AMENDMENT NO. 1 AND CONSENT TO AMENDED AND RESTATED CREDIT
AGREEMENT, DATED AS OF OCTOBER 26, 1998
This Amendment No. 1 and Consent (this "Amendment"),
dated as of February 24, 1999, is made by and among CAREER
EDUCATION CORPORATION, a Delaware corporation (the "Borrower"),
the financial institutions party hereto (the "Lenders"), LASALLE
NATIONAL BANK, as administrative agent for the Lenders (in such
capacity, the "Administrative Agent"), and THE BANK OF NOVA
SCOTIA ("Scotia Bank"), as foreign currency agent for the Lenders
(in such capacity, the "Foreign Currency Agent"; and together
with the Administrative Agent, collectively, called the
"Agents"). Terms defined in the Credit Agreement (as defined
below) shall have the same respective meanings when used herein
and the provisions of Sections 1.2 and 1.3 of the Credit
Agreement shall apply, mutatis mutandis, to this Amendment.
W I T N E S S E T H :
WHEREAS, the parties hereto are parties to that certain
Amended and Restated Credit Agreement, dated as of October 26,
1998 (as in effect on the date hereof, the "Existing Credit
Agreement" and as amended and modified by this Amendment, the
"Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders
consent to the Borrower's acquisition of all of the issued and
outstanding capital stock of Briarcliffe College, Inc., a New
York corporation ("Briarcliffe"), for approximately $20,000,000
in cash (the "Briarcliffe Acquisition"), in accordance with the
terms and conditions set forth in that certain draft Stock
Purchase Agreement, dated as of April 1, 1999, by and among CEC
Holdings I, Inc., and Xxxxxxx X. Xxxxx, and Xxxx X. Xxxxx, a copy
of which is attached hereto as Exhibit A (the "Purchase
Agreement"), with such changes thereto as agreed to by the
Administrative Agent;
WHEREAS, the Borrower has also requested that the
Lenders agree to amend and modify the Existing Credit Agreement
as described herein; and
WHEREAS, the Lenders are willing to consent to the
Briarcliffe Acquisition and amend and modify the Existing Credit
Agreement on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises, the
mutual covenants herein contained and other good and valuable
consideration (the receipt, adequacy and sufficiency of which is
hereby acknowledged), the parties hereto, intending legally to be
bound, hereby agree as follows:
1. Amendments. Subject to the satisfaction of the
conditions precedent set forth in Section 6 below, the Existing
Credit Agreement is hereby amended as follows:
(a) Section 10.1.4 is amended be deleting the
reference to 85/15 contained therein and replacing it
with 90/10; and
(b) Section 12.2 of the Existing Credit Agreement
is deleted in its entirety and replaced with the
following:
"SECTION 12.2 Maximum Leverage Ratio. Not
permit the Leverage Ratio to exceed, as of two (2)
Business Days following the end of any Fiscal Quarter
(for the four Fiscal Quarters then ended) during any
period, 3.50:1.00."
2. Consent. Subject to the satisfaction of the
conditions precedent set forth in Section 6 below, the
undersigned Lenders hereby consent to the Briarcliffe Acquisition
and Briarcliffe becoming a Subsidiary of the Borrower in
connection therewith, on the terms and conditions set forth in
the Purchase Agreement; provided that
(a) after giving effect to the consent set forth in
this Amendment, the Briarcliffe Acquisition shall be a
Permitted Acquisition, other than under clause (f) of the
definition thereof with respect to the 45 day notice
requirement which is hereby waived by the Lenders;
(b) in no event shall the purchase price for the
Briarcliffe Acquisition exceed $20,000,000;
(c) concurrently with the closing of the Briarcliffe
Acquisition, the Borrower shall have complied, or shall have
caused its Subsidiaries to comply, with the terms of the
Credit Agreement including, without limitation, (i)
Briarcliffe's execution and delivery of a Supplement to
Subsidiary Guaranty, whereby Briarcliffe agrees to fully
guarantee the Liabilities of the Borrower under the Credit
Agreement and the other Related Documents, and (ii) the
Borrower's execution and delivery of an amendment to the
Borrower Pledge Agreement, whereby the Borrower pledges to
the Administrative Agent, for the benefit of the Lenders, a
first priority perfected security interest in all of the
outstanding capital stock of Briarcliffe (together with the
delivery of Briarcliffe's stock certificates and stock
powers executed in blank);
(d) all documentation to be delivered in connection
with the Briarcliffe Acquisition shall be satisfactory to
the Administrative Agent; and
(e) all documentation requested by the either Agent or
the Lenders in connection with their due diligence review of
Briarcliffe or the Borrower (prior to and after giving
effect to the Briarcliffe Acquisition) shall have been
received by such Agent or Lender.
3. Documents Remain in Effect. Except as amended and
modified by this Amendment and the consent set forth in Section 2
hereof, the Existing Credit Agreement remains in full force and
effect and the Borrower confirms that its representations,
warranties, agreements and covenants contained in, and
obligations and liabilities under, the Credit Agreement and each
of the other Related Documents are true and correct in all
material respects as if made on the date hereof, except where
such representation, warranty, agreement or covenant speaks as of
a specified date.
