THIRD AMENDED AND RESTATED CREDIT AGREEMENT

Exhibit 10.1

Execution Version

 

Published CUSIP Numbers:

Deal:   218869AA3

Domestic Commitment:   218869AB1

Canadian Commitment: 218869AC95

THIRD AMENDED AND RESTATED

CREDIT AGREEMENT

Dated as of September 30, 2009

among

CORINTHIAN COLLEGES, INC.,

a Delaware corporation,

as the Domestic Borrower,

EVEREST COLLEGES CANADA, INC.,

an Ontario corporation,

as the Canadian Borrower,

BANK OF AMERICA, N.A.,

as Domestic Administrative Agent, Domestic Swing Line Lender

and Domestic L/C Issuer,

BANK OF AMERICA, N.A., acting through its Canada Branch,

as Canadian Administrative Agent, Canadian Swing Line Lender

and Canadian L/C Issuer,

U.S. BANK NATIONAL ASSOCIATION,

as Syndication Agent,

and

U NION B ANK , N.A.,

as Documentation Agent,

and

The Other Lenders Party Hereto

BANC OF AMERICA SECURITIES LLC

and

U.S. BANK NATIONAL ASSOCIATION,

as

Joint Lead Arrangers and Joint Book Managers

 

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

(continued)

 

THIRD AMENDED AND RESTATED CREDIT AGREEMENT

This THIRD AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of September 30 , 2009, among Corinthian Colleges, Inc., a Delaware corporation (the “ Domestic Borrower ”), Everest Colleges Canada, Inc., an Ontario corporation and wholly-owned subsidiary of the Domestic Borrower (the “ Canadian Borrower ” and together with the Domestic Borrower, collectively, the “ Borrowers ” and individually, a “ Borrower ”), each lender from time to time party hereto (collectively, the “ Lenders ” and individually, a “ Lender ”), U.S. Bank National Association, as Syndication Agent, and Union Bank, N.A., as Documentation Agent, Bank of America, N.A., as Domestic Administrative Agent, Domestic Swing Line Lender and Domestic L/C Issuer, and Bank of America, N.A., acting through its Canada Branch, as Canadian Administrative Agent, Canadian Swing Line Lender and Canadian L/C Issuer.

The Borrowers, certain of the Lenders, Documentation Agent, Syndication Agent and Administrative Agents are parties to that certain Second Amended and Restated Credit Agreement dated as of June 8, 2005, as amended prior to the date hereof (as so amended, the “ Existing Credit Agreement ”).

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree that the Existing Credit Agreement is hereby amended and restated in its entirety as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01 Defined Terms . As used in this Agreement, the following terms shall have the meanings set forth below:

“ Acceptance ” has the meaning assigned to that term in Section 2.03(a) .

“ Acceptance Facility ” means the bankers’ acceptance facility established under Section 2.03 .

“ Acceptance Usage ” means, as at any date, the sum (without duplication) of the aggregate Face Amount of all Acceptances accepted by Canadian Lenders pursuant to Section 2.03 which have not been repaid by the Canadian Borrower, whether or not due and whether or not held by any Lender. For purposes of this definition, all Acceptances shall be valued in Dollar Equivalents as of any date of determination.

“ Acquisition ” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any line or segment of business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity (or securities convertible into or exchangeable for such capital stock, partnership interests, membership interests or equity) of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger, amalgamation or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) provided that (i) a Borrower or its Subsidiary is the surviving entity or (ii) after giving effect to such merger, amalgamation or

 

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consolidation, such other Person has become a Subsidiary of a Borrower; provided , further , that no acquisition described in clauses (a) or (b) above shall constitute an Acquisition unless the total consideration (including cash, assumed Indebtedness and equity) paid in respect thereof exceeds $2,500,000; and provided further that in no event shall the formation or establishment of a Subsidiary or the capitalization of or transfer to such Subsidiary of any existing assets or business of a Borrower or any Subsidiary constitute an Acquisition.

“ Administrative Agents ” means Domestic Administrative Agent and Canadian Administrative Agent.

“ Administrative Agent’s Office ” means, with respect to any Administrative Agent, such Administrative Agent’s address and, as appropriate, account as set forth on Schedule 10.02 , or such other address or account as such Administrative Agent may from time to time notify the Borrowers and the Lenders.

“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“ Affiliate ” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. “ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto. Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote 10% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.

“ Aggregate Canadian Commitments ” means the Commitments of all the Canadian Lenders with respect to the Canadian Loans, the Canadian Letters of Credit and the Acceptances, which shall not exceed $20,000,000 in the aggregate, subject to Section 2.15 .

“ Aggregate Domestic Commitments ” means the Commitments of all the Domestic Lenders with respect to the Domestic Loans and the Domestic Letters of Credit, which shall not exceed $260,000,000 in the aggregate, subject to Section 2.15 .

“ Aggregate Pro Rata Share ” means at any time, with respect to each Lender, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is such Lender’s aggregate Commitments and the denominator of which is the sum of the Aggregate Domestic Commitments and the Aggregate Canadian Commitments, in each case immediately prior to any termination of the Commitments.

“ Agreement ” means this Credit Agreement.

“ Applicable Rate ” means, from time to time, the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agents pursuant to Section 6.02(b) :

 

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Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day of the month immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b) ; provided , however , that if no Compliance Certificate is delivered when due in accordance with such Section, then upon the request of the Required Lenders Pricing Level 1 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered until the first Business Day after the delivery of a Compliance Certificate demonstrating that a different Pricing Level is required. The Applicable Rate in effect from the Closing Date through the date of delivery of the Compliance Certificate for the fiscal year ended on June 30, 2009 shall be based on Pricing Level 3.

“ Approved Debt Issuance ” means an issuance after the Closing Date by a Borrower of Indebtedness not otherwise permitted under Section 7.03 on terms reasonably acceptable to the Required Lenders.

“ Arrangers ” means BAS and U.S. Bank, in their capacity as joint lead arrangers and joint book managers.

“ Assignment and Assumption ” means an Assignment and Assumption substantially in the form of Exhibit F .

“ Attorney Costs ” means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel and the reasonable allocated cost of internal legal services and all reasonable expenses and disbursements of internal counsel.

“ Attributable Indebtedness ” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

“ Audited Financial Statements ” means the audited consolidated balance sheet of the Domestic Borrower and its Subsidiaries for the fiscal year ended June 30, 2009, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Domestic Borrower and its Subsidiaries, including the notes thereto.

“ Auto-Renewal Letter of Credit ” has the meaning specified in Section 2.04(b)(iii) .

“ Availability Period ” means the period from and including the Closing Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

 

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“ Average Effective Discount Rate ” means the lesser of (a) the applicable CDOR Rate plus seven and one-half one hundredths of one percent (0.075%) per annum and (b)(i) in respect of any Acceptances to be purchased by a Schedule I Lender pursuant hereto, the arithmetic average of the discount rates (calculated on an annual basis and rounded to the nearest one-hundredth of 1%, with five-thousandths of 1% being rounded up) quoted by each Schedule I Reference Bank at or about 10:00 a.m. (Toronto time) as the discount rate at which such Schedule I Reference Bank would purchase, on the relevant Drawing Date, its own bankers’ acceptances having an aggregate Face Amount equal to and with a term to maturity the same as the Acceptances to be acquired by such Schedule I Reference Bank on such Drawing Date or (ii) in respect of any Acceptances to be purchased by any Canadian Lender other than a Schedule I Lender pursuant hereto, the arithmetic average of the discount rates (calculated on an annual basis and rounded to the nearest one-hundredth of 1%, with five-thousandths of 1% being rounded up) quoted by each Other Reference Lender at or about 10:00 a.m. (Toronto time) as the discount rate at which such Other Reference Lender would purchase, on the relevant Drawing Date, its own bankers’ acceptances having an aggregate Face Amount equal to and with a term to maturity the same as the Acceptances to be acquired by such Other Reference Lender on such Drawing Date. If any Schedule I Reference Bank or Other Reference Lender fails to provide its quotation to the Canadian Administrative Agent, the Average Effective Discount Rate shall be determined on the basis of the quotation by the other Schedule I Reference Bank(s) or Other Reference Lender(s), as applicable.

“ Bank of America ” means Bank of America, N.A. and its successors.

“ Bank of America Canada ” means Bank of America, N.A., acting through its Canada Branch, and its successors.

“ BAS ” means Banc of America Securities LLC.

“ Base Rate ” means for any day a fluctuating rate per annum equal to the highest of (a) in the case of Domestic Loans, the Federal Funds Rate plus 1/2 of 1%, and in the case of Canadian Loans, the average rate for 30 day Canadian Dollar bankers’ acceptances that appears on the Reuters Screen CDOR Page at 10:00 a.m. (Toronto time) on that day, plus 0.75% per annum, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America (in the case of Domestic Loans) as its “prime rate” for loans in Dollars or Bank of America Canada (in the case of Canadian Loans) as its “prime rate” for loans in Canadian Dollars and (c) the Eurodollar Rate as displayed at 11:00 a.m. (London time) on such day (or if such day is not a Business Day, on the preceding Business Day) for a one month Interest Period plus 1.00%. The “prime rate” is a rate set by Bank of America or Bank of America Canada (as applicable) based upon 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, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America or Bank of America Canada (as applicable) shall take effect at the opening of business on the day specified in the public announcement of such change.

“ Base Rate Committed Loan ” means a Committed Loan that is a Base Rate Loan.

“ Base Rate Loan ” means a Loan that bears interest based on the Base Rate.

 

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“ Borrower Materials ” has the meaning specified in Section 6.02 .

“ Borrowers ” has the meaning specified in the introductory paragraph hereto.

“ Borrower Account ” has the meaning specified in Section 2.13(h) .

“ Borrowing ” means a Committed Borrowing or a Swing Line Borrowing, as the context may require.

“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office of the Domestic Administrative Agent is located and, if such day relates to any Canadian Loan or Canadian Letter of Credit, means any such day other than a day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, New York City or the province where the Administrative Agent’s Office of the Canadian Administrative Agent is located, and, in either case, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“ Canadian Administrative Agent ” means Bank of America Canada in its capacity as Canadian administrative agent under any of the Loan Documents, or any Canadian Lender which is a successor Canadian administrative agent hereunder.

“ Canadian Borrower ” means Everest Colleges Canada, Inc.

“ Canadian Dollar ” and “ Cdn. $ ” mean lawful money of Canada.

“ Canadian L/C Issuer ” means Bank of America Canada in its capacity as issuer of Canadian Letters of Credit hereunder, or if Bank of America Canada shall have resigned as Canadian Administrative Agent, any other Canadian Lender and any successor issuer of Canadian Letters of Credit hereunder.

