exv10w2



 






Exhibit 10.2


EXECUTION COPY





 










CREDIT AGREEMENT




dated as of




January 4, 2008




among




APOLLO GROUP, INC.




The Lenders Party Hereto




BANK OF AMERICA, N.A. and BNP PARIBAS

as Co-Documentation Agents




WELLS FARGO BANK, N.A.

as Syndication Agent




and




JPMORGAN CHASE BANK, N.A.

as Administrative Agent




 






J.P. MORGAN SECURITIES INC.

as Sole Bookrunner and Sole Lead Arranger





 





 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	 	Page	 
	ARTICLE I Definitions

	 
	 	 	 	 	 	 
	SECTION 1.01.

	 	Defined Terms
	 	 	1	 
	SECTION 1.02.

	 	Classification of Loans and Borrowings
	 	 	20	 
	SECTION 1.03.

	 	Terms Generally
	 	 	20	 
	SECTION 1.04.

	 	Accounting Terms; GAAP
	 	 	21	 
	SECTION 1.05.

	 	Regulatory Changes in the Consolidated DOE Ratio
	 	 	21	 
	 
	 	 	 	 	 	 
	ARTICLE II The Credits	 	 	21	 
	 
	 	 	 	 	 	 
	SECTION 2.01.

	 	Commitments
	 	 	21	 
	SECTION 2.02.

	 	Loans and Borrowings
	 	 	21	 
	SECTION 2.03.

	 	Requests for Revolving Borrowings
	 	 	22	 
	SECTION 2.04.

	 	Determination of Dollar Amounts
	 	 	23	 
	SECTION 2.05.

	 	Swingline Loans
	 	 	23	 
	SECTION 2.06.

	 	Letters of Credit
	 	 	24	 
	SECTION 2.07.

	 	Funding of Borrowings
	 	 	28	 
	SECTION 2.08.

	 	Interest Elections
	 	 	29	 
	SECTION 2.09.

	 	Termination and Reduction of Commitments
	 	 	30	 
	SECTION 2.10.

	 	Repayment of Loans; Evidence of Debt
	 	 	31	 
	SECTION 2.11.

	 	Prepayment of Loans	 	 	31	 
	SECTION 2.12.

	 	Fees
	 	 	32	 
	SECTION 2.13.

	 	Interest
	 	 	33	 
	SECTION 2.14.

	 	Alternate Rate of Interest
	 	 	34	 
	SECTION 2.15.

	 	Increased Costs
	 	 	34	 
	SECTION 2.16.

	 	Break Funding Payments
	 	 	35	 
	SECTION 2.17.

	 	Taxes
	 	 	36	 
	SECTION 2.18.

	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	 	 	37	 
	SECTION 2.19.

	 	Mitigation Obligations; Replacement of Lenders
	 	 	39	 
	SECTION 2.20.

	 	Expansion Option
	 	 	39	 
	SECTION 2.21.

	 	Market Disruption
	 	 	40	 
	SECTION 2.22.

	 	Judgment Currency
	 	 	41	 
	SECTION 2.23.

	 	Senior Debt
	 	 	41	 
	 
	 	 	 	 	 	 
	ARTICLE III Representations and Warranties	 	 	41	 
	 
	 	 	 	 	 	 
	SECTION 3.01.

	 	Organization; Powers; Subsidiaries
	 	 	41	 
	SECTION 3.02.

	 	Authorization; Enforceability
	 	 	42	 
	SECTION 3.03.

	 	Governmental Approvals; No Conflicts
	 	 	42	 
	SECTION 3.04.

	 	Financial Condition; No Material Adverse Change
	 	 	42	 
	SECTION 3.05.

	 	Properties
	 	 	42	 
	SECTION 3.06.

	 	Litigation and Environmental Matters
	 	 	43	 
	SECTION 3.07.

	 	Compliance with Laws and Agreements
	 	 	43	 
	SECTION 3.08.

	 	Investment Company Status
	 	 	43	 
	SECTION 3.09.

	 	Taxes
	 	 	43	 
	SECTION 3.10.

	 	ERISA
	 	 	43	 
	SECTION 3.11.

	 	Disclosure
	 	 	43	 






 









 





Table of Contents

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	 	Page	 
	SECTION 3.12.

	 	Federal Reserve Regulations
	 	 	44	 
	SECTION 3.13.

	 	Liens
	 	 	44	 
	SECTION 3.14.

	 	No Default
	 	 	44	 
	SECTION 3.15.

	 	No Burdensome Restrictions
	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE IV Conditions	 	 	44	 
	 
	 	 	 	 	 	 
	SECTION 4.01.

	 	Effective Date
	 	 	44	 
	SECTION 4.02.

	 	Each Credit Event
	 	 	45	 
	 
	 	 	 	 	 	 
	ARTICLE V Affirmative Covenants	 	 	46	 
	 
	 	 	 	 	 	 
	SECTION 5.01.

	 	Financial Statements and Other Information
	 	 	46	 
	SECTION 5.02.

	 	Notices of Material Events
	 	 	47	 
	SECTION 5.03.

	 	Existence; Conduct of Business
	 	 	47	 
	SECTION 5.04.

	 	Payment of Obligations
	 	 	48	 
	SECTION 5.05.

	 	Maintenance of Properties; Insurance
	 	 	48	 
	SECTION 5.06.

	 	Books and Records; Inspection Rights
	 	 	48	 
	SECTION 5.07.

	 	Compliance with Laws and Material Contractual Obligations
	 	 	48	 
	SECTION 5.08.

	 	Use of Proceeds
	 	 	48	 
	SECTION 5.09.

	 	Subsidiary Guaranty
	 	 	48	 
	 
	 	 	 	 	 	 
	ARTICLE VI Negative Covenants	 	 	49	 
	 
	 	 	 	 	 	 
	SECTION 6.01.

	 	Indebtedness
	 	 	49	 
	SECTION 6.02.

	 	Liens
	 	 	51	 
	SECTION 6.03.

	 	Fundamental Changes and Asset Sales
	 	 	52	 
	SECTION 6.04.

	 	Investments, Loans, Advances, Guarantees and Acquisitions
	 	 	53	 
	SECTION 6.05.

	 	Swap Agreements
	 	 	55	 
	SECTION 6.06.

	 	Transactions with Affiliates
	 	 	55	 
	SECTION 6.07.

	 	Restricted Payments
	 	 	55	 
	SECTION 6.08.

	 	Restrictive Agreements
	 	 	56	 
	SECTION 6.09.

	 	Subordinated Indebtedness and Amendments to Subordinated
Indebtedness Documents
	 	 	56	 
	SECTION 6.10.

	 	Sale and Leaseback Transactions
	 	 	57	 
	SECTION 6.11.

	 	Financial Covenants	 	 	57	 
	 
	 	 	 	 	 	 
	ARTICLE VII Events of Default	 	 	58	 
	 
	 	 	 	 	 	 
	ARTICLE VIII The Administrative Agent	 	 	60	 
	 
	 	 	 	 	 	 
	ARTICLE IX Miscellaneous	 	 	61	 
	 
	 	 	 	 	 	 
	SECTION 9.01.

	 	Notices
	 	 	61	 
	SECTION 9.02.

	 	Waivers; Amendments
	 	 	62	 
	SECTION 9.03.

	 	Expenses; Indemnity; Damage Waiver
	 	 	63	 
	SECTION 9.04.

	 	Successors and Assigns
	 	 	65	 






ii









 





Table of Contents

(continued)




	 	 	 	 	 	 	 
	 	 	 	 	 	Page	 
	SECTION 9.05.

	 	Survival
	 	 	67	 
	SECTION 9.06.

	 	Counterparts; Integration; Effectiveness
	 	 	67	 
	SECTION 9.07.

	 	Severability
	 	 	68	 
	SECTION 9.08.

	 	Right of Setoff
	 	 	68	 
	SECTION 9.09.

	 	Governing Law; Jurisdiction; Consent to Service of Process
	 	 	68	 
	SECTION 9.10.

	 	WAIVER OF JURY TRIAL
	 	 	69	 
	SECTION 9.11.

	 	Headings
	 	 	69	 
	SECTION 9.12.

	 	Confidentiality
	 	 	69	 
	SECTION 9.13.

	 	USA PATRIOT Act
	 	 	70	 
	 
	 	 	 	 	 	 
	ARTICLE X

	 
	 	 	 	 	 	 
	COLLECTION ALLOCATION MECHANISM EXCHANGE







iii









 





Table of Contents

(continued)




	 	 	 	 	 
	 	 	 	 	Page
	SCHEDULES:
	 	 	 	 
	 
	 	 	 	 
	Schedule 2.01 – Commitments	 	 
	Schedule 2.02 – Mandatory Cost	 	 
	Schedule 3.01 – Subsidiaries	 	 
	Schedule 3.06(b) – Litigation	 	 
	Schedule 6.01 – Existing Indebtedness	 	 
	Schedule 6.02 – Existing Liens	 	 
	Schedule 6.04 – Existing Investments	 	 
	Schedule 6.08 – Restrictive Agreements	 	 
	 
	 	 	 	 
	EXHIBITS:
	 	 	 	 
	 
	 	 	 	 
	Exhibit A – Form of Assignment and Assumption	 	 
	Exhibit B-1 – Form of Opinion of Latham & Watkins LLP	 	 
	Exhibit B-2 – Form of Opinion of Quarles & Brady LLP	 	 
	Exhibit C – Form of Increasing Lender Supplement	 	 
	Exhibit D – Form of Augmenting Lender Supplement	 	 
	Exhibit E – List of Closing Documents	 	 
	Exhibit F – Form of Subsidiary Guaranty	 	 
	Exhibit G – Form of Compliance Certificate	 	 






iv









 





          CREDIT AGREEMENT (this “Agreement”) dated as of January 4, 2008 among APOLLO GROUP,
INC., the LENDERS from time to time party hereto, BANK OF AMERICA, N.A. and BNP PARIBAS, as
Co-Documentation Agents, WELLS FARGO BANK, N.A., as Syndication Agent and JPMORGAN CHASE BANK,
N.A., as Administrative Agent.




          The parties hereto agree as follows:




ARTICLE I




Definitions




          SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:




          “ABR”, when used in reference to any Loan or Borrowing, refers to a Loan, or the Loans
comprising such Borrowing, bearing interest at a rate determined by reference to the Alternate Base
Rate.




          “Adjusted LIBO Rate” means, with respect to any Eurocurrency Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the sum of (i) (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory
Reserve Rate plus, (ii) without duplication, and to the extent the same has not already been
accounted for in the Statutory Reserve Rate, in the case of Loans by a Lender from its office or
branch in the United Kingdom, the Mandatory Cost.




          “Administrative Agent” means JPMorgan Chase Bank, N.A. (including its branches and
affiliates), in its capacity as administrative agent for the Lenders hereunder.




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




          “Affiliate” means, with respect to a specified 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.




          “Agreed Currencies” means (i) Dollars, (ii) euro, (iii) Pounds Sterling (iv) Canadian
Dollars and (v) any other Foreign Currency agreed to by the Administrative Agent and each of the
Lenders.




          “Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a)
the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day
plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.




          “Apollo Global” means Apollo Global, Inc., a Delaware corporation and a Subsidiary of
the Borrower.




          “Applicable Lender” is defined in Section 2.06(d).




 









 








          “Applicable Percentage” means, (i) with respect to any Multicurrency Tranche Lender,
its Multicurrency Tranche Percentage and (ii) with respect to any Dollar Tranche Lender, its Dollar
Tranche Percentage. If the Commitments under a Tranche have terminated or expired, the Applicable
Percentage shall be determined based upon the Commitments under such Tranche most recently in
effect giving effect to any assignment.




          “Applicable Rate” means, for any day, with respect to any Eurocurrency Revolving Loan,
or with respect to the facility fees payable hereunder, as the case may be, the applicable rate per
annum set forth below under the caption “Eurocurrency Spread” or “Facility Fee Rate”, as the case
may be, based upon the Leverage Ratio applicable on such date:




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Eurocurrency	 	 
	 	 	Leverage Ratio:	 	Spread	 	Facility Fee Rate
	Category 1:
	 	 	< 0.50x	 	 	 	0.50	%	 	 	0.125	%
	Category 2:
	 	30.50x but <1.00x	 	 	0.60	%	 	 	0.15	%
	Category 3:
	 	31.00x but <1.50x	 	 	0.725	%	 	 	0.15	%
	Category 4:
	 	 	31.50x	 	 	 	0.825	%	 	 	0.175	%






     For purposes of the foregoing,




     (i) if at any time the Borrower fails to deliver the Financials on or before the date
the Financials are due pursuant to Section 5.01, Category 4 shall be deemed applicable for
the period commencing three (3) Business Days after the required date of delivery and ending
on the date which is three (3) Business Days after the Financials are actually delivered,
after which the Category shall be determined in accordance with the table above as
applicable;




     (ii) adjustments, if any, to the Category then in effect shall be effective three (3)
Business Days after the Administrative Agent has received the applicable Financials (it
being understood and agreed that each change in Category shall apply during the period
commencing on the effective date of such change and ending on the date immediately preceding
the effective date of the next such change); and




     (iii) notwithstanding the foregoing, Category 1 shall be deemed to be applicable until
the Administrative Agent’s receipt of the applicable Financials for the Borrower’s first
fiscal quarter ending after the Effective Date and adjustments to the Category then in
effect shall thereafter be effected in accordance with the preceding paragraphs.



          “Approved Fund” has the meaning assigned to such term in Section 9.04.




          “Approximate Equivalent Amount” of any currency with respect to any amount of Dollars
shall mean the Equivalent Amount of such currency with respect to such amount of Dollars on or as
of such date, rounded up to the nearest amount of such currency as determined by the Administrative
Agent from time to time in a manner consistent with such determination made by the Administrative
Agent under similar credit facilities.




          “Assignment and Assumption” means an assignment and assumption agreement entered into
by a Lender and an assignee (with the consent of any party whose consent is required by Section
9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form
approved by the Administrative Agent.




2









 








          “Augmenting Lender” has the meaning assigned to such term in Section 2.20.




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




          “Banking Services” means each and any of the following bank services provided to the
Borrower or any Subsidiary by any Lender or any of its Affiliates: (a) commercial credit cards, (b)
stored value cards and (c) treasury management services (including, without limitation, controlled
disbursement, automated clearinghouse transactions, return items, overdrafts and interstate
depository network services).




          “Banking Services Agreement” means any agreement entered into by the Borrower or any
Subsidiary in connection with Banking Services.




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




          “Borrower” means Apollo Group, Inc., an Arizona corporation.




          “Borrowing” means (a) Revolving Loans of the same Class, Type and currency made,
converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a
single Interest Period is in effect or (b) a Swingline Loan.




          “Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.03.




          “Burdensome Restrictions” means any consensual encumbrance or restriction of the type
described in clause (a) or (b) of Section 6.08 (without giving effect to any exceptions described
in clauses (i) through (iv) of such Section 6.08).




          “Business Day” means any day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed;
provided that, when used in connection with a Eurocurrency Loan, the term “Business
Day” shall also exclude any day on which banks are not open for dealings in Agreed Currencies
in the London interbank market or the principal financial center of the country in which payment or
purchase of such Agreed Currency can be made (and, if the Borrowings or LC Disbursements which are
the subject of a borrowing, drawing, payment, reimbursement or rate selection are denominated in
euro, the term “Business Day” shall also exclude any day on which the TARGET payment system is not
open for the settlement of payments in euro).




          “CAM” means the mechanism for the allocation and exchange of interests in the
Specified Obligations and collections thereunder established under Article X.




          “CAM Exchange” means the exchange of the Lenders’ interests provided for in Article X.




          “CAM Exchange Date” means the first date on which there shall occur (a) any event
referred to in (h), (i) or (j) of Article VII in respect of the Borrower or (b) an acceleration of
Loans pursuant to Article VII.




          “CAM Percentage” means, as to each Lender, a fraction, expressed as a decimal, of
which (a) the numerator shall be the aggregate Dollar Amount (determined on the basis of Exchange





3











 




Rates on the CAM Exchange Date) of the Specified Obligations owed to such Lender immediately
prior to the CAM Exchange Date and (b) the denominator of which shall be the Dollar Amount (as so
determined) of the Specified Obligations owed to all the Lenders.




          “Canadian Dollars” means the lawful currency of Canada.




          “Capital Lease Obligations” of any Person means the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in accordance with GAAP.




          “Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any Person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the
date hereof), other than Permitted Holders, of Equity Interests representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the
Borrower; (b) occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Borrower by Persons who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by directors so nominated; (c) the acquisition of direct or
indirect Control of the Borrower by any Person or group; or (d) the occurrence of a change in
control, or other similar provision, as defined in any agreement or instrument evidencing any
Material Indebtedness (triggering a default or mandatory prepayment, which default or mandatory
prepayment has not been waived in writing).




          “Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending
office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.




          “Class”, when used in reference to (a) any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are US Tranche Revolving Loans, Multicurrency Tranche
Revolving Loans or Swingline Loans and (b) any Commitment, refers to whether such Commitment is a
Dollar Tranche Commitment or a Multicurrency Tranche Commitment.




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




          “Co-Documentation Agent” means each of Bank of America, N.A. and BNP Paribas in its
capacity as co-documentation agent for the credit facility evidenced by this Agreement.




          “Commitment” means a Dollar Tranche Commitment or a Multicurrency Tranche Commitment.




          “Computation Date” is defined in Section 2.04.




          “Consolidated DOE Ratio” means Borrower’s and its Subsidiaries’ (on a consolidated
basis) 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.




4









 








          “Consolidated EBITDA” means Consolidated Net Income plus, (x) to the extent deducted
from revenues in determining Consolidated Net Income, (i) Consolidated Interest Expense, (ii)
expense for taxes paid or accrued, (iii) depreciation, (iv) amortization, (v) non-cash losses
incurred other than in the ordinary course of business and (vi) share-based non-cash compensation
expense minus, (y) to the extent included in Consolidated Net Income, (vii) interest income, (viii)
non-cash gains realized other than in the ordinary course of business and (ix) any cash payments
made during such period in respect of the item described in clause (x)(vi) above subsequent to the
fiscal quarter in which the relevant share-based non-cash compensation expense was incurred, all
calculated for the Borrower and its Subsidiaries in accordance with GAAP on a consolidated basis.
For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal
quarters (each, a “Reference Period”), (i) if at any time during such Reference Period the
Borrower or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for
such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the property that is the subject of such Material Disposition for such Reference
Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable
thereto for such Reference Period, and (ii) if during such Reference Period the Borrower or any
Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period
shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred
on the first day of such Reference Period. As used in this definition, “Material Acquisition”
means any acquisition of property or series of related acquisitions of property that (a)
constitutes (i) assets comprising all or substantially all or any significant portion of a business
or operating unit of a business, or (ii) all or substantially all of the common stock or other
Equity Interests of a Person, and (b) involves the payment of consideration by the Borrower and its
Subsidiaries in excess of $5,000,000; and “Material Disposition” means any sale, transfer or
disposition of property or series of related sales, transfers, or dispositions of property that
yields gross proceeds to the Borrower or any of its Subsidiaries in excess of $5,000,000.




          “Consolidated EBITDAR” means, for any period, Consolidated EBITDA for such period
plus, to the extent deducted from revenues in determining Consolidated Net Income,
Consolidated Rent Expense for such period, all calculated for the Borrower and its Subsidiaries in
accordance with GAAP on a consolidated basis.




          “Consolidated Interest Expense” means, with reference to any period, the interest
expense (including without limitation interest expense under Capital Lease Obligations that is
treated as interest in accordance with GAAP) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period with respect to all outstanding Indebtedness of the Borrower and
its Subsidiaries allocable to such period in accordance with GAAP.




          “Consolidated Net Income” means, with reference to any period, the net income (or
loss) from continuing operations of the Borrower and its Subsidiaries calculated in accordance with
GAAP on a consolidated basis (without duplication) for such period.




          “Consolidated Rent Expense” means, with reference to any period, all payments under
Operating Leases to the extent deducted in computing Consolidated Net Income, calculated in
accordance with GAAP for the Borrower and its Subsidiaries on a consolidated basis for such period.




          “Consolidated Tangible Assets” means, as of the date of any determination thereof,
Consolidated Total Assets minus, to the extent included in Consolidated Total Assets, all goodwill,
trade names, trademarks, patents, unamortized debt discount and expense and other intangible assets
of the Borrower and its Subsidiaries, calculated in accordance with GAAP on a consolidated basis as
of such date.




5









 








          “Consolidated Total Assets” means, as of the date of any determination thereof, total
assets of the Borrower and its Subsidiaries calculated in accordance with GAAP on a consolidated
basis as of such date.




          “Consolidated Total Indebtedness” means at any time the sum, without duplication, of
(a) the aggregate Indebtedness of the Borrower and its Subsidiaries calculated on a consolidated
basis as of such time in accordance with GAAP, (b) the aggregate amount of Indebtedness of the
Borrower and its Subsidiaries relating to the maximum drawing amount of all letters of credit
outstanding and bankers acceptances and (c) Indebtedness of the type referred to in clauses (a) or
(b) hereof of another Person guaranteed by the Borrower or any of its Subsidiaries.




          “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.




          “Coverage Ratio” has the meaning assigned to such term in Section 6.11(b).




          “Credit Event” means a Borrowing, the issuance (or amendment increasing the face
amount) of a Letter of Credit, an LC Disbursement or any of the foregoing.




          “Default” means any event or condition described in Article VII which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.




          “DOE” means the United States Department of Education.




          “Dollars” or “$” refers to lawful money of the United States of America.




          “Dollar Amount” of any currency at any date shall mean (i) the amount of such currency
if such currency is Dollars or (ii) the equivalent in such currency of Dollars if such currency is
a Foreign Currency, calculated on the basis of the Exchange Rate for such currency, on or as of the
most recent Computation Date provided for in Section 2.04.




          “Dollar Tranche Commitment” means, with respect to each Dollar Tranche Lender, the
commitment of such Dollar Tranche Lender to make Dollar Tranche Revolving Loans and to acquire
participations in Dollar Tranche Letters of Credit and Swingline Loans hereunder, expressed as an
amount representing the maximum aggregate amount of such Dollar Tranche Lender’s Dollar Tranche
Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or terminated from time
to time pursuant to Section 2.09, (b) increased from time to time pursuant to Section 2.20 and (c)
reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04. The initial amount of each Dollar Tranche Lender’s Dollar Tranche Commitment is set
forth on Schedule 2.01, or in the Assignment and Assumption (or other documentation
contemplated by this Agreement) pursuant to which such Dollar Tranche Lender shall have assumed its
Dollar Tranche Commitment, as applicable. The aggregate principal amount of the Dollar Tranche
Commitments on the Effective Date is $200,000,000.




