Plan.
10.14. Delisting. Quest's stock ceases to be listed on NASDAQ for
any reason (except for its being listed, instead, on the NYSE or AMEX).
10.15. Other Breach Under Agreement. The Borrowers fail to meet the
conditions of, or fail to perform any obligation under, any term of this
Agreement not specifically referred to in
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this Article. This includes any failure or anticipated failure by the Borrowers
to comply with any financial covenants set forth in this Agreement, whether such
failure is evidenced by financial statements delivered to the Agent and Lenders
or is otherwise known to the Borrowers, the Agent or Lenders. If, in the
Required Lenders' opinion, the breach is capable of being remedied, the breach
will not be considered an event of default under this Agreement for a period of
10 days after the date on which the Agent gives written notice of the breach to
the Borrowers; provided, however, that the Lenders will not be obligated to
extend any additional credit to the Borrowers during that period.
11. THE AGENT AND THE LENDERS
11.1. Appointment: Powers and Immunities.
(a) Each Lender hereby irrevocably appoints and
authorizes the Agent (including its successors by merger) to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental thereto. The Agent: (i)
shall have no duties or responsibilities except as expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee for any Lender; (ii) shall not
be responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or in any
certificate or other document referred to or provided for in, or received by any
Lender under, this Agreement or any other Loan Document, or for the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document referred to or provided for herein
or therein or for any failure by any Borrower to perform any of its obligations
hereunder or thereunder; (iii) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder or under any other Loan Document
except to the extent requested by the Required Lenders, and then only on terms
and conditions which do not, in the reasonable judgment of the Agent, subject
the Agent to any undue risk, and (iv) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under any other Loan Document or
any other document or instrument referred to or provided for herein or therein
or in connection herewith or therewith, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The provisions of this
Paragraph 11 are solely for the benefit of the Agent and the Lenders, and no
Borrower shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing its functions and duties under this Agreement
and under the other Loan Documents, the Agent shall act solely as agent of the
Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for the Borrowers.
The duties of the Agent shall be ministerial and administrative in nature, and
the Agent shall not have by reason of this Agreement or any other Loan Document
a fiduciary relationship in respect of any Lender. The Agent shall remit to the
Lenders, as soon as reasonably practical following receipt thereof, all payments
and other amounts received by it hereunder for the account of the Lenders;
(b) Unless and until its authority to do so is revoked in
writing by the Required Lenders, the Agent alone shall be authorized to
determine whether to impose or
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release any reserve against borrowing availability, and to exercise its own
credit judgment in connection therewith, which determinations and judgments, if
exercised in good faith, shall exonerate Agent from any liability to any Lender
or any other Person for any errors in judgment;
(c) The Agent shall have the sole and exclusive right and
authority to (i) act as the disbursing and collecting agent for the Lenders with
respect to all payments and collections arising in connection with this
Agreement and the other Loan Documents; (ii) execute and deliver each Loan
Document (other than this Loan Agreement) on behalf of the Lenders and accept
delivery of each such agreement delivered by any Borrower or any other Person;
(iii) act as collateral agent for the Lenders for purposes of the perfection of
all security interests and liens created by this Agreement or the other Loan
Documents with respect to all material items of the Collateral and, subject to
the direction of the Required Lenders, for all other purposes stated therein;
(iv) subject to the direction of the Required Lenders, manage, supervise or
otherwise deal with the Collateral; and (v) except as may be otherwise
specifically restricted by the terms of this Agreement and subject to the
direction of the Required Lenders, exercise all remedies given to the Agent or
Lenders with respect to any of the Collateral under the Loan Documents relating
thereto, applicable law or otherwise. As to any matters not expressly provided
for otherwise by this Agreement or any other Loan Document, the Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and thereunder in accordance with instructions signed by the Required Lenders,
and such instructions of the Required Lenders to the Agent in any action taken
or failure to act pursuant thereto shall be binding on all of the Lenders.
11.2. Reliance by Agent. The Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telecopier, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper person or
persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent.
11.3. Defaults. The Agent shall not be deemed to have knowledge of
the occurrence of a Default or event which with notice or the passage of time
would become a Default (other than the nonpayment of any of the obligations)
unless the Agent has received written notice from a Lender or any Borrower
specifying such Default or other event and stating that such notice is a "Notice
of Default," each of Lenders hereby agreeing to promptly notify in writing the
Agent of any Default or event which with notice or the passage of time would
become a Default to which such Lender obtains knowledge. In the event that the
Agent receives such a notice of the occurrence of a Default or event which with
notice or the passage of time would become a Default, the Agent shall give
prompt notice thereof to the Lenders. The Agent shall give each Lender prompt
notice of each nonpayment of any of the obligations whether or not it has
received any notice of the occurrence of such nonpayment.
