1
EXHIBIT 10.1
FIRST AMENDMENT AGREEMENT
THIS AGREEMENT is made as of the 30th day of October, 1998, by
and between COMPUTER LEARNING CENTERS, INC., a Delaware corporation
("Borrower"), and FIRST UNION NATIONAL BANK, successor-by-merger to
CoreStates Bank, N.A. ("Lender").
RECITALS
R.1 Lender and Borrower are parties to a certain Credit Agreement
dated December 23, 1996 (the "Credit Agreement").
R.2 Borrower has requested that Lender amend the Credit Agreement in
certain respects, and Lender has agreed to do so upon the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of this Agreement, the parties
hereto agree as follows.
1. Defined Terms. All capitalized terms used in this Agreement
without definition shall have the meanings assigned to such terms in the Credit
Agreement, giving effect to the amendments of the Credit Agreement contained in
Sections 2 through 7 of this Agreement.
2. Amendment of Section 1 of the Credit Agreement. Section 1 of
the Credit Agreement is hereby amended as follows:
(a) By adding a new definition, immediately following the
definition of "Borrower Chief Executive Office," as follows:
"BORROWER INSTITUTION": any campus or institution
of the Borrower or any of its Domestic Subsidiaries, or
any branch or location of any thereof, engaged or created
or intended to be engaged, directly or indirectly, in any
business or business operations of the Borrower or any of
its Domestic Subsidiaries, including the provision of
information technology training or services,
computer-related training or services or other educational
training or services.
(b) By adding a new definition, immediately following the
definition of "Business Day," as follows:
2
"CANADIAN CORPORATIONS": collectively, CLCQ
and Delta College.
(c) By adding a new definition, immediately following the
definition of "Change of Control," as follows:
"CLCQ": Computer Learning Centers of Quebec,
Inc., a Quebec corporation.
(d) By amending the definition of "Convertible Term Loan
Maximum Amount" to read, in its entirety, as follows:
"CONVERTIBLE TERM LOAN MAXIMUM AMOUNT": Seven
Million Dollars ($7,000,000.00).
(e) By adding a new definition, immediately following the
definition of "Default," as follows:
"DELTA COLLEGE": Delta College Inc., a Quebec
corporation.
(f) By adding new definitions, immediately following the
definition of "Default," as follows:
"DISQUALIFIED": the certification, eligibility,
authorization or accreditation (provisional or otherwise)
of the Borrower, any of its Domestic Subsidiaries or any
Borrower Institution, or any educational program of any
thereof, to receive, commit or disburse funds under, or to
administer or participate in, any Student Financial Aid
Program, or the participation therein of any thereof,
shall for any reason expire or be revoked, suspended,
terminated or determined to be invalid, in whole or in
part, retroactively or prospectively.
"DISQUALIFIED REVENUES RATIO": as at any date, the
ratio, expressed as a percentage and rounded upwards, if
necessary, to the nearest one-one hundredth of one percent
(1/100%), of (a) the sum, without duplication and
determined in accordance with GAAP for the four (4) most
recently ended quarterly accounting periods of the
Borrower, of the gross revenues of each of the Borrower,
its Domestic Subsidiaries and Borrower Institutions which
is Disqualified as at such date, to (b) the consolidated
gross revenues of the Borrower and its Domestic
Subsidiaries for such
-2-
3
four (4) quarterly accounting periods of the
Borrower, determined in accordance with GAAP.
(g) By adding a new definition, immediately following the
definition of "Dollars," as follows:
"DOMESTIC SUBSIDIARY": as to any Person, a
Subsidiary which is organized under the laws of the United
States of America or any State thereof and which has its
chief executive office and each of its places of business
in the United States of America.
(h) By amending the definition of "L/C Commission Rate" to
read, in its entirety, as follows:
"L/C COMMISSION RATE": Three-quarters of one
percent (.75%) per annum.
(i) By adding a new definition, immediately following the
definition of "Officer Default Certificate," as follows:
"OFFICER FINANCIAL AID PROGRAM CERTIFICATE": a
certificate in form and content satisfactory to the
Lender, signed by the chief financial officer of the
Borrower and certifying, as at and for a particular time
and to the knowledge and belief of such officer after
diligent inquiry (a) for the Borrower, each of its
Domestic Subsidiaries and each Borrower Institution, the
Student Financial Aid Programs with respect to which the
Borrower, such Domestic Subsidiary or such Borrower
Institution, or its educational programs, is authorized,
accredited, certified and eligible (provisionally or
otherwise) to participate and is not Disqualified, (b) for
the Borrower, each of its Domestic Subsidiaries and each
Borrower Institution, default rates with respect to
Student Financial Aid Programs, and (c) a summary of the
current status of any actions, proceedings, investigations
or reviews of which the Borrower was required to notify
the Lender pursuant to clause (ii) of Subsection 6.6(b) of
this Agreement.