“ Canadian Lender ” means any Lender identified as a Canadian Lender on Schedule 2.01 as amended or modified from time to time in accordance with this Agreement.

“ Canadian Letter of Credit ” means any Letter of Credit issued by the Canadian L/C Issuer for the account of the Canadian Borrower.

“ Canadian Loan ” means any Loan extended by a Canadian Lender to the Canadian Borrower.

“ Canadian Pension Plan ” means a “pension plan,” “plan” or similar arrangement which is subject to applicable pension benefits legislation in any jurisdiction of Canada and is applicable to employees resident in Canada of a Borrower or a Subsidiary.

“ Canadian Subsidiary ” means any Subsidiary that is organized under the laws of Canada or any political subdivision of Canada.

 

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“ Canadian Swing Line ” means the revolving credit facility made available by the Canadian Swing Line Lender pursuant to Section 2.05(a)(ii) .

“ Canadian Swing Line Borrowing ” means a borrowing of a Canadian Swing Line Loan pursuant to Section 2.05(b)(ii) .

“ Canadian Swing Line Lender ” means Bank of America Canada in its capacity as provider of Canadian Swing Line Loans, or any Canadian Lender which is a successor swing line lender hereunder.

“ Canadian Swing Line Loan ” has the meaning specified in Section 2.05(a)(ii) .

“ Canadian Swing Line Loan Notice ” means a notice of a Canadian Swing Line Borrowing pursuant to Section 2.05(b)(ii) , which, if in writing, shall be substantially in the form of Exhibit B .

“ Canadian Swing Line Sublimit ” means an amount equal to Ten Million Dollars ($10,000,000). The Canadian Swing Line Sublimit is part of, and not in addition to, the Aggregate Canadian Commitments.

“ Canadian Welfare Plan ” means any medical, health, hospitalization, insurance or other similar employee benefit or welfare plan, agreement or arrangement applicable to employees resident in Canada of a Borrower or a Subsidiary.

“ Cash Collateralize ” means to pledge and deposit with or deliver to the applicable Administrative Agent, for the benefit of the applicable L/C Issuer and the applicable Lenders, as collateral for the L/C Obligations and/or the Obligations respecting the Acceptances, cash or deposit account balances pursuant to documentation in form and substance satisfactory to such Administrative Agent and L/C Issuer (which documents are hereby consented to by such Lenders). Derivatives of such term have corresponding meanings. The applicable Borrower hereby grants to such Administrative Agent, for the benefit of such L/C Issuer and Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America (in the case of Domestic Letters of Credit) or Bank of America Canada (in the case of Canadian Letters of Credit and Acceptances).

“ CDOR Rate ” means, on any day, (a) for Acceptances which have a term to maturity of 1, 2, 3 or 6 months, the annual rate of interest determined by the Canadian Administrative Agent which is equal to the average of the yield rates per annum applicable to Cdn.$ bankers’ acceptances with a term to maturity the same as the Acceptances proposed to be issued by the Canadian Borrower, displayed and identified as such on the Reuters Screen Page CDOR at approximately 10:00 a.m. (Toronto time) on such day, or if such day is not a Business Day, then on the immediately preceding Business Day; and (b) for Acceptances which do not have a term to maturity of 1, 2, 3 or 6 months, the discount rate calculated by the Canadian Administrative Agent by a linear interpolation between the rates determined in (a) above for the closest maturity dates ending before and after the maturity date of the Acceptances proposed to be issued by the Canadian Borrower; provided , however if such rates do not appear on the Reuters Screen Page CDOR, then the “CDOR Rate” shall be the arithmetic average of the discount rates (calculated

 

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on an annual basis and rounded to the nearest one-hundredth of 1%, with five-thousandths of 1% being rounded up) quoted by each Schedule I Reference Bank at or about 10:00 a.m. (Toronto time) as the discount rate at which such Schedule I Reference Bank would purchase, on such day, its own bankers’ acceptances having a Face Amount equal to and with a term to maturity the same as the Acceptances proposed to be issued by the Canadian Borrower.

“ Change of Control ” means, with respect to any Person, an event or series of events by which:

(a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “ option right ”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 35% or more of the equity securities of such Person entitled to vote for members of the board of directors or equivalent governing body of such Person on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or

(b) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of such Person cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii) and clause (iii), any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors).

“ Closing Date ” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the case of Section 4.01(b) , waived by the Person entitled to receive the applicable payment).

“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.

“ Commitment ” means, as to each Domestic Lender with respect to Domestic Loans and Domestic Letters of Credit, and as to each Canadian Lender with respect to Canadian Loans, Canadian Letters of Credit and Acceptances, its obligation to (a) make Committed Loans to a Borrower pursuant to Section 2.01 , (b) purchase participations in L/C Obligations, (c) purchase participations in Swing Line Loans, and (d) in the case of the Canadian Lenders, purchase and

 

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discount Acceptances, in an aggregate principal amount at any one time outstanding not to exceed the amount(s) set forth opposite such Lender’s name on Schedule 2.01 , as such amount(s) may be adjusted from time to time in accordance with this Agreement.

“ Committed Borrowing ” means a borrowing consisting of simultaneous Committed Loans of the same Type and, in the case of Eurodollar Rate Committed Loans, having the same Interest Period.

“ Committed Canadian Loan ” has the meaning specified in Section 2.01(b) .

“ Committed Domestic Loan ” has the meaning specified in Section 2.01(a) .

“ Committed Loan ” means a Committed Domestic Loan or a Committed Canadian Loan.

“ Committed Loan Notice ” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Committed Loans, pursuant to Section 2.02(a) , which, if in writing, shall be substantially in the form of Exhibit A .

“ Compliance Certificate ” means a certificate substantially in the form of Exhibit E .

“ Consolidated Adjusted EBITDA ” means, for any period, an amount equal to Consolidated EBITDA for any Person and its Subsidiaries, as the same has been adjusted to give effect to factually supportable and identifiable cost savings and expenses which have been approved by the Required Lenders and, in addition and without duplication, such other cost savings and expenses which would otherwise be accounted for as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Exchange Act of 1934, as amended, as if such cost savings or expenses were realized on the first day of the applicable period (collectively, the “ S-X Adjustments ”), it being understood that any S-X Adjustments are not subject to the approval of Required Lenders.

“ Consolidated EBITDA ” means, for any period, for any Person and its Subsidiaries on a consolidated basis, an amount equal to the sum of (a) Consolidated Net Income, (b) Consolidated Interest Charges deducted in determining such Consolidated Net Income, (c) the amount of taxes, based on or measured by income, used or included in the determination of such Consolidated Net Income, (d) the amount of depreciation and amortization expense deducted in determining such Consolidated Net Income, including amortization of deferred debt financing fees and expenses, (e) all non-cash charges and extraordinary charges deducted in determining such Consolidated Net Income, and (f) minus all nonrecurring gains and extraordinary gains included in such Consolidated Net Income.

“ Consolidated Fixed Charges ” means, for any period, for the Domestic Borrower and its Subsidiaries on a consolidated basis, the sum of, without duplication, (a) all cash interest expense (excluding fees and expenses payable in connection with the closing of the Loan Documents), and (b) all rental expense, including all real estate rental expense (determined in accordance with GAAP).

 

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“ Consolidated Fixed Charges Coverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Pro Forma Adjusted EBITR for the period of the four prior fiscal quarters ending on such date to (b) Consolidated Fixed Charges for such period.

“ Consolidated Funded Indebtedness ” means, as of any date of determination, for the Domestic Borrower and its Subsidiaries on a consolidated basis, the sum of, without duplication, (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including the Loans hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Indebtedness, (c) all obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments that support Indebtedness in respect of borrowed money or capital leases that have been funded and not repaid, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) all Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which the Domestic Borrower or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to the Domestic Borrower or such Subsidiary, (f) Attributable Indebtedness in respect of capital leases and Synthetic Lease Obligations, and (g) without duplication, all Guarantees with respect to Indebtedness of the types specified in subsections (a) through (f) above of Persons other than the Domestic Borrower or any Subsidiary.

“ Consolidated Interest Charges ” means, for any period, for any Person and its Subsidiaries on a consolidated basis, the sum of (a) all interest expense of such Person and its Subsidiaries for such period (net of all interest income), and, without duplication, (b) the portion of rent expense of such Person and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP, excluding fees and expenses payable in connection with the closing of the Loan Documents and the amortization of debt financing fees and expenses.

“ Consolidated Leverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated Pro Forma Adjusted EBITDA of the Domestic Borrower and its Subsidiaries for the period of the four fiscal quarters ending on such date.

“ Consolidated Net Income ” means, for any period, for any Person and its Subsidiaries on a consolidated basis, the net income of such Person and its Subsidiaries from continuing operations (such net income to be exclusive of (a) non-cash charges comprising (i) impairment of assets, (ii) cumulative effects of changes in accounting principles (all of which are to be in accordance with GAAP) and (iii) any non-cash stock compensation, including, without limitation, any effects arising from the application of rule 123(R) of the Financial Accounting Standards Board; and (b) extraordinary gains or losses).

“ Consolidated Net Worth ” means, as of any date of determination, for the Domestic Borrower and its Subsidiaries on a consolidated basis, Shareholders’ Equity of the Domestic Borrower and its Subsidiaries on that date.

 

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“ Consolidated Pro Forma Adjusted EBITDA ” means, for any period, an amount equal to Consolidated Adjusted EBITDA of the Domestic Borrower and its Subsidiaries, as the same has been adjusted by the Domestic Borrower (such adjustment to be approved by the Domestic Administrative Agent, it being understood that any S-X Adjustments by the Domestic Borrower shall not be subject to the Domestic Administrative Agent’s approval) on a pro forma basis to give effect to the Consolidated Adjusted EBITDA of any Person or assets acquired during such period (for which, and to the extent, financial statements are available) pursuant to a Permitted Acquisition (and not subsequently sold or otherwise disposed of by the Domestic Borrower or any of its Subsidiaries during such period) as if the Person or assets so acquired were owned by the Domestic Borrower for such period.

“ Consolidated Pro Forma Adjusted EBITR ” means, for any period, an amount equal to Consolidated Pro Forma Adjusted EBITDA of the Domestic Borrower and its Subsidiaries, minus the amount of depreciation and amortization expense deducted in determining Consolidated Net Income, including amortization of deferred financing fees and expenses for such period and plus, without duplication, the consolidated rental expense, including without limitation all real estate-related rental expense, of the Domestic Borrower and its Subsidiaries (determined in accordance with GAAP) for such period.