11.4. Rights of Agent and its Affiliates as a Lender. With respect
to the Advances made by the Agent and any affiliate of the Agent, NationsBank in
its capacity as a Lender hereunder and any affiliate of the Agent or such
affiliate in its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though
NationsBank were not acting as the Agent, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include NationsBank in its
individual capacity and any affiliate of the Agent in its individual capacity.
The Agent and any affiliate of the Agent may
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(without having to account therefor to any Lender) accept deposits from, lend
money to and generally engage in any kind of banking, trust or other business
with the Borrowers (and any of the Borrowers' affiliates) as if NationsBank were
not acting as the Agent, and the Agent and any affiliate of the Agent may accept
fees and other consideration from the Borrowers (in addition to any agency fees
and arrangement flees heretofore agreed to between the Borrowers and the Agent)
for services in connection with this Agreement or any other Loan Document or
otherwise without having to account for the same to the Lenders and Agent shall
not be subject to any liability by reason of its acting or refraining to act
pursuant to any request of the Required Lenders except as a result of its own
willful misconduct or gross negligence.
11.5. Indemnification. Each Lender severally agrees to indemnify the
Agent and hold the Agent harmless from, to the extent the Agent shall not have
been reimbursed by the Borrowers, ratably in accordance with its Commitment, for
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits (including, without limitation, counsel fees and
disbursements), and costs and expenses (but not fees) Agent may be required to
bear with respect to any lockbox or collateral collection account arrangement,
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal out-of-pocket administrative costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or any such other documents; provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
11.6. Payee of Note Treated as Owner. The Agent may deem and treat
the payee of any note evidencing the obligations as the owner thereof for all
purposes hereof unless and until a written notice of the assignment or transfer
thereof shall have been filed with the Agent and the provisions of Paragraph
12.3 have been satisfied. Any requests, authority or consent of any person who
at the time of making such request or giving such authority or consent is the
holder of any note evidencing the obligations shall be conclusive and binding on
any subsequent holder, transferee or assignee of that note or of any note or
notes issued in exchange therefor or replacement thereof.
11.7. Nonreliance on Agent and Other Lenders. Each Lender agrees
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrowers and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or. any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. Except as expressly provided in Paragraph 11.3, the Agent
shall not be required to keep itself (or any Lender) informed as to the
performance or observance by Borrowers of this Agreement or any of the other
Loan Documents or any other document referred to or provided for herein or
therein or to inspect the properties or books of Borrowers or any other person.
Except for
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notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder or under the other Loan
Documents, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of Borrowers or any other Person (or any of their
affiliates) which may come into the possession of the Agent.
11.8. Failure to Act. Except for action expressly required of the
Agent hereunder or under the other Loan Documents, the Agent shall in all cases
be fully justified in failing or refusing to act hereunder and thereunder unless
it shall receive further assurances to its satisfaction by the Lenders of their
indemnification obligations under Paragraph 11.S against any and all liability
and expense which may be incurred by the Agent by reason of taking, continuing
to take, or failing to take any such action. In any event, if the Agent requests
in writing the authorization or direction of the Required Lenders (or all
Lenders if required) and the Lenders do not timely respond to such request in
writing, the Agent may act or refrain from acting with respect to the matters
set forth in such request by the Agent without liability to any of the Lenders
with respect to such matters.
11.9. Resignation of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and Quest as Borrowers' Agent. Upon
any such resignation the Required Lenders shall have the right to appoint a
successor Agent, subject to the consent of Borrowers, if no Default is in
existence, which consent shall not be unreasonably withheld or delayed. If no
successor Agent shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Agent's notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent. Any successor Agent shall be a Lender hereunder or other bank
or financial institution which has a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Paragraph 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent hereunder.
11.10. Joinder of Lenders. The rights, remedies, powers and
privileges conferred upon the Agent hereunder and under the other Loan Documents
may be exercised by the Agent without the necessity of the joinder of any other
parties unless otherwise required by applicable law.
11.11. Agreements Regarding Collateral. Each Lender shall have a pro
rata interest, in accordance with the percentage of the obligations held by such
Lender, in the security interests and liens in and to the Collateral and any
other assets granted and assigned to the Agent under the Loan Documents. The
Lenders hereby irrevocably authorize the Agent, at its option and in its
discretion, to release any security interest upon any Collateral (i) as
authorized by this Agreement or any of the other Loan Documents, (ii) upon the
termination of the Commitments and payment or satisfaction of all of the
obligations, or (iii) constituting Collateral sold or disposed of in accordance
with the terms of this Agreement if the Borrowers certify to the Agent that the
disposition is made in compliance with the terms of this Agreement (and the
Agent may
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rely conclusively on any such certificate, without further inquiry). Except as
expressly authorized or required by this Agreement or applicable law, the Agent
shall not execute any release or termination of any security interest upon any
of the Collateral without the prior written authorization of all Lenders. The
Agent shall have no obligation whatsoever to any of the Lenders to assure that
any of the Collateral exists or is owned by any Borrower or is cared for,
protected or insured or has been encumbered, or that the Agent's security
interests have been properly or sufficiently or lawfully created, perfected,
protected or enforced or entitled to any particular priority or to exercise at
all or in any manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights or powers granted or available to the
Agent pursuant to this Agreement or any of the other Loan Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Agent may act in any manner it may deem appropriate,
in its discretion, given the Agent's own interests in the Collateral in its
capacity as one of the Lenders.