(j) By amending the definition of "Prime Rate" to read, in its
entirety, as follows:
"PRIME RATE": the rate which the Lender announces
from time to time as its prime lending rate, as in effect
from time to time. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate
actually charged to any customer.
-3-
4
The Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime
Rate.
(k) By amending the definition of "Revolving Credit Maximum
Amount" to read, in its entirety, as follows:
"REVOLVING CREDIT MAXIMUM AMOUNT": Twenty Million
Dollars ($20,000,000.00), as such amount may be reduced
pursuant to Subsection 2.5.
(l) By amending the definition of "Revolving Credit
Termination Date" to read, in its entirety, as follows:
"REVOLVING CREDIT TERMINATION DATE": October 31,
2000, provided that, upon written request of the Borrower
delivered to the Lender not later than March 31 of each
year, such date (or any date to which such date is
extended in accordance herewith) may be extended for a
period of twelve (12) months upon the written agreement of
the Borrower and the Lender.
(m) By adding a new definition, immediately following the
definition of "Revolving Credit Termination Date," as follows:
"STUDENT FINANCIAL AID PROGRAM": any program under
Title IV of the Higher Education Act of 1965, under which
financial aid or financial assistance is provided to or
for students by the United States of America or any
Governmental Authority of the United States of America.
3. Amendment of Section 2 of the Credit Agreement. Section 2 of
the Credit Agreement is hereby amended as follows:
(a) By deleting from Subsection 2.4 of the Credit Agreement
the language "one-quarter of one percent (1/4%) per annum" and inserting in lieu
thereof the language "one-fifth of one percent (1/5%) per annum".
(b) By amending clause (b) of Subsection 2.7 to read, in its
entirety, as follows:
(b) the Borrower shall have given written notice to the
Lender not more than sixty (60) days and not less than
thirty (30) days prior to such Conversion Date of the
Borrower's desire to convert to a Convertible Term Loan a
portion of the Revolving Credit Loan
-4-
5
Balance which is equal to Five Hundred Thousand Dollars
($500,000.00) or a whole multiple of Fifty Thousand
Dollars ($50,000.00) in excess thereof, accompanied by an
Officer Financial Covenant Certificate as at the end of
the most recently ended quarterly accounting period of the
Borrower, giving pro forma effect to the Conversion
described in such notice and demonstrating compliance by
the Borrower, as at such date and after giving such effect
to such Conversion, with the covenants contained in
Subsection 7.1 of this Agreement,
(c) By amending the second sentence of Subsection 2.9 to read,
in its entirety, as follows:
The original principal amount of each Convertible Term
Loan shall be payable by the Borrower in twenty (20)
consecutive equal quarterly installments, commencing
ninety (90) days after the applicable Conversion;
provided, however, that the principal amount of each
Convertible Term Loan representing a Conversion of one or
more Revolving Credit Loans incurred in connection with
reimbursement of the Lender by the Borrower on account of
one or more drawings under one or more Letters of Credit
shall be payable by the Borrower in eight (8) consecutive
equal quarterly installments, commencing ninety (90) days
after the applicable Conversion.
4. Amendment of Section 6 of the Credit Agreement. Section 6 of
the Credit Agreement is hereby amended as follows:
(a) By adding to Subsection 6.1(c)(i) the following new
clause, immediately following clause (z) thereof:
and (zz) an Officer Financial Aid Program Certificate for
such fiscal year
(b) By amending clause (d) of Subsection 6.1 to read, in its
entirety, as follows:
(d) (i) as soon as available but not later than
April 30 of each year, a copy of projections by the
Borrower of the operating budget and cash flow of the
Borrower and its Subsidiaries for such fiscal year of the
Borrower, in substantially the form attached hereto as
Exhibit F; and (ii) as soon as available but not later
than one (1) week after its submission to the U.S.