“ Consolidated Tangible Assets ” means, as of any date, the total assets of the Domestic Borrower and its Subsidiaries on a consolidated basis minus all Intangible Assets of the Domestic Borrower and its Subsidiaries on a consolidated basis.

“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any material agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“ Control ” has the meaning specified in the definition of “ Affiliate .”

“ Corinthian Properties ” means Corinthian Property Group, Inc., a Florida corporation and wholly-owned Subsidiary of the Domestic Borrower.

“ Credit Extension ” means a Borrowing, an L/C Credit Extension or, in the case of the Canadian Borrower, the creation of Acceptances by the Canadian Lenders.

“ DBNA ” means the Depository Bills and Notes Act (Canada), as amended from time to time, and any successor statute.

“ Debtor Relief Laws ” means the Bankruptcy Code of the United States, the Bankruptcy and Insolvency Act (Canada) and the Companies’ Creditors Arrangement Act (Canada) and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States, Canada or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“ Default ” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

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“ Default Rate ” means an interest rate equal to (a) the Base Rate plus (b) the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per annum; provided , however , that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each case to the fullest extent permitted by applicable Laws.

“ Defaulting Lender ” means any Lender that (a) has failed to fund any portion of the Committed Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder, or has failed to accept any Acceptance required to be accepted by it hereunder, within one Business Day of the date required to be funded or accepted by it hereunder, (b) has otherwise failed to pay over to an Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding or has had a receiver, conservator, trustee or custodian appointed for it, it being understood that if a Lender has been turned over to the FDIC (or a similar regulatory entity) for the purpose of sale or liquidation it shall be a Defaulting Lender.

“ Disposition ” or “ Dispose ” means the sale by a Borrower or any of its Subsidiaries to any Person other than any of its wholly-owned Subsidiaries of (i) any of the stock of any of Subsidiaries, (ii) substantially all of the assets of any division or line of business of a Borrower or any of its Subsidiaries, (iii) any notes or accounts receivable or any rights associated therewith, or (iv) any assets (whether tangible or intangible) of a Borrower or any of its Subsidiaries outside of the ordinary course of business (other than any such other assets to the extent that the aggregate value of such assets sold in any single transaction or related series of transactions is equal to $2,000,000 or less).

“ DOE ” means the United States Department of Education.

“ DOE Ratio ” means the Domestic Borrower’s composite score as of any fiscal year end, as determined by the Secretary of the DOE pursuant to Section 668.172 of the regulations promulgated by the DOE under Title IV.

“ Dollar ” and “ $ ” mean lawful money of the United States.

“ Dollar Equivalents ” means, with respect to any amounts of Canadian Dollars, an equivalent amount of Dollars determined at the rate of exchange quoted by the Canadian Administrative Agent on the date of determination for the spot purchase in the foreign exchange market of Canadian Dollars with Dollars.

“ Domestic Administrative Agent ” means Bank of America in its capacity as domestic administrative agent under any of the Loan Documents, or any successor domestic administrative agent.

“ Domestic Borrower ” has the meaning specified in the introductory paragraph hereto.

“ Domestic L/C Issuer ” means Bank of America in its capacity as issuer of Domestic Letters of Credit hereunder, or if Bank of America shall have resigned as Domestic

 

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Administrative Agent, any other Domestic Lender and any successor issuer of Domestic Letters of Credit hereunder.

“ Domestic Lender ” means any Lender identified as a Domestic Lender on Schedule 2.01 as amended or modified from time to time in accordance with this Agreement.

“ Domestic Letter of Credit ” means any Letter of Credit issued by the Domestic L/C Issuer for the account of the Domestic Borrower.

“ Domestic Loan ” means any Loan extended by a Domestic Lender to the Domestic Borrower.

“ Domestic Subsidiary ” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

“ Domestic Swing Line ” means the revolving credit facility made available by the Domestic Swing Line Lender pursuant to Section 2.05(a)(i) .

“ Domestic Swing Line Borrowing ” means a borrowing of a Domestic Swing Line Loan pursuant to Section 2.05(b)(i) .

“ Domestic Swing Line Lender ” means Bank of America in its capacity as provider of Domestic Swing Line Loans, or any successor domestic swing line lender hereunder.

“ Domestic Swing Line Loan ” has the meaning specified in Section 2.05(a)(i) .

“ Domestic Swing Line Loan Notice ” means a notice of a Domestic Swing Line Borrowing pursuant to Section 2.05(b)(i) , which, if in writing, shall be substantially in the form of Exhibit B.

“ Domestic Swing Line Sublimit ” means an amount equal to Fifteen Million Dollars ($15,000,000). The Domestic Swing Line Sublimit is part of, and not in addition to, the Aggregate Domestic Commitments.

“ Drafts ” means, at any time, either a depository bill within the meaning of the DBNA or a blank bill of exchange, within the meaning of the Bills of Exchange Act (Canada), drawn by the Canadian Borrower on a Canadian Lender and bearing such distinguishing letters and numbers as such Canadian Lender may determine, but which at such time, except as otherwise provided herein, has not been completed or accepted by such Canadian Lender.

“ Drawing ” means the acceptance of Acceptances by a Canadian Lender pursuant to Section 2.03 .

“ Drawing Date ” means any Business Day fixed pursuant to Section 2.03(b) for a Drawing.

“ Drawing Fee ” means, with respect to the Drafts drawn by the Canadian Borrower hereunder and accepted by any Canadian Lender as provided herein on any Drawing Date, an

 

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amount equal to the Applicable Rate per annum on the aggregate Face Amount of such Drafts calculated on the basis of the term to maturity of such Draft and a year of 365 days.

“ Drawing Notice ” has the meaning assigned to that term in Section 2.03(b) .

“ Drawing Purchase Price ” means, in respect of Acceptances to be purchased by a Canadian Lender, the difference between (i) the result (rounded to the nearest whole cent, with one-half of one cent being rounded up) obtained by dividing the aggregate Face Amount of such Acceptances by the sum of one plus the product of (x) the applicable Average Effective Discount Rate multiplied by (y) a fraction the numerator of which is the term of such Acceptances and denominator of which is 365; and (ii) the applicable Drawing Fee.

“ Eligible Assignee ” has the meaning specified in Section 10.06(h) .

“ Environmental Laws ” means any and all Federal, state, provincial, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrowers, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with any Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by any Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer

 

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Plan; or (f) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Borrower or any ERISA Affiliate.

“ Eurodollar Rate ” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated from time to time by the Domestic Administrative Agent in the case of Domestic Loans and the Canadian Administrative Agent in the case of Canadian Loans) at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period, for deposits in Dollars in the case of Domestic Loans and Canadian Dollars in the case of Canadian Loans (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the applicable Administrative Agent to be the rate at which deposits in Dollars or Canadian Dollars as applicable for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America or Bank of America Canada as applicable and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

“ Eurodollar Rate Committed Loan ” means a Committed Loan that bears interest at a rate based on the Eurodollar Rate.

“ Eurodollar Rate Loan ” means a Eurodollar Rate Committed Loan.

“ Event of Default ” has the meaning specified in Section 8.01 .

“ Existing Credit Agreement ” has the meaning specified in second introductory paragraph hereto.

“ Existing Letters of Credit ” means the letters of credit issued for the account of the Borrowers by the L/C Issuers and listed on Schedule 2.04 annexed hereto which will, as of the Closing Date, be deemed outstanding as Letters of Credit issued pursuant to Section 2.04 .

“ Face Amount ” means, in respect of a Draft or an Acceptance, as the case may be, the amount payable to the holder thereof on its maturity.

“ Federal Funds Rate ” means, for any day, the rate per annum 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 on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of

 

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1%) charged to Bank of America on such day on such transactions as determined by the Domestic Administrative Agent.

“ Fee Letters ” means the letter agreements dated August 11, 2009, among the Domestic Borrower, Bank of America and BAS and between the Domestic Borrower and U.S. Bank.

“ Foreign Lender ” has the meaning specified in Section 10.14(a) .

“ Foreign Subsidiary ” means any Subsidiary that is organized under the laws of any jurisdiction other than a political subdivision of the United States, Canada or a political subdivision of Canada.

“ FRB ” means the Board of Governors of the Federal Reserve System of the United States.

“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“ GAAP Consolidated Net Income ” means, for any period, for any Person and its Subsidiaries on a consolidated basis, the net income of such Person and its Subsidiaries as determined in accordance with GAAP.

“ Governmental Authority ” means any nation or government, any state, province or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“ Guarantee ” means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if

 

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not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“ Guarantors ” means, with respect to the Obligations of the Domestic Borrower, collectively, each Domestic Subsidiary of the Domestic Borrower that is a Material Subsidiary and any other Domestic Subsidiary that directly owns a Material Subsidiary, whether now existing or hereafter arising, and means, with respect to the Obligations of the Canadian Borrower, collectively, the Domestic Borrower, each Domestic Subsidiary thereof that is a Material Subsidiary and any other Domestic Subsidiary that directly owns a Material Subsidiary and each Canadian Subsidiary (other than the Canadian Borrower) of a Borrower that is a Material Subsidiary and any other Canadian Subsidiary that directly owns a Material Subsidiary, in both cases whether now existing or hereafter existing, subject (in the case of a new Material Subsidiary) to the time delays set forth in the first parenthetical of Section 6.12 .

“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“ Impacted Lender ” means (a) a Defaulting Lender or (b) a Lender (i) that has defaulted in fulfilling its monetary obligations generally under other syndicated credit facilities and such defaults are continuing or (ii) as to which an entity that controls such Lender has been deemed insolvent (by a Governmental Authority) or become the subject to a bankruptcy or other similar proceeding.

“ Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements, bankers’ acceptances or other similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c) net obligations of such Person under any Swap Contract in an amount equal to the Swap Termination Value thereof;

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business);

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

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(f) Attributable Indebtedness of such Person in respect of capital leases and Synthetic Lease Obligations; and

(g) all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“ Indemnitees ” has the meaning set forth in Section 10.04(b) .

“ Intangible Assets ” means assets that are considered to be intangible assets that are not subject to amortization under GAAP, including goodwill, trade names, trademarks, patents, franchises and licenses to the extent that such items are not subject to amortization under GAAP.

“ Interbank Reference Rate ” means the interest rate expressed as a percentage per annum which is customarily used by the Canadian Administrative Agent when calculating interest due by it or owing to it arising from correction of errors between it and other chartered banks.

“ Interest Payment Date ” means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date.

“ Interest Period ” means as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or (in the case of any Eurodollar Rate Committed Loan) converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by a Borrower in its Committed Loan Notice; provided that:

(i) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Rate Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(ii) any Interest Period pertaining to a Eurodollar Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(iii) no Interest Period shall extend beyond the scheduled Maturity Date.