11.12. Agent Field Audits. The Agent shall promptly, upon receipt
thereof, forward to each Lender copies of the results of any field audits by the
Agent with respect to Borrowers. The Agent shall have no liability to any Lender
for any errors in or omissions from any field audit or other examination of the
Borrowers or the Collateral, unless such error or omission was the direct result
of the Agent's willful misconduct.
11.13. Designation of Co-Agent. It is the purpose of this Agreement
that there hall be no violation of any applicable law denying or restricting the
right of financial institutions to transact business as an agent in any
jurisdiction. It is recognized that, in case of litigation under any of the Loan
Documents, or in case the Agent deems that by reason of present or future laws
of any jurisdiction the Agent might be prohibited from exercising any of the
powers, rights or remedies granted to the Agent or the Lenders hereunder or
under any of the Loan Documents or from holding title to or a security interest
upon any Collateral or from taking any other action which may be necessary
hereunder or under any of the Loan Documents, the Agent may appoint an
additional person or persons as a separate collateral agent or co-collateral
agent which is not so prohibited from taking any of such actions or exercising
any of such powers, rights or remedies. If the Agent shall appoint an additional
person as a separate collateral agent or co-collateral agent as provided above,
each and every remedy, power, right, claim, demand or cause of action intended
by this Agreement and any of the Loan Documents and every remedy, power, right,
claim, demand or cause of action intended by this Agreement and any of the Loan
Documents to be exercised by or vested in or conveyed to the Agent with respect
thereto shall be exercisable by and vested in such separate collateral agent or
co-collateral agent, but only to the extent necessary to enable such separate
collateral agent or co-collateral agent to exercise such powers, rights and
remedies, and every covenant and obligation necessary to the exercise thereof by
such separate collateral agent or co-collateral agent shall run to and be
enforceable by any of them. Should any instrument from the Lenders be required
by the separate collateral agent or co-collateral agent so appointed by the
Agent in order more fully and certainly to vest in and confirm to him or it such
rights, powers, duties and obligations, any and all of such instruments shall,
on request, be executed, acknowledged and delivered by the Lenders whether or
not a Default Condition or Event of Default then exists. In case any separate
collateral agent or co-collateral agent, or a successor to either, shall die,
become incapable of acting, resign or be removed, all the estates, properties,
rights, power, duties and obligations of such separate collateral agent or
co-collateral agent, so far as
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permitted by applicable law, shall vest in and be exercised by the Agent until
the appointment of a new collateral agent or successor to such separate
collateral agent or co-collateral agent.
11.14. Settlement Procedures. Notwithstanding any other terms of this
Agreement to the contrary, as between Agent and the Lenders, the following
settlement procedures shall be controlling:
(a) Line Balance. In respect of Advances made, and
principal payments received, by Agent under the Facility, on the first (1st)
banking day of each calendar week, or more frequently (including daily), if
Agent so elects (each such day being a "Settlement Date"), Agent will advise
each Lender by telephone or telecopy of the amount of each such Lender's pro
rata share of the principal balance of then outstanding Advances under the
Facility (herein, the "Line Balance") as of the close of business of the (2nd)
second banking day immediately preceding the Settlement Date. In the event that
any payments are necessary to adjust the amount of such Lender's required pro
rata share of the Line Balance to such Lender's actual pro rata share of the
Line Balance as of any Settlement Date, the party from which such payment is due
will pay the other, in same day funds, by wire transfer to the other's account
not later than 1:00 p.m. (Atlanta time) on the banking day following the
Settlement Date.
(b) Interest. For purposes of this paragraph (b), the
following terms will have the meanings indicated:
(i) "Daily Loan Balance" means an amount calculated
as of the end of each calendar day by subtracting (i) the cumulative
principal amount remitted by Agent to a Lender with respect to any
Advances under the Facility (herein called, in each case, a "Loan")
from the Closing Date through and including such calendar day, in
payment thereof from (ii) the cumulative principal amount remitted by
such Lender to Agent on that Loan from the Closing Date through and
including such calendar day.
