FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
EXHIBIT 10.1
FIRST AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
This First Amendment to Amended and Restated Credit Agreement (herein, this “Amendment”) is entered into as of October 31, 2014, by and among CAREER EDUCATION CORPORATION, a Delaware corporation (the “Company”), CEC EDUCATIONAL SERVICES, LLC, an Illinois limited liability company (“CECE”; the Company and CECE shall be referred to herein as the “Borrowers” and individually as a “Borrower”), certain of the direct and indirect Domestic Subsidiaries of the Company, as Subsidiary Guarantors (the Borrowers and the Subsidiary Guarantors collectively referred to herein as the “Loan Parties”), and BMO Xxxxxx Bank N.A., in its capacity as Administrative Agent, L/C Issuer and the sole Lender (in such capacities, “BMO Xxxxxx”).
PRELIMINARY STATEMENTS
A. The Borrowers, the Subsidiary Guarantors and BMO Xxxxxx entered into a certain Amended and Restated Credit Agreement, dated as of December 30, 2013 (the “Credit Agreement”). All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.
B. The Borrowers have requested that BMO Xxxxxx increase the Aggregate Commitments from $70,000,000 to $120,000,000 and make certain other amendments to the Credit Agreement, and BMO Xxxxxx is willing to do so under the terms and conditions set forth in this Amendment.
Now, Therefore, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. AMENDMENTS.
Subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Credit Agreement shall be and hereby is amended, effective as of the date hereof, as follows:
1.1. The defined terms “Aggregate Commitments”, “Applicable Rate” and “Domestic Cash” appearing in Section 1.01 of the Credit Agreement shall be amended and restated to read in their entirety as follows:
“Aggregate Commitments” means the Commitments of all the Lenders, which as of October 31, 2014 equals $120,000,000 in the aggregate.
“Applicable Rate” means with respect to (a) Base Rate Loans, 0.50% per annum, (b) Eurodollar Rate Loans and the Letter of Credit Fee for Letters of Credit (other than Existing Letters of Credit), 1.50% per annum, (c) the Letter of Credit Fee for Existing Letters of Credit, 0.75% per annum, and (d) the commitment fees payable under Section 2.09, 0.25% per annum.
“Domestic Cash” means, at any time the same is determined, the sum of (i) unrestricted cash and Cash Equivalents of the Loan Parties and their Domestic Subsidiaries maintained at financial institutions located in the United States at such time, plus (ii) unrestricted Investments of the Loan Parties and their Domestic Subsidiaries permitted by Section 7.02(a)(ii) and Section 7.02(a)(iii) constituting marketable securities maintained at financial institutions located in the United States at such time, plus (iii) the aggregate amount of Lease Buybacks from October 1, 2014 to such date of determination to the extent permitted by Section 7.11(b).
1.2. Section 1.01 of the Credit Agreement shall be further amended by inserting new defined terms “Average Domestic Cash”, “Existing Letter of Credit”, and “Lease Buyouts” in their appropriate alphabetical order to read in their entirety as follows:
“Average Domestic Cash” means, at any time the same is to be determined, an amount equal to (a) the sum of the Domestic Cash as of the last day for each of the three most recent months then ended, divided by (b) three (3).
“Existing Letter of Credit” means each Letter of Credit outstanding as of October 31, 2014, as such Letter of Credit may be renewed, extended, or modified from time to time; provided, that if the stated amount of such Letter of Credit is increased (whether in connection with an extension, renewal or otherwise), such Letter of Credit shall no longer be deemed to be an Existing Letter of Credit at the time of such increase for purposes of the defined term “Applicable Rate”.
“Lease Buyouts” means the cash payments paid by the Company and its Subsidiaries in connection with the buyout of leases for campus locations and other facilities.
1.3. Section 6.01(c) of the Credit Agreement shall be amended and restated to read in its entirety as follows:
(c) as soon as available, but in any event within 30 days after the end of each month, the Company shall deliver to the Administrative Agent and the Lenders a report showing the cash balances of the Company and its Subsidiaries as of the last day of such month (including a separate line item for Domestic Cash) together with the average cash balances of the Company and its Subsidiaries as of the last day of the month for each of the three most recent months then ended.