          “Dollar Tranche LC Exposure” means, at any time, the sum of (a) the aggregate undrawn
Dollar Amount of all outstanding Dollar Tranche Letters of Credit at such time plus (b) the
aggregate Dollar Amount of all LC Disbursements in respect of Dollar Tranche Letters of Credit that
have not yet been reimbursed by or on behalf of the Borrower at such time. The Dollar Tranche LC
Exposure of any





6









 







Dollar Tranche Lender at any time shall be its Dollar Tranche Percentage of the total Dollar
Tranche LC Exposure at such time.




          “Dollar Tranche Lender” means a Lender with a Dollar Tranche Commitment or Dollar
Tranche Revolving Loans.




          “Dollar Tranche Letter of Credit” means any letter of credit issued under the Dollar
Tranche Commitments pursuant to this Agreement.




          “Dollar Tranche Percentage” means, with respect to any Dollar Tranche Lender, the
percentage of the total Dollar Tranche Commitments represented by such Lender’s Dollar Tranche
Commitment. If the Dollar Tranche Commitments have terminated or expired, the Dollar Tranche
Percentages shall be determined based upon the Dollar Tranche Commitments most recently in effect,
giving effect to any assignments.




          “Dollar Tranche Revolving Borrowing” means a Borrowing comprised of Dollar Tranche
Revolving Loans.




          “Dollar Tranche Revolving Credit Exposure” means, with respect to any Dollar Tranche
Lender at any time, and without duplication, the sum of the outstanding principal amount of such
Dollar Tranche Lender’s Dollar Tranche Revolving Loans and its Dollar Tranche LC Exposure and its
Swingline Exposure at such time.




          “Dollar Tranche Revolving Loan” means a Loan made by a Dollar Tranche Lender pursuant
to Section 2.01(a). Each Dollar Tranche Revolving Loan shall be a Eurocurrency Loan denominated in
Dollars or an ABR Loan denominated in Dollars.




          “Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction
located in the United States of America.




          “Effective Date” means the date on which the conditions specified in Section 4.01 are
satisfied (or waived in accordance with Section 9.02).




          “Eligible Assignee” means (i) a Lender, an Affiliate of a Lender or an Approved Fund
or (ii) a commercial bank, financial institution or other “accredited investor” (as defined in
Regulation D of the Securities and Exchange Commission) or “qualified institutional buyer” (as
defined in Rule 144A of the Securities Act of 1933); provided that Eligible Assignee shall not
include the Borrower, a Subsidiary, an Affiliate of the Borrower and any natural person.




          “Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions or binding agreements issued, promulgated or entered into by any
Governmental Authority, relating in any way to the environment, preservation or reclamation of
natural resources, the management, release or threatened release of any Hazardous Material.




          “Environmental Liability” means any liability, contingent or otherwise (including any
liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the
Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) the applicable
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.




7









 








          “Equity Interests” means shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity ownership
interests in a Person, and any warrants, options or other rights entitling the holder thereof to
purchase or acquire any such equity interest.




          “Equivalent Amount” of any currency with respect to any amount of Dollars at any date
shall mean the equivalent in such currency of such amount of Dollars, calculated on the basis of
the arithmetical mean of the buy and sell spot rates of exchange of the Administrative Agent for
such other currency at 11:00 a.m., London time, on the date on or as of which such amount is to be
determined.




          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.




          “ERISA Affiliate” means any trade or business (whether or not incorporated) that,
together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code
or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.




          “ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan; (c) the receipt by
the Borrower or any ERISA Affiliate from the PBGC of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (d) the incurrence by
the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or
partial withdrawal of the Borrower or any of its ERISA Affiliates from any Plan or Multiemployer
Plan; or (e) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the
imposition upon the Borrower or any of its ERISA Affiliates of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of
Title IV of ERISA.




          “EU” means the European Union.




          “euro” and/or “EUR” means the single currency of the participating member
states of the EU.




          “Eurocurrency”, when used in reference to any Loan or Borrowing, means that such Loan,
or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the
Adjusted LIBO Rate.




          “Eurocurrency Payment Office” of the Administrative Agent shall mean, for each Foreign
Currency, the office, branch, affiliate or correspondent bank of the Administrative Agent for such
currency as specified from time to time by the Administrative Agent to the Borrower and each
Lender.




          “Event of Default” has the meaning assigned to such term in Article VII.




          “Exchange Rate” means, on any day, with respect to any Foreign Currency, the rate at
which such Foreign Currency may be exchanged into Dollars, as set forth at approximately 11:00
a.m., Local Time, on such date on the Reuters World Currency Page for such Foreign Currency. In
the event that such rate does not appear on any Reuters World Currency Page, the Exchange Rate with
respect to such Foreign Currency shall be determined by reference to such other publicly available
service for displaying exchange rates as may be reasonably selected by the Administrative Agent or,
in the event no




8









 







such service is selected, such Exchange Rate shall instead be calculated on the basis of the
arithmetical mean of the buy and sell spot rates of exchange of the Administrative Agent for such
Foreign Currency on the London market at 11:00 a.m., Local Time, on such date for the purchase of
Dollars with such Foreign Currency, for delivery two Business Days later; provided, that if
at the time of any such determination, for any reason, no such spot rate is being quoted, the
Administrative Agent, after consultation with the Borrower, may use any reasonable method it deems
appropriate to determine such rate, and such determination shall be conclusive absent manifest
error.




          “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income
by the United States of America, or by the jurisdiction (or any political subdivision thereof)
under the laws of which such recipient is organized or in which its principal office is located or,
in the case of any Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign Lender (other than
an assignee pursuant to a request by the Borrower under Section 2.19(b)), any withholding tax that
is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party to this Agreement (or designates a new lending office) or is attributable to such Foreign
Lender’s failure to comply with Section 2.17(e), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a).




          “Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.




          “Financial Officer” means the chief financial officer, principal accounting officer,
treasurer or controller of the Borrower.




          “Financials” means the annual or quarterly financial statements, and accompanying
certificates and other documents, of the Borrower and its Subsidiaries required to be delivered
pursuant to Section 5.01(a) or 5.01(b).




          “Foreign Currencies” means Agreed Currencies other than Dollars.




          “Foreign Currency LC Exposure” means, at any time, the sum of (a) the Dollar Amount of
the aggregate undrawn and unexpired amount of all outstanding Foreign Currency Letters of Credit at
such time plus (b) the aggregate principal Dollar Amount of all LC Disbursements in respect of
Foreign Currency Letters of Credit that have not yet been reimbursed at such time.




          “Foreign Currency Letter of Credit” means a Multicurrency Tranche Letter of Credit
denominated in a Foreign Currency.




          “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is located. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.




9









 








          “Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.




          “GAAP” means generally accepted accounting principles in the United States of America.




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




          “Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or lease property,
securities or services for the purpose of assuring the owner of such Indebtedness or other
obligation of the payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business.




          “Headquarters Sale and Leaseback Transaction” means the sale and leaseback of the
Borrower’s new corporate headquarters located in Phoenix, Arizona that is expected to occur in 2008
and described in the Borrower’s Form 10-K filed October 29, 2007.




          “Hazardous Materials” means all explosive or radioactive substances and all hazardous
or toxic substances, hazardous 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.




          “Increasing Lender” has the meaning assigned to such term in Section 2.20.




          “Indebtedness” of any Person means, without duplication, (a) all obligations of such
Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes
or similar instruments, (c) all obligations of such Person upon which interest charges are
customarily paid (excluding interest charges applied for late payment), (d) all obligations of such
Person under conditional sale or other title retention agreements relating to property acquired by
such Person, (e) all obligations of such Person in respect of the deferred purchase price of
property or services (excluding accounts payable incurred in the ordinary course of business), (f)
all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all
reimbursement obligations, contingent or otherwise, of such Person as an account party in respect
of letters of credit and letters of guaranty, (j) all obligations to pay principal, contingent or
otherwise, of such Person in respect of bankers’ acceptances, (k) all obligations of such Person
under any Swap Agreement or under any similar type of agreement and (l) all obligations of such
Person under Sale and Leaseback Transactions; provided, (1) deferred compensation arrangements, (2)
non-compete or consulting obligations incurred in connection with Permitted Acquisitions and (3)
earn-out obligations arising with respect to any Permitted Acquisition shall not constitute
Indebtedness. The Indebtedness of





10









 







any Person shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable therefor as a result of
such Person’s ownership interest in or other relationship with such entity, except to the extent
the terms of such Indebtedness provide that such Person is not liable therefor. In the event any
of the foregoing Indebtedness is limited to recourse against a particular asset or assets of such
Person, the amount of the corresponding Indebtedness shall be equal to the lesser of the amount of
such Indebtedness and the fair market value of such asset or assets at the date for determination
of the amount of such Indebtedness.




          “Indemnified Taxes” means Taxes other than Excluded Taxes.




          “Information Memorandum” means the Confidential Information Memorandum dated November
2007 relating to the Borrower and the Transactions.




          “Interest Election Request” means a request by the Borrower to convert or continue a
Revolving Borrowing in accordance with Section 2.08.




          “Interest Payment Date” means (a) with respect to any ABR Loan (other than a Swingline
Loan), the last day of each March, June, September and December and the Maturity Date, (b) with
respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period
of more than three months’ duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months’ duration after the first day of such Interest Period and the
Maturity Date and (c) with respect to any Swingline Loan, the day that such Loan is required to be
repaid and the Maturity Date.




          “Interest Period” means with respect to any Eurocurrency Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or six months thereafter, as the Borrower may elect;
provided, that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a
Eurocurrency Borrowing only, such next succeeding Business Day would fall in the next calendar
month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any
Interest Period pertaining to a Eurocurrency Borrowing that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the
date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be
the effective date of the most recent conversion or continuation of such Borrowing.




          “Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i).
The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.




          “LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of
Credit.




          “LC Exposure” means, at any time, the sum of (a) the aggregate undrawn Dollar Amount
of all outstanding Letters of Credit at such time plus (b) the aggregate Dollar Amount of all LC
Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The
LC Exposure of any Multicurrency Tranche Lender at any time shall be its Multicurrency Tranche
Percentage




11









 







of the total Multicurrency Tranche LC Exposure at such time and the LC Exposure of any Dollar
Tranche Lender at any time shall be its Dollar Tranche Percentage of the total Dollar Tranche LC
Exposure at such time.




          “Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a Lender hereunder pursuant to Section 2.20 or pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline
Lender.




          “Letter of Credit” means any Multicurrency Tranche Letter of Credit or Dollar Tranche
Letter of Credit.




          “Leverage Ratio” has the meaning assigned to such term in Section 6.11(a).




          “LIBO Rate” means, with respect to any Eurocurrency Borrowing for any Interest Period,
the rate appearing on, in the case of Dollars, Reuters BBA Libor Rates Page 3750 and, in the case
of any Foreign Currency, the appropriate page of such service which displays British Bankers
Association Interest Settlement Rates for deposits in such Foreign Currency (or, in each case, on
any successor or substitute page of such service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on such page of such
service, as determined by the Administrative Agent from time to time for purposes of providing
quotations of interest rates applicable to deposits in the relevant Agreed Currency in the London
interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to (or, in
the case of Loans denominated in Pounds Sterling, on the day of) the commencement of such Interest
Period, as the rate for deposits in the relevant Agreed Currency with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for any reason, then
the “LIBO Rate” with respect to such Eurocurrency Borrowing for such Interest Period shall
be the rate at which deposits in the relevant Agreed Currency in an Equivalent Amount of $5,000,000
and for a maturity comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such
Interest Period.




          “Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call
or similar right of a third party with respect to such securities.




          “Loan Documents” means this Agreement, the Subsidiary Guaranty, any promissory notes
executed and delivered pursuant to Section 2.10(e) and any and all other instruments and documents
executed and delivered in connection with any of the foregoing.




          “Loan Parties” means, collectively, the Borrower and the Subsidiary Guarantors.




          “Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.




          “Local Time” means (i) New York City time in the case of a Loan, Borrowing or LC
Disbursement denominated in Dollars to, or for the account of, the Borrower and (ii) local time at
the place of the relevant Loan, Borrowing or LC Disbursement (or such earlier local time as is
necessary for




12









 







the relevant funds to be received and transferred to the Administrative Agent for same day
value on the date the relevant reimbursement obligation is due) in the case of a Loan, Borrowing or
LC Disbursement which is denominated in a Foreign Currency.




          “Mandatory Cost” is described in Schedule 2.02.




          “Material Adverse Effect” means a material adverse effect on (a) the business,
operations, assets or financial condition of the Borrower and the Subsidiaries taken as a whole or
(b) the validity or enforceability of this Agreement or any and all other Loan Documents or the
rights or remedies of the Administrative Agent and the Lenders thereunder.




          “Material Domestic Subsidiary” means each Domestic Subsidiary (i) which, as of the
most recent fiscal quarter of the Borrower, for the period of four consecutive fiscal quarters then
ended, for which financial statements have been delivered pursuant to Section 5.01, contributed
greater than ten percent (10%) of the Borrower’s Consolidated EBITDA for such period or (ii) which
contributed greater than ten percent (10%) of the Borrower’s Consolidated Total Assets as of such
date; provided that, if at any time the aggregate amount of the EBITDA or consolidated
total assets of all Domestic Subsidiaries that are not Material Domestic Subsidiaries exceeds
fifteen percent (15%) of the Borrower’s Consolidated EBITDA for any such period or fifteen percent
(15%) of the Borrower’s Consolidated Total Assets as of the end of any such fiscal quarter, the
Borrower (or, in the event the Borrower has failed to do so within ten (10) days, the
Administrative Agent) shall designate sufficient Domestic Subsidiaries as “Material Domestic
Subsidiaries” to eliminate such excess, and such designated Subsidiaries shall for all purposes of
this Agreement constitute Material Domestic Subsidiaries.




          “Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding $50,000,000. For purposes
of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or
any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to
pay if such Swap Agreement were terminated at such time.




          “Maturity Date” means January 4, 2013.




          “Maximum Apollo Global Guarantee and Intercompany Loan Amount” means, the sum of (i)
$1,000,000,000 and (ii) 30% of the cumulative Consolidated EBITDA of Borrower and its Subsidiaries
(including Apollo Global and its subsidiaries) for the Borrower’s 2008 fiscal year and each fiscal
year thereafter.




          “Moody’s” means Moody’s Investors Service, Inc.




          “Multicurrency Tranche Commitment” means, with respect to each Multicurrency Tranche
Lender, the commitment of such Multicurrency Tranche Lender to make Multicurrency Tranche Revolving
Loans and to acquire participations in Multicurrency Tranche Letters of Credit hereunder, expressed
as an amount representing the maximum aggregate amount of such Multicurrency Tranche Lender’s
Multicurrency Tranche Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or
terminated from time to time pursuant to Section 2.09, (b) increased from time to time pursuant to
Section 2.20 and (c) reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Multicurrency Tranche Lender’s
Multicurrency Tranche Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption
(or other documentation contemplated by this Agreement) pursuant to which such Multicurrency
Tranche




13









 







Lender shall have assumed its Multicurrency Tranche Commitment, as applicable. The aggregate
principal amount of the Multicurrency Tranche Commitments on the Effective Date is $300,000,000.




          “Multicurrency Tranche LC Exposure” means, at any time, the sum of (a) the aggregate
undrawn Dollar Amount of all outstanding Multicurrency Tranche Letters of Credit at such time plus
(b) the aggregate Dollar Amount of all LC Disbursements in respect of Multicurrency Tranche Letters
of Credit that have not yet been reimbursed by or on behalf of the Borrower at such time. The
Multicurrency Tranche LC Exposure of any Multicurrency Tranche Lender at any time shall be its
Multicurrency Tranche Percentage of the total Multicurrency Tranche LC Exposure at such time.




          “Multicurrency Tranche Lender” means a Lender with a Multicurrency Tranche Commitment
or Multicurrency Tranche Revolving Loans.




          “Multicurrency Tranche Letter of Credit” means any letter of credit issued under the
Multicurrency Tranche Commitments pursuant to this Agreement.




          “Multicurrency Tranche Percentage” means, with respect to any Multicurrency Tranche
Lender, the percentage of the total Multicurrency Tranche Commitments represented by such Lender’s
Multicurrency Tranche Commitment. If the Multicurrency Tranche Commitments have terminated or
expired, the Multicurrency Tranche Percentages shall be determined based upon the Multicurrency
Tranche Commitments most recently in effect, giving effect to any assignments.




          “Multicurrency Tranche Revolving Borrowing” means a Borrowing comprised of
Multicurrency Tranche Revolving Loans.




          “Multicurrency Tranche Revolving Credit Exposure” means, with respect to any
Multicurrency Tranche Lender at any time, and without duplication, the sum of the outstanding
principal amount of such Multicurrency Tranche Lender’s Multicurrency Tranche Revolving Loans and
its Multicurrency Tranche LC Exposure at such time.




          “Multicurrency Tranche Revolving Loan” means a Loan made by a Multicurrency Tranche
Lender pursuant to Section 2.01(b). Each Multicurrency Tranche Revolving Loan shall be a
Eurocurrency Loan denominated in an Agreed Currency or an ABR Loan denominated in Dollars.




          “Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of
ERISA to which the Borrower or its ERISA Affiliates is making contributions on behalf of
participants who are or were employed by any of them.




          “Obligations” means all indebtedness (including interest accruing during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding), obligations and liabilities of any of the Borrower and
its Subsidiaries to any of the Lenders and the Administrative Agent, individually or collectively,
existing on the Effective Date or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured,
arising by contract, operation of law or otherwise, solely to the extent arising or incurred under
this Credit Agreement or any of the other Loan Documents or to the Lenders or any of their
Affiliates under any Swap Agreement or any Banking Services Agreement or in respect of any of the
Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other
instruments at any time evidencing any thereof.




14









 







          “Operating Lease” of a Person means any lease of property (other than a capital lease
under GAAP) by such Person as lessee which has an original term (including any required renewals
and any renewals effective at the option of the lessor) of one year or more.



          “Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or
any other Loan Document.



          “Overnight Foreign Currency Rate” means, for any amount payable in a Foreign Currency,
the rate of interest per annum as reasonably determined by the Administrative Agent at which
overnight or weekend deposits in the relevant currency (or if such amount due remains unpaid for
more than three Business Days, then for such other period of time as the Administrative Agent may
reasonably elect) for delivery in immediately available and freely transferable funds would be
offered by the Administrative Agent to major banks in the interbank market upon request of such
major banks for the relevant currency as determined above and in an amount comparable to the unpaid
principal amount of the related Credit Event, plus any taxes, levies, imposts, duties, deductions,
charges or withholdings imposed upon, or charged to, the Administrative Agent by any relevant
correspondent bank in respect of such amount in such relevant currency.



          “Participant” has the meaning set forth in Section 9.04.



          “PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.



          “Permitted Acquisition” means any acquisition (whether by purchase, merger,
consolidation or otherwise) or series of related acquisitions by the Borrower or any Subsidiary of
(i) all or substantially all the assets of a Person or division or line of business of a Person or
(ii) all or substantially all the Equity Interests (other than directors’ qualifying shares) in, a
Person, if at the time of and immediately after giving effect thereto, (a) no Event of Default has
occurred and is continuing or would arise after giving effect thereto, (b) such Person or division
or line of business is engaged in the same or a similar line of business as the Borrower and the
Subsidiaries or business reasonably related thereto, (c) all actions required to be taken with
respect to such acquired or newly formed Subsidiary under Section 5.09 shall have been taken within
the time period set forth therein, (d) the Borrower and the Subsidiaries have, on a pro forma basis
reasonably acceptable to the Administrative Agent after giving effect to such acquisition (but
without giving effect to any synergies or cost savings), a Leverage Ratio of 2.00 to 1.00 or less,
recomputed as of the last day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available, as if such acquisition (and any related incurrence or repayment
of Indebtedness, with any new Indebtedness being deemed to be amortized over the applicable testing
period in accordance with its terms) had occurred on the first day of each relevant period for
testing such compliance and, if the aggregate consideration paid in respect of such acquisition
exceeds $100,000,000, the Borrower shall have delivered to the Administrative Agent a certificate
of a Financial Officer of the Borrower to such effect, together with all relevant financial
information, statements and projections reasonably requested by the Administrative Agent and (e) in
the case of an acquisition or merger involving the Borrower, the Borrower is the surviving entity
of such merger and/or consolidation.



          “Permitted Encumbrances” means:



          (a) (i) Liens imposed by law for taxes that are not yet due or are being contested in
compliance with Section 5.04 and (ii) Liens for taxes not required to be paid in accordance with
Section 5.04 and securing obligations not to exceed $1,000,000 in the aggregate;




15









 









          (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing obligations that are not
(i) overdue by more than thirty (30) days or are being contested in compliance with Section 5.04 or
(ii) otherwise in excess of $1,000,000;




          (c) pledges and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or regulations;




          (d) pledges and deposits to secure the performance of bids, government contracts, trade
contracts, leases, tenders, statutory obligations, surety and appeal bonds, performance and
return-of-money bonds and other obligations of a like nature, in each case in the ordinary course
of business;




          (e) judgment liens in respect of judgments that do not constitute an Event of Default under
clause (k) of Article VII;




          (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected property or interfere with
the ordinary conduct of business of the Borrower or any Subsidiary;




          (g) any interest or title of a licensor, lessee, lessor or sublessor under any operating lease
or sublease of property not prohibited hereunder and any Lien encumbering such interest or title of
a lessor or sublessor;




          (h) Liens solely on any cash earnest money deposits made by Borrower or any of its
Subsidiaries in connection with any letter of intent or purchase agreement permitted hereunder;




          (i) purported Liens evidenced by the filing of precautionary UCC financing statements relating
solely to operating leases of personal property or consignments or similar arrangements entered
into in the ordinary course of business;




          (j) 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; and




          (k) Liens arising under Article 4 of the UCC and Liens arising solely by virtue of any
statutory or common Law provision relating to banker’s liens, rights of set-off or similar rights,
in each case incurred in the ordinary course of business;




provided that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.




          “Permitted Holders” shall mean (i) Dr. John G. Sperling and Peter v. Sperling and each
of their spouses and all of their lineal descendants and all spouses and adopted children of such
descendents; (ii) all trusts for the benefit of any person described in clause (i), including, but
not limited to, the John Sperling Voting Stock Trust and the Peter Sperling Voting Stock Trust, and
trustees of such trusts; (iii) all legal representatives of any person or trust described in
clauses (i) or (ii); and (iv) all partnerships, corporations, limited liability companies or other
entities controlling, controlled by or under common control with any person, trust or other entity
described in clauses (i), (ii) or (iii). “Control” for these purposes shall mean the ability to
influence, direct or otherwise significantly affect the major policies, activities or action of any
person or entity.