(ii) "Daily Interest Rate" means an amount
calculated by dividing the interest rate per annum payable to a Lender
on a Loan at the applicable rate as provided in Paragraph 3.1 by three
hundred sixty (36O).
(iii) "Daily Interest Amount" means an amount
calculated by multiplying the Daily Loan Balance of a Loan by the
associated Daily Interest Rate on that Loan.
(iv) "Interest Ratio" means a number calculated by
dividing the total amount of the interest on a Loan received by Agent
with respect to the immediately preceding calendar month by the total
amount of interest on that Loan due from Borrowers during the
immediately preceding calendar month.
On the first (1st) banking day of each calendar month ("Interest Settlement
Date"), Agent will advise each Lender by telephone, telex, or telecopy of the
amount of such Lender's pro rata share of interest and any per annum fees on
each of the Loans as of the end of the last day of the immediately preceding
calendar month. Provided that such Lender has made all payments required to be
made by it under this Agreement and is otherwise in compliance herewith, Agent
will pay to such Lender, by wire transfer to such Lender's account (as specified
by such Lender
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on the signature page of this Agreement or the applicable Assignment and
Acceptance, as amended by such Lender from time to time after the date hereof
pursuant to the notice provisions contained herein or in the applicable Lender
Assignment and Acceptance) not later than 3:00 p.m. (Atlanta time) on the
Interest Settlement Date, such Lender's pro rata share of interest and per annum
fees on each of the Loans. Such Lender's pro rata share of interest on each Loan
will be calculated for that Loan by adding together the Daily Interest Amounts
for each calendar day of the prior calendar month for that Loan and multiplying
the total thereof by the Interest Ratio for that Loan. Such Lender's pro rata
share of any per annum fees shall be paid and calculated in a manner consistent
with the payment and calculation of interest as described in this subsection
(b).
(c) Other Payments. Payments of all principal, interest
and fees not otherwise described in subsections (a) or (b) above will be settled
on the first banking day of each week following their receipt by Agent in
accordance with the provisions of this Agreement in relation thereto.
(d) Availability of Lender's Pro Rata Share. Unless Agent
has been notified by a Lender prior to a funding date of such Lender's intention
not to fund its pro rata share of such Loan amount requested by Borrower, Agent
may assume that such Lender will make such amount available to Agent by 1:00
p.m. (Atlanta time) on the banking day following the next Settlement Date. If
such amount is not, in fact, made available to Agent by such Lender when due,
Agent will be entitled to recover such amount on demand from such Lender without
set-off, counterclaim or deduction of any kind. Nothing contained in this
Section will be deemed to relieve a Lender of its obligation to fulfill its
commitments or to prejudice any rights Agent or Borrower may have against such
Lender as a result of any default by such Lender under this Agreement.
(e) Return of Payments. If Agent pays an amount to a
Lender under this Agreement in the belief or expectation that a related payment
has been or will be received by Agent from Borrowers and such related payment is
not received by Agent, then Agent will be entitled to recover such amount from
such Lender without set-off, counterclaim or deduction of any kind. If Agent
determines at any time that any amount received by Agent under this Agreement
must be returned to Borrowers or paid to any other person pursuant to any
solvency law or otherwise, then, notwithstanding any other term or condition of
this Agreement, Agent will not be required to distribute any portion thereof to
any Lender. In addition, each Lender will repay to Agent on demand any portion
of such amount that Agent has distributed to such Lender, together with interest
at such rate, if any, as Agent is required to pay to Borrowers or such other
person, without set-off, counterclaim or deduction of any kind.
12. ENFORCING THIS AGREEMENT; MISCELLANEOUS
12.1. GAAP. Except as otherwise stated in this Agreement, all
financial information provided to the Agent and Lenders and all financial
covenants will be made under generally accepted accounting principles,
consistently applied (herein, "GAAP").