 

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“ Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person of any of the following: (a) the purchase or other acquisition of 50% or less of the capital stock, partnership interests, membership interests or equity (or securities convertible into or exchangeable for such capital stock, partnership interests, membership interests or equity) of any Person; (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition of assets of another Person that does not constitute an Acquisition; provided that in no event shall an Acquisition constitute an Investment. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“ IP Rights ” has the meaning set forth in Section 5.16 .

“ IRS ” means the United States Internal Revenue Service.

“ ISP ” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“ Laws ” means, collectively, all international, foreign, Federal, state, provincial and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“ L/C Advance ” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Pro Rata Share.

“ L/C Borrowing ” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Committed Borrowing.

“ L/C Credit Extension ” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.

“ L/C Issuers ” means, collectively, the Domestic L/C Issuer and the Canadian L/C Issuer.

“ L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07 . For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

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“ Lender ” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the L/C Issuers and the Swing Line Lenders.

“ Lending Office ” means, as to any Lender, the office or offices of such Lender described as such on Schedule 10.02 , or such other office or offices as a Lender may from time to time notify the Borrowers and the Administrative Agents.

“ Letter of Credit ” means any letter of credit issued hereunder. A Letter of Credit may be a commercial letter of credit or a standby letter of credit.

“ Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the applicable L/C Issuer.

“ Letter of Credit Expiration Date ” means the first anniversary of the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

“ Letter of Credit Sublimit ” means, with respect to the Domestic Letters of Credit, an amount equal to Fifty Million Dollars ($50,000,000) and, with respect to the Canadian Letters of Credit, an amount equal to Fifteen Million Dollars ($15,000,000). The applicable Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Domestic Commitments and the Aggregate Canadian Commitments, respectively.

“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing).

“ Loan ” means an extension of credit by a Lender to a Borrower under Article II in the form of a Committed Loan or a Swing Line Loan.

“ Loan Documents ” means this Agreement, each Note, the Fee Letter, the Security Documents and any Swap Contracts executed with a Lender or any of its Affiliates.

“ Loan Parties ” means, collectively, each Borrower and each Guarantor.

“ Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the business, results of operation or condition (financial or otherwise) of the Loan Parties taken as a whole; (b) a material impairment of the ability of the Loan Parties, taken as a whole, to perform their obligations under the Loan Documents; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

“ Material Subsidiary ” means, at any time, any Subsidiary of a Borrower that owns more than $1,000,000 of assets or that had more than $1,000,000 of revenue for the four prior fiscal quarters; provided that the total consolidated assets of Subsidiaries that are not Material Subsidiaries shall not exceed $2,000,000 at any time, and provided further that the total

 

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consolidated revenue for the prior four fiscal quarters of all Subsidiaries that are not Material Subsidiaries shall not exceed $2,000,000.

“ Maturity Date ” means October 1, 2012.

“ Multiemployer Plan ” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which any Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding three calendar years, has made or been obligated to make contributions.

“ Nonrenewal Notice Date ” has the meaning specified in Section 2.04(b)(iii) .

“ Note ” means a promissory note made by a Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit C .

“ Obligations ” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, Acceptance or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“ Organization Documents ” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“ Other Reference Lenders ” means those Canadian Lenders identified as an Other Reference Lender on Schedule 2.01 .

“ Outstanding Amount ” means (i) with respect to Committed Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Committed Loans and Swing Line Loans, as the case may be, occurring on such date; (ii) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date; and (iii) with respect to Acceptances on any date, the aggregate Acceptance Usage.

 

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“ Participant ” has the meaning specified in Section 10.06(d) .

“ PBGC ” means the Pension Benefit Guaranty Corporation.

“ Pension Plan ” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by any Borrower or any ERISA Affiliate or to which any Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately preceding five plan years.

“ Permitted Acquisitions ” means Acquisitions by any Borrower or any of its Subsidiaries of Persons and/or assets that meet each of the following criteria:

(i) for each such Acquisition, the prior, effective written consent or approval to such Acquisition of the board of directors or equivalent governing body of the other party or parties has been obtained;

(ii) the Borrowers shall have complied with the requirements of Section 6.13 , if applicable;

(iii) the Persons or assets to be acquired are in (or used in) the Post-Secondary Education Business or other businesses permitted under Section 7.07 hereof;

(iv) if the total consideration paid (including assumed Indebtedness, if any) exceeds Fifteen Million Dollars ($15,000,000) and, if Person to be acquired is required to be accredited, it must be accredited by any applicable Governmental Authorities and accrediting agencies and in full regulatory compliance therewith in all material respects;

(v) immediately before and after giving effect to the proposed Acquisition, no Default or Event of Default shall have occurred and be continuing and each Borrower and each other Loan Party must be in compliance with the terms of the Loan Documents and with all material regulatory requirements;

(vi) within thirty (30) days following consummation of such Acquisition or, in the case of an Acquisition of a publicly-held Canadian Subsidiary, within four (4) months following the consummation of such Acquisition, the acquired Person (if any) shall execute the documents described in Section 6.12 and the Borrowers shall execute or cause the execution of a pledge agreement in substantially the form of the Second Amended and Restated Pledge Agreement (Canadian Borrower Obligations) or Second Amended and Restated Pledge Agreement (Domestic Borrower and Canadian Borrower Obligations) with respect to the acquired Person’s capital stock, membership interest or partnership interest, if applicable; and

(vii) immediately after giving effect to the Acquisition, (a) the pro forma Consolidated Leverage Ratio of the Domestic Borrower and its Subsidiaries shall be less than 2.25 to 1.00 and (b) there shall be at least $25,000,000 of unused Commitments hereunder.

 

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“ Permitted Liens ” means the following types of Liens (excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA):

(i) Liens for taxes, assessments or governmental charges or claims the payment of which is not, at the time, required by Section 6.04 ;

(ii) statutory Liens of landlords, statutory Liens of banks and rights of set-off, statutory Liens of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens imposed by law, in each case incurred in the ordinary course of business (a) for amounts not yet overdue or (b) for amounts that are overdue and that (in the case of any such amounts overdue for a period in excess of 30 days) are being contested in good faith by appropriate proceedings, so long as such reserves or other appropriate provisions, if any, as shall be required by GAAP shall have been made for any such contested amounts;

(iii) Liens incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, trade contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

(iv) any attachment or judgment Lien not constituting an Event of Default under Section 8.01(h) ;

(v) leases or subleases granted to third parties and not interfering in any material respect with the ordinary conduct of the business of a Borrower or any of its Subsidiaries;

(vi) easements, rights-of-way, restrictions, encroachments, and other minor defects or irregularities in title, in each case which do not and will not interfere in any material respect with the ordinary conduct of the business of a Borrower or any of its Subsidiaries;

(vii) any (a) interest or title of a lessor or sublessor under any lease permitted by this Agreement, (b) restriction or encumbrance that the interest or title of such lessor or sublessor may be subject to, or (c) subordination of the interest of the lessee or sublessee under such lease to any restriction or encumbrance referred to in the preceding clause (b);

(viii) Liens arising from filing UCC or PPSA financing statements relating solely to leases permitted by this Agreement;

(ix) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

(x) any zoning or similar Law or right reserved to or vested in any governmental office or agency to control or regulate the use of any real property;

 

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(xi) Liens securing obligations (other than obligations representing Indebtedness for borrowed money) under operating, reciprocal easement or similar agreements entered into in the ordinary course of business of a Borrower and its Subsidiaries;

(xii) Licenses of patents, trademarks and other intellectual property rights granted by a Borrower or any of its Subsidiaries in the ordinary course of business and not interfering in any material respect with the ordinary conduct of the business of such Borrower or such Subsidiary; and

(xiii) Liens or reservations contained in the original grant from the Crown in respect of Canadian real property.

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“ Plan ” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.

“ Platform ” has the meaning specified in Section 6.02 .

“ Post-Secondary Education Business ” means the business of operating eligible institutions of higher education in the U.S. as defined in the Higher Education Act of 1965, as amended, and the business of operating similar institutions of higher education in Canada.

“ Pro Rata Share ” means at any time, with respect to each Domestic Lender in regard to the Domestic Loans and the Domestic Letters of Credit, or with respect to each Canadian Lender in regard to the Canadian Loans, the Canadian Letters of Credit and the Acceptances, a fraction (expressed as a percentage, carried out to the ninth decimal place), the numerator of which is the amount of the Commitment of such Lender at such time in regard to the Domestic Loans and the Domestic Letters of Credit or in regard to the Canadian Loans, the Canadian Letters of Credit and the Acceptances, and the denominator of which is the amount of the Aggregate Domestic Commitments or the Aggregate Canadian Commitments as applicable at such time. The initial Pro Rata Share of each Lender is set forth opposite the name of such Lender on Schedule 2.01 .

“ Register ” has the meaning set forth in Section 10.06(c) .

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

“ Request for Credit Extension ” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, (c) with respect to a Domestic Swing Line Loan, a

 

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Domestic Swing Line Loan Notice, (d) with respect to a Canadian Swing Line Loan, a Canadian Swing Line Loan Notice and (e) with respect to an Acceptance, a Drawing Notice.

“ Required Lenders ” means, as of any date of determination, Lenders having more than 50% of the sum of the Aggregate Domestic Commitments and the Aggregate Canadian Commitments or, if the Commitments have been terminated, Lenders holding in the aggregate more than 50% of the Total Outstandings (taking into account funded participations in L/C Obligations and Swing Line Loans); provided that the Commitment of, and the outstanding principal amount of the Total Outstandings (taking into account funded participations in L/C Obligations and Swing Line Loans) held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

“ Responsible Officer ” means the chief executive officer, president, executive vice president, senior vice president, chief financial officer, treasurer or assistant treasurer of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other equity interest of the Domestic Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other equity interest or of any option, warrant or other right to acquire any such capital stock or other equity interest.

“ Schedule I Lender ” means any Canadian Lender that is a bank referred to in Schedule I to the Bank Act (Canada), S.C. 1991, c.46, as amended.

“ Schedule I Reference Banks ” means those Canadian Lenders identified as a Schedule I Reference Bank on Schedule 2.01 .

“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“ Second Amended and Restated Guaranty (Canadian Borrower Obligations) ” means that certain Second Amended and Restated Guaranty (Canadian Borrower Obligations) of even date herewith from the Guarantors of the Obligations of the Canadian Borrower, as the same may be amended, restated or otherwise modified from time to time.