          “Permitted Investments” means:




16









 








       (a) direct obligations of, or obligations the principal of and interest on which are
unconditionally guaranteed by, the United States of America (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of acquisition thereof;




       (b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit rating
obtainable from S&P or from Moody’s;




       (c) investments in certificates of deposit, banker’s acceptances and time deposits
maturing within 180 days from the date of acquisition thereof issued or guaranteed by or
placed with, and money market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not less than
$500,000,000;




       (d) fully collateralized repurchase agreements with a term of not more than thirty
(30) days for securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above;




       (e) money market funds that (i) comply with the criteria set forth in Securities and
Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AA by
S&P and Aa by Moody’s at the time of such purchase and (iii) have portfolio assets of at
least $5,000,000,000; and




       (f) investments that are consistent with Borrower’s investment policy, as in effect on
the Effective Date and as previously disclosed to the Administrative Agent, with such
changes thereto as are reasonably acceptable to the Administrative Agent.




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




          “Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA,
and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.




          “Pounds Sterling” means the lawful currency of the United Kingdom.




          “Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City;
each change in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective.




          “Register” has the meaning set forth in Section 9.04.




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




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          “Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and
unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures
and unused Commitments at such time.




          “Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the 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 Equity Interests in the Borrower or any option, warrant or
other right to acquire any such Equity Interests in the Borrower.




          “Revolving Credit Exposure” means a Dollar Tranche Revolving Credit Exposure or a
Multicurrency Revolving Credit Tranche Exposure.




          “Revolving Loan” means any Dollar Tranche Revolving Loan or Multicurrency Tranche
Revolving Loan.




          “S&P” means Standard & Poor’s.




          “Sale and Leaseback Transaction” means any sale or other transfer of any property or
asset by any Person after the date hereof with the intent to lease such property or asset as
lessee; provided that in no event shall “Sale and Leaseback Transaction” include the Headquarters
Sale and Leaseback Transaction.




          “Specified Obligations” means Obligations consisting of the principal of and interest
on outstanding Loans, reimbursement obligations in respect of LC Disbursements and any interest
with respect thereto, and fees.




          “Statutory Reserve Rate” means, with respect to any currency, a fraction (expressed as
a decimal), the numerator of which is the number one and the denominator of which is the number one
minus the aggregate of the maximum reserve, liquid asset, fees or similar requirements (including
any marginal, special, emergency or supplemental reserves or other requirements) established by any
central bank, monetary authority, the Board, the Financial Services Authority, the European Central
Bank or other Governmental Authority for any category of deposits or liabilities customarily used
to fund loans in such currency, expressed in the case of each such requirement as a decimal. Such
reserve percentages shall, in the case of Dollar denominated Loans, include those imposed pursuant
to Regulation D of the Board. Eurocurrency Loans shall be deemed to be subject to such reserve,
liquid asset or similar requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under any applicable law, rule or
regulation, including Regulation D. The Statutory Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in any reserve, liquid asset or similar requirement.




          “Subordinated Indebtedness” means any Indebtedness of the Borrower or any Subsidiary
the payment of which is subordinated to payment of the obligations under the Loan Documents to the
written reasonable satisfaction of, and the terms and conditions of which are otherwise reasonably
satisfactory to, the Administrative Agent; provided that, in the case of high yield securities,
market subordination terms then applicable to high yield securities shall be deemed reasonably
satisfactory to the Administration Agent.





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          “Subordinated Indebtedness Documents” means any document, agreement or instrument
evidencing any Subordinated Indebtedness or entered into in connection with any Subordinated
Indebtedness.




          “subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent.




          “Subsidiary” means any subsidiary of the Borrower; provided that, so long as,
as of the end of the then most recently completed fiscal quarter of the Borrower, the Leverage
Ratio does not exceed 2.00 to 1.00, none of Apollo Global nor any of its subsidiaries shall, unless
otherwise expressly provided herein, be considered a Subsidiary of the Borrower for the purposes of
Article III, Article V (other than Section 5.09, and the definitions used therein), Article VI
(other than Sections 6.11(a) and 6.11(b) and the definitions used therein) and Article VII.




          “Subsidiary Guarantor” means each Material Domestic Subsidiary. The Subsidiary
Guarantors on the Effective Date are identified as such in Schedule 3.01 hereto.




          “Subsidiary Guaranty” means that certain Guaranty dated as of the Effective Date in
the form of Exhibit F (including any and all supplements thereto) and executed by each
Subsidiary Guarantor, as amended, restated, supplemented or otherwise modified from time to time.




          “Swap Agreement” means any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a
Swap Agreement.




          “Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall
be its Dollar Tranche Percentage of the total Swingline Exposure at such time.




          “Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder.




          “Swingline Loan” means a Loan made pursuant to Section 2.05.




          “Syndication Agent” means Wells Fargo Bank, N.A. in its capacity as syndication agent
for the credit facility evidenced by this Agreement.




          “TARGET” means the Trans-European Automated Real-time Gross Settlement Express
Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other




19









 




payment system (if any) reasonably determined by the Administrative Agent to be a suitable
replacement) for the settlement of payments in euro.




          “Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.




          “Tranche” means a category of Commitments and extensions of credit thereunder. For
purposes hereof, each of the following comprises a separate Tranche: (a) Multicurrency Tranche
Commitments, Multicurrency Tranche Revolving Loans and Multicurrency Tranche Letters of Credit and
(b) Dollar Tranche Commitments, Dollar Tranche Revolving Loans, Dollar Tranche Letters of Credit
and Swingline Loans.




          “Transactions” means the execution, delivery and performance by the Loan Parties of
this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions,
the use of the proceeds thereof and the issuance of Letters of Credit hereunder.




          “Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.




          “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
New York.




          “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.




          SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a “Dollar Tranche
Revolving Loan”) or by Type (e.g., a “Eurocurrency Loan”) or by Class and Type
(e.g., a “Eurocurrency Dollar Tranche Revolving Loan”). Borrowings also may be classified
and referred to by Class (e.g., a “Dollar Tranche Revolving Borrowing”) or by Type
(e.g., a “Eurocurrency Borrowing”) or by Class and Type (e.g., a “Eurocurrency
Dollar Tranche Revolving Borrowing”).




          SECTION 1.03. Terms Generally. The definitions of terms herein shall apply equally
to the singular and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, restated, supplemented or otherwise modified (subject to any
restrictions on such amendments, restatements supplements or modifications set forth herein), (b)
any reference herein to any Person shall be construed to include such Person’s successors and
assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular provision hereof,
(d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
“asset” and “property” shall be construed to have the same meaning and effect and to refer to any
and all tangible and intangible assets and properties, including cash, securities, accounts and
contract rights.




20









 





          SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on the operation of
such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.




          SECTION 1.05. Regulatory Changes in the Consolidated DOE Ratio. If at any time any
regulatory change in the Consolidated DOE Ratio would affect the computation of the Consolidated
DOE Ratio or Section 6.11(c), and either the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such
ratio or requirement to preserve the original intent thereof in light of such change in the
Consolidated 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
Consolidated DOE Ratio prior to such change therein.




ARTICLE II




The Credits




          SECTION 2.01. Commitments. (a) Subject to the terms and conditions set forth herein,
each Dollar Tranche Lender agrees to make Dollar Tranche Revolving Loans to the Borrower in Dollars
from time to time during the Availability Period in an aggregate principal amount that will not
result in (i) such Lender’s Dollar Tranche Revolving Credit Exposure exceeding such Lender’s Dollar
Tranche Commitment or (ii) the sum of the total Dollar Tranche Revolving Credit Exposures (after
giving effect, if applicable, to the repayment of any Swingline Loans with the proceeds of such
Dollar Tranche Revolving Loan) exceeding the aggregate Dollar Tranche Commitments. Within the
foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Dollar Tranche Revolving Loans.




          (b) Subject to the terms and conditions set forth herein, each Multicurrency Tranche Lender
agrees to make Multicurrency Tranche Revolving Loans to the Borrower in Agreed Currencies from time
to time during the Availability Period in an aggregate principal amount that will not result in (i)
the Dollar Amount of such Lender’s Multicurrency Tranche Revolving Credit Exposure exceeding such
Lender’s Multicurrency Tranche Commitment or (ii) subject to Section 2.04, the sum of the Dollar
Amount of the total Multicurrency Tranche Revolving Credit Exposures exceeding the aggregate
Multicurrency Tranche Commitments. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrower may borrow, prepay and reborrow Multicurrency Tranche
Revolving Loans.




          SECTION 2.02. Loans and Borrowings. (a) Each Dollar Tranche Revolving Loan shall be
made as part of a Borrowing consisting of Dollar Tranche Revolving Loans made by the Dollar Tranche
Lenders ratably in accordance with their respective Dollar Tranche Commitments. Each Multicurrency
Tranche Revolving Loan shall be made as part of a Borrowing consisting of Multicurrency Tranche
Revolving Loans made by the Multicurrency Tranche Lenders ratably in accordance with their
respective Multicurrency Tranche Commitments. The failure of any Lender to make any Loan required
to be made by it shall not relieve any other Lender of its obligations hereunder; provided
that the




21









 




Commitments of the Lenders are several and no Lender shall be responsible for any other
Lender’s failure to make Loans as required.




          (b)
Subject to Section 2.14, (i) each Dollar Tranche Revolving Borrowing shall be comprised
entirely of ABR Loans or Eurocurrency Loans as the Borrower may request in accordance herewith and
(ii) each Multicurrency Tranche Revolving Borrowing shall be comprised entirely of ABR Loans or
Eurocurrency Loans as the Borrower may request in accordance herewith; provided that each ABR Loan
shall only be made in Dollars. Each Swingline Loan shall be an ABR Loan. Each Lender at its
option may make any Eurocurrency Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall not affect
the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.




          (c)
At the commencement of each Interest Period for any Eurocurrency Revolving Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less
than $5,000,000 (or the Approximate Equivalent Amount of each such amount if such Borrowing is
denominated in a Foreign Currency). At the time that each ABR Revolving Borrowing is made, such
Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less
than $1,000,000; provided that an ABR Revolving Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the Dollar Tranche Commitments or Multicurrency
Tranche Commitments, as the case may be, or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall be in an amount that is
an integral multiple of $250,000 and not less than $500,000. Borrowings of more than one Type and
Class may be outstanding at the same time; provided that there shall not at any time be
more than a total of ten (10) Eurocurrency Revolving Borrowings outstanding.




          (d)
Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.




          SECTION 2.03. Requests for Revolving Borrowings. To request a Revolving Borrowing,
the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of
a Eurocurrency Borrowing, not later than 11:00 a.m., Local Time, three (3) Business Days (in the
case of a Eurocurrency Borrowing denominated in Dollars) or four (4) Business Days (in the case of
a Eurocurrency Borrowing denominated in a Foreign Currency), in each case before the date of the
proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., New York City
time, one (1) Business Day before the date of the proposed Borrowing; provided that any
such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.06(e) may be given not later than 11:00 a.m., New York City time, on the
date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy (or otherwise in accordance with Section
9.01(b)) to the Administrative Agent of a written Borrowing Request in a form approved by the
Administrative Agent and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:





     (i) the aggregate amount of the requested Borrowing;




     (ii) the date of such Borrowing, which shall be a Business Day;




     (iii) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing and
whether such Borrowing is to be a Dollar Tranche Revolving Borrowing or Multicurrency
Tranche Revolving Borrowing;



22









 






     (iv) in the case of a Eurocurrency Borrowing, the Agreed Currency and initial Interest
Period to be applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and




     (v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07.


If no election as to the Type of Revolving Borrowing is specified, then, in the case of a Borrowing
denominated in Dollars, the requested Revolving Borrowing shall be an ABR Borrowing. If no
Interest Period is specified with respect to any requested Eurocurrency Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one month’s duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent
shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made
as part of the requested Borrowing.




          SECTION 2.04. Determination of Dollar Amounts. The Administrative Agent will
determine the Dollar Amount of:




          (a) each Multicurrency Tranche Eurocurrency Borrowing in Foreign Currencies as of the date
three (3) Business Days prior to the date of such Borrowing or, if applicable, the date of
conversion/continuation of any Borrowing as a Multicurrency Tranche Eurocurrency Borrowing,




          (b) the LC Exposure as of the date of each request for the issuance, amendment, renewal or
extension of any Letter of Credit in Foreign Currencies, and




          (c) all outstanding Credit Events on and as of the last Business Day of each calendar quarter
and, during the continuation of an Event of Default, on any other Business Day elected by the
Administrative Agent in its discretion or upon instruction by the Required Lenders.




Each day upon or as of which the Administrative Agent determines Dollar Amounts as described in the
preceding clauses (a), (b) and (c) is herein described as a “Computation Date” with respect to each
Credit Event for which a Dollar Amount is determined on or as of such day.




          SECTION 2.05. Swingline Loans. (a) Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Swingline Loans in Dollars to the Borrower from time to
time during the Availability Period, in an aggregate principal amount at any time outstanding that
will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding
$25,000,000 or (ii) the Dollar Amount of the total Dollar Tranche Revolving Credit Exposures
exceeding the total Dollar Tranche Commitments; provided that the Swingline Lender shall
not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the
foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Swingline Loans.




          (b)
To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such
request by telephone (confirmed by telecopy), not later than 12:00 noon, New York City time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such notice received from the
Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means
of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the
case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e), by remittance to the Issuing Bank) by 3:00 p.m., New York City time, on the
requested date of such Swingline Loan.




23









 








          (c)
The Swingline Lender may by written notice given to the Administrative Agent not later than
10:00 a.m., New York City time, on any Business Day require the Dollar Tranche Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Dollar Tranche Lenders will
participate. Promptly upon receipt of such notice, the Administrative Agent will give notice
thereof to each Dollar Tranche Lender, specifying in such notice such Lender’s Dollar Tranche
Percentage of such Swingline Loan or Loans. Each Dollar Tranche Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative
Agent, for the account of the Swingline Lender, such Dollar Tranche Lender’s Dollar Tranche
Percentage of such Swingline Loan or Loans. Each Dollar Tranche Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is
absolute and unconditional and shall not be affected by any circumstance whatsoever, including the
occurrence and continuance of a Default or reduction or termination of the Dollar Tranche
Commitments, and that each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever. Each Dollar Tranche Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as provided in
Section 2.07 with respect to Loans made by such Dollar Tranche Lender (and Section 2.07 shall
apply, mutatis mutandis, to the payment obligations of the Dollar Tranche Lenders),
and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by
it from the Dollar Tranche Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments
in respect of such Swingline Loan shall be made to the Administrative Agent and not to the
Swingline Lender. Any amounts received by the Swingline Lender from the Borrower (or other party
on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of
the proceeds of a sale of participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Dollar Tranche Lenders that shall have made their payments pursuant to
this paragraph and to the Swingline Lender, as their interests may appear; provided that
any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative
Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower
for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph
shall not relieve the Borrower of any default in the payment thereof.




          SECTION 2.06. Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Multicurrency Tranche Letters
of Credit denominated in Agreed Currencies and Dollar Tranche Letters of Credit denominated in
Dollars, in each case for its own account, in a form reasonably acceptable to the Administrative
Agent and the Issuing Bank, at any time and from time to time during the Availability Period. In
the event of any inconsistency between the terms and conditions of this Agreement and the terms and
conditions of any form of letter of credit application or other agreement submitted by the Borrower
to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the
terms and conditions of this Agreement shall control; and any grant of security in such application
or agreement shall be null and void.




          (b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower shall hand deliver or telecopy (or transmit by electronic communication,
if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal
or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the
Agreed Currency applicable thereto, the name and address of the beneficiary thereof, whether such
Letter of Credit is a Multicurrency




24









 




Tranche Letter of Credit or a Dollar Tranche Letter of Credit and such other information as
shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank’s
standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of
each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the Dollar Amount of the LC Exposure
shall not exceed $200,000,000, (ii) subject to Section 2.04, the sum of the Dollar Amount of the
total Multicurrency Tranche Revolving Credit Exposures shall not exceed the total Multicurrency
Tranche Commitments and (iii) the sum of the total Dollar Tranche Revolving Credit Exposures shall
not exceed the total Dollar Tranche Commitments.




          (c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five (5) Business Days prior to the Maturity Date.




          (d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender in
respect of the Tranche under which such Letter of Credit is issued (an “Applicable Lender”)
hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such
Lender’s Applicable Percentage of the aggregate Dollar Amount available to be drawn under such
Letter of Credit. In consideration and in furtherance of the foregoing, each Applicable Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing
Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the Borrower for any reason.
Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected
by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or termination of the
Commitments, and that each such payment shall be made without any offset, abatement, withholding or
reduction whatsoever.




          (e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative
Agent in Dollars the Dollar Amount equal to such LC Disbursement, calculated as of the date the
Issuing Bank made such LC Disbursement (or if the Issuing Bank shall so elect in its sole
discretion by notice to the Borrower, in such other Agreed Currency which was paid by the Issuing
Bank pursuant to such LC Disbursement in an amount equal to such LC Disbursement) not later than
12:00 noon, Local Time, on the Business Day following the date that such LC Disbursement is made,
if the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., Local Time,
on such preceding Business Day, or, if such notice has not been received by the Borrower prior to
such time on such date, then not later than 12:00 noon, Local Time, on the second Business Day
immediately following the day that the Borrower receives such notice; provided that, if
such LC Disbursement is not less than the Dollar Amount of $1,000,000, the Borrower may, subject to
the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that
such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent Dollar
Amount of such LC Disbursement and, to the extent so financed, the Borrower’s obligation to make
such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan on the date such reimbursement is required to be made. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Applicable Lender of the applicable LC
Disbursement, the payment then due from the Borrower in




25









 




respect thereof and such Applicable Lender’s Applicable Percentage thereof. Promptly
following receipt of such notice, each Applicable Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in
Section 2.07 with respect to Loans made by such Applicable Lender (and Section 2.07 shall apply,
mutatis mutandis, to the payment obligations of the Applicable Lenders), and the
Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the
Applicable Lenders. Promptly following receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the
Issuing Bank or, to the extent that Applicable Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by an Applicable Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans
or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement. If the Borrower’s reimbursement of,
or obligation to reimburse, any amounts in any Foreign Currency would subject the Administrative
Agent, the Issuing Bank or any Multicurrency Tranche Lender to any stamp duty, ad valorem charge or
similar tax that would not be payable if such reimbursement were made or required to be made in
Dollars, the Borrower shall, at its option, either (x) pay the amount of any such tax requested by
the Administrative Agent, the Issuing Bank or the relevant Multicurrency Tranche Lender or (y)
reimburse each LC Disbursement made in such Foreign Currency in Dollars, in an amount equal to the
Equivalent Amount, calculated using the applicable exchange rates, on the date such LC Disbursement
is made, of such LC Disbursement.




          (f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the
Issuing Bank under a Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a right of setoff against,
the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the
Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or
failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing sentences shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise
care when determining whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence of gross
negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court
of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such
determination. In furtherance of the foregoing and without limiting the generality thereof, the
parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to




26









 







the contrary, or refuse to accept and make payment upon such documents if such documents are
not in strict compliance with the terms of such Letter of Credit.




          (g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made
or will make an LC Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such LC Disbursement in accordance with the terms of this
Agreement.




          (h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans (or in the case such LC
Disbursement is denominated in a Foreign Currency, at the Overnight Foreign Currency Rate for such
Agreed Currency plus the then effective Applicable Rate with respect to Eurocurrency
Revolving Loans); provided that, if the Borrower fails to reimburse such LC Disbursement
when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that
interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this
Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such
payment.




          (i) Replacement of Issuing Bank. The Issuing Bank may be replaced at any time by
written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement
of the Issuing Bank. At the time any such replacement shall become effective, the Borrower shall
pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank”
shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing
Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit then outstanding and issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.




          (j) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower receives notice from the Administrative Agent or the Required
Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure
representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent,
in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to 105% of the Dollar Amount of the LC Exposure as of such date plus any accrued and unpaid
interest thereon; provided that (i) the portions of such amount attributable to undrawn
Foreign Currency Letters of Credit or LC Disbursements in a Foreign Currency that the Borrower is
not late in reimbursing shall be deposited in the applicable Foreign Currencies in the actual
amounts of such undrawn Letters of Credit and LC Disbursements and (ii) the obligation to deposit
such cash collateral shall become effective immediately, and such deposit shall become immediately
due and payable, without demand or other notice of any kind, upon the occurrence of any Event of
Default with respect to the Borrower described in clause (h) or (i) of




27









 




Article VII. For the purposes of this paragraph, the Foreign Currency LC Exposure shall be
calculated using the applicable exchange rates of the Administrative Agent on the date notice
demanding cash collateralization is delivered to the Borrower. The Borrower also shall deposit
cash collateral pursuant to this paragraph as and to the extent required by Section 2.11(b). Such
deposit shall be held by the Administrative Agent as collateral for the payment and performance of
the Obligations. The Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held
for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders
with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy
other obligations of the Borrower under this Agreement. If the Borrower is required to provide an
amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to the Borrower as promptly as
practicable but in no event later than three (3) Business Days after all Events of Default have
been cured or waived.




          (k) Conversion. In the event that the Loans become immediately due and payable on any
date pursuant to Article VII, all amounts (i) that the Borrower is at the time or thereafter
becomes required to reimburse or otherwise pay to the Administrative Agent in respect of LC
Disbursements made under any Foreign Currency Letter of Credit (other than amounts in respect of
which the Borrower has deposited cash collateral pursuant to paragraph (j) above, if such cash
collateral was deposited in the applicable Foreign Currency to the extent so deposited or applied),
(ii) that the Multicurrency Tranche Lenders are at the time or thereafter become required to pay to
the Administrative Agent and the Administrative Agent is at the time or thereafter becomes required
to distribute to the Issuing Bank pursuant to paragraph (e) of this Section in respect of
unreimbursed LC Disbursements made under any Foreign Currency Letter of Credit and (iii) of each
Multicurrency Tranche Lender’s participation in any Foreign Currency Letter of Credit under which
an LC Disbursement has been made shall, automatically and with no further action required, be
converted into the Dollar Amount, calculated using the Administrative Agent’s currency exchange
rates on such date (or in the case of any LC Disbursement made after such date, on the date such LC
Disbursement is made), of such amounts. On and after such conversion, all amounts accruing and
owed to the Administrative Agent, the Issuing Bank or any Multicurrency Tranche Lender in respect
of the obligations described in this paragraph shall accrue and be payable in Dollars at the rates
otherwise applicable hereunder.