12.2. Georgia Law. This Agreement is governed by Georgia law.
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12.3. Successors and Assigns. This Agreement is binding on each
Borrower's, each Lender's and the Agent's successors and assignees. The
Borrowers agree that they will not assign this Agreement without the Lenders'
prior consent. Each Lender may sell participations in or assign all or any
portion of its rights under this Agreement and the Advances, and may exchange
financial information about the Borrowers with actual or potential participants
or assignees. If a participation is sold or all or any portion of the Advances
and this Agreement are assigned, the purchaser or assignee will have the right
of set-off against the Borrowers. In the event of any such assignment, the
assignor Lender, the assignee Lender and the Agent shall execute and deliver an
assignment and acceptance in form satisfactory to the Agent ("Assignment and
Acceptance") pursuant to which the assignor Lender shall assign to the assignee
Lender all or a proportionate part of its rights and obligations under this
Agreement and the other Loan Documents and such assignee Lender shall assume
such obligations. Upon (A) execution of the Assignment and Acceptance by such
assignor Lender, such assignee Lender and the Agent, (B) delivery of an executed
copy of the Assignment and Acceptance to the Borrowers and the Agent, (C)
payment by such assignee Lender to such assignor Lender of an amount equal to
the purchase price agreed between such assignor Lender and such assignee Lender,
and (D) payment by such assignee Lender of a processing and recordation fee of
$5,000 to the Agent, such assignee Lender shall for all purposes be a Lender
party to this Agreement and shall have all the rights and obligations of a
Lender under this Agreement to the same extent as if it were an original party
hereto with a Commitment as set forth in such Assignment and Acceptance, and the
assignor Lender shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by the Borrowers, the
Lenders or the Agent shall be required. Upon the consummation of any transfer to
an assignee Lender pursuant to this paragraph 12.3, the assignor Lender, the
Agent and the Borrower shall make appropriate arrangements so that, if required,
a new note is issued to each of the assignee Lender and such assignor Lender.
12.4. Arbitration.
(a) Dispute Resolution. Any controversy or claim between
or among the parties or their assignees arising out of or relating to this
Agreement or any agreements or instruments relating hereto or delivered in
connection herewith, including any claim based on or arising from an alleged
tort, shall at the request of any party be determined by arbitration, reference,
or trial by a judge as provided hereafter. A controversy involving only a single
claimant, or claimants who are related or asserting claims arising from a single
transaction, shall be determined by arbitration as described below. Any other
controversy shall be determined by judicial reference of the controversy to a
referee appointed by the court or, if the court where the controversy is venued
lacks the power to appoint a referee, by trial by a judge without a jury, as
described below. THE PARTIES AGREE AND UNDERSTAND THAT THEY ARE GIVING UP THE
RIGHT TO TRIAL BY JURY, AND THERE SHALL BE NO JURY WHETHER THE CONTROVERSY OR
CLAIM IS DECIDED BY ARBITRATION, BY JUDICIAL REFERENCE, OR BY TRIAL BY A JUDGE.
(b) Arbitration. Since this Agreement touches and
concerns interstate commerce, an arbitration under this Agreement shall be
conducted in accordance with the United States Arbitration Act (Title 9, United
States Code), notwithstanding any choice of law provision in this Agreement. The
Commercial Rules of the American Arbitration Association ("AAA") also shall
apply. The arbitrator(s) shall follow the law and shall give effect to statutes
of
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limitation in determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrator(s). The award of the
arbitrator(s) shall be in writing and include a statement of reasons for the
award. The award shall be final. Judgment upon the award may be entered in any
court having jurisdiction, and no challenge to entry of judgment upon the award
shall be entertained except as provided by Section 10 of the United States
Arbitration Act or upon a finding of manifest injustice.
(c) Judicial Reference or Trial by a Judge. At the
request of any party, any controversy or claim under subparagraph (a) that is
not submitted to arbitration as provided in subparagraph (b) shall be determined
by reference to a referee appointed by the court who, sitting alone and without
a jury, shall decide all questions of law and fact. The parties shall designate
to the court a referee selected under the auspices of the AAA in the same manner
as arbitrators are selected in AAA-sponsored proceedings. The referee shall be
an active attorney or retired judge. If the court where the controversy is
venued lacks the power to appoint a referee, the controversy instead shall be
decided by trial by a judge without a jury.
(d) Self-Help. Foreclosure. and Provisional Remedies. No
provision of this paragraph shall limit the right of any party to this Agreement
to exercise self-help remedies such as setoff or repossession (subject to the
provisions of Paragraph 12.19), to foreclose by power of sale or judicially
against or sell any collateral or security, or to obtain any provisional or
ancillary remedies from a court of competent jurisdiction before, after, or
during the pendency of any arbitration under subparagraph (b), above. Neither
the obtaining nor the exercise of any such remedy shall waive the right of
either party to demand that the related or any other dispute or controversy be
determined by arbitration as provided above.