“ Second Amended and Restated Pledge Agreement (Canadian Borrower Obligations) ” means a Second Amended and Restated Pledge Agreement (Canadian Borrower Obligations) from the Canadian Borrower and each Guarantor of the Obligations of the Canadian Borrower, as applicable, in respect of the pledge of shares held by the Canadian Borrower and each Guarantor of the Obligations of the Canadian Borrower in Material Subsidiaries of the Canadian Borrower, in the form of Exhibit D hereto.

 

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“ Second Amended and Restated Guaranty (Domestic Borrower Obligations) ” means that certain Second Amended and Restated Guaranty (Domestic Borrower Obligations) from the Guarantors of the Obligations of the Domestic Borrower, as the same may be amended, restated or otherwise modified from time to time.

“ Second Amended and Restated Pledge Agreement (Domestic Borrower and Canadian Borrower Obligations) ” means that certain Second Amended and Restated Pledge Agreement (Domestic Borrower and Canadian Borrower Obligations) from the Domestic Borrower and each Guarantor of the Obligations of the Domestic Borrower, in respect of the pledge of shares held by the Domestic Borrower and each Guarantor of the Obligations of the Domestic Borrower in Material Subsidiaries of the Domestic Borrower, as the same may be amended, restated or otherwise modified from time to time.

“ Security Documents ” means the Second Amended and Restated Guaranty (Canadian Borrower Obligations), the Second Amended and Restated Guaranty (Domestic Borrower Obligations), the Second Amended and Restated Pledge Agreement (Canadian Borrower Obligations), the Second Amended and Restated Pledge Agreement (Domestic Borrower and Canadian Borrower Obligations) and all other collateral security documents hereafter executed in favor of any Administrative Agent for the benefit of the Lenders.

“ Shareholders’ Equity ” means, as of any date of determination, consolidated shareholders’ equity of the Domestic Borrower and its Subsidiaries as of that date determined in accordance with GAAP.

“ Solvent ” means, as to any Person at any time, that (i) the fair value of the property of such Person is greater than the amount of such Person’s liabilities (whether subordinated, contingent, unmatured, unliquidated or otherwise); (ii) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (iii) such Person is able to pay its debts and other liabilities as they mature in the normal course of business; (iv) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (v) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute unreasonably small capital.

“ Student Note Receivables ” means, the aggregate outstanding principal amount of loans to students or former students of any Borrower and its Subsidiaries.

“ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Domestic Subsidiary, Canadian Subsidiary or Foreign Subsidiary or Subsidiaries of a Borrower.

 

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“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.

“ Swap Termination Value ” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

“ Swing Line Borrowing ” means a Domestic Swing Line Borrowing or a Canadian Swing Line Borrowing.

“ Swing Line Lenders ” means the Domestic Swing Line Lender and the Canadian Swing Line Lender.

“ Swing Line Loan ” means a Domestic Swing Line Loan or a Canadian Swing Line Loan.

“ Swing Line Loan Notice ” means a Domestic Swing Line Loan Notice or Canadian Swing Line Loan Notice.

“ Syndication Agent ” means U.S. Bank, in its sole capacity as syndication agent hereunder.

“ Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“ S-X Adjustment ” has the meaning set forth in the definition of the term “Consolidated Adjusted EBITDA”.

 

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“ Title IV ” means Title IV of the Higher Education Action of 1965, as amended.

“ Total Outstandings ” means the aggregate Outstanding Amount of all Loans, all L/C Obligations and Acceptances.

“ Type ” means with respect to a Committed Loan to a particular Borrower, its character as a Base Rate Loan or a Eurodollar Rate Loan.

“ Unfunded Pension Liability ” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

“ United States ” and “ U.S. ” mean the United States of America.

“ Unreimbursed Amount ” has the meaning set forth in Section 2.04(c)(i) .

“ U.S. Bank ” means U.S. Bank National Association.

1.02 Other Interpretive Provisions . With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

(b) (i) The words “ herein ,” “ hereto ,” “ hereof ” and “ hereunder ” and words of similar import when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

(ii) Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears.

(iii) The term “ including ” is by way of example and not limitation.

(iv) The term “ documents ” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form.

(c) In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ;” the words “ to ” and “ until ” each mean “ to but excluding ;” and the word “ through ” means “ to and including .”

(d) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

(e) Any limitations herein expressed in terms of Dollars shall, to the extent such limitations apply to the sums of Canadian Loans, Canadian Letters of Credit or Acceptances

 

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available hereunder (as denominated in Canadian Dollars), be calculated upon the Dollar Equivalents of such sums.

1.03 Accounting Terms . (a) All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements (subject to adjustment as provided in Section 1.03(b)).

(b) If at any time after the date hereof any change in GAAP (or in the Borrower’s application of GAAP) would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrowers or the Required Lenders shall so request, the Administrative Agents, the Lenders and the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (or in the Borrower’s application of GAAP) (subject to the approval of the Required Lenders); provided that , until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrowers shall provide to the Administrative Agents and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

(c) If at any time any regulatory change in the DOE Ratio would affect the computation of the DOE Ratio or Section 7.11(d) , and either the Borrowers or the Required Lenders shall so request, the Administrative Agents, the Lenders and the Borrowers shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in the DOE Ratio; provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with regulations referred to in the definition of the DOE Ratio prior to such change therein.

1.04 Rounding . Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.05 References to Agreements and Laws . Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.

 

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1.06 Times of Day . Unless otherwise specified, all references to times of day herein shall be references to Pacific time (daylight or standard, as applicable), except where such references pertain to Canadian Loans, Canadian Letters of Credit or Acceptances, in which case such references shall be to Eastern time (daylight or standard, as applicable).

1.07 Letter of Credit Amounts . Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided , however , that with respect to any Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

2.01 Committed Loans .

(a) Subject to the terms and conditions set forth herein, each Domestic Lender severally agrees to make loans (each such loan, a “ Committed Domestic Loan ”) to the Domestic Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Domestic Lender’s Commitment with respect to Domestic Loans and Domestic Letters of Credit; provided , however , that after giving effect to any Committed Borrowing, (i) the Total Outstandings with respect to Domestic Loans and Domestic Letters of Credit shall not exceed the Aggregate Domestic Commitments, and (ii) the aggregate Outstanding Amount of the Committed Domestic Loans of any Domestic Lender, plus such Domestic Lender’s Pro Rata Share of the Outstanding Amount of all L/C Obligations with respect to Domestic Letters of Credit, plus such Domestic Lender’s Pro Rata Share of the Outstanding Amount of all Domestic Swing Line Loans shall not exceed such Lender’s Commitment with respect to Domestic Loans and Domestic Letters of Credit. Within the limits of each Domestic Lender’s Commitment, and subject to the other terms and conditions hereof, the Domestic Borrower may borrow under this Section 2.01(a) , prepay under Section 2.06 , and reborrow under this Section 2.01(a) . Committed Domestic Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein. Committed Domestic Loans shall be funded and repaid in Dollars.

(b) Subject to the terms and conditions set forth herein, each Canadian Lender severally agrees to make loans in Canadian Dollars (each such loan, a “ Committed Canadian Loan ”) to the Canadian Borrower from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Canadian Lender’s Commitment with respect to Canadian Loans and Canadian Letters of Credit; provided , however , that after giving effect to any Committed Borrowing, (i) the sum of (A) Total Outstandings with respect to Canadian Loans and Canadian Letters of Credit and (B) the aggregate Acceptance Usage shall not exceed the Aggregate Canadian Commitments, and (ii) the aggregate Outstanding Amount of the Committed Canadian Loans of any Canadian Lender, plus such Canadian Lender’s Pro Rata Share of the Outstanding

 

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Amount of all L/C Obligations with respect to Canadian Letters of Credit, plus such Canadian Lender’s Pro Rata Share of the Outstanding Amount of all Canadian Swing Line Loans, plus such Canadian Lender’s Pro Rata Share of the aggregate Acceptance Usage shall not exceed such Lender’s Commitment with respect to Canadian Loans, Canadian Letters of Credit and Acceptances. Within the limits of each Canadian Lender’s Commitment, and subject to the other terms and conditions hereof, the Canadian Borrower may borrow under this Section 2.01(b) , prepay Committed Canadian Loans under Section 2.06 , reborrow Committed Canadian Loans under this Section 2.01(b) and request the Canadian Lenders to create Acceptances pursuant to Section 2.03 . Committed Canadian Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein. Committed Canadian Loans shall be funded and repaid in Canadian Dollars, and the aggregate sum of Committed Canadian Loans available hereunder shall be determined upon their Dollar Equivalents.

(c) If the Dollar Equivalent of the sum of Outstanding Amounts of Canadian Loans, L/C Obligations in respect of Canadian Letters of Credit and the aggregate Acceptance Usage for any reason shall exceed 100% of the Aggregate Canadian Commitments, the Canadian Borrower shall within 10 Business Days after notice from the Canadian Administrative Agent of such excess repay Canadian Loans by the amount of such excess. Amounts repaid in accordance with this Section 2.01(c) may be reborrowed in accordance with the terms and conditions of this Agreement.

2.02 Borrowings, Conversions and Continuations of Committed Loans .

(a) The Domestic Borrower may request Committed Domestic Loans by notice to the Domestic Administrative Agent, and the Canadian Borrower may request Committed Canadian Loans by notice to the Canadian Administrative Agent, all as provided below. Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Committed Loans as the same Type shall be made upon the applicable Borrower’s irrevocable notice to the applicable Administrative Agent, which may be given by telephone. Each such notice from the Domestic Borrower must be received by the Domestic Administrative Agent not later than 10:00 a.m. (i) three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans or of any conversion of Eurodollar Rate Committed Loans to Base Rate Committed Loans, and (ii) on the requested date of any Borrowing of Base Rate Committed Loans. Each such notice from the Canadian Borrower must be received by the Canadian Administrative Agent not later than (i) 1:00 p.m. three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans or of any conversion of Eurodollar Rate Committed Loans to Base Rate Committed Loans, and (ii) 11:30 a.m. on the requested date of any Borrowing of Base Rate Committed Loans. Each such telephonic notice must be confirmed promptly by delivery to the applicable Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the applicable Borrower. Each Committed Borrowing of, conversion to or continuation of Eurodollar Rate Committed Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Each Committed Borrowing of or conversion to Base Rate Committed Loans shall be in a principal amount of $500,000 or a whole multiple of $100,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the applicable Borrower is requesting a Committed Borrowing, a

 

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conversion of Committed Loans from one Type to the other, or a continuation of Eurodollar Rate Committed Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the applicable Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if such Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Committed Loans. If the applicable Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Committed Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

(b) Following receipt of a Committed Loan Notice, the applicable Administrative Agent shall promptly notify each applicable Lender of its Pro Rata Share of the applicable Committed Loans, and if no timely notice of a conversion or continuation is provided by the applicable Borrower, such Administrative Agent shall notify each such Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a Committed Borrowing, each applicable Lender shall make the amount of its Committed Loan available to the applicable Administrative Agent in immediately available funds at the applicable Administrative Agent’s Office not later than 11:00 a.m. in the case of Domestic Loans and Canadian Eurodollar Rate Committed Loans and 1:00 p.m. in the case of Canadian Base Rate Committed Loans on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01 ), the applicable Administrative Agent shall make all funds so received available to the applicable Borrower in like funds as received by such Administrative Agent by crediting the account of such Borrower on the books of Bank of America or Bank of America Canada (as applicable) with the amount of such funds or otherwise disbursing such funds in accordance with the applicable Borrower’s written instructions; provided , however , that if, on the date of a Committed Borrowing there are L/C Borrowings by such Borrower outstanding, then the proceeds of such Borrowing shall be applied, first , to the payment in full of any such L/C Borrowings, and second , to such Borrower as provided above.