          SECTION 2.07. Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of immediately available funds
(i) in the case of Loans denominated in Dollars, by 12:00 noon, New York City time, to the account
of the Administrative Agent most recently designated by it for such purpose by notice to the
Lenders and (ii) in the case of each Loan denominated in a Foreign Currency, by 12:00 noon, Local
Time, in the city of the Administrative Agent’s Eurocurrency Payment Office for such currency and
at such Eurocurrency Payment Office for such currency; provided that Swingline Loans shall
be made as provided in Section 2.05. The Administrative Agent will make such Loans available to
the Borrower by promptly crediting the amounts so received, in like funds, to (x) an account of the
Borrower maintained with the Administrative Agent in New York City or Chicago and designated by the
Borrower in the applicable Borrowing Request, in the case of Loans denominated in Dollars and (y)
an account of the Borrower maintained with the Administrative Agent in the relevant jurisdiction
and designated by the Borrower in the applicable Borrowing Request, in the case of Loans
denominated in a Foreign Currency; provided that




28









 




ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank.




          (b)
Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation (including without limitation the Overnight
Foreign Currency Rate in the case of Loans denominated in a Foreign Currency) or (ii) in the case
of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing.




          SECTION 2.08. Interest Elections. (a) Each Revolving Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency
Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurocurrency Revolving Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. This Section shall not apply to
Swingline Borrowings, which may not be converted or continued.




          (b)
To make an election pursuant to this Section, the Borrower shall notify the Administrative
Agent of such election by telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower. Notwithstanding any contrary provision herein,
this Section shall not be construed to permit the Borrower to (i) change the currency of any
Borrowing, (ii) elect an Interest Period for Eurocurrency Loans that does not comply with Section
2.02(d) or (iii) convert any Borrowing to a Borrowing of a Type not available under the Class of
Commitments pursuant to which such Borrowing was made.




          (c)
Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:





     (i) the Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the portions thereof
to be allocated to each resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);



29









 






     (ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;




     (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency
Borrowing and whether the resulting Borrowing is to be a Dollar Tranche Borrowing or a
Multicurrency Tranche Borrowing; and




     (iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period and
Agreed Currency to be applicable thereto after giving effect to such election, which
Interest Period shall be a period contemplated by the definition of the term “Interest
Period”.


If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an
Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one
month’s duration.




          (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.




          (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurocurrency Revolving Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest Period (i) in the
case of a Borrowing denominated in Dollars, such Borrowing shall be converted to an ABR Borrowing
and (ii) in the case of a Borrowing denominated in a Foreign Currency, such Borrowing shall
automatically continue as a Eurocurrency Borrowing in the same Agreed Currency with an Interest
Period of one month unless (x) such Eurocurrency Borrowing is or was repaid in accordance with
Section 2.11 or (y) the Borrower shall have given the Administrative Agent an Interest Election
Request requesting that, at the end of such Interest Period, such Eurocurrency Borrowing continue
as a Eurocurrency Borrowing for the same or another Interest Period. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event
of Default is continuing (i) no outstanding Revolving Borrowing may be converted to or continued as
a Eurocurrency Borrowing and (ii) unless repaid, each Eurocurrency Revolving Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable thereto.




          SECTION 2.09. Termination and Reduction of Commitments. (a) Unless previously
terminated, the Commitments shall terminate on the Maturity Date.




          (b) The Borrower may at any time terminate, or from time to time reduce, the Commitments of
any Class; provided that (i) each reduction of the Commitments of any Class shall be in an
amount that is an integral multiple of $1,000,000 and not less than $5,000,000, (ii) the Borrower
shall not terminate or reduce the Dollar Tranche Commitments if, after giving effect to any
concurrent prepayment of the Dollar Tranche Revolving Loans in accordance with Section 2.11, the
sum of the Dollar Tranche Revolving Credit Exposures would exceed the total Dollar Tranche
Commitments and (iii) the Borrower shall not terminate or reduce the Multicurrency Tranche
Commitments if, after giving effect to any concurrent prepayment of the Multicurrency Tranche
Revolving Loans in accordance with Section 2.11, the Dollar Amount of the sum of the Multicurrency
Tranche Revolving Credit Exposures would exceed the total Multicurrency Tranche Commitments.




          (c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
the Commitments of any Class under paragraph (b) of this Section at least three (3) Business Days
prior to the effective date of such termination or reduction, specifying such election and the
effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall
advise the Lenders of




30









 




the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable; provided that a notice of termination of the Commitments of any Class
delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments of any Class shall be permanent. Each
reduction of the Commitments of any Class shall be made ratably among the applicable Lenders in
accordance with their respective Commitments of such Class.




          SECTION 2.10. Repayment of Loans; Evidence of Debt. (a)The Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Revolving Loan on the Maturity Date in the currency of such
Loan and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on
the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the
15th or last day of a calendar month and is at least five (5) Business Days after such Swingline
Loan is made; provided that on each date that a Revolving Borrowing is made, the Borrower
shall repay all Swingline Loans then outstanding.




          (b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.




          (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Class, Agreed Currency and Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.




          (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this Agreement.




          (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall execute and deliver to such Lender a promissory note payable to the order
of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in
a form prepared by the Administrative Agent and reasonably acceptable to Borrower. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is a registered note,
to such payee and its registered assigns).




          SECTION 2.11. Prepayment of Loans.




          (a) The Borrower shall have the right at any time and from time to time to prepay any
Borrowing in whole or in part, subject to prior notice in accordance with the provisions of this
Section 2.11(a). The Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurocurrency Revolving Borrowing, not later
than 11:00 a.m., Local Time, three (3) Business Days before the date of prepayment, (ii) in the
case of prepayment of




31









 




an ABR Revolving Borrowing, not later than 11:00 a.m., New York City time, one (1) Business
Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later
than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Commitments as contemplated by Section
2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.09. Promptly following receipt of any such notice relating to a
Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.
Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in
the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Revolving Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by (i) accrued interest to the extent required by
Section 2.13 and (ii) break funding payments pursuant to Section 2.16.




          (b) If at any time, (i) other than as a result of fluctuations in currency exchange rates, the
sum of the aggregate principal Dollar Amount of all of the Revolving Credit Exposures of any Class
(calculated, with respect to those Credit Events denominated in Foreign Currencies, as of the most
recent Computation Date with respect to each such Credit Event) exceeds the aggregate Commitments
of such Class and (ii) solely as a result of fluctuations in currency exchange rates, the sum of
the aggregate principal Dollar Amount of all of the outstanding Multicurrency Tranche Revolving
Loans and LC Exposure, in each case denominated in Foreign Currencies (collectively, “Foreign
Currency Exposure”), as of the most recent Computation Date with respect to each such Credit
Event, exceeds 105% of the aggregate Multicurrency Tranche Commitments, the Borrower shall
immediately repay the applicable Borrowings or cash collateralize LC Disbursements in an account
with the Administrative Agent pursuant to Section 2.06(j), as applicable, in an aggregate principal
amount sufficient to cause the aggregate Dollar Amount of all Revolving Credit Exposures (so
calculated) of each Class to be less than or equal to the aggregate Commitments of such Class.




          SECTION 2.12. Fees. (a)The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily
amount of the Dollar Tranche Commitment and Multicurrency Tranche Commitment of such Lender
(whether used or unused) during the period from and including the Effective Date to but excluding
the date on which the last of such Commitment terminates; provided that, if such Lender
continues to have any Revolving Credit Exposure of any Class after its Commitment of such Class
terminates, then such facility fee shall continue to accrue on the daily amount of such Lender’s
Revolving Credit Exposure of such Class from and including the date on which its Commitment of such
Class terminates to but excluding the date on which such Lender ceases to have any Revolving Credit
Exposure of such Class. Accrued facility fees shall be payable in arrears on the last day of
March, June, September and December of each year and on the date on which the last of the
Commitments terminate, commencing on the first such date to occur after the date hereof;
provided that any facility fees accruing after the date on which such Commitments terminate
shall be payable on demand. All facility fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first day but excluding
the last day).




          (b)
The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a
participation fee with respect to its participations in Letters of Credit, which shall accrue at
the same Applicable Rate used to determine the interest rate applicable to Eurocurrency Revolving
Loans on the average daily Dollar Amount of such Lender’s LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates
and the date on which such Lender ceases to have any LC Exposure and (ii) to the Issuing Bank a
fronting fee, which




32









 




shall accrue at the rate of 0.125% per annum on the average daily Dollar Amount of the LC
Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) attributable
to Letters of Credit issued by the Issuing Bank during the period from and including the Effective
Date to but excluding the later of the date of termination of the last of the Commitments and the
date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees and
commissions with respect to the issuance, amendment, cancellation, negotiation, transfer,
presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder.
Unless otherwise specified above, accrued participation fees and fronting fees shall be payable in
arrears on the last day of March, June, September and December of each year, commencing on the
first such date to occur after the Effective Date; provided that all such fees shall be
payable on the date on which the last of the Commitments terminate and any such fees accruing after
the date on which such Commitments terminate shall be payable on demand. Any other fees payable to
the Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand.
All participation fees and fronting fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day but excluding the
last day).




          (c)
The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrower and the Administrative
Agent.




          (d)
All fees payable hereunder shall be paid on the dates due, in Dollars (except as otherwise
expressly provided in this Section 2.12) and immediately available funds, to the Administrative
Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of
facility fees and participation fees, to the Lenders. Fees paid shall not be refundable under any
circumstances.




          SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing (including each
Swingline Loan) shall bear interest at the Alternate Base Rate.




          (b)
The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.




          (c)
Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus
the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section
or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section.




          (d)
Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for
such Loan and, in the case of Revolving Loans, upon termination of the applicable Commitments;
provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest
on the principal amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurocurrency Revolving Loan prior to the
end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.




          (e)
All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest (i) computed by reference to the Alternate Base Rate at times when the Alternate Base Rate
is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a
leap year) and (ii) for Borrowings denominated in Pounds Sterling shall be computed on the basis of
a year of 365





33












 




days, and in each case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO
Rate shall be determined by the Administrative Agent, and such determination shall be conclusive
absent manifest error.




          SECTION 2.14. Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurocurrency Borrowing:





     (a)
the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or




     (b)
the Administrative Agent is advised by a majority in interest of the Lenders that
would participate in such Borrowing that the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period will not adequately and fairly reflect the cost to such
Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such
Borrowing for such Interest Period;


then the Administrative Agent shall give notice thereof to the Borrower and the applicable Lenders
by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the applicable Lenders that the circumstances giving rise to such notice
no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving
Borrowing to, or continuation of any Revolving Borrowing as, a Eurocurrency Borrowing shall be
ineffective and (ii) if any Borrowing Request requests a Eurocurrency Revolving Borrowing, such
Borrowing shall be made as an ABR Borrowing; provided that if the circumstances giving rise
to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be
permitted.




          SECTION 2.15. Increased Costs. (a) If any Change in Law shall:





     (i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit extended by,
any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Bank; or




     (ii) impose on any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurocurrency Loans made by such Lender or any Letter
of Credit or participation therein;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurocurrency Loan or of maintaining its obligation to make any such Loan
(including, without limitation, pursuant to any conversion of any Borrowing denominated in an
Agreed Currency into a Borrowing denominated in any other Agreed Currency) or to increase the cost
to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit
(including, without limitation, pursuant to any conversion of any Borrowing denominated in an
Agreed Currency into a Borrowing denominated in any other Agreed Currency) or to reduce the amount
of any sum received or receivable by such Lender or the Issuing Bank hereunder, whether of
principal, interest or otherwise (including, without limitation, pursuant to any conversion of any
Borrowing denominated in an Agreed Currency into a Borrowing denominated in any other Agreed
Currency), then the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank, as the case may
be, for such additional costs incurred or reduction suffered.




34









 





          (b)
If any Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if
any, as a consequence of this Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below
that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such Lender’s or the
Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.




          (c)
A certificate of a Lender or the Issuing Bank setting forth in reasonable detail the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the
case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be prima facie evidence of the matters set forth therein, absent manifest error.
The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as
due on any such certificate within ten (10) days after receipt thereof.




          (d)
Failure or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right
to demand such compensation; provided that the Borrower shall not be required to compensate
a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may
be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 180-day period referred to above shall be extended to include
the period of retroactive effect thereof.




          SECTION 2.16. Break Funding Payments. In the event of (a) the payment of any
principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to
Section 2.11), (b) the conversion of any Eurocurrency Loan other than on the last day of the
Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any
Eurocurrency Loan on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.11(a) and is revoked in accordance therewith) or
(d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to Section 2.19 or the CAM
Exchange, then, in any such event, the Borrower shall compensate each Lender for the actual loss,
cost and expense of such Lender attributable to such event. Such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan,
exclusive of the applicable margin, for the period from the date of such event to the last day of
the then current Interest Period therefor (or, in the case of a failure to borrow, convert or
continue, for the period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period at the interest rate
which such Lender would bid were it to bid, at the commencement of such period, for deposits in the
relevant currency of a comparable amount and period from other banks in the eurocurrency market. A
certificate of any Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall be prima facie absent
manifest error. The Borrower



35









 






shall pay such Lender the amount shown as due on any such certificate within ten (10) days
after receipt thereof.




          SECTION 2.17. Taxes. (a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as
the case may be) receives an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with applicable law.




          (b)
In addition, the Borrower shall pay any Other Taxes imposed on or incurred by the
Administrative Agent, a Lender or the Issuing Bank to the relevant Governmental Authority in
accordance with applicable law.




          (c)
The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank,
within ten (10) days after written demand therefor, for the actual full amount of any Indemnified
Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case
may be, on or with respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as
to the amount of such payment or liability delivered to the Borrower by a Lender or the Issuing
Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing
Bank, shall be conclusive absent manifest error.




          (d)
As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.




          (e)
Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law, or reasonably requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will permit such payments
to be made without withholding or at a reduced rate or withholding.



Without limiting the generality of the foregoing, each Foreign Lender shall duly complete and
deliver to the Borrower and the Administrative Agent (in such number of copies as shall be
requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the request of the Borrower or the
Administrative Agent), but only if such Foreign Lender is legally entitled to do so, whichever of
the following is applicable:





     (i) Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an
income tax treaty to which the United States of America is a party,



36









 






     (ii) Internal Revenue Service Form W-8ECI,




     (iii) in the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the effect that
such Foreign Lender is not (A) a “bank” within the meaning of section 881(c)(3)(A) of the
Code, (B) a “10 percent shareholder” of the Borrower within the meaning of section
881(c)(3)(B) of the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) Internal Revenue Service Form W-8BEN, or




     (iv) Internal Revenue Service Form W-8IMY, accompanied by any required supporting
statements or forms, including Internal Revenue Service Form W-8ECI, Form W-8BEN (including,
if applicable, a certificate described in paragraph (iii) above), Form W-9 or Form W-8IMY.


At the request of Borrower or the Administrative Agent, each Lender that is not a Foreign Lender
and is not an “exempt recipient” (within the meaning of Treasury Regulation Section
1.6049-4(c)(1)(ii) (without regard to the third sentence thereof)) shall deliver an Internal
Revenue Service Form W-9 or other such documentation prescribed by applicable law or reasonably
requested by Borrower or the Administrative Agent as will enable Borrower or Administrative Agent
to determine whether or not such Lender is subject to backup withholding or information reporting
requirements.




          (f)
If the Administrative Agent or a Lender determines, in its reasonable discretion, that it
has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section
2.17, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this Section 2.17 with respect to the Taxes
or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such
Lender is required to repay such refund to such Governmental Authority. This paragraph shall not be
construed to require the Administrative Agent or any Lender to make available its tax returns (or
any other information relating to its taxes which it deems confidential) to the Borrower or any
other Person.




          SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.




          (a)
The Borrower shall make each payment required to be made by it hereunder (whether of
principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section
2.15, 2.16 or 2.17, or otherwise) prior to (i) in the case of payments denominated in Dollars,
12:00 noon, New York City time and (ii) in the case of payments denominated in a Foreign Currency,
12:00 noon, Local Time, in the city of the Administrative Agent’s Eurocurrency Payment Office for
such currency, in each case on the date when due, in immediately available funds, without set-off
or counterclaim. Any amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding Business Day for
purposes of calculating interest thereon. All such payments shall be made (i) in the same currency
in which the applicable Credit Event was made (or where such currency has been converted to euro,
in euro) and (ii) to the Administrative Agent at its offices at 270 Park Avenue, New York, New York
10017 or, in the case of a Credit Event denominated in a Foreign Currency, the Administrative
Agent’s Eurocurrency Payment Office for such currency, except payments to be made directly to the
Issuing Bank or Swingline Lender as expressly



37









 






provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall
be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any
such payments denominated in the same currency received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be
due on a day that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall
be payable for the period of such extension. Notwithstanding the foregoing provisions of this
Section, if, after the making of any Credit Event in any Foreign Currency, currency control or
exchange regulations are imposed in the country which issues such currency with the result that the
type of currency in which the Credit Event was made (the “Original Currency”) no longer
exists or the Borrower is not able to make payment to the Administrative Agent for the account of
the applicable Lenders in such Original Currency, then all payments to be made by the Borrower
hereunder in such currency shall instead be made when due in Dollars in an amount equal to the
Dollar Amount (as of the date of repayment) of such payment due, it being the intention of the
parties hereto that the Borrower takes all risks of the imposition of any such currency control or
exchange regulations.




          (b)
If at any time insufficient funds are received by and available to the Administrative Agent
to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed
LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal and unreimbursed LC Disbursements then due to such parties.




          (c)
If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Revolving Loans or
participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Revolving Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Revolving Loans and participations in LC Disbursements and Swingline
Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be
shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued
interest on their respective Revolving Loans and participations in LC Disbursements and Swingline
Loans; provided that (i) if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and (ii) the provisions
of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements and Swingline Loans to any assignee or participant, other than
to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with
respect to such participation as fully as if such Lender were a direct creditor of the Borrower in
the amount of such participation.




          (d)
Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the applicable Lenders or the Issuing Bank, as the
case may



38









 






be, the amount due. In such event, if the Borrower has not in fact made such payment, then
each of the applicable Lenders or the Issuing Bank, as the case may be, severally agrees to repay
to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing
Bank with interest thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation (including without limitation the Overnight Foreign
Currency Rate in the case of Loans denominated in a Foreign Currency).




          (e)
If any Lender shall fail to make any payment required to be made by it pursuant to Section
2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), then the Administrative Agent may, in its
discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received
by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations
under such Sections until all such unsatisfied obligations are fully paid.




          SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If any Lender
requests compensation under Section 2.15, or if the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender pursuant to
Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or
2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed
cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.




          (b)
If any Lender requests compensation under Section 2.15, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative
Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject
to the restrictions contained in Section 9.04), all its interests, rights and obligations under the
Loan Documents to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans,
accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and fees) or the
Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting
from a claim for compensation under Section 2.15 or payments required to be made pursuant to
Section 2.17, such assignment will result in a reduction in such compensation or payments. A
Lender shall not be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.




          SECTION 2.20. Expansion Option. The Borrower may from time to time elect to increase
the total Dollar Tranche Commitments or Multicurrency Tranche Commitments in minimum increments of
$25,000,000 so long as, after giving effect thereto, the aggregate amount of all such increases
does not exceed $250,000,000. The Borrower may arrange for any such increase to be provided by one
or more Lenders (each Lender so agreeing to an increase in its Commitment, an “Increasing
Lender”), or by one or more new banks, financial institutions or other entities (each such new
bank,



39









 






financial institution or other entity, an “Augmenting Lender”), to increase their
existing Commitments of any Class, or extend Commitments of any Class, as the case may be;
provided that (i) each Augmenting Lender, shall be subject to the approval of the Borrower
and the Administrative Agent, such consent not to be unreasonably withheld, and (ii) (x) in the
case of an Increasing Lender, the Borrower and such Increasing Lender execute an agreement
substantially in the form of Exhibit C hereto, and (y) in the case of an Augmenting Lender,
the Borrower and such Augmenting Lender execute an agreement substantially in the form of
Exhibit D hereto. Increases and new Commitments created pursuant to this Section 2.20
shall become effective on the date agreed by the Borrower, the Administrative Agent and the
relevant Increasing Lenders or Augmenting Lenders and the Administrative Agent shall notify each
Lender thereof. Notwithstanding the foregoing, no increase in any Class of the Commitments (or in
the Commitment of any Class of any Lender) shall become effective under this paragraph unless, (i)
on the proposed date of the effectiveness of such increase, (A) the conditions set forth in
paragraphs (a) and (b) of Section 4.02 shall be satisfied or waived by the Required Lenders and the
Administrative Agent shall have received a certificate to that effect dated such date and executed
by a Financial Officer of the Borrower and (B) the Borrower shall be in compliance (on a pro forma
basis reasonably acceptable to the Administrative Agent) with the covenants contained in Section
6.11 and (ii) the Administrative Agent shall have received authorizing resolutions and legal
opinions consistent with those delivered on the Effective Date as to the corporate power and
authority of the Borrower to borrow hereunder after giving effect to such increase. On the
effective date of any increase in the Commitments of any Class, (i) each relevant Increasing Lender
and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately
available funds as the Administrative Agent shall determine, for the benefit of the other Lenders
of such Class, as being required in order to cause, after giving effect to such increase and the
use of such amounts to make payments to such other Lenders, each Lender’s portion of the
outstanding Revolving Loans of such Class of all the Lenders to equal its Dollar Tranche Percentage
or Multicurrency Tranche Percentage, as applicable, of such outstanding Revolving Loans, and (ii)
the Borrower shall be deemed to have repaid and reborrowed all outstanding Revolving Loans of such
Class as of the date of any increase in the Commitments of such Class (with such reborrowing to
consist of the Types of Revolving Loans of such Class, with related Interest Periods if applicable,
specified in a notice delivered by the Borrower, in accordance with the requirements of Section
2.03). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence
shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of
each Eurocurrency Loan, shall be subject to indemnification by the Borrower pursuant to the
provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related
Interest Periods.