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1.4. Section 6.02(b) of the Credit Agreement shall be amended and restated to read in its entirety as follows:
(b) concurrently with the delivery of the cash balance reports referred to in Section 6.01(c), a duly completed Compliance Certificate signed by a Responsible Officer of the Company;
1.5. Section 7.11 of the Credit Agreement shall be amended and restated to read in its entirety as follows:
7.11 Minimum Average Domestic Cash; Maximum Lease Buyouts.
(a) Minimum Average Domestic Cash. Permit, as of the last day of each month, commencing with October 31, 2014, the Average Domestic Cash to be less than $190,000,000.
(b) Maximum Lease Buyouts. Permit, at any date the same may be determined, the aggregate amount of Lease Buyouts to exceed (i) $10,000,000 for the period commencing October 1, 2014 through the date of determination, if such date occurs on or prior to December 31, 2014, (ii) $15,000,000 in the aggregate for the period commencing October 1, 2014 through the date of determination, if such date occurs after December 31, 2014 but on or prior to Xxxxx 00, 0000, (xxx) $20,000,000 in the aggregate for the period commencing October 1, 2014 through the date of determination, if such date occurs after March 31, 2015 but on or prior to June 30, 2015, and (iv) $25,000,000 in the aggregate for the period commencing October 1, 2014 through the date of determination, if such date occurs after September 30, 2015 but on or prior to the Maturity Date.
1.6. The Schedules to the Credit Agreement shall be amended and replaced by the Schedules attached hereto.
1.7. Exhibit C to the Credit Agreement shall be amended and replaced by Exhibit C attached hereto.
SECTION 2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of all of the following conditions precedent:
2.1. The Loan Parties and BMO Xxxxxx shall have executed and delivered this Amendment.
2.2. BMO Xxxxxx shall have received copies of resolutions of each Loan Parties’ Board of Directors (or similar governing body) authorizing the execution, delivery and performance of this Amendment, together with specimen signatures of the persons authorized to execute such documents on each Loan Parties’ behalf, all certified in each instance by its Secretary or Assistant Secretary (or comparable Responsible Officer).
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2.3. BMO Xxxxxx shall have received copies of the certificates of good standing for each Loan Party (dated no earlier than 30 days prior to the date hereof) from the office of the secretary of the state of its incorporation or organization, and with respect to the Company, the State of Illinois.
2.4. BMO Xxxxxx shall have received the favorable written opinion of counsel to each Loan Party, in form and substance reasonably satisfactory to BMO Xxxxxx.
2.5. BMO Xxxxxx shall have received a non-refundable upfront fee in the amount of $250,000.
2.6. BMO Xxxxxx shall have received copies (executed or certified, as may be appropriate) of all legal documents or proceedings taken in connection with the execution and delivery of this Amendment to the extent BMO Xxxxxx or its counsel may reasonably request.
2.7. Legal matters incident to the execution and delivery of this Amendment shall be satisfactory to the Bank and its counsel.
SECTION 3. REPRESENTATIONS.
3.1. In order to induce BMO Xxxxxx to execute and deliver this Amendment, the Loan Parties hereby represents to BMO Xxxxxx that as of the date hereof (a) the representations and warranties set forth in Article V of the Credit Agreement are and shall be and remain true and correct in all material respects (without duplication of materiality qualifiers) (except that the representations contained in Section 5.05 shall be deemed to refer to the most recent Audited Financial Statements and unaudited consolidated financial statements of the Company and its Subsidiaries delivered to BMO Xxxxxx) and (b) no Default has occurred and is continuing under the Credit Agreement or shall result after giving effect to this Amendment.
3.2. Each of the certificate of incorporation and bylaws of the Company as previously provided with the Assistant Corporate Secretary’s Certificate, dated as of December 30, 2013, remains in full force and effect in accordance with its terms as of the date hereof. Each of the articles of organization and operating agreement of CECE as previously provided with that certain Secretary’s Certificate, dated as of December 30, 2013, remains in full force and effect in accordance with its terms as of the date hereof.