12.5. Severability; Waivers. If any part of this Agreement is not
enforceable, the rest of the Agreement may be enforced. The Agent retains all
rights, even if Lenders make an Advance after default. If the Required Lender or
Lenders, as applicable, waive a default, they may enforce a later default. Any
amendment, consent or waiver under this Agreement must be in writing and signed
by the Required Lenders (and, if the rights or duties of the Agent are affected
thereby, by the Agent) and, in the case of an amendment, by the Borrowers
provided that, no such amendment, consent or waiver shall, unless signed by all
Lenders (or, in the case of any amendment, consent or waiver in respect of any
Commitment or Advance, each Lender then holding any interest therein), (i)
change the Commitment of any Lender or subject any Lender to any additional
obligation, (ii) change the principal of or rate of interest on any Advance or
any fees (other than fees payable to the Agent) hereunder, (iii) change the date
fixed for any payment of principal of or interest on any Advance or any fees
hereunder, (iv) change the amount of principal, interest or fees due on any date
fixed for the payment thereof, (v) change the percentage of the Commitments or
of the aggregate unpaid principal amount of any notes, evidencing the
obligations or the percentage of Lenders, which shall be required for the
Lenders or any of them to take any action under this Section or any other
provision of this Agreement, (vi) change the manner of application of any
payments made under this Agreement or any notes, evidencing the obligations or
the provisions with respect to pro rata treatment among Lenders (including,
without limitation, as to sharing of payments and expenses), (vii) except as
expressly provided in this Agreement or any of the other Loan Documents, release
or substitute, or agree to subordination of, all or any substantial part of the
Collateral held as security for the obligations, (viii) release any guarantee
given to support payment of the obligations, (ix) change the definition of
"Required Lenders," (x) change the provisions of any of
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Paragraph 12.3, 12.9, 12.14 or 12.19, (xi) change the joint and several nature
of the obligations of Borrowers, or the several nature of the obligations of the
Lenders under their respective Commitments, or (xii) change any provision of
this Agreement or any Loan Document which by its terms expressly requires the
approval of all Lenders to a modification thereof.
12.6. Reimbursement Costs. The Borrowers agree to reimburse the
Agent immediately for any expenses it incurs in the preparation of this
Agreement and any agreement or instrument required by this Agreement. Expenses
include, but are not limited to, reasonable attorneys' fees, including any
allocated costs of the Agent's in-house counsel, filing, recording and search
fees, appraisal fees, title report fees and documentation fees.
12.7. Administration Costs. The Borrowers shall pay the Agent for
all reasonable costs incurred by the Agent in connection with administering this
Agreement.
12.8. Attorneys' Fees. The Borrowers shall reimburse the Agent and
each Lender for any reasonable costs and attorneys' fees incurred by the Agent
and each Lender in connection with the enforcement or preservation of any rights
or remedies under this Agreement and any other documents executed in connection
with this Agreement, and including any amendment, waiver, "workout" or
restructuring under this Agreement. In the event of a lawsuit or arbitration
proceeding, the prevailing party is entitled to recover costs and reasonable
attorneys' fees incurred in connection with the lawsuit or arbitration
proceeding, as determined by the court or arbitrator. In the event that any case
is commenced by or against the Borrowers under the Bankruptcy Code (Title 11,
United States Code) or any similar or successor statute, the Agent and each
Lender are entitled to recover costs and reasonable attorneys' fees incurred by
the Agent and each Lender related to the preservation, protection, or
enforcement of any rights of the Agent in such a case. As used in this
paragraph, "attorneys' fees" includes the allocated costs of the Agent's and
each Lender's in-house counsel.
12.9. Joint and Several Liability.
(a) Each Borrower agrees that it is jointly and severally
liable to the Agent and Lenders for the payment of all obligations arising under
this Agreement, and that such liability is independent of the obligations of the
other Borrower(s) (or any guarantor). The Agent, individually or on behalf of
Lenders, may bring an action against any Borrower, whether an action is brought
against the other Borrower(s) (or any guarantor).
(b) Each Borrower agrees that any release which may be
given by the Lenders to the other Borrower(s) (or any guarantor) will not
release such Borrower from its obligations under this Agreement.
(c) Each Borrower waives any right to assert against the
Agent or my Lender, any defense, setoff, counterclaim, or claims which such
Borrower may have against the other Borrower(s) or any other party (including
any guarantor) liable to the Agent and Lenders for the obligations of the
Borrowers under this Agreement.
(d) Each Borrower agrees that it is solely responsible
for keeping itself informed as to the financial condition of the other
Borrower(s) and of all circumstances which bear upon the risk of nonpayment.
Each Borrower waives any right it may have to require the
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Agent or any Lender to disclose to such Borrower any information which the Agent
or any Lender may now or hereafter acquire concerning the financial condition of
the other Borrower(s).
(e) Each Borrower waives all rights to notices of default
or nonperformance by any other Borrower under this Agreement. Each Borrower
further waives all rights to notices of the existence or the creation of new
indebtedness by any other Borrower.
(f) The Borrowers represent and warrant to the Agent and
Lenders that they each will derive benefit, directly and indirectly, from the
collective administration and availability of credit under this Agreement. The
Borrowers agree that neither the Agent nor any Lender will be required to
inquire as to the disposition by any Borrower of funds disbursed in accordance
with the terms of this Agreement.