(c) Except as otherwise provided herein, a Eurodollar Rate Committed Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Committed Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Committed Loans without the consent of the Required Lenders.

(d) The applicable Administrative Agent shall promptly notify the applicable Borrower and the applicable Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Committed Loans upon determination of such interest rate. The determination of the Eurodollar Rate by such Administrative Agent shall be conclusive in the absence of manifest error. The applicable Administrative Agent shall notify the applicable

 

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Borrower and the applicable Lenders of any change in the prime rate of Bank of America or Bank of America Canada (as applicable) used in determining the Base Rate promptly following the public announcement of such change if any Base Rate Loans are then outstanding.

(e) After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than eight (8) Interest Periods in effect with respect to Domestic Loans and not more than five (5) Interest Periods in effect with respect to Canadian Loans.

2.03 Acceptances .

(a) In addition to requesting Committed Canadian Loans pursuant to Section 2.01(b), the Canadian Borrower may request pursuant to this Section 2.03(a) , from time to time during the Availability Period, that the Canadian Lenders create bankers’ acceptances (each, an “ Acceptance ”) by accepting Drafts from the Canadian Borrower in an aggregate amount not exceeding each of the Canadian Lender’s Commitments; provided that the Canadian Borrower shall not request the creation and purchase of any Acceptance if, after giving effect thereto, the sum of (i) Total Outstandings with respect to Canadian Loans, Letters of Credit and Acceptance Usage would exceed the Aggregate Canadian Commitments then in effect, and no Canadian Lender shall have any obligation to create and purchase any Acceptance if, after giving effect thereto, the sum of (i) Total Outstandings with respect to Canadian Loans and Letters of Credit of such Canadian Lender plus (ii) such Canadian Lender’s Pro Rata Share of all Canadian Swing Line Loans, plus (iii) the aggregate Acceptance Usage of such Canadian Lender would exceed its Commitment with respect to Canadian Loans, Canadian Letters of Credit and Acceptances.

Each Drawing shall be in an aggregate Face Amount of not less than Cdn.$3,000,000 and in integral multiples of Cdn.$100,000 and shall consist of the creation and purchase of Acceptances by Canadian Lenders on the same day in accordance with Section 2.03 , ratably in accordance with their respective Pro Rata Shares; provided that if apportionment of Acceptances among the Canadian Lenders cannot be made on a pro rata basis in even multiples of Cdn.$100,000, the Canadian Administrative Agent shall round the allocations among Canadian Lenders consistent with the Canadian Administrative Agent’s money market practices. There shall not be more than eight (8) Drawings in effect with respect to Acceptances.

Whenever the Canadian Borrower requests the Canadian Lenders to create Acceptances, each Canadian Lender that is not permitted by applicable law or by customary market practice to accept an Acceptance (a “ Non BA Lender ”) shall, in lieu of accepting its pro rata amount of such Acceptances, make available to the Canadian Borrower on the Drawing Date a loan (a “ BA Equivalent Loan ”) in Canadian Dollars and in an amount equal to the Drawing Purchase Price of the Acceptances that the Non BA Lender would have been required to accept on the Drawing Date if it were able to accept Acceptances. To the extent not otherwise deducted in the calculation of the amount of the BA Equivalent Loan, each Non BA Lender shall also be entitled to deduct from the BA Equivalent Loan an amount equal to the Drawing Fee that would have been applicable had it been able to accept Acceptances. The BA Equivalent Loan shall have a term equal to the term of the Acceptances that the Non BA Lender would otherwise have

 

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accepted and the Canadian Borrower shall, at the end of that term, be obligated to pay the Non BA Lender an amount equal to the aggregate face amount of the Acceptances that it would otherwise have accepted. All provisions of this Agreement applicable to Acceptances and Canadian Lenders that accept Acceptances shall apply mutatis mutandis to BA Equivalent Loans and Non BA Lenders.

(b) Each Drawing shall be made on two Business Days prior written notice, given not later than 1:00 p.m. (Toronto time), by the Canadian Borrower to the Canadian Administrative Agent, which shall give each Canadian Lender prompt notice thereof and of such Canadian Lender’s ratable portion of aggregate Face Amount of the Drafts to be accepted under the Drawing. Each such notice of a Drawing (a “ Drawing Notice ”) shall be given in substantially the form of Exhibit H hereto or by telephone confirmed promptly in writing in substantially the form of Exhibit H , and shall specify therein (i) the Drawing Date; (ii) the aggregate Face Amount of Drafts to be accepted; and (iii) the maturity date for such Drafts (it being agreed and understood that the Canadian Borrower shall not request a maturity date for Drafts that would be subsequent to the Maturity Date).

Neither the Canadian Administrative Agent nor any Canadian Lender shall incur any liability to the Canadian Borrower in acting on the telephonic notice referred to above which the Canadian Administrative Agent or such Canadian Lender believes in good faith to have been given by a duly authorized officer or other person authorized to borrow on behalf of the Canadian Borrower or for otherwise acting in good faith under this Section 2.03 , and upon the creation and purchase or delivery of Acceptances pursuant to any such telephonic notice, the Canadian Borrower shall be liable with respect thereto as provided herein.

Each Drawing Notice shall be irrevocable and binding on the Canadian Borrower. The Canadian Borrower shall indemnify each Canadian Lender against any loss or expense incurred by such Canadian Lender as a result of any failure by the Canadian Borrower to fulfill or honor before the date specified for any Drawing, the applicable conditions set forth in this Section 2.03 if the Drawing, as a result of such failure, is not made on such date.

(c) Each Draft presented by the Canadian Borrower shall (i) be in an integral multiple of Cdn.$100,000; (ii) be dated the date of the Drawing; (iii) mature and be payable by the Canadian Borrower (in common with all other Drafts presented in connection with such Drawing) on a Business Day which occurs approximately 30, 60, 90 or 180 days after the date thereof or such shorter period than 180 days as agreed by the Canadian Borrower and the Canadian Administrative Agent; and (iv) be otherwise consistent with the provisions of this Agreement relating to the amounts and maturity dates thereof.

The Canadian Borrower hereby renounces, and shall not claim, any days of grace for the payment of any Acceptances.

(d) Not later than 11:00 a.m. (Toronto time) on an applicable Drawing Date, each Canadian Lender shall complete one or more Drafts dated the date of such Drawing, with the maturity date specified in the applicable Drawing Notice, accept such Drafts, and following fulfillment of any applicable conditions and as specified in the applicable Drawing Notice, purchase the Acceptances thereby created for the Drawing Purchase Price.

 

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The failure of any Canadian Lender to create and purchase or deliver Acceptances as part of any Drawing shall not relieve any other Canadian Lender of its obligation, if any, to create and purchase or deliver Acceptances hereunder, but a Canadian Lender shall not be responsible for the failure of any other Canadian Lender to create and purchase or deliver Acceptances on the Drawing Date for any Drawing.

(e) Subject to Section 2.03(b) and satisfaction of the conditions set forth in Section 4.03 , each Canadian Lender shall, before 12:00 noon (Toronto time) on the applicable Drawing Date, pay or cause to be paid the Drawing Purchase Price in respect of any Acceptances to be purchased by such Canadian Lender by depositing or causing to be deposited such amount to such account maintained by the Canadian Administrative Agent at its Administrative Agent’s Office as shall have been notified to such Canadian Lender by the Canadian Administrative Agent, in Canadian Dollars in same day funds. Promptly upon receipt of such funds, the Canadian Administrative Agent shall make such funds available to the Canadian Borrower by debiting such account (or causing such account to be debited), and (a) by crediting the Canadian Borrower’s account, as specified by the Canadian Borrower in writing to the Canadian Administrative Agent prior thereto, maintained by the Canadian Administrative Agent at its Administrative Agent’s Office (or causing such account to be credited) with like funds in the aggregate amount of such funds or (b) by wiring such funds in such amount to the account of the Canadian Borrower with another financial institution specified prior thereto by the Canadian Borrower in writing to the Canadian Administrative Agent.

Acceptances purchased by a Canadian Lender hereunder may be held by it for its own account until maturity or sold by it at any time prior thereto in any relevant market therefor in Canada, in such Canadian Lender’s sole discretion.

(f) Each Schedule I Reference Bank or Other Reference Lender, as the case may be, agrees to furnish to the Canadian Administrative Agent timely information for the purpose of determining each Average Effective Discount Rate. If any one or more of the Schedule I Reference Banks or Other Reference Lenders shall not furnish such information to the Canadian Administrative Agent, the Canadian Administrative Agent shall determine such Average Effective Discount Rate on the basis of timely information furnished by the remaining Schedule I Reference Bank or Other Reference Lender, as applicable.

The Canadian Administrative Agent shall give prompt notice to the Canadian Borrower and the Canadian Lenders of each Average Effective Discount Rate determined by the Canadian Administrative Agent for an applicable Drawing Date and the applicable discount rates, if any, furnished by each Schedule I Reference Bank and Other Reference Lender for determining any applicable Average Effective Discount Rate.

(g) The Canadian Borrower unconditionally hereby agrees to pay to the Canadian Administrative Agent for the account of each Canadian Lender, on the maturity date for each Acceptance an amount in Canadian Dollars in same day funds equal to the Face Amount of such then-maturing Acceptance.