4. References in Other Documents. References to the
Existing Credit Agreement in any other document shall be deemed
to include a reference to the Credit Agreement, whether or not
reference is made to this Amendment.
5. Representations. The Borrower hereby represents
and warrants to the Lenders and the Agents that:
(a) The execution, delivery and performance of
this Amendment are within the Borrower's corporate
authority, have been duly authorized by all necessary
corporate action, have received all necessary consents
and approvals (if any shall be required), and do not
and will not contravene or conflict with any provision
of law or of the Certificate of Incorporation or
By-laws of the Borrower or its Subsidiaries, or of any
other agreement binding upon the Borrower or its
Subsidiaries or their respective property;
(b) This Amendment constitutes the legal, valid,
and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms;
(c) no Default has occurred and is continuing or
will result from this Amendment; and
(d) after giving effect to the consent set forth in
this Amendment, the Briarcliffe Acquisition is a Permitted
Acquisition.
6. Conditions Precedent. The effectiveness of this
Amendment is subject to the receipt by the Administrative Agent
of each of the following, each appropriately completed and duly
executed as required and otherwise in form and substance
satisfactory to the Administrative Agent:
(a) Certified copies of resolutions of the Board
of Directors of the Borrower authorizing or ratifying
the execution, delivery and performance by the Borrower
of this Amendment;
(b) A certificate of the President or a Vice-
President of the Borrower that all necessary consents
or approvals with respect to this Amendment have been
obtained;
(c) A certificate of the Secretary or Assistant
Secretary of the Borrower, certifying the name(s) of
the officer(s) of the Borrower authorized to sign this
Amendment and the documents related hereto on behalf of
the Borrower;
(d) An opinion of Xxxxxx Xxxxxx & Xxxxx covering
those matters set forth in clauses (a) and (b) of
Section 5 and such other legal matters as the
Administrative Agent or its counsel may request; and
(e) Such other instruments, agreements and documents
as the Administrative Agent may reasonably request, in each
case duly executed as required and otherwise in form and
substance satisfactory to the Lenders.
7. Miscellaneous.
(a) Section headings used in this Amendment are for
convenience of reference only, and shall not affect the
construction of this Amendment.
(b) This Amendment and any amendment hereof or
supplement hereto may be executed in any number of counterparts
and by the different parties on separate counterparts and each
such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same
agreement.
(c) This Amendment shall be a contract made under and
governed by the internal laws of the State of Illinois, without
giving effect to principles of conflicts of laws.
(d) All obligations of the Borrower and rights of the
Lenders and the Agents, that are expressed herein, shall be in
addition to and not in limitation to those provided by applicable
law.
(e) Whenever possible, each provision of this
Amendment shall be interpreted in such manner as to be effective
and valid under applicable law; but if any provision of this
Amendment shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Amendment.
(f) This Amendment shall be binding upon the Borrower,
the Lenders, and the Agents and their respective successors and
assigns, and shall inure to the benefit of the Borrower, the
Lenders, and the Agents and their respective successors and
assigns.
* * *
IN WITNESS WHEREOF, the parties hereto have caused the
execution and delivery hereof by their respective representatives
thereunto duly authorized as of the date first herein appearing.
CAREER EDUCATION CORPORATION
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
INTERNATIONAL ACADEMY OF
MERCHANDISING & DESIGN (CANADA)
LTD.
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
ACADEMIE INTERNATIONALE dU DESIGN INC.
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
LASALLE NATIONAL BANK, in its
individual corporate capacity and
as Administrative Agent
By: /s/ XXXXX XXXX
Name: Xxxxx Xxxx
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA, in its
individual corporate capacity and
as Foreign Currency Agent
By: /s/ F.C.H. XXXXX
Name: F.C.H. Xxxxx
Title: Senior Manager Loan Operations
ABN AMRO BANK CANADA, in its
individual corporate capacity
By: /s/ XXXXX XXXX
Name: Xxxxx Xxxxx
Title: Vice President
By: /s/ XXXX XXXXXXX
Name: Xxxx Xxxxxxx
Title: G.V.P.
NATIONAL CITY BANK, in its
individual corporate capacity
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
COMERICA BANK, in its
individual corporate capacity
By: /s/ XXXXXXX X. BLOCK
Name: Xxxxxxx X. Block
Title: Vice President
XXXXXX TRUST AND SAVINGS BANK, in
its individual corporate capacity
By: /s/ M. XXXXX XXXXX,III
Name: M. Xxxxx Xxxxx, III
Title: Vice President
UNION BANK OF CALIFORNIA, N.A., in
its individual corporate capacity
By: /s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
THE BANK OF MONTREAL, in its
individual corporate capacity
By: /s/ X.X. XXXXXX
Name: X.X. XxXxxx
Title: Relationship Manager