3.3. Each of the articles of incorporation (or equivalent organizing document) of each Subsidiary Guarantor (other than Xxxxxxx-Xxxxx Group, Inc., f/k/a International Academy of Merchandising & Design, Ltd.) as previously provided with that certain Subsidiary Guarantors’ Officers’ Certificate, dated as of December 27, 2012, remains in full force and effect in accordance with its terms as of the date hereof. Each of the operating agreements or bylaws, as applicable, of each Subsidiary Guarantor as previously provided with that certain Subsidiary Guarantors’ Officers’ Certificate, dated as of December 27, 2012, remains in full force and effect in accordance with its terms as of the date hereof.
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SECTION 4. MISCELLANEOUS.
4.1. CECE heretofore executed and delivered to BMO Xxxxxx that certain Security Agreement, as amended. The Borrowers hereby acknowledge and agree that the Liens created and provided for by the Security Agreement continue to secure the Secured Obligations (as defined in the Security Agreement); and the Security Agreement and the rights and remedies of BMO Xxxxxx thereunder, the obligations of CECE thereunder, and the Liens created and provided for thereunder remain in full force and effect and shall not be affected, impaired or discharged hereby. Nothing herein contained shall in any manner affect or impair the priority of the Liens and security interests created and provided for by the Security Agreement as to the indebtedness which would be secured thereby prior to giving effect to this Amendment.
4.2. Except as specifically amended herein, the Credit Agreement shall continue in full force and effect in accordance with its original terms. Reference to this specific Amendment need not be made in the Credit Agreement, the Note, or any other instrument or document executed in connection therewith, or in any certificate, letter or communication issued or made pursuant to or with respect to the Credit Agreement, any reference in any of such items to the Credit Agreement being sufficient to refer to the Credit Agreement as amended hereby.
4.3. The Borrowers agrees to pay on demand all costs and expenses of or incurred by the Bank in connection with the negotiation, preparation, execution and delivery of this Amendment, including the fees and expenses of counsel for BMO Xxxxxx, in each case as required under Section 11.04 of the Credit Agreement.
4.4. This Amendment may be executed in any number of counterparts, and by the different parties on different counterpart signature pages, all of which taken together shall constitute one and the same agreement. Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original. Delivery of a counterpart hereof by facsimile transmission or by e-mail transmission of an Adobe portable document format file (also known as a “PDF” file) shall be effective as delivery of a manually executed counterpart hereof. This Amendment shall be governed by, and construed in accordance with, the internal laws of the State of Illinois.
[SIGNATURE PAGE TO FOLLOW]
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This First Amendment to Amended and Restated Credit Agreement is entered into as of the date and year first above written.
| “BORROWERS”
CAREER EDUCATION CORPORATION | ||
| By: | /s/ Xxxx X. Xxxxxxx | |
| Name: Xxxx X. Xxxxxxx | ||
| Title: Senior Vice President, Chief Financial Officer | ||
| CEC EDUCATIONAL SERVICES, LLC | ||
| By: | /s/ Xxxx X. Xxxxxxx | |
| Name: Xxxx X. Xxxxxxx | ||
| Title: President and Chief Executive Officer | ||
[Signature Page to First Amendment to Amended and Restated Credit Agreement]
| “GUARANTORS” |
| AMERICAN INTERCONTINENTAL UNIVERSITY, INC. |
| BRIARCLIFFE COLLEGE, INC. |
| COLORADO TECHNICAL UNIVERSITY, INC. |
| INTERNATIONAL ACADEMY OF MERCHANDISING & DESIGN, INC. |
| XXXXXXX-XXXXX GROUP, INC. (f/k/a International Academy of Merchandising & Design, Ltd.) |
| XXXXXXX-XXXXX, LIMITED |
| SCOTTSDALE CULINARY INSTITUTE, LTD. |
| By: | /s/ Xxxx X. Xxxxxxx | |
| Name: Xxxx X. Xxxxxxx | ||
| Title: Vice President and Chief Financial Officer |
| AIU ONLINE, LLC LE CORDON BLEU NORTH AMERICA, LLC | ||
| By: | /s/ Xxxx X. Xxxxxxx | |
| Name: Xxxx X. Xxxxxxx | ||
| Title: Vice President and Chief Financial Officer | ||
| XXXXXX ACQUISITION CORP. | ||
| By: | /s/ Xxxx X. Xxxxxxx | |
| Name: Xxxx X. Xxxxxxx | ||
| Title: President | ||
[Signature Page to First Amendment to Amended and Restated Credit Agreement]
Accepted and agreed to.