 

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The obligation of the Canadian Borrower set forth above to pay to the Canadian Administrative Agent the Face Amount of any then-maturing Acceptance may be satisfied by paying to the Canadian Administrative Agent at or before 12:00 noon (Toronto time) on the maturity date for such Acceptance an amount in Canadian Dollars in same day funds equal to the Face Amount of such Acceptance; provided that the Canadian Borrower shall have given not less than one Business Day’s prior notice to the Canadian Administrative Agent (which shall promptly notify each Canadian Lender thereof) of its intent to pay the Canadian Administrative Agent in the manner contemplated by this sentence. The Canadian Borrower shall make each payment hereunder in respect of Acceptances by deposit of the required funds to the Canadian Administrative Agent at its Administrative Agent’s Office. Upon receipt of such payment, the Canadian Administrative Agent will promptly thereafter cause such payment to be distributed in like funds in payment of Acceptances ratably (based on the proportion that the aggregate Face Amount of Acceptances accepted by any Canadian Lender maturing on the relevant date bears to the aggregate Face Amount of Acceptances accepted by all Canadian Lenders maturing on such date) to Canadian Lenders for their account. Such payment to the Canadian Administrative Agent shall satisfy the Canadian Borrower’s obligations under any Acceptances to which it relates and each Canadian Lender that has accepted such Acceptances shall thereafter be solely responsible for the payment of such Acceptances.

The obligation of the Canadian Borrower set forth in the first paragraph of this Section 2.03(g) to pay to the Canadian Administrative Agent the Face Amount of any then-maturing Acceptance may be satisfied by the Canadian Borrower requesting that new Drafts in an amount sufficient to repay any then-maturing Acceptances be accepted and discounted by the Canadian Lenders in the manner contemplated by Section 2.03 in substitution for any then-maturing Acceptance (to the extent that such amount is otherwise available hereunder); provided that no Default or Event of Default shall have occurred and be continuing and the Canadian Borrower shall have delivered to the Canadian Administrative Agent (which shall promptly provide a copy thereof to each Canadian Lender) a duly completed Drawing Notice not later than 12:00 noon (Toronto time) one Business Day prior to such maturity date, together with any other documents, instruments, certificates and other information contemplated by Section 2.03 .

In the event the Canadian Borrower does not or cannot for any reason comply with the provisions of the two previous paragraphs with respect to the obligation of the Canadian Borrower to pay to the Canadian Administrative Agent the Face Amount of any then-maturing Acceptance, the unpaid amount due and payable in respect thereof shall be converted as of such date, and without any necessity for the Canadian Borrower to request a Committed Borrowing in accordance with Section 2.02 , to, and thereafter be outstanding as, a Base Rate Committed Loan made by Canadian Lenders in accordance with their Pro Rata Shares, and shall bear interest calculated and payable as provided in Section 2.09 .

(h) The Canadian Borrower hereby appoints each Canadian Lender, acting by any authorized signatory of such Canadian Lender, the attorney of the Canadian Borrower:

(i) to execute, for and on behalf and in the same name of the Canadian Borrower as drawer, and to endorse on its behalf, drafts in a form in accordance with Section 2.03(c) and which constitute depository bills for the purpose of the DBNA;

 

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(ii) to complete the amount, date and maturity of such Acceptances; and

(iii) to deposit such Acceptances that have been accepted by such Canadian Lender with a clearing house (as defined in the DBNA);

provided that such acts in each case are to undertaken by such Canadian Lender in accordance with instructions given to such Canadian Lender by the Canadian Borrower as provided in this Section 2.03(h) . For certainty, signatures of any authorized signatory of such Canadian Lender may be mechanically reproduced in facsimile on Acceptances issued in accordance with this Section 2.03(h) and such facsimile signatures will be binding and effective as if they had been manually executed by such authorized signatory of such Canadian Lender. Instructions from the Canadian Borrower to such Canadian Lender relating to the execution, completion, endorsement and/or discount by such Canadian Lender on behalf of the Canadian Borrower of Acceptances will be communicated by delivery of a Drawing Notice to the Canadian Administrative Agent.

(i) If the Canadian Administrative Agent determines in good faith, which determination shall be final, conclusive and binding upon the Canadian Borrower, and notifies the Canadian Borrower and each Canadian Lender that, by reason of circumstances affecting the money market (i) there is no market for Acceptances; or (ii) the demand for Acceptances is insufficient to allow the sale or trading of the Acceptances created and purchased hereunder; then:

(i) the right of the Canadian Borrower to request a Drawing shall be suspended until the Canadian Administrative Agent determines that the circumstances causing such suspension no longer exist and the Canadian Administrative Agent so notifies the Canadian Borrower and each Canadian Lender; and

(ii) any Drawing Notice which is outstanding shall be cancelled and the Drawing requested therein shall not be made.

The Canadian Administrative Agent shall promptly notify the Canadian Borrower and each Canadian Lender of the suspension of its right to request a Drawing and of the termination of any such suspension.

(j) No repayment of an Acceptance shall be made by the Canadian Borrower to a Canadian Lender prior to the maturity date thereof except that the Canadian Borrower may prepay the Canadian Administrative Agent an amount in Canadian Dollars in same day funds equal to the aggregate Face Amount of all outstanding Acceptances. The Canadian Administrative Agent shall pay each Canadian Lender its Pro Rata Share of the amount received. Any scheduled repayment shall be made (unless such repayment has been rescinded or otherwise is required to be returned by such Canadian Lender to the Canadian Borrower for any reason) in accordance with the provisions of the second paragraph of Section 2.03(g) . Any such payment or prepayment by the Canadian Borrower to the Canadian Administrative Agent shall satisfy the Canadian Borrower’s obligations under the Acceptance to which it relates and any such Canadian Lender which has accepted such Acceptance shall thereafter be solely responsible for the payment of such Acceptance and shall indemnify and hold the Canadian Borrower harmless against any liabilities, costs or expenses incurred by the

 

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Canadian Borrower as a result of any failure by such Canadian Lender to pay such Acceptance in accordance with its terms. Following the maturity and indefeasible payment of all Acceptances, each Canadian Lender shall pay to the Canadian Borrower an amount equal to the interest that would have accrued had the amount paid to that Canadian Lender been held in an account bearing interest at the rate customarily paid by that Canadian Lender on deposits of similar size and term pending payment of the Acceptances as they matured.

(k) The proceeds of any Acceptance created under this Section 2.03 shall be used in the manner and for the purposes set forth in Section 6.11 with respect to the use of proceeds of Loans.

2.04 Letters of Credit .

(a) The Letter of Credit Commitment .

(i) The Domestic Borrower may request Domestic Letters of Credit by notice to the Domestic L/C Issuer and the Domestic Administrative Agent, and the Canadian Borrower may request Canadian Letters of Credit upon notice to the Canadian L/C Issuer and the Canadian Administrative Agent, all as provided below. Subject to the terms and conditions set forth herein, (A) the applicable L/C Issuer agrees, in reliance upon the agreements of the other applicable Lenders set forth in this Section 2.04 , (1) from time to time on any Business Day during the period from the Closing Date until the Maturity Date, to issue Letters of Credit for the account of the applicable Borrower, and to amend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drafts under the Letters of Credit as required under applicable law; and (B) such Lenders severally agree to participate in Letters of Credit issued for the account of such Borrower; provided that the Domestic L/C Issuer shall not be obligated to make any L/C Credit Extension with respect to any Domestic Letter of Credit, and no Domestic Lender shall be obligated to participate in, any Domestic Letter of Credit if as of the date of such L/C Credit Extension, (x) the Total Outstandings with respect to Domestic Loans and Domestic Letters of Credit would exceed the Aggregate Domestic Commitments, (y) the aggregate Outstanding Amount of the Committed Domestic Loans of any Domestic Lender, plus such Lender’s Pro Rata Share of the Outstanding Amount of all Domestic L/C Obligations, plus such Domestic Lender’s Pro Rata Share of the Outstanding Amount of all Domestic Swing Line Loans would exceed such Lender’s Commitment with respect to Domestic Loans and Domestic Letters of Credit, or (z) the Outstanding Amount of the Domestic L/C Obligations would exceed the Letter of Credit Sublimit; provided , further, the Canadian L/C Issuer shall not be obligated to make any L/C Credit Extension with respect to any Canadian Letter of Credit, and no Canadian Lender shall be obligated to participate in any Canadian Letter of Credit if as of the date of such L/C Credit Extension (x) the Total Outstandings with respect to Canadian Loans, Canadian Letters of Credit and Acceptances would exceed the Aggregate Canadian Commitments, (y) the aggregate Outstanding Amount of the Committed Canadian Loans of any Canadian Lender, plus such Canadian Lender’s Pro Rata Share of the Outstanding Amount of all Canadian L/C Obligations, plus such Canadian Lender’s Pro Rata Share of all Acceptance Usage plus such Canadian Lender’s Pro Rata Share of the Outstanding Amount of all Canadian Swing Line Loans would exceed such Lender’s Commitment

 

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with respect to Canadian Loans, Canadian Letters of Credit and Acceptances or (z) the Outstanding Amount of Canadian L/C Obligations would exceed the Letter of Credit Sublimit. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

(ii) An L/C Issuer shall be under no obligation to issue any Letter of Credit if:

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter of Credit, or any Law applicable to such L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Issuer shall prohibit, or request that such L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which such L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Issuer in good faith deems material to it;

(B) the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance, unless the Required Lenders have approved such expiry date;

(C) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date;

(D) the issuance of such Letter of Credit would violate one or more policies of such L/C Issuer;

(E) such Letter of Credit is in a face amount less than $50,000, in the case of a commercial Letter of Credit, or $25,000, in the case of a standby Letter of Credit, or is to be denominated in a currency other than Dollars in the case of Domestic Letters of Credit and Canadian Dollars in the case of Canadian Letters of Credit; or

(F) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time an Impacted Lender hereunder, unless the applicable L/C Issuer has been provided cash collateral as contemplated by Section 2.16 or has entered into satisfactory arrangements with the applicable Borrower or such Lender to eliminate such L/C Issuer’s risk with respect to such Lender.

(iii) An L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) such L/C Issuer would have no obligation at such time to issue such Letter of

 

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Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

(b) Procedures for Issuance and Amendment of Letters of Credit .

(i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the applicable Borrower delivered to the applicable L/C Issuer (with a copy to the applicable Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of such Borrower. Such L/C Application must be received by the applicable L/C Issuer and the applicable Administrative Agent not later than 8:00 a.m. in the case of Domestic Letters of Credit and 12:00 noon in the case of Canadian Letters of Credit at least two Business Days (or such later date and time as such L/C Issuer may agree in a particular instance in its sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as such L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the applicable L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as such L/C Issuer may require.