Department of Education, a copy of a compliance audit of
the administration by
-5-
6
the Borrower and its Domestic Subsidiaries of Student
Financial Aid Programs under Title IV of the Higher
Education Act of 1965 conducted by independent certified
public accountants or a government auditor and complying
with all Requirements of Law;
(c) By amending Subsection 6.3 to read, in its entirety, as
follows:
6.3 Conduct of Business and Maintenance of
Existence. (a) Continue, and cause each of its
Subsidiaries to continue, to engage in the business of
information technology education; (b) preserve, renew and
keep in full force and effect, and cause each of its
Subsidiaries to preserve, renew and keep in full force and
effect, its organizational existence; (c) take, and cause
each of its Subsidiaries to take, all reasonable action to
maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of its business; and
(d) comply with, and cause each of its Subsidiaries to
comply with, all Contractual Obligations and Requirements
of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(d) By amending clause (b) of Subsection 6.6 to read, in its
entirety, as follows:
(b) (i) of receipt of any written notice of
default or event of default under or as defined in any
Contractual Obligation of the Borrower or any of its
Subsidiaries which could reasonably be expected to have a
Material Adverse Effect, (ii) of any notice or knowledge
that the Borrower, any of its Domestic Subsidiaries or any
Borrower Institution, or any educational program of any
thereof, has been Disqualified, accompanied by a written
calculation by the Borrower of the Disqualified Revenues
Ratio as at the date that the Borrower, such Domestic
Subsidiary, such Borrower Institution or such educational
program was Disqualified, and (iii) of any notice or
knowledge of any action or proceeding against, or any
investigation or review of, the Borrower, any of its
Subsidiaries or any Borrower Institution, or any
educational program conducted by any thereof, by or on
behalf of any accrediting agency, the Department of
Education or any State of the United States of America or
any other Governmental Authority;
(e) By amending Subsection 6.7 to read, in its entirety, as
follows:
-6-
7
6.7 Government Regulations. Subject to any other
more specific provisions of this Agreement, comply with,
and cause each of its Subsidiaries to comply with, all
applicable Requirements of Law relating to the conduct of
its business.
(f) By adding a new Subsection 6.11, immediately following
Subsection 6.10, as follows:
6.11 Year 2000 Compatibility. Take all action
necessary to assure that all computer-based systems of the
Borrower and each of its Subsidiaries are able to operate
and effectively process data, including dates, on and
after January 1, 2000. At the request of the Lender, the
Borrower shall provide the Lender with assurance
acceptable to the Lender of the Year 2000 compatibility of
the computer-based systems of the Borrower and each of its
Subsidiaries.
5. Amendment of Section 7 of the Credit Agreement. Section 7 of
the Credit Agreement is hereby amended as follows:
(a) By amending Subsection 7.9 to read, in its entirety, as
follows:
7.9 Limitation on Restricted Payments. Make or
commit to make, or permit any of its Subsidiaries to make
or commit to make, any Restricted Payments except:
(a) payments to the Borrower by any Subsidiary of
the Borrower;
(b) payments of compensation, stock options,
bonuses, insurance, fringe benefits and reimbursement of
expenses to employees of the Borrower in the ordinary
course of business;
(c) payments of dividends (including dividends
paid in capital stock of the Borrower) by the Borrower to
stockholders of the Borrower;
(d) payments made by the Borrower to repurchase
securities of the Borrower, to the extent such payments
are made with proceeds of a public offering of securities
of the Borrower;
(e) payments made by the Borrower to repurchase
securities of the Borrower, other than as permitted by
-7-
8
clause (d) of this Subsection, to the extent that, at the
time of each such payment, the Cash Equivalents of the
Borrower exceed Ten Million Dollars ($10,000,000.00);
provided that the aggregate amount of all such payments
shall not exceed Two Million Five Hundred Thousand Dollars
($2,500,000.00); and provided further that, within five
(5) Business Days after each such payment, the Borrower
shall provide to the Lender in writing evidence
satisfactory to the Lender of the amount of such payment
and the amount of the Cash Equivalents of the Borrower at
the time of such payment; and
(f) other payments not exceeding Two Million Five
Hundred Thousand Dollars ($2,500,000.00) in the aggregate.
(b) By amending Subsection 7.15 to read, in its entirety, as
follows:
7.15 Fiscal Year. Permit the fiscal year of the
Borrower or any of its Subsidiaries to end on a day other
than January 31.
6. Amendment of Section 8 of the Credit Agreement. Section 8 of
the Credit Agreement is hereby amended as follows:
(a) By amending clause (f) by inserting the language ", any of
its Subsidiaries" immediately following the language "The Borrower".
(b) By amending clause (g) by inserting the language ", any of
its Subsidiaries" immediately following the language "The Borrower" and the
language "the Borrower" in each instance in which such language appears.