          SECTION 2.21. Market Disruption. Notwithstanding the satisfaction of all conditions
referred to in Article II and Article IV with respect to any Credit Event to be effected in any
Foreign Currency, if (i) there shall occur on or prior to the date of such Credit Event any change
in national or international financial, political or economic conditions or currency exchange rates
or exchange controls which would in the reasonable opinion of the Administrative Agent, the Issuing
Bank (if such Credit Event is a Letter of Credit) or the Required Lenders make it impracticable for
the Eurocurrency Borrowings or Letters of Credit comprising such Credit Event to be denominated in
the Agreed Currency specified by the Borrower or (ii) an Equivalent Amount of such currency is not
readily calculable, then the Administrative Agent shall forthwith give notice thereof to the
Borrower, the Lenders and, if such Credit Event is a Letter of Credit, the Issuing Bank, and such
Credit Events shall not be denominated in such Agreed Currency but shall, except as otherwise set
forth in Section 2.07, be made on the date of such Credit Event in Dollars, (a) if such Credit
Event is a Borrowing, in an aggregate principal amount equal to the Dollar Amount of the aggregate
principal amount specified in the related Credit Event Request or Interest Election Request, as the
case may be, as ABR Loans, unless the Borrower notifies the Administrative Agent on such date that
(i) it elects not to borrow on such date or (ii) it elects to borrow on such date in a different
Agreed Currency, as the case may be, in which the denomination of such Loans would in the
reasonable opinion of the Administrative Agent and the Required Lenders be practicable and



40









 






in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount
specified in the related Credit Event Request or Interest Election Request, as the case may be or
(b) if such Credit Event is a Letter of Credit, in a face amount equal to the Dollar Amount of the
face amount specified in the related request or application for such Letter of Credit, unless the
Borrower notifies the Administrative Agent on such date that (i) it elects not to request the
issuance of such Letter of Credit on such date or (ii) it elects to have such Letter of Credit
issued on such date in a different Agreed Currency, as the case may be, in which the denomination
of such Letter of Credit would in the reasonable opinion of the Issuing Bank, the Administrative
Agent and the Required Lenders be practicable and in face amount equal to the Dollar Amount of the
face amount specified in the related request or application for such Letter of Credit, as the case
may be.




          SECTION 2.22. Judgment Currency. If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due from the Borrower hereunder in the currency expressed to
be payable herein (the “specified currency”) into another currency, the parties hereto
agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall
be that at which in accordance with normal banking procedures the Administrative Agent could
purchase the specified currency with such other currency at the Administrative Agent’s main New
York City office on the Business Day preceding that on which final, non-appealable judgment is
given. The obligations of each Borrower in respect of any sum due to any Lender or the
Administrative Agent hereunder shall, notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that on the Business Day following receipt by
such Lender or the Administrative Agent (as the case may be) of any sum adjudged to be so due in
such other currency such Lender or the Administrative Agent (as the case may be) may in accordance
with normal, reasonable banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than the sum originally due
to such Lender or the Administrative Agent, as the case may be, in the specified currency, the
Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and
notwithstanding any such judgment, to indemnify such Lender or the Administrative Agent, as the
case may be, against such loss, and if the amount of the specified currency so purchased exceeds
(a) the sum originally due to any Lender or the Administrative Agent, as the case may be, in the
specified currency and (b) any amounts shared with other Lenders as a result of allocations of such
excess as a disproportionate payment to such Lender under Section 2.18, such Lender or the
Administrative Agent, as the case may be, agrees to remit such excess to the Borrower.




          SECTION 2.23. Senior Debt. The Borrower hereby designates all Obligations now or
hereinafter incurred or otherwise outstanding, and agrees that the Obligations shall at all times
constitute, senior indebtedness and designated senior indebtedness, or terms of similar import,
which are entitled to the benefits of the subordination provisions of all Subordinated
Indebtedness.




ARTICLE III




Representations and Warranties




          The Borrower represents and warrants to the Lenders that:




          SECTION 3.01. Organization; Powers; Subsidiaries. Each of the Borrower and each
Subsidiary Guarantor is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and
is in good standing in, every jurisdiction where such qualification is required. Schedule
3.01 hereto identifies, as of the date



41









 






hereof, each Subsidiary, noting whether such Subsidiary is a Material Domestic Subsidiary, the
jurisdiction of its incorporation or organization, as the case may be, the percentage of issued and
outstanding shares of each class of its capital stock or other equity interests owned by the
Borrower and the other Subsidiaries and, if such percentage is not 100% (excluding directors’
qualifying shares as required by law), a description of each class issued and outstanding. As of
the date hereof, all of the outstanding shares of capital stock and other equity interests of each
Subsidiary are validly issued and outstanding and fully paid and nonassessable and all such shares
and other equity interests indicated on Schedule 3.01 as owned by the Borrower or another
Subsidiary are owned, beneficially and of record, by the Borrower or any Subsidiary free and clear
of all Liens (except Liens permitted under Section 6.02). As of the date hereof, there are no
outstanding commitments or other obligations of the Borrower or any Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any class of capital
stock or other equity interests of the Borrower or any Subsidiary, in each case unless otherwise
disclosed in the Form 10-K of the Borrower filed October 29, 2007.




          SECTION 3.02. Authorization; Enforceability. The Transactions are within the each
Loan Party’s organizational powers and have been duly authorized by all necessary corporate,
limited liability, partnership or similar organizational and, if required, shareholder, member,
partner or similar action. The Loan Documents to which each Loan Party is a party have been duly
executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of
such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and
subject to general principles of equity, regardless of whether considered in a proceeding in equity
or at law.




          SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in full force and effect,
(b) will not violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any indenture, material
agreement or other material instrument binding upon the Borrower or any of its Subsidiaries or its
assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any
of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset
of the Borrower or any of its Subsidiaries, other than pursuant to Section 9.08.




          SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The Borrower has
heretofore furnished to the Lenders its consolidated balance sheet and statements of income,
stockholders equity and cash flows as of and for the fiscal year ended August 31, 2007 reported on
by Deloitte & Touche LLP, independent public accountants. Such financial statements present
fairly, in all material respects, the financial position and results of operations and cash flows
of the Borrower and its consolidated Subsidiaries as of such date and for such period in accordance
with GAAP.




          (b) Since August 31, 2007, there has been no material adverse change in the business, assets,
operations or financial condition of the Borrower and its Subsidiaries, taken as a whole.




          SECTION 3.05. Properties. (a) Each of the Borrower and its Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not interfere with its ability to conduct its
material businesses as currently conducted or to utilize such properties for their intended
purposes.




          (b) Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its business, and the
use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any



42









 






such infringements that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.




          SECTION 3.06. Litigation and Environmental Matters. (a) Except as set forth on
Schedule 3.06(b), there are no actions, suits, proceedings or investigations by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any of its Subsidiaries as to which there is a
reasonable possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect.
There are no labor controversies pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries which could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect.




          (b)Except with respect to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law or (ii) has become
subject to any Environmental Liability.




          (c)Neither the Borrower nor any Subsidiary is party or subject to any law, regulation, rule or
order, or any obligation under any agreement or instrument, that has a Material Adverse Effect.




          SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with (i) all laws, regulations and orders of any Governmental
Authority applicable to it or its property and (ii) all indentures, agreements and other
instruments binding upon it or its property, except where, in each case, the failure to so comply,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.




          SECTION 3.08. Investment Company Status. Neither the Borrower nor any of its
Subsidiary Guarantors is an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.




          SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in
good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable,
has set aside on its books adequate reserves in accordance with GAAP or (b) to the extent that the
failure to do so could not reasonably be expected to result in a Material Adverse Effect.




          SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability is reasonably
expected to occur, could reasonably be expected to result in a Material Adverse Effect.




          SECTION 3.11. Disclosure. As of the Effective Date, the Borrower has disclosed to
the Lenders all agreements, instruments and corporate or other restrictions to which it or any of
its Subsidiaries is subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither the
Information Memorandum nor any of the other written reports, financial statements, certificates or
other written information furnished by or on behalf of the Borrower or any Subsidiary to the
Administrative Agent or any Lender in connection with the negotiation of this Agreement or
delivered hereunder (as modified or supplemented by other written information so furnished),
contains any material misstatement of fact or omits to state any




43









 




material fact necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time and Administrative Agent and the Lenders
acknowledge that actual results may vary from such projections and such variations may be material.




          SECTION 3.12. Federal Reserve Regulations. No part of the proceeds of any Loan have
been used or will be used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations T, U and X.




          SECTION 3.13. Liens. There are no Liens on any of the real or personal properties of
the Borrower or any Subsidiary except for Liens permitted by Section 6.02.




          SECTION 3.14. No Default. No Default or Event of Default has occurred and is
continuing.




          SECTION 3.15. No Burdensome Restrictions. The Borrower is not subject to any
Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.08.




ARTICLE IV




Conditions




          SECTION 4.01. Effective Date. The obligations of the Lenders to make Loans and of
the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance with Section 9.02):





     (a)
The Administrative Agent (or its counsel) shall have received from (i) each party
hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B)
written evidence satisfactory to the Administrative Agent (which may include telecopy or
electronic transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement and (ii) each initial Subsidiary Guarantor either (A)
a counterpart of the Subsidiary Guaranty signed on behalf of such Subsidiary Guarantor or
(B) written evidence satisfactory to the Administrative Agent (which may include telecopy or
electronic transmission of a signed signature page of the Subsidiary Guaranty) that such
Subsidiary Guarantor has signed a counterpart of the Subsidiary Guaranty.




     (b)
The Administrative Agent shall have received a favorable written opinion (addressed
to the Administrative Agent and the Lenders and dated the Effective Date) of Latham &
Watkins LLP and Quarles & Brady LLP, counsels for the Loan Parties, substantially in the
forms of Exhibits B-1 and B-2, respectively, and covering such matters relating to
the Loan Parties, the Loan Documents or the Transactions as the Administrative Agent shall
reasonably request. The Borrower hereby requests such counsel to deliver such opinion.




     (c)
The Lenders shall have received (i) satisfactory audited consolidated financial
statements of the Borrower for the two most recent fiscal years ended prior to the Effective
Date as to which such financial statements are available, (ii) unaudited interim
consolidated financial statements of the Borrower for each quarterly period ended subsequent
to the date of the latest financial statements delivered pursuant to clause (i) of this
paragraph as to which such financial statements are publicly available and (iii) financial
statement projections through and including



44









 






the Borrower’s 2012 fiscal year, together with such information as the Administrative
Agent and the Lenders shall reasonably request and as is reasonably available to the
Borrower (including, without limitation, a detailed description of the assumptions used in
preparing such projections).




     (d)
The Administrative Agent shall have received such documents and certificates as the
Administrative Agent or its counsel may reasonably request relating to the organization,
existence and good standing of the initial Loan Parties, the authorization of the
Transactions and any other legal matters relating to such Loan Parties, the Loan Documents
or the Transactions, all in form and substance satisfactory to the Administrative Agent and
its counsel and as further described in the list of closing documents attached as
Exhibit E.




     (e)
The Administrative Agent shall have received a certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer of the Borrower,
confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section
4.02.




     (f)
The Administrative Agent shall have received evidence satisfactory to it that any
credit facility currently in effect for the Borrower shall have been terminated and
cancelled and all indebtedness thereunder shall have been fully repaid (except to the extent
being so repaid with the initial Revolving Loans) and any and all liens thereunder shall
have been terminated other than any credit facility or indebtedness described in Schedule
6.01.




     (g)
The Administrative Agent shall have received evidence reasonably satisfactory to it
that all material governmental and third party approvals necessary in connection with the
Transactions have been obtained and are in full force and effect.




     (h)
The Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement
or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder.


The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such
notice shall be conclusive and binding.




          SECTION 4.02. Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend (other than an
automatic renewal or extension in accordance with its terms) any Letter of Credit, is subject to
the satisfaction of the following conditions:





     (a)
The representations and warranties of the Borrower set forth in this Agreement shall
be true and correct in all material respects on and as of the date of such Borrowing or the
date of such issuance, amendment, renewal or extension of such Letter of Credit, as
applicable, unless specifically stated to have been made on a previous date, in which case
such representation and warranty shall be true and correct in all material respects as of
such date.




     (b)
At the time of and immediately after giving effect to such Borrowing or such
issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no
Default shall have occurred and be continuing.


Each Borrowing and each such issuance, amendment, renewal or extension of a Letter of Credit shall
be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (a) and (b) of this Section.




45









 








ARTICLE V




Affirmative Covenants




          Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed (or cash
collateralized on terms and conditions reasonably satisfactory to the Administrative Agent), the
Borrower covenants and agrees with the Lenders that:




          SECTION 5.01. Financial Statements and Other Information. The Borrower will furnish
to the Administrative Agent and each Lender:





     (a) within ninety (90) days after the end of each fiscal year of the Borrower, its
audited consolidated balance sheet and related statements of operations, stockholders’
equity and cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all reported on by Deloitte &
Touche LLP or other independent public accountants of recognized national standing (without
a “going concern” or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and results of
operations of the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;




     (b) within forty-five (45) days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, its consolidated balance sheet and related
statements of operations, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case
in comparative form the figures for the corresponding period or periods of (or, in the case
of the balance sheet, as of the end of) the previous fiscal year, all certified by one of
its Financial Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to normal year-end
audit adjustments and the absence of footnotes;




     (c) concurrently with any delivery of financial statements under clause (a) or (b)
above, a certificate of a Financial Officer of the Borrower (i) certifying as to whether a
Default has occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section 6.11 and (iii) stating whether
any change in GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 3.04 that affects such financial statements and,
if any such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;




     (d) concurrently with any delivery of financial statements under clause (a) above, a
report of the accounting firm that reported on such financial statements stating whether
they obtained knowledge during the course of their examination of any failure of the
Borrower to comply with the terms of Article VI as such terms relate to accounting and
financial matters (which report may be limited to the extent required by accounting rules or
guidelines);




     (e) within ninety (90) days after the end of each fiscal year of Apollo Global, the
consolidated balance sheet and related statements of operations, stockholders’ equity and
cash flows as of the end of and for such year for Apollo Global, setting forth in each case
in



46









 






     comparative form the figures for the previous fiscal year, all prepared by a the chief
financial officer, principal accounting officer, treasurer or controller of Apollo Global
which consolidated financial statements present fairly in all material respects the
financial condition and results of operations of Apollo Global and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;




     (f) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Borrower or any Subsidiary with
the Securities and Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally, as the case may be; and




     (g) promptly following any request therefor, such other information reasonably
available to the Borrower regarding the operations, business affairs and financial condition
of the Borrower or any Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender (coordinated through the Administrative Agent) may
reasonably request.


Documents required to be delivered pursuant to this Section 5.01 may be delivered electronically
and if so delivered, shall be deemed to have been delivered on the date (i) on which such documents
are posted on the Borrower’s behalf on IntraLinksTM or a substantially similar electronic platform,
if any, to which each Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); or (ii) in the case of
documents required to be delivered pursuant to clauses (a), (b) and (f) of this Section 5.01, on
which such documents are filed for public availability on the U.S. Securities and Exchange
Commission’s Electronic Data Gathering and Retrieval System; provided that the Borrower
shall notify (which may be by facsimile or electronic mail) the Administrative Agent of the posting
of any such documents and provide to the Administrative Agent by electronic mail electronic
versions (i.e., soft copies) of such documents, if requested.




          SECTION 5.02. Notices of Material Events. The Borrower will furnish to the
Administrative Agent prompt written notice of the following:





     (a) the occurrence of any Default;




     (b) the filing or commencement of any action, suit or proceeding by or before any
arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate
thereof that could reasonably be expected to result in a Material Adverse Effect;




     (c) the occurrence of any ERISA Event that, alone or together with any other ERISA
Events that have occurred, could reasonably be expected to result in a Material Adverse
Effect; and




     (d) to the extent such disclosure is not prohibited by any applicable law, rule or
regulation, any other development that results in, or could reasonably be expected to result
in, a Material Adverse Effect.


Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer
or other executive officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto.




          SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause each
of the Subsidiary Guarantors to, do or cause to be done all things necessary to preserve, renew and



47









 






keep in full force and effect (i) its legal existence and (ii) the rights, qualifications,
licenses, permits, privileges, franchises, governmental authorizations and intellectual property
rights material to the conduct of its business, and maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted, except, in the case of clause
(ii), where the failure to do so could not reasonably be expected to result in a Material Adverse
Effect; provided that the foregoing shall not prohibit any merger, consolidation,
liquidation, dissolution, sale, transfer, lease or other disposition permitted under Section 6.03.




          SECTION 5.04. Payment of Obligations. The Borrower will, and will cause each of its
Subsidiaries to, pay its obligations, not constituting Indebtedness, including Tax liabilities,
that, if not paid, could reasonably be expected to result in a Material Adverse Effect before the
same shall become delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to result in a
Material Adverse Effect.




          SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of
its business in normal working order and condition, ordinary wear and tear excepted, and (b) self
insure or maintain, with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.




          SECTION 5.06. Books and Records; Inspection Rights. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or, during the continuation of an Event of
Default, any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine
and make extracts from its books and records, and to discuss its affairs, finances and condition
with its officers and independent accountants, all at such reasonable times and as often as
reasonably requested.




          SECTION 5.07. Compliance with Laws and Material Contractual Obligations. The
Borrower will, and will cause each of its Subsidiaries to, (i) comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its property (including
without limitation Environmental Laws) and (ii) perform in all material respects its obligations
under material agreements to which it is a party, in each case except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect.




          SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only to
finance the working capital needs, and for general corporate purposes (including, without
limitation, the funding of Permitted Acquisitions) of the Borrower and its Subsidiaries including,
without limitation, funding loans to Apollo Global and other transactions not prohibited by this
Agreement. No part of the proceeds of any Loan will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board, including Regulations
T, U and X.




          SECTION 5.09. Subsidiary Guaranty. As promptly as possible but in any event within
thirty (30) days (or such later date as may be agreed upon by the Administrative Agent) after any
Person becomes a Subsidiary or any Subsidiary qualifies independently as, or is designated by the
Borrower or the Administrative Agent as, a Subsidiary Guarantor pursuant to the definitions of
“Material Domestic Subsidiary” and “Subsidiary Guarantor”, the Borrower shall provide the
Administrative Agent with





48












 




written notice thereof setting forth information in reasonable detail describing the material
assets of such Person and shall cause each such Subsidiary which also qualifies as a Subsidiary
Guarantor to deliver to the Administrative Agent a joinder to the Subsidiary Guaranty (in the form
contemplated thereby) pursuant to which such Subsidiary agrees to be bound by the terms and
provisions thereof, such Subsidiary Guaranty to be accompanied by appropriate corporate
resolutions, other corporate documentation (including, without limitation, identification
information enabling Lenders to comply with “know-your-customer” and other laws, regulations and
orders of any Governmental Authority) and legal opinions in form and substance reasonably
satisfactory to the Administrative Agent and its counsel.




ARTICLE VI




Negative Covenants




          Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired
or terminated (or cash collateralized on terms and conditions reasonably satisfactory to the
Administrative Agent) and all LC Disbursements shall have been reimbursed, the Borrower covenants
and agrees with the Lenders that:



          SECTION 6.01. Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except:




     (a) the Obligations and any other Indebtedness created under the Loan Documents;




     (b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and
extensions, renewals and replacements of any such Indebtedness with Indebtedness of a
similar type that does not increase the outstanding principal amount thereof;




     (c) Indebtedness constituting investments, loans or advances permitted under Section
6.04(d);




     (d) Guarantees by (i) the Borrower of Indebtedness of any Subsidiary (other than Apollo
Global) and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary and
(ii) the Borrower or its Subsidiaries of Indebtedness of Apollo Global or its subsidiaries
provided that the principal amount of the Indebtedness guaranteed pursuant to this clause
(d)(ii), when aggregated with the aggregate principal amount of loans or advances to Apollo
Global and its subsidiaries by the Borrower and its Subsidiaries (other than Apollo Global
and its subsidiaries), shall not exceed the Maximum Apollo Global Guarantee and Intercompany
Loan Amount;




     (e) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital Lease
Obligations and any Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof; provided that (i) such Indebtedness is
incurred prior to or within 180 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of Indebtedness
permitted by this clause (e) shall not exceed $25,000,000 at any time outstanding;



49









 






     (f) Indebtedness of the Borrower or any Subsidiary as an account party in respect of
trade letters of credit;




     (g)
to the extent Apollo Global is deemed a “Subsidiary”, Indebtedness of Apollo Global
to the Borrower or any Subsidiary Guarantor;




     (h)
Indebtedness of the Borrower or any Subsidiary secured by a Lien on any asset of the
Borrower or such Subsidiary; provided that the aggregate outstanding principal
amount of Indebtedness permitted by this clause (h) shall not in the aggregate exceed 10% of
Consolidated Tangible Assets (determined at the time of the incurrence thereof);




     (i) unsecured Indebtedness of the Borrower or any Subsidiary so long as, at the time of
the incurrence thereof and after giving effect (including pro forma effect) thereto, the
Borrower is in pro forma compliance with the covenants under Section 6.11;




     (j)
Indebtedness of Apollo Global and its subsidiaries existing at the time Apollo
Global becomes a Subsidiary for purposes of this Agreement and replacements, refinancings,
refundings, renewals or extensions thereof that do not increase the principal amount thereof
by an amount greater than the fees and expenses incurred in connection therewith;




     (k)
Indebtedness incurred by Borrower or any of its Subsidiaries arising from agreements
providing for indemnification, holdbacks, working capital or other purchase price
adjustments, earn-outs, non-compete agreements, deferred compensation or similar
obligations, or from guaranties or letters of credit, surety bonds or performance bonds
securing the performance of Borrower or any such Subsidiary pursuant to such agreements, in
connection with Permitted Acquisitions or dispositions permitted under Section 6.03 of any
business, assets or Subsidiary of Borrower or any of its Subsidiaries;




     (l)
Indebtedness which may be deemed to exist pursuant to any performance, surety,
statutory, customs appeal bonds, return-of-money or similar obligations incurred in the
ordinary course of business;




     (m)
Indebtedness in respect of netting services, overdraft protections, check
endorsement guaranties and otherwise in connection with deposit accounts or cash management
services, all in the ordinary course of business;




     (n) (i) Indebtedness of a Person or Indebtedness attaching to assets of a Person that,
in either case, becomes a Subsidiary, or Indebtedness attaching to assets that are acquired
by Borrower or any of its Subsidiaries, in each case after the Effective Date, in an
aggregate principal amount not to exceed $50,000,000 at any one time outstanding for all
such Indebtedness under this clause (n), provided that (x) such Indebtedness existed at the
time such Person became a Subsidiary or at the time such assets were acquired and, in each
case, was not created in anticipation thereof and (y) such Indebtedness is not guaranteed in
any respect by Borrower or any Subsidiary (other than by any such person that so becomes a
Subsidiary), and (ii) any replacements, refunding, renewal or extension of any Indebtedness
specified in subclause (i) above, provided, that (1) the principal amount of any such
Indebtedness is not increased above the principal amount thereof outstanding immediately
prior to such refinancing, refunding, renewal or extension (other than capitalization of
interest and costs), (2) the direct and contingent obligors with respect to such
Indebtedness are not changed and (3) such Indebtedness shall not be secured by any assets
other than the assets securing the Indebtedness being renewed, extended or refinanced;



50









 






     (o) Indebtedness owed to any Person providing property, casualty, business interruption or
liability insurance to Borrower or any Subsidiary of Borrower, so long as such Indebtedness shall
not be in excess of the amount of the unpaid cost of, and shall be incurred only to defer the cost
of, such insurance for the annual period in which such Indebtedness is incurred;




     (p) Indebtedness consisting of a Sale and Leaseback Transaction permitted by Section 6.10; and




     (q) obligations under any Swap Agreements permitted under Section 6.05.