(g) Each Borrower waives any right of subrogation,
reimbursement, indemnification and contribution (contractual, statutory or
otherwise), including without limitation, any claim or right of subrogation
under the Bankruptcy Code (Title 11 of the U.S. Code) or any successor statute,
which such Borrower may now or hereafter have against any other Borrower with
respect to the indebtedness incurred under this Agreement, unless and until this
Agreement is terminated and all obligations arising hereunder have been fully
paid and satisfied. Each Borrower further waives any right to enforce any remedy
which the Agent or Lender now have or may hereafter have against any other
Borrower, and waives any benefit of, and any right to participate in, any
security now or hereafter held by the Agent or Lenders.
12.10. One Agreement. This Agreement and any related security or
other agreements required by this Agreement, collectively:
(a) represent the sum of the understandings and
agreements among the Agent, Lenders and the Borrowers concerning this credit;
(b) replace any prior oral or written agreements among
the Agent, Lenders and the Borrowers concerning this credit; and
(c) are intended by the Agent, Lenders and the Borrowers
as the final, complete and exclusive statement of the terms agreed to by them.
In the event of any conflict between this Agreement and any other agreements
required by this Agreement, this Agreement will prevail.
12.11. Disposition of Schedules. Neither the Agent nor any Lender
will be obligated to return any schedules, invoices, statements, budgets,
forecasts, reports or other papers delivered by the Borrowers. The Agent and
each Lender will destroy or otherwise dispose of such materials at such time as
the Agent or such Lender, in its discretion, deems appropriate.
12.12. Credit Adjustments. Until the Agent exercises its rights to
collect the accounts receivable as provided under any security agreement
required under this Agreement, the Borrowers may continue their present policies
for credit adjustments.
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12.13. Verification of Receivables. The Agent may at any time, either
orally or in writing, request confirmation from any debtor of the current amount
and status of the accounts receivable upon which such debtor is obligated.
12.14. Indemnification. The Borrowers will indemnify and hold the
Agent and each Lender harmless from any loss, liability, damages, judgments, and
costs of any kind relating to or arising directly or indirectly out of (a) this
Agreement or any document required hereunder, (b) any credit extended or
committed by the Agent or Lenders to the Borrowers hereunder, (c) any claim,
whether well-founded or otherwise, that there has been a failure to comply with
any law regulating the Borrowers' sales or leases to or performance of services
for debtors obligated upon the Borrowers' accounts receivable and disclosures in
connection therewith, and (d) any litigation or proceeding related to or arising
out of this Agreement, any such document, any such credit, or any such claim.
This indemnity includes but is not limited to attorneys' fees (including the
allocated cost of in-house counsel). This indemnity extends to the Agent and
each Lender, their respective parents, their and their parent's subsidiaries and
all of their directors, officers, employees, agents, successors, attorneys, and
assigns. This indemnity will survive repayment of the Borrowers' obligations to
the Agent and Lenders and this Agreement's termination. All sums due to the
Agent and Lenders hereunder shall be obligations of the Borrowers, due and
payable immediately without demand.
12.15. Notices. All notices required under this Agreement shall be
personally delivered, delivered by reputable overnight courier service or sent
by first class mail, postage prepaid, to the addresses on the signature page of
this Agreement, or to such other addresses as the Agent, Lenders and the
Borrowers may specify from time to time in writing.
12.16. Headings. Article and paragraph headings are for reference
only and shall not affect the interpretation or meaning of any provisions of
this Agreement.
12.17. Counterparts. This Agreement may be executed in as many
counterparts as necessary or convenient, and by the different parties on
separate counterparts each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
agreement.
12.18. Amendment and Restatement. This Agreement constitutes an
amendment and restatement of the Amended and Restated Business Loan Agreement,
dated as of March 13, 1998, between Borrowers (or certain of them, as the case
may be) and NationsBank, as successor to Bank of America, FSB (the "First
Restated Loan Agreement"), which itself constituted an amendment and restatement
of that certain Business Loan Agreement, dated as of February 25, 1997, between
Borrowers (or certain of them) and Bank of America, FSB (the "original Loan
Agreement"). The execution and delivery of this Agreement shall not constitute a
novation, waiver, release or modification of any rights, claims or remedies of
NationsBank under the First Restated Loan Agreement, the original Loan Agreement
or otherwise, or any indebtedness or other obligations owing to NationsBank
under the First Restated Loan Agreement, the original Loan Agreement or
otherwise, based on any facts or events occurring or existing prior to the
execution and delivery of this Agreement.