(c) By amending clause (m) by inserting the language ", any of
its Subsidiaries" immediately following the language "the Borrower".
(d) By adding a new clause (p), immediately following clause
(o) thereof, as follows:
(p) as at the date that the Borrower, any of its Domestic
Subsidiaries or any Borrower Institution, or any
educational program of any thereof, is Disqualified, the
Disqualified Revenues Ratio shall be equal to or greater
than ten percent (10%) and shall not be reduced to less
than ten percent (10%) as at a date within fifteen (15)
calendar days thereafter;
7. Amendment of Section 9 of the Credit Agreement. The notice
address for the Lender set forth in Subsection 9.3 is hereby amended to read, in
its entirety, as follows:
-8-
9
First Union National Bank
0000 Xxxxx Xxxxx Xxxx
XxXxxx, XX 00000
Fax: (000) 000-0000
8. Amendment of Schedules and Exhibits to the Credit Agreement.
The Credit Agreement is hereby amended as follows:
(a) By deleting Schedule I to the Credit Agreement in its
entirety and replacing such Schedule with Schedule I to this Agreement.
(b) By deleting Exhibit A to the Credit Agreement in its
entirety and replacing such Exhibit with Exhibit A to this Agreement.
(c) By deleting Exhibit B to the Credit Agreement in its
entirety and replacing such Exhibit with Exhibit B to this Agreement.
(d) By deleting Exhibit C to the Credit Agreement in its
entirety and replacing such Exhibit with Exhibit C to this Agreement.
9. Representations and Warranties of Borrower. In order to induce
Lender to enter into this Agreement, Borrower represents and warrants to Lender
that:
(a) Borrower has the power and authority to execute, deliver
and perform this Agreement and the other Credit Documents executed or to be
executed by it in connection with this Agreement (the "Related Documents").
Borrower has taken all necessary action to authorize its execution, delivery and
performance of this Agreement and the Related Documents. No consent, approval or
authorization of, or filing with, any Governmental Authority, and no consent of
any other Person, is required in connection with Borrower's execution, delivery
and performance of this Agreement and the Related Documents, except for those
already duly obtained.
(b) This Agreement and the Related Documents have been duly
executed and delivered by Borrower, and constitute the legal, valid and binding
obligations of Borrower, enforceable against Borrower in accordance with their
terms without defense, setoff or counterclaim. Borrower's execution, delivery
and performance of this Agreement and the Related Documents do not and will not
conflict with, or constitute a violation or breach of, or constitute a default
under, or result in the creation or imposition of any Lien upon any property of
Borrower or any Subsidiary of Borrower by reason of the terms of (a) any
mortgage, lease, agreement, instrument or Contractual Obligation to which
Borrower or any Subsidiary of Borrower is a party or which is binding upon it,
(b) any Requirement of Law, or (c) the articles of incorporation, as amended, or
bylaws, as amended, of Borrower.
-9-
10
(c) Each of the representations and warranties of Borrower
contained in the Credit Agreement and the other Credit Documents, other than
those contained Subsections 4.1, 4.2, 4.6, 4.9, 4.10 and 4.12 of the Credit
Agreement, are correct and complete in all material respects as of the date
hereof.
(d) The Borrower does not own, lease, sublease, occupy, use or
operate any real property or improvements other than the Borrower Business
Premises. The Borrower's chief executive office (within the meaning of Section
9-103 of the Maryland Uniform Commercial Code) is located at the Borrower Chief
Executive Office. All financial books and records of the Borrower are located at
the Borrower Business Premises.
(e) Except as set forth in Exhibit D attached hereto, no
litigation, proceeding or, to the Borrower's actual knowledge, investigation of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrower, threatened by or against the Borrower or against any
of its properties or revenues (i) with respect to this Agreement, the Credit
Agreement or any of the other Credit Documents or any of the transactions
contemplated hereby or thereby, or (ii) which, if determined adversely to the
Borrower, could reasonably be expected to have a Material Adverse Effect. There
are no strikes, work stoppages, grievance proceedings or other controversies
pending or, to the knowledge and belief of the Borrower, imminent or threatened
between the Borrower and any employees of the Borrower or between the Borrower
and any union or other collective bargaining unit representing employees of the
Borrower which could reasonably be expected to have a Material Adverse Effect.
(f) The Borrower has no Subsidiaries except for the Canadian
Corporations.