          SECTION 6.02. Liens. The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:




     (a) Permitted Encumbrances;




     (b) any Lien on any property or asset of the Borrower or any Subsidiary existing on the
date hereof and set forth in Schedule 6.02; provided that (i) such Lien
shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii)
such Lien shall secure only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the outstanding principal
amount thereof;




     (c) any Lien existing on any property or asset prior to the acquisition thereof by the
Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof (or on such Person’s assets) prior to the time such Person
becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of
or in connection with such acquisition or such Person becoming a Subsidiary, as the case may
be, (ii) such Lien shall not apply to any other property or assets of the Borrower or any
other Subsidiary and (iii) such Lien shall secure only those obligations which it secures on
the date of such acquisition or the date such Person becomes a Subsidiary, as the case may
be, and extensions, renewals and replacements thereof that do not increase the outstanding
principal amount thereof;




     (d) Liens on fixed or capital assets acquired, constructed or improved by the Borrower
or any Subsidiary; provided that (i) such security interests secure Indebtedness
permitted by clause (e) of Section 6.01, (ii) such security interests and the Indebtedness
secured thereby are incurred prior to or within 180 days after such acquisition or the
completion of such construction or improvement, (iii) the Indebtedness secured thereby does
not exceed the cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of the Borrower
or any Subsidiary;




     (e) Liens on assets of the Borrower and its Subsidiaries not otherwise permitted above
so long as the aggregate principal amount of the Indebtedness and other obligations secured
by such Liens does not at any time exceed the aggregate principal amount of Indebtedness
permitted under Section 6.01(h);




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



51









 






     (g) Liens on (i) insurance policies and the proceeds thereof securing the financing of
the premiums with respect thereto permitted under Section 6.01(o), (ii) dividends and
rebates and other identifiable proceeds therefrom which may become payable under insurance
policies and loss payments which reduce the incurred premiums on such insurance policies,
(iii) rights which may arise under state insurance guarantee funds relating to any such
insurance policy, in each case securing Indebtedness permitted to be incurred pursuant to
Section 6.01(o) and (iv) pledges or deposits of cash and cash equivalents securing
deductibles, self-insurance, co-payment, co-insurance, retentions or similar obligations to
providers of property, casualty or liability insurance in the ordinary course of business;




     (h) Liens on the assets of Apollo Global and its subsidiaries existing at the time it
becomes a Subsidiary for purposes of this Agreement and any renewal, replacement or
substitution thereof; and




     (i) Liens securing intercompany Indebtedness permitted by Section 6.01(c) so long as
such Liens only encumber treasury stock of the Company or any Subsidiary and proceeds of the
foregoing.



          SECTION 6.03. Fundamental Changes and Asset Sales. (a) The Borrower will not, and
will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) any of its assets (including pursuant to a Sale
and Leaseback Transaction), or any of the Equity Interests of any of its Subsidiaries (in each
case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the
time thereof and immediately after giving effect thereto no Default shall have occurred and be
continuing:




     (i) any Person may merge into the Borrower in a transaction in which the Borrower is
the surviving corporation;




     (ii) (A) any Subsidiary may merge into or consolidate with a Loan Party in a
transaction in which the surviving entity is such Loan Party (provided that any such merger
or consolidation involving the Borrower must result in the Borrower as the surviving entity)
and (B) any other Subsidiary that is not a Loan Party may merge into or consolidate with any
Subsidiary that is not a Loan Party;




     (iii) (A) the Borrower or any of its Subsidiaries may sell, transfer, lease or
otherwise dispose of any of its assets to a Loan Party and/or Apollo Global and its
subsidiaries; provided that the aggregate amount of all such assets sold, transferred,
leased or otherwise disposed to Apollo Global and its subsidiaries by Borrower or any such
Subsidiary (other than Apollo Global or any of its subsidiaries) pursuant to this Section
6.03(a)(iii)(A), together with investments in Equity Interests of, and capital contributions
to, Apollo Global and its subsidiaries permitted pursuant to Section 6.04(d), in any case
whether made prior to, on or after the Effective Date, shall not exceed $801,000,000
(provided further that any such assets sold, transferred, leased or disposed to Apollo
Global and its subsidiaries shall not include any business unit or operations of University
of Phoenix engaged primarily in U.S. education activities), and (B) any Subsidiary which is
not a Subsidiary Guarantor may sell, transfer, lease or otherwise dispose of its assets to
another Subsidiary which is not a Subsidiary Guarantor;




     (iv) the Borrower and its Subsidiaries may (A) sell inventory in the ordinary course
of business, (B) effect sales, trade-ins or dispositions of used equipment for value in the
ordinary course of business consistent with past practice, (C) enter into licenses of
technology in the



52









 






ordinary course of business, (D) make any other sales, transfers, leases or
dispositions that, together with all other property of the Borrower and its Subsidiaries
previously leased, sold, transferred or disposed of as permitted by this clause (D) during
any fiscal year of the Borrower, does not exceed 10% of Consolidated Tangible Assets
(determined as of the end of the most recently completed fiscal year of the Borrower), and
(E) dispose (including subleases of property no longer used or useful in the business of the
Loan Parties) of obsolete, worn out or surplus property (including the abandonment of
intellectual property no longer used or useful in the business of the Loan Parties);




     (v) any Subsidiary may, liquidate or dissolve (or merge into another Person for such
purpose) if the Borrower determines in good faith that such merger, liquidation or
dissolution is in the best interests of the Borrower and is not materially disadvantageous
to the Lenders;




     (vi) any Subsidiary may merge into, liquidate or dissolve to effect a transaction
otherwise permitted pursuant to Section 6.03(a)(iv) or a Permitted Acquisition or
disposition of assets in connection with any transaction permitted by Section 6.04;




     (vii) the Borrower and any of its Subsidiaries may write-off, discount, sell or
otherwise dispose of defaulted or past due receivables and similar obligations in the
ordinary course of business;




     (viii) the Borrower and any of its Subsidiaries may issue Equity Interests to qualify
directors of the board of directors (or similar governing body) of Borrower or any of its
Subsidiaries where required by applicable law or to satisfy other requirements of applicable
law with respect to the ownership of Equity Interests in Foreign
Subsidiaries or nominal shares for tax considerations;



     (ix) the Borrower and any of its Subsidiaries may sell non-core, duplicative or
unnecessary assets acquired in Permitted Acquisitions;




     (x) the Borrower and any of its Subsidiaries may make dispositions in connection with
condemnation or casualty events;




     (xi) the Borrower and any of its Subsidiaries may license or sublicense intellectual
property in the ordinary course of business;




     (xii) the Borrower and any of its Subsidiaries may make dividends and distributions
otherwise permitted under Section 6.07; and




     (xiii) the Borrower or any of its Subsidiaries may issue Equity Interests to employees
in connection with employee compensation arrangements.



          (b)
The Borrower will not, and will not permit any of its Subsidiaries to, engage to any
material extent in any business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.



          (c)
The Borrower will not, nor will it permit any of its Subsidiaries to, change its fiscal
year from the fiscal year in effect on the Effective Date.



          SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire
(including



53









 




pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such
merger) any capital stock, evidences of indebtedness or other securities (including any option,
warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any investment or any other
interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of
related transactions) any Person or any assets of any other Person constituting a business unit,
except:




          (a) cash and Permitted Investments;



          (b) Permitted Acquisitions;



          (c) (i) investments by the Borrower existing on the date hereof in the capital stock of its
Subsidiaries and (ii) other investments described in Schedule 6.04 and extensions, renewals and
replacements with a similar type thereof;



          (d)(i) investments, loans or advances made by the Borrower in or to any Subsidiary and made by
any Subsidiary to the Borrower or any other Subsidiary and (ii) investments, loans or advances made
by the Borrower or any of its Subsidiaries in Apollo Global or any of its subsidiaries; provided
that not more than $50,000,000 in investments, loans or advances or capital contributions may be
made and remain outstanding, during the term of this Agreement, by any Loan Party to a Subsidiary
(other than Apollo Global and its subsidiaries) which is not a Loan Party; and provided
further that (x) the aggregate amount of investments in Equity Interests of, or capital
contributions to, Apollo Global and its subsidiaries made by the Borrower and its Subsidiaries
(other than Apollo Global and its subsidiaries) pursuant to this Section 6.04(d) shall not,
together with the aggregate amount of asset sales, transfers, leases or dispositions to, Apollo
Global and its subsidiaries permitted pursuant to Section 6.03(a)(iii)(A) in each case whether
prior to, on or after the Effective Date, exceed $801,000,000 and (y) the aggregate amount of the
loans or advances to Apollo Global and its subsidiaries by Borrower and its Subsidiaries (other
than Apollo Global and its subsidiaries) plus the aggregate principal amount of Indebtedness of
Apollo Global and its subsidiaries guarantied pursuant to clause 6.01(d)(ii) shall not exceed the
Maximum Apollo Global Guarantee and Intercompany Loan Amount;



          (e) Guarantees constituting Indebtedness permitted by Section 6.01; and



          (f) any other investment, loan or advance (including acquisitions but excluding investments,
loans and advances in or to Apollo Global and its subsidiaries) so long as the aggregate
outstanding amount of all such investments, loans and advances, when aggregated with the total
consideration for acquisitions permitted under this clause (f), does not exceed $100,000,000;



          (g) any investment owned by, or committed to be acquired by, Apollo Global, its subsidiaries
or any other Person at the time it becomes a Subsidiary for purposes of this Agreement;



          (h) investments in (i) any Equity Interests received in satisfaction or partial satisfaction
thereof from financially troubled account debtors and (ii) deposits, prepayments and other credits
to suppliers made in the ordinary course of business;



          (i) loans and advances to employees of Borrower and its Subsidiaries made in the ordinary
course of business in an aggregate outstanding amount not to exceed $1,000,000;



          (j) investments made after the Effective Date in joint ventures in a business or line of
business permitted with respect to the Loan Parties and the Subsidiaries under this Agreement;
provided, (i) immediately prior to the making of any such investment, and after giving
effect (including pro forma



54









 





effect) thereto, no Event of Default shall have occurred and be continuing and (ii) all
transactions in connection therewith shall be consummated, in all material respects, in accordance
with all applicable laws and in conformity with all authorizations of applicable Governmental
Authorities; provided, further, that the aggregate amount of all such investments
in joint ventures pursuant to this clause (j) does not exceed $50,000,000 in the aggregate;



          (k) investments constituting Swap Agreements permitted under Section 6.05;



          (l) Investments arising out of the receipt by the Borrower or any of its Subsidiaries of
non-cash consideration for the sale of assets permitted under Section 6.03;



          (m) loans made by the Borrower to officers and employees of the Borrower or its Subsidiaries,
the proceeds of which are used to purchase Borrower’s Equity Interests in an aggregate outstanding
principal amount not to exceed $5,000,000; and



          (n) to the extent permitted under Section 6.02, Borrower or any Subsidiary may make (i)
deposits in the ordinary course of business consistent with past practices to secure the
performance of operating leases and payment of utility contracts, (ii) good faith deposits required
in connection with Permitted Acquisitions and Joint Ventures permitted under this Section 6.04 and
(iii) escrowed money for dispositions and Permitted Acquisitions to the extent otherwise permitted
hereunder.



          SECTION 6.05. Swap Agreements. The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or
mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in
respect of Equity Interests of the Borrower or any of its Subsidiaries), and (b) Swap Agreements
entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.



          SECTION 6.06. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) on terms and conditions not less favorable to
the Borrower or such Subsidiary than could be obtained on an arm’s-length basis from unrelated
third parties, (b) transactions between or among the Borrower and its wholly owned Subsidiaries not
involving any other Affiliate, (c) any Restricted Payment permitted by Section 6.07, (d)
transactions otherwise permitted by Section 6.04 and (e) related party transactions described in
Note 13 of the Borrower’s Form 10-K filed October 29, 2007.



          SECTION 6.07. Restricted Payments. The Borrower will not, and will not permit any of
its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, except (a) the Borrower may declare and pay dividends with respect to its
Equity Interests payable solely in additional shares of its common stock, (b) Subsidiaries may
declare and pay dividends ratably with respect to their Equity Interests, (c) the Borrower and its
Subsidiaries may make Restricted Payments pursuant to and in accordance with stock option plans or
other benefit plans for management or employees of the Borrower and its Subsidiaries and (d) the
Borrower and its Subsidiaries may make any other Restricted Payment so long as (i) no Default or
Event of Default has occurred and is continuing or would arise after giving effect (including pro
forma effect) thereto and (ii) the aggregate amount of such Restricted Payments does not exceed
$50,000,000 in the aggregate during any fiscal year of the Borrower; provided, that the
foregoing aggregate limitation for Restricted Payments shall not apply so long as the Borrower and
the Subsidiaries are in compliance on a pro forma basis reasonably acceptable



55









 




to the Administrative Agent with a maximum Leverage Ratio of 2.00 to 1.00 both immediately
before and after giving effect (including pro forma effect) thereto.




          SECTION 6.08. Restrictive Agreements. The Borrower will not, and will not permit any
of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement
or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or
assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect
to holders of its Equity Interests or to make or repay loans or advances to the Borrower or any
other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary;
provided that the foregoing shall not apply to:




     (i) conditions imposed by any law, rule or regulation, under any of the Loan Documents
or customary conditions on then-market terms (for the applicable Indebtedness) under any
Indebtedness permitted under Section 6.01 (so long as, in the case of Indebtedness under
Sections 6.01(b), (j) or (n), the conditions imposed by any such Indebtedness which
constitutes extended, renewed or replaced Indebtedness are not more restrictive than the
applicable original Indebtedness);




     (ii) conditions imposed by the holder of any Lien permitted by Section 6.02 with
respect to the property purported to be encumbered by such Lien;




     (iii) other restrictions not otherwise permitted by this Section and listed on
Schedule 6.08;




     (iv) any agreement in effect at the time any Person becomes a Subsidiary (and any
extensions, renewals, or replacements thereof so long as any restrictions and conditions in
such extended, renewed or replaced agreement are not more restrictive than the applicable
original agreement);




     (v) customary restrictions and conditions contained in agreements relating to any sale
or disposition of any asset or property pending such sale or disposition; and




     (vi) customary restrictions and conditions in (A) organizational documents (including
joint venture agreements) and (B) agreements entered into by Apollo Global and its
subsidiaries and other non-wholly-owned Subsidiaries in connection with any Indebtedness
permitted under Section 6.01.



          SECTION 6.09. Subordinated Indebtedness and Amendments to Subordinated Indebtedness
Documents. The Borrower will not, and will not permit any Subsidiary to, directly or
indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or
otherwise acquire, any Subordinated Indebtedness or any Indebtedness from time to time outstanding
under the Subordinated Indebtedness Documents. Furthermore, the Borrower will not, and will not
permit any Subsidiary to, amend the Subordinated Indebtedness Documents or any document, agreement
or instrument evidencing any Indebtedness incurred pursuant to the Subordinated Indebtedness
Documents (or any replacements, substitutions, extensions or renewals thereof) or pursuant to which
such Indebtedness is issued where such amendment, modification or supplement provides for the
following or which has any of the following effects:




     (a) increases the overall principal amount of any such Indebtedness or increases the
amount of any single scheduled installment of principal or interest;



56









 






     (b) shortens or accelerates the date upon which any installment of principal or
interest becomes due or adds any additional mandatory redemption provisions;




     (c) shortens the final maturity date of such Indebtedness or otherwise accelerates the
amortization schedule with respect to such Indebtedness;




     (d) increases the rate of interest accruing on such Indebtedness;




     (e) provides for the payment of additional fees or increases existing fees;




     (f) amends or modifies any financial or negative covenant (or covenant which prohibits
or restricts the Borrower or any Subsidiary from taking certain actions) in a manner which
is more onerous or more restrictive in any material respect to the Borrower or such
Subsidiary or which is otherwise materially adverse to the Borrower, any Subsidiary and/or
the Lenders or, in the case of any such covenant, which places material additional
restrictions on the Borrower or such Subsidiary or which requires the Borrower or such
Subsidiary to comply with more restrictive financial ratios or which requires the Borrower
to better its financial performance, in each case from that set forth in the existing
applicable covenants in the Subordinated Indebtedness Documents or the applicable covenants
in this Agreement; or




     (g) amends, modifies or adds any affirmative covenant in a manner which (i) when taken
as a whole, is materially adverse to the Borrower, any Subsidiary and/or the Lenders or (ii)
is more onerous than the existing applicable covenant in the Subordinated Indebtedness
Documents or the applicable covenant in this Agreement.



          SECTION 6.10. Sale and Leaseback Transactions. The Borrower shall not, nor shall it
permit any Subsidiary to, enter into any Sale and Leaseback Transaction, other than Sale and
Leaseback Transactions in respect of which the net cash proceeds received in connection therewith
does not exceed $50,000,000 in the aggregate during any fiscal year of the Borrower, determined on
a consolidated basis for the Borrower and its Subsidiaries.



          SECTION 6.11. Financial Covenants.



          (a) Maximum Leverage Ratio. The Borrower will not permit the ratio (the
“Leverage Ratio”), determined as of the end of each of its fiscal quarters ending on and
after February 28, 2008, of (i) Consolidated Total Indebtedness to (ii) Consolidated EBITDA for the
period of four (4) consecutive fiscal quarters ending with the end of such fiscal quarter, all
calculated for the Borrower and its Subsidiaries on a consolidated basis, to be greater than 2.50
to 1.00.



          (b) Minimum Coverage Ratio. The Borrower will not permit the ratio (the “Coverage
Ratio”), determined as of the end of each of its fiscal quarters ending on and after February
28, 2008, of (i) Consolidated EBITDAR to (ii) Consolidated Interest Expense plus Consolidated Rent
Expense, in each case for the period of four (4) consecutive fiscal quarters ending with the end of
such fiscal quarter, all calculated for the Borrower and its Subsidiaries on a consolidated basis,
to be less than 1.75 to 1.00.



          (c) Minimum Consolidated DOE Ratio. The Borrower will not permit the Consolidated DOE
Ratio for itself and its Subsidiaries regulated by the DOE, determined as of the end of each of its
fiscal years, to be less than 1.50 to 1.00.



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ARTICLE VII




Events of Default




          If any of the following events (“Events of Default”) shall occur:



          (a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation
in respect of any LC Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;



          (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under this Agreement, when
and as the same shall become due and payable, and such failure shall continue unremedied for a
period of three (3) Business Days;



          (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any
Subsidiary in or in connection with this Agreement or any other Loan Document or any amendment or
modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection with this Agreement or
any other Loan Document or any amendment or modification thereof or waiver thereunder, shall prove
to have been incorrect in a material respect when made or deemed made;



          (d) (i) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in Section 5.02, 5.03 (with respect to the Borrower’s existence), 5.08 or 5.09 or in
Article VI or (ii) any Loan Document shall for any reason not be or shall cease to be in full force
and effect or is declared to be null and void, or the Borrower or any Subsidiary takes any action
for the purpose of terminating, repudiating or rescinding any Loan Document or any of its
obligations thereunder;



          (e) the Borrower or any Subsidiary Guarantor, as applicable, shall fail to observe or perform
any covenant, condition or agreement contained in this Agreement (other than those specified in
clause (a), (b) or (d) of this Article) or any other Loan Document, and such failure shall continue
unremedied for a period of thirty (30) days after notice thereof from the Administrative Agent to
the Borrower (which notice will be given at the request of the Required Lenders);



          (f) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Material Indebtedness, when and as the same
shall become due and payable (after giving effect to any applicable grace period);



          (g) any event or condition occurs that results in any Material Indebtedness becoming due prior
to its scheduled maturity or that enables or permits the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;



          (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any
Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for sixty (60) days or an order or decree approving or ordering any of the
foregoing shall be entered;



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          (i) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;



          (j) the Borrower or any Subsidiary shall become unable, admit in writing its inability or fail
generally to pay its debts as they become due;



          (k) one or more judgments for the payment of money in an aggregate amount in excess of
$50,000,000 (exclusive of amounts covered by creditworthy insurance that has not denied coverage)
shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same
shall remain undischarged for a period of sixty (60) consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment;



          (l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect;



          (m) the Borrower or any Subsidiary shall have received notice from a Governmental Authority of
a final imposition of a fine, liability, disallowance or other sanction based upon a failure to
comply in any material respect with any of the terms and provisions of any material license, permit
or regulation issued by the DOE or of any Governmental Authority, unless the fine, liability
disallowance or sanction imposed would not result in a Material Adverse Effect; or



          (n) a Change in Control shall occur;


then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different times: (i)
terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be due and payable),
and thereupon the principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued hereunder and under the
other Loan Documents, shall become due and payable immediately, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of
any event with respect to the Borrower described in clause (h) or (i) of this Article, the
Commitments shall automatically terminate and the principal of the Loans then outstanding, together
with accrued interest thereon and all fees and other Obligations accrued hereunder and under the
other Loan Documents, shall automatically become due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the Borrower.




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ARTICLE VIII




The Administrative Agent




          Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its behalf, including
execution of the other Loan Documents, and to exercise such powers as are delegated to the
Administrative Agent by the terms of the Loan Documents, together with such actions and powers as
are reasonably incidental thereto.



          The bank serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.



          The Administrative Agent shall not have any duties or obligations except those expressly set
forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the
Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of
whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is
required to exercise in writing as directed by the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as provided in Section
9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall
not have any duty to disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or obtained by the bank
serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent
shall not be liable for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or
willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default
unless and until written notice thereof is given to the Administrative Agent by the Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document delivered hereunder or in
connection with any Loan Document, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.



          The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.



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          The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Administrative Agent.



          Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, with the consent (so long as no Event of Default has occurred and is continuing) of the
Borrower, to appoint a successor. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may,
on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall
be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of
any actions taken or omitted to be taken by any of them while it was acting as Administrative
Agent.



          Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.