| BMO Xxxxxx Bank N.A., in its capacity as | ||
| By | /s/ Xxxx X. Xxxxx | |
| Name | Xxxx X. Xxxxx | |
| Title | Managing Director |
[Signature Page to First Amendment to Amended and Restated Credit Agreement]
SCHEDULE 2.01
COMMITMENTS
AND APPLICABLE PERCENTAGES
| Lender |
Commitment | Applicable Percentage |
||||||
| BMO Xxxxxx Bank N.A. |
$ | 120,000,000 | 100.00 | % | ||||
| Total |
$ | 120,000,000 | 100.00 | % | ||||
SCHEDULE 2.02
MATERIAL DOMESTIC SUBSIDIARIES
American InterContinental University, Inc.
AIU Online, LLC
International Academy of Merchandising & Design, Inc.
Xxxxxxx-Xxxxx Group, Inc.
Xxxxxx Acquisition Corp.
Scottsdale Culinary Institute, Ltd.
Le Cordon Bleu North America, LLC
Briarcliffe College, Inc.
Xxxxxxx-Xxxxx, Limited
Colorado Technical University, Inc.
SCHEDULE 5.06
LITIGATION
On September 18, 2014, the Minnesota Attorney General (“MN AG”) issued a Civil Investigative Demand (“CID”) to Xxxxx College. The CID relates to the MN AG’s investigation of whether Xxxxx College has complied with certain Minnesota state consumer protection laws. Pursuant to the CID, the MN AG has requested detailed information on a broad spectrum of business practices, including student recruitment and enrollment, externships, programmatic accreditation, student employment outcomes, placement rates of graduates and other organizational information. The documents and information sought by the MN AG in connection with its investigation cover the time period from January 1, 2010 to the present. The Company is cooperating with the MN AG’s office with a view towards resolving this inquiry as promptly as possible.
SCHEDULE 5.09
ENVIRONMENTAL MATTERS
None.
SCHEDULE 5.13
SUBSIDIARIES; OTHER EQUITY INVESTMENTS;
EQUITY INTERESTS IN THE BORROWER
Part (a). Subsidiaries.
“The Xxxxxxxxx Xxxxx Corporation—Melville”
AIU Online, LLC
American InterContinental University, Inc.
American InterContinental University-London, Ltd. U.S.
Briarcliffe College, Inc.
Xxxxxx Institute of Photography, L.L.C.
California Culinary Academy, Inc.
California Culinary Academy, LLC
Career Education Student Finance LLC
CEC Educational Services, LLC
CEC Employee Group, LLC
CEC Europe, LLC
CEC Food and Beverage LLC
CEC Leasing, LLC
CEC Real Estate Holding, Inc.
Colorado Tech, Inc.
Colorado Technical University, Inc.
Education and Training, Incorporated
Xxxxxxxxxx Institute of Interior Design, Inc.
International Academy of Design & Technology Nashville, LLC
International Academy of Design & Technology-Detroit, Inc.
International Academy of Merchandising & Design, Inc.
Kitchen Academy, Inc.
LCB Culinary Schools, LLC
Le Cordon Bleu College Of Culinary Arts, Inc., A Private Two-Year College
Le Cordon Bleu North America, LLC
Market Direct, Inc.
Xxxxxx Acquisition Corp.
Missouri College, Inc.
Xxxxxxx-Xxxxx College, Inc., A Private Two-Year College
Xxxxxxx-Xxxxx College, LLC
Xxxxxxx-Xxxxx Group, Inc.
Xxxxxxx-Xxxxx MN, Inc.
Xxxxxxx-Xxxxx, Limited
SBC Health Midwest, Inc.
School of Computer Technology, Inc.
Scottsdale Culinary Institute, Ltd.
TCA Beverages, LLC
TCA Group, LLC
The Cooking and Hospitality Institute of Chicago, Inc.
The Xxxxxxxxx Xxxxx School of Norwalk, Inc.
The Xxxxxxxxx Xxxxx School of Providence, Inc.