(g) There has not occurred any material adverse change in the
business, operations, assets or financial condition of Borrower from those
indicated in the last financial statements delivered to the Lender pursuant to
Subsection 6.1(a) or 6.1(c) of the Credit Agreement.
(h) There exists no Default or Event of Default as of the date
hereof.
(i) Each of CLCQ and Delta College (i) is a Quebec corporation
duly organized, validly existing and in good standing, (ii) has the legal right
to own and operate its property, to lease the property it operates as lessee and
to conduct the business in which it is currently engaged, (iii) is duly
qualified to conduct business and is in good standing in each jurisdiction in
which such qualification is required by applicable Requirement of Law, and (iv)
is in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(j) The authorized capital stock of CLCQ consists of two (2)
classes, namely, Common Shares, having voting rights, and Dividend Access
Shares, having no voting
-10-
11
rights except as provided in Sections 10.1, 11.1 and 12.2 of the Articles of
Incorporation of CLCQ. All of the issued and outstanding capital stock of each
class of CLCQ is legally and beneficially owned by the persons and in the
amounts set forth in Exhibit E attached hereto. All of the issued and
outstanding capital stock of each class of Delta College is legally and
beneficially owned by CLCQ, with the discretionary power and right to exercise
all rights and privileges, including voting rights, with respect thereto.
(k) No litigation, proceeding or, to the Borrower's actual
knowledge, investigation of or before any arbitrator or Governmental Authority
is pending or, to the knowledge of the Borrower, threatened by or against CLCQ
or Delta College or against any of their properties or revenues which, if
determined adversely to CLCQ or Delta College, as the case may be, could
reasonably be expected to have a Material Adverse Effect. There are no strikes,
work stoppages, grievance proceedings or other controversies pending or, to the
knowledge and belief of the Borrower, imminent or threatened between CLCQ or
Delta College and any employees of CLCQ or Delta College, respectively, or
between CLCQ or Delta College and any union or other collective bargaining unit
representing employees of CLCQ or Delta College, respectively, which could
reasonably be expected to have a Material Adverse Effect.
(l) Neither CLCQ nor Delta College is in default under or with
respect to any Contractual Obligation in any respect which could reasonably be
expected to have a Material Adverse Effect. The sum of the assets of each of
Delta College and CLCQ, at a fair valuation, exceeds the debts of CLCQ and Delta
College, respectively, exclusive, in the case of Delta College, of debts of
Delta College to the Borrower or CLCQ. The present fair salable value of the
assets of each of CLCQ and Delta College is greater than the amount required to
pay the liability on its debts of CLCQ and Delta College, respectively, as such
debts become absolute and matured, exclusive, in the case of Delta College, of
debts of Delta College to the Borrower or CLCQ. Each of CLCQ and Delta College
has sufficient capital with which to conduct its business. For purposes of this
Subsection, "debt" means "liability on a claim" and "claim" means any (i) right
to payment, whether or not such right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured, or (ii) right to an equitable remedy for
breach of performance if such breach gives rise to a right to payment, whether
or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
(m) Each of CLCQ and Delta College has good title to all of
its property, and none of such property is subject to any Lien, except as
permitted by Subsection 7.3.
(n) To the Borrower's knowledge: (i) no Hazardous Substance
has been released, discharged, spilled, emitted or disposed of on any Obligor
Use Property by CLCQ or Delta College or under any circumstances as a result of
which CLCQ or Delta College would be liable or financially responsible for
damages or the cost of remediation or clean-up; (ii) there is no existing
Hazardous Substance Contamination of any Obligor Use Property which was caused
by CLCQ or Delta College or under circumstances as a result of which CLCQ or
Delta
-11-
12
College would be liable or financially responsible for damages or the cost of
remediation or clean-up; (iii) all operations now or previously conducted on
Obligor Use Property by CLCQ or Delta College comply with all Environmental
Laws; (iv) no underground storage tanks have been installed on any Obligor Use
Property by CLCQ or Delta College or under circumstances as a result of which
CLCQ or Delta College would be liable or financially responsible for damages or
the cost of removal, remediation or clean-up; and (v) neither CLCQ nor Delta
College has received, and neither CLCQ nor Delta College is aware of, any
Environmental Claim against, relating to or affecting in any way CLCQ or Delta
College or the use of any Obligor Use Property by CLCQ or Delta College or any
operations conducted on any Obligor Use Property by CLCQ or Delta College.