          None of the Lenders, if any, identified in this Agreement as a Syndication Agent or
Co-Documentation Agent shall have any right, power, obligation, liability, responsibility or duty
under this Agreement other than those applicable to all Lenders as such. Without limiting the
foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to the relevant Lenders in
their respective capacities as Syndication Agent or Co-Documentation Agents, as applicable, as it
makes with respect to the Administrative Agent in the preceding paragraph.



ARTICLE IX




Miscellaneous




          SECTION 9.01. Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows:



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     (i) if to the Borrower, to it at Apollo Group, Inc., 4615 East Elwood Street, Phoenix,
Arizona 85040, Attention of Joseph L. D’Amico, Executive Vice President and Chief Financial
Officer (Telecopy No. (480) 379-3503; Telephone No. (480) 557-1729) and Brian L. Swartz,
Senior Vice President and Chief Accounting Officer (Telecopy No. (480) 379-3503; Telephone
No. (480) 557-1534);




     (ii) if to the Administrative Agent, (A) in the case of Borrowings denominated in
Dollars, to JPMorgan Chase Bank, N.A., 10 South Dearborn Street, 7th Floor,
Attention of Bill Urban (Telecopy No. (312) 732-1544) and (B) in the case of Borrowings
denominated in Foreign Currencies, to J.P. Morgan Europe Limited, 125 London Wall, London
EC2Y 5AJ, Attention of Kathryn Jepson (Telecopy No. 44 207 777 2360), and in each case with
a copy to JPMorgan Chase Bank, N.A., 650 Town Center Drive, Suite 1000, Costa Mesa,
California 92626, Attention of Anna C. Ruiz (Telecopy No. (310) 975-1353);




     (iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, N.A., 10 South Dearborn
Street, 7th Floor, Attention of Bill Urban (Telecopy No. (312) 732-1544);




     (iv) if to the Swingline Lender, to it at JPMorgan Chase Bank, N.A., 10 South Dearborn
Street, 7th Floor, Attention of Bill Urban (Telecopy No. (312) 732-1544); and




     (v) if to any other Lender, to it at its address (or telecopy number) set forth in its
Administrative Questionnaire.



          (b)Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent;
provided that the foregoing shall not apply to notices pursuant to Article II unless
otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or communications.



          (c)Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.



          SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other
Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any other right or power.
The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and
under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only
in the specific instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing
Bank may have had notice or knowledge of such Default at the time.



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          (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase any Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest (other than an increased rate pursuant to Section 2.13(c)) thereon, or
reduce any fees payable hereunder, without the written consent of each Lender directly affected
thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of,
waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment,
without the written consent of each Lender directly affected thereby, (iv) change Section 2.18(b)
or (c) in a manner that would alter the pro rata sharing of payments required thereby, or alter the
manner in which payments or prepayments of principal, interest or other amounts hereunder shall be
applied as among the Lenders or Types of Loans, in each case, without the written consent of each
Lender, (v) change any of the provisions of this Section or the definition of “Required Lenders” or
any other provision hereof specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender (or each Lender of such Class, as the
case may be), (vi) except to the extent in connection with the disposition, merger, liquidation,
consolidation or other transfer of the Subsidiary Guarantor(s) to the extent permitted hereunder,
release all or substantially all of the Subsidiary Guarantors from their obligations under the
Subsidiary Guaranty, without the written consent of each Lender or (vii) change any provisions of
Article X without the written consent of each Lender; provided further that (A) no
such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Issuing Bank or the Swingline Lender hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be and (B) any
waiver, amendment or modification of this Agreement that by its terms affects the rights or duties
under this Agreement of the Lenders of one Class (but not the Lenders of any other Class) may be
effected by an agreement or agreements in writing entered into by the Borrower and the requisite
percentage of the affected Class of Lenders.



          (c) If, in connection with any proposed amendment, waiver or consent requiring the consent of
“each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained,
but the consent of other necessary Lenders is not obtained (any such Lender whose consent is
necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then the
Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided
that, concurrently with such replacement, (i) another bank or other entity which is reasonably
satisfactory to the Borrower and the Administrative Agent shall agree, as of such date, to purchase
for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment
and Assumption and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the
requirements of clause (b) of Section 9.04, and (ii) to the extent not reflected in the purchase
price paid by such replacement Lender, the Borrower shall pay to such Non-Consenting Lender in same
day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but
unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of
termination, including without limitation payments due to such Non-Consenting Lender under Sections
2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such
Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting
Lender been prepaid on such date rather than sold to the replacement Lender.



          SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i)
all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including



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the reasonable fees, charges and disbursements of one primary counsel (and one local counsel
in each applicable jurisdiction) for the Administrative Agent, in connection with the syndication
and distribution (including, without limitation, via the internet or through a service such as
Intralinks) of the credit facilities provided for herein, the preparation and administration of
this Agreement and the other Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Issuing Bank or any Lender, including the reasonable fees, charges and
disbursements of one primary counsel (and one local counsel in each applicable jurisdiction) for
the Administrative Agent and the Issuing Bank and one additional counsel for all of the Lenders and
additional counsel as the Administrative Agent or any Lender or group of Lenders reasonably
determines are necessary in light of actual or potential conflicts of interest or the availability
of different claims or defenses, in connection with the enforcement or protection of its rights in
connection with this Agreement and any other Loan Document, including its rights under this
Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all
such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect
of such Loans or Letters of Credit.



          (b)The Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of,
in connection with, or as a result of (i) the execution or delivery of any Loan Document or any
agreement or instrument contemplated thereby, the performance by the parties hereto of their
respective obligations thereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply with the terms of
such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on
or from any property owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to
have resulted from the gross negligence, willful misconduct or bad faith of such Indemnitee or any
of its Related Parties.



          (c)To the extent that the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender’s pro rata share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (it being
understood that the Borrower’s failure to pay any such amount shall not relieve the Borrower of any
default in the payment thereof); provided that the unreimbursed expense or indemnified
loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.



          (d)To the extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or



64









 





punitive damages (as opposed to direct or actual damages) arising out of, in connection with,
or as a result of, this Agreement, any other Loan Document or any agreement or instrument
contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the
proceeds thereof.



          (e)All amounts due under this Section shall be payable not later than thirty (30) days after
written demand therefor supported by reasonable detail of the amounts so demanded.



          SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of
Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance
with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and assigns permitted
hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly
contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and
the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.




     (b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender
may assign to one or more assignees, which assignee is an Eligible Assignee and is not a
competitor of the Borrower, all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitments and the Loans at the time owing to
it) with the prior written consent (such consent not to be unreasonably withheld) of:




     (A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund
or, if an Event of Default described in paragraphs (a), (b), (h), (i) or (j) of
Article VII has occurred and is continuing, any other assignee;




     (B) the Administrative Agent; and




     (C) the Issuing Bank.




     (ii) Assignments shall be subject to the following additional conditions:




     (A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an Approved Fund or an assignment of the entire remaining amount of the assigning
Lender’s Commitment or Loans of any Class, the amount of the applicable Commitment
or Loans of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that no
such consent of the Borrower shall be required if an Event of Default has occurred
and is continuing;




     (B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement,
provided that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in respect
of one Class of Commitments or Loans;



65









 






     (C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500; and




     (D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.



          For the purposes of this Section 9.04(b), the term “Approved Fund” has the following
meaning:



          “Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.



          (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this
Section, from and after the effective date specified in each Assignment and Assumption the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment
and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption,
be released from its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of
Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 9.04 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.



          (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the Commitment of, and
principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.



          (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Assumption and record the
information contained therein in the Register; provided that if either the assigning Lender
or the assignee shall have failed to make any payment required to be made by it pursuant to Section
2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no
obligation to accept such Assignment and Assumption and record the information therein in the
Register unless and until such payment shall have been made in full, together with all accrued
interest thereon. No assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.



          (c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent, the
Issuing Bank or the Swingline Lender, sell participations to one or more banks or other



66









 





entities, none of which is a competitor of the Borrower (a “Participant”) in all or a
portion of such Lender’s rights and obligations under this Agreement (including all or a portion of
its Commitments and the Loans owing to it); provided that (A) such Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided that such
agreement or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the first proviso to
Section 9.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and
2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant
to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.18(c) as though it were a Lender.



          (ii) A Participant shall not be entitled to receive any greater payment under Section 2.15 or
2.17 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is
made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it
were a Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.17(e) as though it were a Lender.



          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.



          SECTION 9.05. Survival. All covenants, agreements, representations and warranties
made by the Loan Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement or any other Loan Document shall be
considered to have been relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf and notwithstanding
that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of
any Default or incorrect representation or warranty at the time any credit is extended hereunder,
and shall continue in full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have
not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII
shall survive and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the
Letters of Credit and the Commitments or the termination of this Agreement or any other Loan
Document or any provision hereof or thereof.



          SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto on different counterparts), each of which
shall



67









 





constitute an original, but all of which when taken together shall constitute a single
contract. This Agreement, the other Loan Documents and any separate letter agreements with respect
to fees payable to the Administrative Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except as provided in
Section 4.01, this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement
by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.



          SECTION 9.07. Severability. Any provision of any Loan Document held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions thereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.



          SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final and in whatever currency denominated) at any time
held and other obligations at any time owing by such Lender or Affiliate to or for the credit or
the account of the Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall
have made any demand under the Loan Documents and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and remedies (including
other rights of setoff) which such Lender may have. Each Lender shall promptly notify the Borrower
upon exercising its right of set-off.



          SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of New York.



          (b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan
Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or any other Loan
Document against any Loan Party or its properties in the courts of any jurisdiction.



          (c) Each of the parties hereto hereby irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement
or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the
parties hereto hereby




68












 




irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.




          (d) Each of the parties hereto irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.




          SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY
OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.




          SECTION 9.11. Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.




          SECTION 9.12. Confidentiality. Each of the Administrative Agent, the Issuing Bank
and the Lenders agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its and its Affiliates’ directors, officers,
employees and agents, including accountants, legal counsel and other advisors (collectively, the
“Lender Professionals”) (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and instructed to keep such
Information confidential) and each Lender shall be liable for any failures of its respective Lender
Professionals to maintain the confidentiality of the Information, (b) to the extent requested by
any regulatory authority, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an
agreement containing provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights
or obligations under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Borrower and its obligations, (g)
with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other
than the Borrower. For the purposes of this Section, “Information” means all information received
from the Borrower relating to the Borrower or its business, other than any such information that is
available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis
prior to disclosure by the Borrower; provided that, in the case of information received
from the Borrower after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of Information as
provided in this Section shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of such Information as
such Person would accord to its own confidential information.




69









 








          SECTION 9.13. USA PATRIOT Act. Each Lender that is subject to the requirements of
the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law November 26, 2001)) (the
“Act”) hereby notifies the Borrower and the Subsidiary Guarantors that pursuant to the
requirements of the Act, it is required to obtain, verify and record information that identifies
the Borrower and the Subsidiary Guarantors, which information includes the name and address of the
Borrower and the Subsidiary Guarantors and other information that will allow such Lender to
reasonably identify the Borrower and the Subsidiary Guarantors in accordance with the Act.




ARTICLE X




COLLECTION ALLOCATION MECHANISM EXCHANGE




          (a) On the CAM Exchange Date, (i) the Commitments shall automatically and without further act
be terminated as provided in Article VII and (ii) the Lenders shall automatically and without
further act be deemed to have exchanged interests in the Specified Obligations such that, in lieu
of the interests of each Lender in the particular Specified Obligations that it shall own as of
such date and prior to the CAM Exchange, such Lender shall own an interest equal to such Lender’s
CAM Percentage in all the Specified Obligations. Each Lender, each person acquiring a participation
from any Lender as contemplated by Section 9.04, and the Borrower hereby consents and agrees to the
CAM Exchange. Each of the Borrower and the Lenders agrees from time to time to execute and deliver
to the Administrative Agent all such promissory notes and other instruments and documents as the
Administrative Agent shall reasonably request to evidence and confirm the respective interests and
obligations of the Lenders after giving effect to the CAM Exchange, and each Lender agrees to
surrender any promissory notes originally received by it hereunder to the Administrative Agent
against delivery of any promissory notes so executed and delivered; provided that the failure of
the Borrower to execute or deliver or of any Lender to accept any such promissory note, instrument
or document shall not affect the validity or effectiveness of the CAM Exchange.




          (b) As a result of the CAM Exchange, on and after the CAM Exchange Date, (i) each payment
received by the Administrative Agent pursuant to any Loan Document in respect of the Specified
Obligations shall be distributed to the Lenders pro rata in accordance with their respective CAM
Percentages (to be redetermined as of each such date of payment or distribution to the extent
required by paragraph (c) below) and (ii) Section 2.17(e) shall not apply with respect to any Taxes
required to be withheld or deducted by the Borrower from or in respect of payments hereunder to any
Lender or the Administrative Agent that exceed the Taxes the Borrower would have been required to
withhold or deduct from or in respect of payments to such Lender or the Administrative Agent had
such CAM Exchange not occurred.




          (c) In the event that, on or after the CAM Exchange Date, the aggregate amount of the
Specified Obligations shall change as a result of the making of an LC Disbursement by the Issuing
Bank that is not reimbursed by the Borrower, then (i) each Lender (determined without giving effect
to the CAM Exchange) shall, in accordance with Section 2.06(d), promptly purchase from the Issuing
Bank a participation in such LC Disbursement in the amount of such Lender’s Applicable Percentage
of such LC Disbursement (without giving effect to the CAM Exchange), (ii) the Administrative Agent
shall redetermine the CAM Percentages after giving effect to such LC Disbursement and the purchase
of participations therein by the applicable Lenders, and (iii) in the event distributions shall
have been made in accordance with clause (i) of paragraph (b) above, the Lenders shall make such
payments to one another as shall be necessary in order that the amounts received by them shall be
equal to the amounts they would have received had each LC Disbursement been outstanding immediately
prior to the CAM



70









 






Exchange. Each such redetermination shall be binding on each of the Borrower and Lenders and
their successors and assigns and shall be conclusive absent manifest error.




[Signature Pages Follow]




71









 









          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective authorized officers as of the day and year first above written.




	 	 	 	 	 	 
	 
	 	 	APOLLO GROUP, INC.,	 
	 	 	as the Borrower	 
	 
	 	 	 	 	 
	 

	 	By
	 	     /s/ Joseph L. D’Amico
 

Title:      Executive Vice President and
	 
	 

	 	 	 	               Chief Financial Officer	 
	 
	 	 	 	 	 
	 
	 	 	JPMORGAN CHASE BANK, N.A., individually as a Lender, as the
Swingline Lender, as the Issuing Bank and as Administrative
Agent	 
	 
	 	 	 	 	 
	 

	 	By
	 	     /s/ Anna C. Ruiz	 
	 

	 	 	 	 	 
	 

	 	 	 	Title:      Vice President	 
	 
	 	 	 	 	 
	 
	 	 	WELLS FARGO BANK, N.A., individually as a Lender and as
Syndication Agent	 
	 
	 	 	 	 	 
	 

	 	By
	 	     /s/ Douglas Jorgensen	 
	 

	 	 	 	 	 
	 

	 	 	 	Title:      Vice President	 
	 
	 	 	 	 	 
	 
	 	 	BNP PARIBAS, individually as a Lender and as Co-Documentation
Agent	 
	 
	 	 	 	 	 
	 

	 	By
	 	     /s/ Brian S. Hunnicutt	 
	 

	 	 	 	 	 
	 

	 	 	 	Title:      Director	 
	 
	 	 	 	 	 
	 

	 	By
	 	      /s/ Gregg Bonardi	 
	 

	 	 	 	 	 
	 

	 	 	 	Title:      Director	 
	 
	 	 	 	 	 
	 
	 	 	BANK OF AMERICA, N.A., individually as a Lender and as
Co-Documentation Agent	 
	 
	 	 	 	 	 
	 

	 	By
	 	      /s/ David R. Barney	 
	 

	 	 	 	 	 
	 

	 	 	 	Title:      Senior Vice President	 
	 
	 	 	 	 	 
	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as a Lender	 
	 
	 	 	 	 	 
	 

	 	By
	 	      /s/ Jacob Payne	 
	 

	 	 	 	 	 
	 

	 	 	 	Title:      Vice President	 






Signature Page to Credit Agreement

Apollo Group, Inc.

January 2008




 









 








	 	 	 	 	 	 	 
	 	 	FIFTH THIRD BANK, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Gary S. Losey
 

Title:      Vice President
	 	 
	 
	 	 	 	 	 	 
	 
	 	 	BANK OF ARIZONA, N.A., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Christine A. Nowaczyk	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 
	 	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	     /s/ D. Barnell	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      Vice President & Manager	 	 
	 
	 	 	 	 	 	 
	 	 	CITIBANK N.A., as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Thomas Faherty	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      Vice President	 	 
	 
	 	 	 	 	 	 
	 
	 	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Denise Alvarez	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      Vice President	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ James Neira	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      Associate	 	 
	 
	 	 	 	 	 	 
	 
	 	 	MALAYAN BANKING BERHAD, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Fauzi Zulkifli	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      General Manager	 	 
	 
	 	 	 	 	 	 
	 
	 	 	MIDFIRST BANK, a federally chartered savings association, as a

Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	     /s/ Rory Nordvold	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      Vice President	 	 






Signature Page to Credit Agreement

Apollo Group, Inc.

January 2008




 









 








	 	 	 	 	 	 	 
	 	 	MIZUHO CORPORATE BANK (USA), as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Bertram H. Tang
 

Title:      Senior Vice President & Team
Leader
	 	 
	 
	 	 	 	 	 	 
	 
	 	 	THE NORTHERN TRUST COMPANY, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Morgan Lyons	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      Vice President	 	 
	 
	 	 	 	 	 	 
	 
	 	 	THE BANK OF NOVA SCOTIA, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Chris Osborn	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      Managing Director	 	 
	 
	 	 	 	 	 	 
	 
	 	 	HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Andrew W. Hietala	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      First Vice President	 	 
	 
	 	 	 	 	 	 
	 
	 	 	MEGA INTERNATIONAL COMMERCIAL BANK CO., LTD., LOS ANGELES
BRANCH, as a Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	      /s/ Chia Jang Liu	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:      SVP & General Manager	 	 






Signature Page to Credit Agreement

Apollo Group, Inc.

January 2008




 









 








SCHEDULE 2.01




COMMITMENTS




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	DOLLAR	 	MULTICURRENCY	 	 
	 	 	TRANCHE	 	TRANCHE	 	TOTAL
	LENDER	 	COMMITMENT	 	COMMITMENT	 	COMMITMENT
	 
	JPMORGAN CHASE BANK, N.A.
	 	$	19,821,429.00	 	 	$	40,178,571.00	 	 	$	60,000,000.00	 
	WELLS FARGO BANK, N.A.
	 	 	19,821,429.00	 	 	 	40,178,571.00	 	 	 	60,000,000.00	 
	BANK OF AMERICA, N.A.
	 	 	16,517,857.00	 	 	 	33,482,143.00	 	 	 	50,000,000.00	 
	BNP PARIBAS
	 	 	16,517,857.00	 	 	 	33,482,143.00	 	 	 	50,000,000.00	 
	U.S. BANK NATIONAL ASSOCIATION
	 	 	12,553,571.00	 	 	 	25,446,429.00	 	 	 	38,000,000.00	 
	FIFTH THIRD BANK
	 	 	7,598,214.00	 	 	 	15,401,786.00	 	 	 	23,000,000.00	 
	BANK OF ARIZONA, N.A.
	 	 	6,937,500.00	 	 	 	14,062,500.00	 	 	 	21,000,000.00	 
	THE BANK OF TOKYO-MITSUBISHI
UFJ, LTD.
	 	 	6,937,500.00	 	 	 	14,062,500.00	 	 	 	21,000,000.00	 
	CITIBANK N.A.
	 	 	6,937,500.00	 	 	 	14,062,500.00	 	 	 	21,000,000.00	 
	CREDIT SUISSE, CAYMAN ISLANDS
BRANCH
	 	 	6,937,500.00	 	 	 	14,062,500.00	 	 	 	21,000,000.00	 
	MALAYAN BANKING BERHAD
	 	 	21,000,000.00	 	 	 	0.00	 	 	 	21,000,000.00	 
	MIDFIRST BANK
	 	 	21,000,000.00	 	 	 	0.00	 	 	 	21,000,000.00	 
	MIZUHO CORPORATE BANK (USA)
	 	 	6,937,500.00	 	 	 	14,062,500.00	 	 	 	21,000,000.00	 
	THE NORTHERN TRUST COMPANY
	 	 	6,937,500.00	 	 	 	14,062,500.00	 	 	 	21,000,000.00	 
	THE BANK OF NOVA SCOTIA
	 	 	6,937,500.00	 	 	 	14,062,500.00	 	 	 	21,000,000.00	 
	HSBC BANK USA, NATIONAL
ASSOCIATION
	 	 	6,607,143.00	 	 	 	13,392,857.00	 	 	 	20,000,000.00	 
	MEGA INTERNATIONAL COMMERCIAL
BANK CO., LTD.
	 	 	10,000,000.00	 	 	 	0.00	 	 	 	10,000,000.00	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL COMMITMENTS
	 	$	200,000,000.00	 	 	$	300,000,000.00	 	 	$	500,000,000.00	 







 









 









SCHEDULE 2.02




MANDATORY COST





	1.	 	The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of
compliance with (a) the requirements of the Bank of England and/or the Financial Services
Authority (or, in either case, any other authority which replaces all or any of its functions)
or (b) the requirements of the European Central Bank.
	 
	2.	 	On the first day of each Interest Period (or as soon as possible thereafter) the
Administrative Agent shall calculate, as a percentage rate, a rate (the “Associated Costs
Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory
Cost will be calculated by the Administrative Agent as a weighted average of the Lenders’
Associated Costs Rates (weighted in proportion to the percentage participation of each Lender
in the relevant Loan) and will be expressed as a percentage rate per annum.
	 
	3.	 	The Associated Costs Rate for any Lender lending from a Facility Office in a Participating
Member State will be the percentage notified by that Lender to the Administrative Agent. This
percentage will be certified by that Lender in its notice to the Administrative Agent to be
its reasonable determination of the cost (expressed as a percentage of that Lender’s
participation in all Loans made from that Facility Office) of complying with the minimum
reserve requirements of the European Central Bank in respect of loans made from that Facility
Office.
	 
	4.	 	The Associated Costs Rate for any Lender lending from a Facility Office in the United Kingdom
will be calculated by the Administrative Agent as follows:






	 	(a)	 	in relation to a Loan in Pounds Sterling:





	 	 	 	 	 
	 

	 	AB + C(B – D) + E x 0.01
 

100 – (A + C)
	 	per cent. per annum 







	 	(b)	 	in relation to a Loan in any currency other than Pounds Sterling:





	 	 	 	 	 
	 

	 	E x 0.01
 

300
	 	per cent. per annum.