Words of Wisdom, LLC
Part (b). Other Equity Investments.
| 1. | CCKF, Limited (Ireland) - 15% Equity Ownership |
| 2. | SIMTICS Limited (New Zealand) - < 10% Equity Ownership |
SCHEDULE 5.17
INTELLECTUAL PROPERTY MATTERS
American University (a Washington, DC not-for-profit educational institution) has instituted administrative proceedings in the Trademark Trial and Appeal Board seeking to prevent Career Education Corporation from registering marks using the phrase “American InterContinental University”.
SCHEDULE 5.19
TITLE IV MATTERS
None.
SCHEDULE 7.01
EXISTING LIENS
Career Education Corporation
| JURISDICTION |
SEARCH DATE |
TYPE OF SEARCH | FILING NO. | FILING DATE |
SECURED PARTY |
COLLATERAL TYPE | ||||||
| Delaware Secretary of State |
12/10/13 through 9/26/14 |
UCC | 20093487557 | 10/30/09 | Zeno Office Solutions | Specific Equipment pursuant to lease | ||||||
| 20101515182 | 4/30/10 | General Electric Capital Corporation | All equipment leased to or financed for the Debtor by Secured Party | |||||||||
| 20103121815 | 9/8/10 | Macquarie Equipment Finance, LLC | Specific Equipment pursuant to lease | |||||||||
| 20104660597 | 12/31/10 | Macquarie Equipment Finance, LLC | Specific Equipment pursuant to lease | |||||||||
| 20110170996 | 1/15/11 | Macquarie Equipment Finance, LLC | Specific Equipment pursuant to lease | |||||||||
| 20111477267 | 4/20/11 | Macquarie Equipment Finance, LLC | Specific Equipment pursuant to lease | |||||||||
| 20111477275 | 4/20/11 | Macquarie Equipment Finance, LLC | Specific Equipment pursuant to lease | |||||||||
| 20132471051 | 6/27/13 | CIT Finance LLC and XXX Xxxxxxxxxxx | Specific equipment | |||||||||
| 20132617497 | 7/9/13 | Termination of 20132471051 [Authorized by XXX Xxxxxxxxxxx] | ||||||||||
| Xxxx County Circuit Court, Illinois |
12/10/13 through 10/1/14 |
Local Defendant Suits |
2011-CH-41973 | 12/7/11 | Xxxxxxx Xxxxxxx et al | Case Type: Breach of Fiduciary Duty and Abuse of Control | ||||||
| 2012-L-011444 | 10/9/12 | Xxxxx Xxxxxx Et Al | Case: Personal Injury (Motor Vehicle) (Wrongful Death) | |||||||||
| 213-CH-27421 | 12/11/13 | Axis Insurance Company | Case: Declaratory Judgment | |||||||||
American Intercontinental University, Inc.
| JURISDICTION |
TYPE OF SEARCH | THROUGH DATE | SECURED PARTY |
FILING NO./DATE | COLLATERAL | |||||
| Georgia Clerks Authority |
UCC | 12/10/13 through 10/1/14 |
GreatAmerica Leasing Corporation | 0072009017794 9/30/09 |
Various postage machines and all products, proceeds and attachments | |||||
| US Bancorp |
0072009018469 10/9/09 |
Specific equipment | ||||||||
| Docuteam Inc. |
0072009018865 10/19/09 |
Various Sharp copier, printer and fax systems and all products, proceeds and attachments | ||||||||
| Docuteam, Inc. |
0072010017431 9/14/10 |
Various Sharp and Kyocera copiers, printers, faxes and accessories and all products, proceeds and attachments | ||||||||
| De Xxxx Xxxxxx Financial Services, Inc. |
0602011002445 3/21/11 |
Equipment leased or financed by Secured Party to Debtor, together with all attachments, accessories, substitutions and proceeds | ||||||||
International Academy of Merchandising & Design, Ltd.
| JURISDICTION |
TYPE OF SEARCH | THROUGH DATE | SECURED PARTY |
FILING NO./DATE | COLLATERAL | |||||
| SOS IL | UCC | 12/10/13 through 10/3/14 |
Ricoh Americas Corporation | 14200797 4/13/09 |
Equipment leased to or financed by Secured Party to Debtor and all products, proceeds and attachments | |||||
| Xxxxx Fargo Financial Leasing, Inc. | 14229655 4/22/09 |
Certain Konica Minolta copiers and all attachments, accessories, substitutions and proceeds | ||||||||
Briarcliffe College, Inc.