(o) Each of CLCQ and Delta College has filed or caused to be
filed all tax returns which are required to be filed by it, and each of CLCQ and
Delta College has paid all taxes shown to be due and payable on said returns on
any assessments made against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any Governmental
Authority (other than taxes the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of CLCQ or
Delta College, as applicable), and, to the knowledge of the Borrower, no claim
is being asserted with respect to any such tax, fee or other charge. No tax lien
has been filed against CLCQ or Delta College or any of their assets.
10. Conditions to Effectiveness of Amendments. The amendments of
the Credit Agreement contained in Sections 2 through 8 of this Agreement shall
be conditioned upon, and shall not be effective until, each of the following
conditions precedent shall have been satisfied as determined by Lender:
(a) There shall have been delivered to Lender, appropriately
completed and duly executed (when applicable) by an Authorized Officer of
Borrower, (i) an amendment and restatement of the Revolving Credit Note in the
form attached hereto as Exhibit F, (ii) a Certificate of the Secretary of
Borrower in form and content satisfactory to Lender, and (iii) in form and
substance satisfactory to Lender and its counsel, such other documents,
instruments and agreements, including financing statements, as Lender may
reasonably request in connection with the transactions contemplated by this
Agreement, the Related Documents and the other Credit Documents.
(b) No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority shall be pending against Borrower or
any of its Subsidiaries, or against any properties or revenues of the Borrower
or any of its Subsidiaries (i) with respect to this Agreement, any of the Credit
Documents or any of the transactions contemplated hereby or thereby, or (ii)
which, if determined adversely to Borrower or any of its Subsidiaries, could
reasonably be expected to have a Material Adverse Effect.
-12-
13
(c) As of the date hereof, all of Borrower's representations
and warranties contained in the Credit Agreement, this Agreement, the Related
Documents and the other Credit Documents shall be correct and complete in all
material respects, and no Default or Event of Default shall have occurred and be
continuing.
11. No Defenses or Claims. In order to induce Lender to enter into
this Agreement, Borrower acknowledges and represents to Lender that it has no
defense, setoff, cause of action or claim of any kind against Lender on account
of actions heretofore taken or not taken by Lender or otherwise, which can be
asserted as a basis to seek affirmative relief or damages from Lender or to
reduce or eliminate any obligations of Borrower to Lender.
12. No Novation or Waiver. Borrower and Lender intend that the
execution and delivery of this Agreement shall not constitute or be construed to
operate as a novation of the Credit Agreement or any obligations of Borrower
evidenced by any of the Credit Documents or as a novation of any security
interests or other Liens directly or indirectly securing any of such
obligations. The amendment and restatement of the Revolving Credit Note executed
and delivered to Lender pursuant to Section 10 of this Agreement shall
constitute the "Revolving Credit Note" for purposes of and as defined in the
Credit Agreement. Nothing contained in this Agreement or in any prior oral or
written communications from or on behalf of Lender to Borrower shall constitute
or be construed to operate as a waiver by Lender of any Defaults or Events of
Default which have occurred or of any rights or remedies heretofore or hereafter
accruing to Lender on account of any such Default or Event of Default or any
other Default or Event of Default.
13. Expenses. Whether or not the transactions contemplated hereby
are consummated, Borrower agrees to pay to Lender all costs and expenses that
Lender has paid or incurred or subsequently pays or incurs in connection with
the development, preparation, negotiation and execution of this Agreement and
the Related Documents, all as further provided in Section 9.6 of the Credit
Agreement.
14. Ratification of Documents and Obligations. Borrower and Lender
hereby ratify and confirm the Credit Agreement (as amended pursuant hereto), the
Borrower Security Agreement and the other Credit Documents, and agree that the
same, and all obligations of the parties thereunder, shall remain in full force
and effect.
15. Binding Nature, Merger, Counterparts and Choice of Law. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, and each reference in this
Agreement to any of the parties hereto shall be deemed to include the successors
and assigns of such party. This Agreement contains the entire agreement of the
parties with respect to the matters covered and the transactions contemplated
hereby and thereby, and no agreement, statement or promise made by any party, or
by any employee, officer, agent or attorney of any party, which is not contained
herein or therein, shall be valid or binding. This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when so executed
-13-
14
and delivered, shall be an original, but all such counterparts shall together
constitute one and the same agreement. This Agreement, and the rights and
obligations of the parties hereunder, shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of Maryland,
exclusive of principles of conflicts of laws.
-14-
15
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement under seal as of the date first above written.
ATTEST/WITNESS: COMPUTER LEARNING CENTERS, INC.
By:(SEAL)
----------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By:(SEAL)
----------------------------
Name:
Title:
-15-