12.19. Setoff: Sharing of Setoffs. Each Lender agrees that if it
shall, by exercising any right of setoff or counterclaim or resort to collateral
security or otherwise, receive payment of a
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proportion of the aggregate amount of the principal and interest owing with
respect to the Advances held by it, which is greater than the proportion
received by any other Lender in respect of the aggregate amount of all principal
and interest owing with respect to the Advances held by such other Lender, the
Lender receiving such proportionately greater payment shall purchase such
participations in the Advances owing to such other Lenders, and such other
adjustments shall be made, as may be required so that all such payments of
principal and interest with respect to the Advances owing to such other Lenders
shall be shared by the Lenders pro rata; provided that (i) nothing in this
Section shall impair the right of any Lender to exercise any right of setoff or
counterclaim it may have and to apply the amount subject to such exercise to the
payment of indebtedness of the Borrowers other than the obligations, and (ii) if
all or any portion of such payment received by the purchasing Lender is
thereafter recovered from such purchasing Lender, such purchase from each other
Lender shall be rescinded and such other Lender shall repay to the purchasing
Lender the purchase price of such participation to the extent of such recovery
together with an amount equal to such other Lender's ratable share (according to
the proportion of (x) the amount of such other Lender's required repayment to
(y) the total amount so recovered from the purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered. Each of obligers agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in
any Advance, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of obligers in the amount of such participation.
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This Agreement is executed as of the date stated at the top of the first page.
"AGENT" "BORROWERS"
NATIONSBANK, N.A. QUEST EDUCATION CORPORATION
By: By:
---------------------------- ------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx Xxxxxx
Title: Senior Vice President Title: Vice President
Address where notice to Attest
the Agent are to be sent: ------------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
000 Xxxxxxxxx Xxxxxx, X.X. Address where notices to:
Xxxxxxx, Xxxxxxx 00000 the Borrowers are to be sent:
"LENDERS"
0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000
XXXXXXXXXXX, N.A. Xxxxxxx, Xxxxxxx 00000
By:
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
Commitment: $40,000,000
Address for notices: 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
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ANDON COLLEGES, INC.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
CALIFORNIA ACADEMY OF MERCHANDISING,
ART AND DESIGN, INC.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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DBS ACQUISITION CORP.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
DEST EDUCATION CORPORATION
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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ICM ACQUISITION CORP.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
HBC ACQUISITION CORP.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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MARIC LEARNING SYSTEMS
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
MTSX ACQUISITION CORP.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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OIOPT ACQUISITION CORP.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
PALO VISTA COLLEGE OF NURSING AND
ALLIED HEALTH SCIENCES, INC.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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SACMD ACQUISITION CORP.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
SCOTTSDALE EDUCATIONAL CENTER FOR
ALLIED HEALTH CAREERS, INCORPORATED
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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55
NEBRASKA ACQUISITION CORP.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
CHI ACQUISITION CORP.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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NEW HAMPSHIRE ACQUISITION CORP.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
COMPUTER HARDWARE SERVICE COMPANY,
INC.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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XXXXXX, INC.
By:
-----------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
Attest:
-----------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Chief executive office:
0000 Xxxxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
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Schedule 9.16
QUEST EDUCATION CORPORATION f/k/a EDUCATIONAL MEDICAL, INC.
LIST OF SUBSIDIARIES
Registrant: Quest Education Corporation f/k/a Educational Medical, Inc.
1. Andon Colleges, Inc. d/b/a Andon College, Andon College at Modesto
2. California Academy of Merchandising, Art and Design, Inc. f/k/a CAMAD
Acquisition Corp. d/lo/a California Academy of Fashion Merchandising,
Art and Design
3. CHI Acquisition Corp. d/b/a CHI Institutes
4. DBS Acquisition Corp. f/k/a A-DBS Acquisition Corp. d/bra Dominion
College (previously d/b/a Dominion Business School)
5. DEST Education Corporation d/b/a Andon College, Andon College at
Stockton, (DEST is 100% owned by Andon Colleges, Inc. which is 100%
owned by Quest Education Corporation f/k/a Educational Medical, Inc.)
6. HBC Acquisition Corp. d/b/a Hagerstown Business College
7. ICM Acquisition Corp. d/b/a ICM School of Business
8. Iowa College Acquisition Corporation d/b/a American Institutes of
Commerce and Xxxxxxxx Colleges.
9. Maric Learning Systems, Inc. d/b/a Maric College of Medical Careers
(San Diego)
10. MTSX Acquisition Corp. d/b/a Modem Technology School of X-Ray and Modem
Technology College
11. Nebraska Acquisition Corp. d/b/a (l) Lincoln School of Commerce and (2)
Nebraska School of Business
12. New Hampshire Acquisition Corp. d/b/a Xxxxxx Colleges
13. OIOPT Acquisition Corp. d/b/a Ohio Institute of Photography and
Technology
14. Palo Vista College of Nursing and Allied Health Sciences, Inc. d/b/a
Maric College of Medical Careers (Vista)
15. SACMD Acquisition Corp. d/b/a (1) Career Centers of Texas - El Paso and
(2) San Antonio College of Medical and Dental Assistants
16. Scottsdale Educational Center for Allied Health Careers, Inc. d/b/a
Long Medical Institute