| JURISDICTION |
TYPE OF SEARCH | THROUGH DATE | SECURED PARTY |
FILING NO./DATE | COLLATERAL | |||||
| SOS NY | UCC | 12/10/13 through 9/30/14 |
ABN Amro Incorporated, successor in interest to ChiCorp Financial Services, Inc. | 002498 1/6/99 Continuation- Continuation- Continuation- |
Specific equipment and all attachments, accessories, substitutions and proceeds |
SCHEDULE 7.03
EXISTING INDEBTEDNESS
| (Dollars or Pounds sterling in thousands) |
||||||
| Letters of credit |
$ | 11,863 | As of 10/24/2014 | |||
| Surety Bonds |
$ | 10,562 | As of 10/24/2014 | |||
| Amount owed to Regents University as rent credits in connection with London lease assumed by Regents |
£ | 1,320 | As 10/31/14 | |||
C-1
Compliance Certificate
SCHEDULE 7.05
DISCONTINUED OPERATIONS
AIU South Florida, Weston FL
Xxxxxxx College, Phoenix, AZ
Colorado Technical University, North Kansas City, North Kansas City, MO
Colorado Technical University, Pueblo, Pueblo, CO
Colorado Technical University, Sioux Falls, Sioux Falls, SD
Le Cordon Bleu College (or Institute) of Culinary Arts (“LCB”) LCB Pittsburgh, Pittsburgh, PA
International Academy of Design & Technology (“IADT”):
IADT Nashville, Nashville, TN
IADT Detroit, Troy, MI
IADT Sacramento, Sacramento, CA
IADT Schaumburg, Schaumburg, IL
Xxxxxxx-Xxxxx College (“SBC”):
SBC Austin, Austin, TX
SBC Boston, Boston, MA
SBC Chicago, Chicago, IL
SBC Cleveland, Cleveland, OH
SBC Collinsville, Collinsville IL
SBC Columbus, Columbus, OH
SBC Dearborn, Dearborn, MI
SBC Farmington, Farmington, CT
SBC Fenton, Fenton, MO
SBC Grand Rapids, Grand Rapids, MI
SBC Hazelwood, Hazelwood, MO
SBC Hillside, Hillside, IL
SBC Houston North Loop, Houston, TX
SBC Indianapolis, Indianapolis, IN
SBC Las Vegas, Henderson, NV
SBC Milwaukee, Milwaukee, WI
SBC Orlando, Orlando, FL
SBC Phoenix, Phoenix, AZ
SBC Portland, Portland, OR
SBC Skokie, Skokie, IL
SBC Xx. Xxxxxx, Xx. Xxxxxx, XX
SBC Tinley Park, Tinley Park, IL
C-2
Compliance Certificate
SBC Tysons Corner, McLean, VA
Xxxxxxx-Xxxxx Institute (“SBI”):
SBI Cranston, Cranston, RI
SBI Landover, Landover, MD
SBI Orlando, Orlando, FL
SBI Pittsburgh, Pittsburgh, PA
SBI Trevose, Trevose, PA
SBI White Plains, White Plains, NY
SBI Xxxxxxx Township, Pittsburgh, PA
C-3
Compliance Certificate
EXHIBIT C
CAREER EDUCATION CORPORATION
CEC EDUCATIONAL SERVICES, LLC
COMPLIANCE CERTIFICATE
| To: | BMO Xxxxxx Bank N.A., as | |
| Administrative Agent under, and the | ||
| Lenders party to, the Credit | ||
| Agreement described below | ||
This Compliance Certificate is furnished to the Administrative Agent and the Lenders pursuant to that certain Amended and Restated Credit Agreement dated as of December 30, 2013, among Career Education Corporation, CEC Educational Services, LLC and you (as extended, renewed, modified, amended or restated from time to time, the “Credit Agreement”). Unless otherwise defined herein, the terms used in this Compliance Certificate have the meanings ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. The officer executing this Compliance Certificate is the duly elected of Career Education Corporation;
2. The officer executing this Compliance Certificate has reviewed the terms of the Credit Agreement and has made, or has caused to be made under his/her supervision, a detailed review of the transactions and conditions of the Company and its Subsidiaries during the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and such officer has no knowledge of, the existence of any condition or the occurrence of any event which constitutes a Default during or at the end of the accounting period covered by the attached financial statements or as of the date of this Compliance Certificate, except as set forth below;
4. The financial statements required by Section 6.01 of the Credit Agreement and being furnished to you concurrently with this Compliance Certificate were prepared in accordance with GAAP and, fairly present in all material respects the financial condition, results of operations, shareholders equity and cash flows of the Company and its Subsidiaries in accordance with GAAP, subject, in each case, in respect of interim statements to normal year-end adjustments and the absence of footnotes; and
C-4
Compliance Certificate
5. The Schedule I hereto sets forth financial data and computations evidencing the Borrower’s compliance with certain covenants of the Credit Agreement, all of which data and computations are, to the best of such officer’s knowledge, true, complete and correct and have been made in accordance with the relevant Sections of the Credit Agreement.
Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the nature of the condition or event, the period during which it has existed and the action which the Borrowers have taken, is taking, or proposes to take with respect to each such condition or event:
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The foregoing certifications, together with the computations set forth in Schedule I hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this day of 20 .
| CAREER EDUCATION CORPORATION | ||||
| By | ||||
| Name | ||||
| Title | ||||
C-5
Compliance Certificate
SCHEDULE I
TO COMPLIANCE CERTIFICATE
CAREER EDUCATION CORPORATION
CEC EDUCATIONAL SERVICES, LLC
COMPLIANCE CALCULATIONS
FOR AMENDED AND RESTATED
CREDIT AGREEMENT DATED AS OF DECEMBER 30, 2013
CALCULATIONS AS OF , (THE “CALCULATION DATE”)
|
| ||
| A. | Minimum Domestic Cash (Section 7.11(a)) | |||||||||||
| 1. | Unrestricted cash and Cash Equivalents as of |
|||||||||||
| (a) the Calculation Date |
$___________ | |||||||||||
| (b) , 201 (immediate prior month end) |
$___________ | |||||||||||
| (c) , 201 (month ended two months prior to the Calculation Date) |
$___________ | |||||||||||
| (d) Sum of lines 1(a), 1(b) and 1(c) |
$___________ | |||||||||||
| 2. | Unrestricted marketable securities as of |
$___________ | ||||||||||
| (a) the Calculation Date |
$___________ | |||||||||||
| (b) , 201 (immediate prior month end) |
$___________ | |||||||||||
| (c) , 201 (month ended two months prior to the Calculation Date) |
||||||||||||
| (d) Sum of lines 2(a), 2(b) and 2(c) |
$___________ | |||||||||||
| 3. | Aggregate amount of Lease Buyouts from October 1, 2014 through | |||||||
| (a) the Calculation Date | $___________ | |||||||
| (b) , 201 (immediate prior month end) | $___________ | |||||||
| (c) , 201 (month ended two months prior to the Calculation Date) | $___________ | |||||||
| (d) Sum of lines 3(a), 3(b) and 3(c) | $___________ | |||||||
| 4. | Sum of lines A1(d), A2(d) and A3(d) | $___________ | ||||||
| 5. | Line A4 divided by 3 | $___________ | ||||||
| 6. | Line A5 shall not be less than | $190,000,000 | ||||||
| 7. | The Borrowers are in compliance (circle yes or no) | yes/no | ||||||
| B. | Maximum Lease Buyouts (Section 7.11(b)) | |||||||
| 1. | Aggregate amount of Lease Buyouts from October 1, 2014 through the Calculation Date: | $___________ | ||||||
| 2. | Line B2 shall not exceed | $___________ | ||||||
| (a) From 10/01/14 through the Calculation Date, if such date is on or prior to 12/31/14 |
$10,000,000 | |||||||
| (b) From 10/01/14 through the Calculation Date, if such date is after 12/31/14, but on or prior to 03/31/15 |
$15,000,000 | |||||||
| (c) From 10/01/14 through the Calculation Date, if such date is after 03/31/15, but on or prior to 06/30/15 |
$20,000,000 | |||||||
| (d) From 10/01/14 through the Calculation Date, if such date is after 06/30/15, but on or prior to the Maturity Date |
$25,000,000 | |||||||
| 3. | The Borrowers are in compliance (circle yes or no) | yes/no | ||||||