(ii) Promptly after receipt of any Letter of Credit Application, the applicable L/C Issuer will confirm with the applicable Administrative Agent (by telephone or in writing) that such Administrative Agent has received a copy of such Letter of Credit Application from the applicable Borrower and, if not, such L/C Issuer will provide such Administrative Agent with a copy thereof. Upon receipt by such L/C Issuer of confirmation from such Administrative Agent that the requested issuance or amendment is permitted in accordance with the terms hereof, then, subject to the terms and conditions hereof, such L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the applicable Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with such L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Domestic Letter of Credit, each Domestic Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Domestic L/C Issuer a risk participation in such Domestic Letter of Credit in an amount equal to the product of such Domestic Lender’s Pro Rata Share times the amount of such Domestic Letter of Credit. Immediately upon the issuance of each Canadian Letter of Credit, each Canadian Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Canadian L/C Issuer a risk participation in such Canadian Letter of Credit in an amount equal to the product of such Canadian Lender’s Pro Rata Share times the amount of such Canadian Letter of Credit.

 

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(iii) If the applicable Borrower so requests in any Letter of Credit Application, the applicable L/C Issuer may, in it sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an “ Auto-Renewal Letter of Credit ”); provided that any such Auto-Renewal Letter of Credit must permit such L/C Issuer to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “ Nonrenewal Notice Date ”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the applicable L/C Issuer, the applicable Borrower shall not be required to make a specific request to such L/C Issuer for any such renewal. Once an Auto-Renewal Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the applicable L/C Issuer to permit the renewal of such Letter of Credit at any time prior to a date not later than the Letter of Credit Expiration Date; provided , however , that such L/C Issuer shall not permit any such renewal if (A) such L/C Issuer would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Nonrenewal Notice Date from the applicable Administrative Agent, any applicable Lender or the applicable Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied.

(iv) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the applicable L/C Issuer will also deliver to the applicable Borrower and the applicable Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c) Drawings and Reimbursements; Funding of Participations .

(i) Upon any drawing under any Letter of Credit, the applicable L/C Issuer shall notify the applicable Borrower and the applicable Administrative Agent thereof. Not later than 11:00 a.m. on the date of any payment by the applicable L/C Issuer under a Letter of Credit (each such date, an “ Honor Date ”), the applicable Borrower shall reimburse the applicable L/C Issuer through the applicable Administrative Agent in an amount equal to the amount of such drawing. If such Borrower fails to so reimburse such L/C Issuer by such time, such Administrative Agent shall promptly notify each applicable Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and such Lender’s Pro Rata Share thereof. In such event, such Borrower shall be deemed to have requested a Committed Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Domestic Commitments or Aggregate Canadian Commitments as applicable and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by an L/C Issuer or Administrative Agent pursuant to this Section 2.04(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

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(ii) Each Lender (including any Lender acting as an L/C Issuer) shall upon any notice pursuant to Section 2.04(c)(i) make funds available to the applicable Administrative Agent for the account of the applicable L/C Issuer at the applicable Administrative Agent’s Office in an amount equal to its Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by such Administrative Agent, whereupon, subject to the provisions of Section 2.04(c)(iii) , each Lender that so makes funds available shall be deemed to have made a Committed Base Rate Loan to the applicable Borrower in such amount. The applicable Administrative Agent shall remit the funds so received to the applicable L/C Issuer.

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the applicable Borrower shall be deemed to have incurred from the applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to the applicable Administrative Agent for the account of such L/C Issuer pursuant to Section 2.04(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.04 .

(iv) Until each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.04(c) to reimburse the applicable L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account of such L/C Issuer.

(v) Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse the applicable L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.04(c) , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other right which such Lender may have against such L/C Issuer, the Borrowers or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Lender’s obligation to make Committed Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02 . Any such reimbursement shall not relieve or otherwise impair the obligation of the applicable Borrower to reimburse the applicable L/C Issuer for the amount of any payment made by such L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi) If any Lender fails to make available to the applicable Administrative Agent for the account of the applicable L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(ii) , such L/C Issuer shall be entitled to recover from such Lender (acting through such Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on

 

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which such payment is immediately available to such L/C Issuer at a rate per annum equal to the Federal Funds Rate (in the case of the Domestic L/C Issuer) or the Interbank Reference Rate (in the case of the Canadian L/C Issuer) from time to time in effect. A certificate of an L/C Issuer submitted to any Lender (through the applicable Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

(d) Repayment of Participations .

(i) At any time after an L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.04(c) , if the applicable Administrative Agent receives for the account of such L/C Issuer any payment related to such Letter of Credit (whether directly from the applicable Borrower or otherwise, including proceeds of Cash Collateral applied thereto by such Administrative Agent), or any payment of interest thereon, such Administrative Agent will distribute to such Lender its Pro Rata Share thereof in the same funds as those received by such Administrative Agent.

(ii) If any payment received by an Administrative Agent for the account of an L/C Issuer pursuant to Section 2.04(c)(i) is required to be returned, each applicable Lender shall pay to such Administrative Agent for the account of such L/C Issuer its Pro Rata Share thereof on demand of such Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate (in the case of the Domestic L/C Issuer) or the Interbank Reference Rate (in the case of the Canadian L/C Issuer) from time to time in effect.

(e) Obligations Absolute . The obligation of each Borrower to reimburse the applicable L/C Issuer for each drawing under a Letter of Credit, and to repay each L/C Borrowing and each drawing under a Letter of Credit that is refinanced by a Borrowing of Committed Loans, shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other agreement or instrument relating thereto;

(ii) the existence of any claim, counterclaim, set-off, defense or other right that such Borrower may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), such L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii) any draft, demand, certificate or other document presented under such 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; or any loss or delay in the

 

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transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv) any payment by such L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by such L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, such Borrower;

provided , that if the payment by such L/C Issuer under the applicable Letter of Credit shall have constituted gross negligence or willful misconduct of such L/C Issuer under the circumstances in question, such Borrower shall retain its right to bring a separate action against such L/C Issuer after such Borrower has made such reimbursement.

The applicable Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with such Borrower’s instructions or other irregularity, such Borrower will immediately notify the applicable L/C Issuer. Such Borrower shall be conclusively deemed to have waived any such claim against such L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f) Role of L/C Issuers . Each Lender and the Borrowers agree that, in paying any drawing under a Letter of Credit, the L/C Issuers shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuers, the Administrative Agents, any of their respective Related Parties, nor any of the respective correspondents, participants or assignees of the L/C Issuers shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Letter of Credit Application. Each Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude such Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuers, the Administrative Agents, any of their respective Related Parties, nor any of the respective correspondents, participants or assignees of the L/C Issuers, shall be liable or responsible for any of the matters described in clauses (i) through (v) of Section 2.04(e) ; provided , however , that anything in such clauses to the contrary notwithstanding, a Borrower may have a claim against an L/C Issuer, and an L/C Issuer may be liable to a Borrower, to the extent, but only to

 

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the extent, of any direct, as opposed to consequential or exemplary, damages suffered by such Borrower which such Borrower proves were caused by such L/C Issuer’s willful misconduct or gross negligence or such L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuers may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuers shall not be responsible for 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 thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

(g) Cash Collateral . Upon the request of the applicable Administrative Agent, (i) if an L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Maturity Date, (A) any Letter of Credit issued by such L/C Issuer may for any reason remain outstanding and partially or wholly undrawn, or (B) any amount remains available to be drawn under any Letter of Credit by reason of the operation of Section 3.14 of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance), the applicable Borrower shall immediately Cash Collateralize the then Outstanding Amount of all such L/C Borrowings or Letters of Credit, as the case may be (in an amount equal to such Outstanding Amount of such Letter of Credit Borrowings or Letters of Credit, as applicable, determined as of the date of such L/C Borrowing or the Maturity Date, as the case may be).

(h) Applicability of ISP98 and UCP . Unless otherwise expressly agreed by the applicable L/C Issuer and Borrower when a Letter of Credit is issued, (i) the rules of the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance) shall apply to each standby Letter of Credit, and (ii) the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce (the “ ICC ”) at the time of issuance shall apply to each commercial Letter of Credit.

(i) Letter of Credit Fees . Each Borrower shall pay to the applicable Administrative Agent for the account of each applicable Lender (other than Defaulting Lenders) in accordance with its Pro Rata Share a Letter of Credit fee for each Letter of Credit issued for such Borrower’s account equal to the Applicable Rate times the average daily maximum amount available to be drawn under each such Letter of Credit (whether or not such maximum amount is then in effect under such Letter of Credit). Such letter of credit fees shall be computed on a quarterly basis in arrears. Such letter of credit fees shall be due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, and on the Letter of Credit Expiration Date. If there is any change in the Applicable Rate during any quarter, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

 

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(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuers . Each Borrower shall pay directly to the applicable L/C Issuer for its own account a fronting fee with respect to each Letter of Credit issued for such Borrower’s account in the amounts and at the times specified in the Fee Letter. Fronting fees with respect to commercial Letters of Credit shall be paid upon the issuance thereof and at the time of any increase in the amount available to be drawn thereunder, and fronting fees with respect to standby Letters of Credit shall be paid quarterly in arrears. In addition, each Borrower shall pay directly to the applicable L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of such L/C Issuer relating to letters of credit as from time to time in effect. Such fees and charges are due and payable on demand and are nonrefundable.

(k) Conflict with Letter of Credit Application . In the event of any conflict between the terms hereof and the terms of any Letter of Credit Application, the terms hereof shall control.

(l) Existing Letters of Credit . Notwithstanding anything to the contrary herein, as of the Closing Date, all of the Existing Letters of Credit shall be deemed to be Letters of Credit issued hereunder and shall be subject to all of the terms and provisions of this Agreement, including all terms and provisions applicable to Letters of Credit under this Agreement. Each Lender agrees that its obligations with respect to Letters of Credit pursuant to this Section 2.04 shall include the Existing Letters of Credit as of the Closing Date. With respect to each Existing Letter of Credit, for the period commencing on the Closing Date to and including the expiration date of any such Existing Letter of Credit, the applicable Borrower shall pay all fees and commissions set forth in Section 2.04(i) at the times and in the manner set forth therein.

2.05 Swing Line Loans .

(a)(i) The Domestic Swing Line . Subject to the terms and conditions set forth herein, the Domestic Swing Line Lender agrees to make loans (each such loan, a “ Domestic Swing Line Loan ”) to the Domestic Borrower from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Domestic Swing Line Sublimit, notwithstanding the fact that such Domestic Swing Line Loans, when aggregated with the Outstanding Amount of Committed Loans of the Domestic Swing Line Lender in its capacity as a Domestic Lender of Committed Domestic Loans, may exceed the amount of such Lender’s Commitment regarding Committed Domestic Loans; provided , however , that after giving effect to any Domestic Swing Line Loan, (i) the aggregate Outstanding Amount of all Domestic Loans and L/C Obligations regarding Domestic Letters of Credit shall not exceed the Aggregate Domestic Commitments, and (ii) the aggregate Out