Where:



	 	 	 
	A

	 	is the percentage of Eligible Liabilities (assuming these to be in excess of any
stated minimum) which that Lender is from time to time required to maintain as an
interest free cash ratio deposit with the Bank of England to comply with cash ratio
requirements.
	 
	 	 
	B

	 	is the percentage rate of interest (excluding the Applicable Rate and the
Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of interest
specified in Section 2.13(c)) payable for the relevant Interest Period on the Loan.
	 
	 	 
	C

	 	is the percentage (if any) of Eligible Liabilities which that Lender is required
from time to time to maintain as interest bearing Special Deposits with the Bank of
England.






 









 






	 	 	 
	D

	 	is the percentage rate per annum payable by the Bank of England to the
Administrative Agent on interest bearing Special Deposits.
	 
	 	 
	E

	 	is designed to compensate Lenders for amounts payable under the Fees Rules and is
calculated by the Administrative Agent as being the average of the most recent rates of
charge supplied by the Reference Banks to the Administrative Agent pursuant to paragraph
7 below and expressed in pounds per £1,000,000.







	5.	 	For the purposes of this Schedule:






	 	(a)	 	“Eligible Liabilities” and “Special Deposits” have the meanings given to them
from time to time under or pursuant to the Bank of England Act 1998 or (as may be
appropriate) by the Bank of England;
	 
	 	(b)	 	“Facility Office” means the office or offices notified by a Lender to the
Administrative Agent in writing on or before the date it becomes a Lender (or, following
that date, by not less than five Business Days’ written notice) as the office or offices
through which it will perform its obligations under this Agreement.
	 
	 	(c)	 	“Fees Rules” means the rules on periodic fees contained in the FSA Supervision
Manual or such other law or regulation as may be in force from time to time in respect
of the payment of fees for the acceptance of deposits;
	 
	 	(d)	 	“Fee Tariffs” means the fee tariffs specified in the Fees Rules under the
activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
required pursuant to the Fees Rules but taking into account any applicable discount
rate);
	 
	 	(e)	 	“Participating Member State” means any member state of the European Union that
adopts or has adopted the euro as its lawful currency in accordance with legislation of
the European Union relating to economic and monetary union.
	 
	 	(f)	 	“Reference Banks” means, in relation to Mandatory Cost, the principal London
offices of JPMorgan Chase Bank, N.A.
	 
	 	(g)	 	“Tariff Base” has the meaning given to it in, and will be calculated in
accordance with, the Fees Rules.
	 
	 	(h)	 	“Unpaid Sum” means any sum due and payable but unpaid by any Borrower under the
Loan Documents.






	6.	 	In application of the above formulae, A, B, C and D will be included in the formulae as
percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A
negative result obtained by subtracting D from B shall be taken as zero. The resulting
figures shall be rounded to four decimal places.
	 
	7.	 	If requested by the Administrative Agent, each Reference Bank shall, as soon as practicable
after publication by the Financial Services Authority, supply to the Administrative Agent, the
rate of




2









 






	 	 	charge payable by that Reference Bank to the Financial Services Authority pursuant to the
Fees Rules in respect of the relevant financial year of the Financial Services Authority
(calculated for this purpose by that Reference Bank as being the average of the Fee Tariffs
applicable to that Reference Bank for that financial year) and expressed in pounds per
£1,000,000 of the Tariff Base of that Reference Bank.
	 
	8.	 	Each Lender shall supply any information required by the Administrative Agent for the purpose
of calculating its Associated Costs Rate. In particular, but without limitation, each Lender
shall supply the following information on or prior to the date on which it becomes a Lender:






	 	(i)	 	the jurisdiction of its Facility Office; and
	 
	 	(j)	 	any other information that the Administrative Agent may reasonably require for
such purpose.




Each Lender shall promptly notify the Administrative Agent of any change to the information
provided by it pursuant to this paragraph.





	9.	 	The percentages of each Lender for the purpose of A and C above and the rates of charge of
each Reference Bank for the purpose of E above shall be determined by the Administrative Agent
based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on the
assumption that, unless a Lender notifies the Administrative Agent to the contrary, each
Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as
those of a typical bank from its jurisdiction of incorporation with a Facility Office in the
same jurisdiction as its Facility Office.
	 
	10.	 	The Administrative Agent shall have no liability to any person if such determination results
in an Associated Costs Rate which over or under compensates any Lender and shall be entitled
to assume that the information provided by any Lender or Reference Bank pursuant to paragraphs
3, 7 and 8 above is true and correct in all respects.
	 
	11.	 	The Administrative Agent shall distribute the additional amounts received as a result of the
Mandatory Cost to the Lenders on the basis of the Associated Costs Rate for each Lender based
on the information provided by each Lender and each Reference Bank pursuant to paragraphs 3, 7
and 8 above.
	 
	12.	 	Any determination by the Administrative Agent pursuant to this Schedule in relation to a
formula, the Mandatory Cost, an Associated Costs Rate or any amount payable to a Lender shall,
in the absence of manifest error, be conclusive and binding on all parties hereto.
	 
	13.	 	The Administrative Agent may from time to time, after consultation with the Borrower and the
relevant Lenders, determine and notify to all parties hereto any amendments which are required
to be made to this Schedule 2.02 in order to comply with any change in law, regulation or any
requirements from time to time imposed by the Bank of England, the Financial Services
Authority or the European Central Bank (or, in any case, any other authority which replaces
all or any of its functions) and any such determination shall, in the absence of manifest
error, be conclusive and binding on all parties hereto.




3









 












EXHIBIT A




ASSIGNMENT AND ASSUMPTION




          This Assignment and Assumption (the “Assignment and Assumption”) is dated as
of the Effective Date set forth below and is entered into by and between [Insert name of Assignor]
(the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms
used but not defined herein shall have the meanings given to them in the Credit Agreement
identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.




          For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including any letters of credit,
guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under
or in connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all
other claims at law or in equity related to the rights and obligations sold and assigned pursuant
to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii)
above being referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.




	 	 	 	 	 	 	 	 	 
	1.

	 	Assignor:	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	2.

	 	Assignee:	 	 	 	 	 	 
	 

	 	 	 	 

	 	 	 	 
	 	 	 	 	[and is an Affiliate/Approved Fund of [identify Lender]1]
	 
	 	 	 	 	 	 	 	 
	3.

	 	Borrower(s):
	 	Apollo Group, Inc.
 

	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	4.	 	Administrative Agent:	 	JPMorgan Chase Bank, N.A., as the
administrative agent under the
Credit Agreement
	 
	 	 	 	 	 	 	 	 
	5.	 	Credit Agreement:	 	The Credit Agreement dated as of
January 4, 2008 among Apollo
Group, Inc., the Lenders parties
thereto, JPMorgan Chase Bank,
N.A., as Administrative Agent,
and the other agents parties
thereto
	 
	 	 	 	 	 	 	 	 
	6.

	 	Assigned Interest:	 	 	 	 	 	 








 




			
	1	 	Select as applicable.




 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate Amount of	 	 	 	 
	 	 	Commitment/Loans	 	Amount of Commitment/	 	Percentage Assigned of
	Facility Assigned2	 	for all Lenders	 	Loans Assigned	 	Commitment/Loans3
	 
	 	$	 	 	 	$	 	 	 	 	%	 
	 
	 	$	 	 	 	$	 	 	 	 	%	 
	 
	 	$	 	 	 	$	 	 	 	 	%	 






Effective Date:                      ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL
BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]



The terms set forth in this Assignment and Assumption are hereby agreed to:




	 	 	 	 	 	 	 
	 	 	ASSIGNOR
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNOR]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Title:
	 	 
	 
	 	 	 	 	 	 
	 	 	ASSIGNEE
	 
	 	 	 	 	 	 
	 	 	[NAME OF ASSIGNEE]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Title:
	 	 






Consented to and Accepted:




	 	 	 	 	 
	JPMORGAN CHASE BANK, N.A., as
Administrative Agent and Issuing
Bank	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Title:
	 	 
	 
	 	 	 	 
	[Consented to:]4	 	 
	 
	 	 	 	 
	APOLLO GROUP, INC.	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Title:
	 	 








 




			
	2	 	Fill in the appropriate terminology for the types of
facilities under the Credit Agreement that are being assigned under this
Assignment (e.g., “Dollar Tranche Commitment” or “Multicurrency Tranche
Commitment”).
	 
	3	 	Set forth, so at least 9 decimals, as a percentage of
the Commitment/Loans of all Lenders thereunder.
	 
	4	 	To be added only if the consent of the Borrower is
required by the terms of the Credit Agreement.





2









 





ANNEX I




STANDARD TERMS AND CONDITIONS FOR




ASSIGNMENT AND ASSUMPTION




          1. Representations and Warranties.




          1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.




          1.2. Assignee. The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as
applicable, and such other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision independently and
without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.




          2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.




          3. General Provisions. This Assignment and Assumption shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Assumption may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and




 









 







Assumption. This Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of New York.




2









 








EXHIBIT B




OPINION OF COUNSEL FOR THE LOAN PARTIES




[Attached]





 









 








EXHIBIT C




FORM OF INCREASING LENDER SUPPLEMENT




          INCREASING LENDER SUPPLEMENT, dated                     , 20___ (this “Supplement”), by and
among each of the signatories hereto, to the Credit Agreement, dated as of January 4, 2008 (as
amended, restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Apollo Group, Inc. (the “Borrower”), the Lenders party thereto and
JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative
Agent”).




W I T N E S S E T H




          WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the Borrower has the right,
subject to the terms and conditions thereof, to effectuate from time to time an increase in the
aggregate Commitments under the Credit Agreement by requesting one or more Lenders to increase the
amount of its Dollar Tranche Commitment and/or its Multicurrency Tranche Commitment;




          WHEREAS, the Borrower has given notice to the Administrative Agent of its intention to
increase the aggregate [Dollar Tranche Commitments] [and the aggregate] [Multicurrency Tranche
Commitments] pursuant to such Section 2.20; and




          WHEREAS, pursuant to Section 2.20 of the Credit Agreement, the undersigned Increasing
Lender now desires to increase the amount of its [Dollar Tranche Commitment] [and its]
Multicurrency Tranche Commitment] under the Credit Agreement by executing and delivering to the
Borrower and the Administrative Agent this Supplement;




          NOW, THEREFORE, each of the parties hereto hereby agrees as follows:




          [1. The undersigned Increasing Lender agrees, subject to the terms and conditions of the
Credit Agreement, that on the date of this Supplement it shall have its Dollar Tranche Commitment
increased by $[                    ], thereby making the aggregate amount of its total Dollar Tranche
Commitments equal to $[                    ].]




          [1. The undersigned Increasing Lender agrees, subject to the terms and conditions of the
Credit Agreement, that on the date of this Supplement it shall have its Multicurrency Tranche
Commitment increased by $[                    ], thereby making the aggregate amount of its total
Multicurrency Tranche Commitments equal to $[                    ].]




          2. The Borrower hereby represents and warrants that no Default or Event of Default has
occurred and is continuing on and as of the date hereof.




          3. Terms defined in the Credit Agreement shall have their defined meanings when used herein.




          4. This Supplement shall be governed by, and construed in accordance with, the laws of the
State of New York.




          5. This Supplement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same document.




 









 








          IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and
delivered by a duly authorized officer on the date first above written.




	 	 	 	 	 	 	 
	 	 	[INSERT NAME OF INCREASING LENDER]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 





Accepted and agreed to as of the date first written above:




	 	 	 	 	 
	APOLLO GROUP, INC.
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	Acknowledged as of the date first written above:
	 
	 	 	 	 
	JPMORGAN CHASE BANK, N.A.
	as Administrative Agent
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 








2









 








EXHIBIT D




FORM OF AUGMENTING LENDER SUPPLEMENT




          AUGMENTING LENDER SUPPLEMENT, dated                     , 20___ (this “Supplement”), to the
Credit Agreement, dated as of January 4, 2008 (as amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among Apollo Group, Inc. (the
“Borrower”), the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent (in such capacity, the “Administrative Agent”).




W I T N E S S E T H




          WHEREAS, the Credit Agreement provides in Section 2.20 thereof that any bank, financial
institution or other entity may extend Commitments under the Credit Agreement subject to the
approval of the Borrower and the Administrative Agent, by executing and delivering to the Borrower
and the Administrative Agent a supplement to the Credit Agreement in substantially the form of this
Supplement; and




          WHEREAS, the undersigned Augmenting Lender was not an original party to the Agreement but now
desires to become a party thereto;




          NOW, THEREFORE, each of the parties hereto hereby agrees as follows:




          1. The undersigned Augmenting Lender agrees to be bound by the provisions of the Credit
Agreement and agrees that it shall, on the date of this Supplement, become a Lender for all
purposes of the Credit Agreement to the same extent as if originally a party thereto, with a
[Dollar Tranche Commitment with respect to Revolving Loans of $[                    ]] [and a] [Multicurrency
Tranche Commitment with respect to Revolving Loans of $[                    ]].




          2. The undersigned Augmenting Lender (a) represents and warrants that it is legally
authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements delivered pursuant to
Section 5.01 thereof, as applicable, and has reviewed such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to enter into this
Supplement; (c) agrees that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking action under the
Credit Agreement or any other instrument or document furnished pursuant hereto or thereto; (d)
appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to
exercise such powers and discretion under the Credit Agreement or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound
by the provisions of the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be performed by it as a
Lender.




          3. The undersigned’s address for notices for the purposes of the Credit Agreement is as
follows:




               [                    ]




          4. The Borrower hereby represents and warrants that no Default or Event of Default has
occurred and is continuing on and as of the date hereof.




 









 








          5. Terms defined in the Credit Agreement shall have their defined meanings when used herein.




          6. This Supplement shall be governed by, and construed in accordance with, the laws of the
State of New York.




          7. This Supplement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same document.




[remainder of this page intentionally left blank]






2









 








          IN WITNESS WHEREOF, each of the undersigned has caused this Supplement to be executed and
delivered by a duly authorized officer on the date first above written.




	 	 	 	 	 	 	 
	 	 	[INSERT NAME OF AUGMENTING LENDER]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 





Accepted and agreed to as of the date first written above:




	 	 	 	 	 
	APOLLO GROUP, INC.
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	Acknowledged as of the date first written above:
	 
	 	 	 	 
	JPMORGAN CHASE BANK, N.A.
	as Administrative Agent
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 







3











 





EXHIBIT E




LIST OF CLOSING DOCUMENTS




APOLLO GROUP, INC.




CREDIT FACILITIES




January 4, 2008




LIST OF CLOSING DOCUMENTS1




A. LOAN DOCUMENTS





	1.	 	Credit Agreement (the “Credit Agreement”) by and among Apollo Group, Inc., an Arizona
corporation (the “Borrower”), the institutions from time to time parties thereto as
Lenders (the “Lenders”) and JPMorgan Chase Bank, N.A., in its capacity as
Administrative Agent for itself and the other Lenders (the “Administrative Agent”),
evidencing a revolving credit facility to the Borrower from the Lenders in an initial
aggregate principal amount of $500,000,000.





SCHEDULES




	 	 	 	 	 
	Schedule 2.01

	 	—
	 	Commitments
	Schedule 2.02

	 	—
	 	Mandatory Cost
	Schedule 3.01

	 	—
	 	Subsidiaries
	Schedule 3.06(b)

	 	—
	 	Litigation
	Schedule 6.01

	 	—
	 	Existing Indebtedness
	Schedule 6.02

	 	—
	 	Existing Liens
	Schedule 6.04

	 	—
	 	Existing Investments
	Schedule 6.08

	 	—
	 	Restrictive Agreements






EXHIBITS




	 	 	 	 	 
	Exhibit A

	 	—
	 	Form of Assignment and Assumption
	Exhibit B-1

	 	—
	 	Form of Opinion of Latham & Watkins LLP
	Exhibit B-2

	 	—
	 	Form of Opinion of Quarles & Brady LLP
	Exhibit C

	 	—
	 	Form of Increasing Lender Supplement
	Exhibit D

	 	—
	 	Form of Augmenting Lender Supplement
	Exhibit E

	 	—
	 	List of Closing Documents
	Exhibit F

	 	—
	 	Form of Subsidiary Guaranty
	Exhibit G

	 	—
	 	Form of Compliance Certificate







	2.	 	Notes executed by the Borrower in favor of each of the Lenders, if any, which has requested a
note pursuant to Section 2.10(e) of the Credit Agreement.







 




			
	1	 	Each capitalized term used herein and not defined
herein shall have the meaning assigned to such term in the above-defined Credit
Agreement. Items appearing in bold and italics shall be prepared and/or
provided by the Borrower and/or Borrower’s counsel.




 









 











	3.	 	Guaranty executed by the initial Subsidiary Guarantors (collectively with the Borrower, the
“Loan Parties”) in favor of the Administrative Agent





B. CORPORATE DOCUMENTS





	4.	 	Certificate of the Secretary or an Assistant Secretary of each Loan Party certifying (i) that
there have been no changes in the Certificate of Incorporation or other charter document of
such Loan Party, as attached thereto and as certified as of a recent date by the Secretary of
State of the jurisdiction of its organization, since the date of the certification thereof by
such secretary of state, (ii) the By-Laws or other applicable organizational document, as
attached thereto, of such Loan Party as in effect on the date of such certification, (iii)
resolutions of the Board of Directors or other governing body of such Loan Party authorizing
the execution, delivery and performance of each Loan Document to which it is a party, and (iv)
the names and true signatures of the incumbent officers of each Loan Party authorized to sign
the Loan Documents to which it is a party, and (in the case of the Borrower) authorized to
request a Borrowing or the issuance of a Letter of Credit under the Credit Agreement.






	5.	 	Good Standing Certificate for each Loan Party from the Secretary of State of the jurisdiction
of its organization.





C. OPINIONS




6. Opinion of Latham & Watkins LLP, counsel for the Loan Parties.




7. Opinion of Quarles & Brady LLP, counsel for the Loan Parties.




D. CLOSING CERTIFICATES AND MISCELLANEOUS





	8.	 	A Certificate signed by the President, a Vice President or a Financial Officer of the
Borrower certifying the following: (i) all of the representations and warranties of the
Borrower set forth in the Credit Agreement are true and correct and (ii) no Default has
occurred and is then continuing.





2









 





EXHIBIT F




FORM OF SUBSIDIARY GUARANTY




GUARANTY




          THIS GUARANTY (this “Guaranty”) is made as of January 4, 2008, by and among each of
the undersigned (the “Initial Guarantors” and along with any additional Subsidiaries of the
Borrower which become parties to this Guaranty by executing a supplement hereto in the form
attached as Annex I, the “Guarantors”) in favor of the Administrative Agent, for the
ratable benefit of the Holders of Guaranteed Obligations (as defined below), under the Credit
Agreement referred to below.




WITNESSETH




          WHEREAS, Apollo Group, Inc., an Arizona corporation (the “Borrower”), the institutions
from time to time parties thereto as lenders (the “Lenders”), and JPMorgan Chase Bank,
N.A., in its capacity as administrative agent (the “Administrative Agent”), have entered
into a certain Credit Agreement dated as of January 4, 2008 (as the same may be amended, modified,
supplemented and/or restated, and as in effect from time to time, the “Credit Agreement”),
providing, subject to the terms and conditions thereof, for extensions of credit and other
financial accommodations to be made by the Lenders to the Borrower;




          WHEREAS, it is a condition precedent to the extensions of credit by the Lenders under the
Credit Agreement that each of the Guarantors (constituting all of the Subsidiaries of the Borrower
required to execute this Guaranty pursuant to Section 5.09 of the Credit Agreement) execute and
deliver this Guaranty, whereby each of the Guarantors shall guarantee the payment when due of all
Obligations; and




          WHEREAS, in consideration of the direct and indirect financial and other support that the
Borrower has provided, and such direct and indirect financial and other support as the Borrower may
in the future provide, to the Guarantors, and in order to induce the Lenders and the Administrative
Agent to enter into the Credit Agreement, each of the Guarantors is willing to guarantee the
Obligations of the Borrower;




          NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:




          SECTION 1. Definitions. Terms defined in the Credit Agreement and not otherwise
defined herein have, as used herein, the respective meanings provided for therein.




          SECTION 2. Representations, Warranties and Covenants. Each of the Guarantors
represents and warrants (which representations and warranties shall be deemed to have been renewed
at the time of the making, conversion or continuation of any Loan or issuance of any Letter of
Credit) that:





     (A) It is a corporation, partnership or limited liability company duly and properly
incorporated or organized, as the case may be, validly existing and (to the extent such
concept applies to such entity) in good standing under the laws of its jurisdiction of
incorporation, organization or formation and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted, except to the extent that
the failure to have such authority could not reasonably be expected to have a Material
Adverse Effect.



 









 






     (B) It (to the extent applicable) has the requisite power and authority and legal
right to execute and deliver this Guaranty and to perform its obligations hereunder. The
execution and delivery by each Guarantor of this Guaranty and the performance by each of its
obligations hereunder have been duly authorized by proper proceedings, and this Guaranty
constitutes a legal, valid and binding obligation of such Guarantor, respectively,
enforceable against such Guarantor, respectively, in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors’ rights generally.



     (C) Neither the execution and delivery by it of this Guaranty, nor the consummation by
it of the transactions herein contemplated, nor compliance by it with the provisions hereof
will (i) violate any law, rule, regulation, order, writ, judgment, injunction, decree or
award binding on it or its articles or certificate of incorporation (or equivalent charter
documents), limited liability company or partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating agreement or other management
agreement, as the case may be, or the provisions of any indenture, material instrument or
material agreement to which the Borrower or any of its Subsidiaries is a party or is
subject, or by which it, or its property, is
bound, or (ii) conflict with, or constitute a
default under, or result in, or require, the creation or imposition of any Lien in, of or on
its property pursuant to the terms of, any such indenture, instrument or agreement (other
than any Loan Document). No order, consent, adjudication, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by, or other
action in respect of any governmental or public body or authority, or any subdivision
thereof, which has not been obtained by it, is required to be obtained by it in connection
with the execution, delivery and performance by it of, or the legality, validity, binding
effect or enforceability against it of, this Guaranty.



          In addition to the foregoing, each of the Guarantors covenants that, so long as any Lender has
any Commitment outstanding under the Credit Agreement or any amount payable under the Credit
Agreement or any other Guaranteed Obligations shall remain unpaid, it will, and, if necessary, will
enable the Borrower to, fully comply with those covenants and agreements of the Borrower applicable
to such Guarantor set forth in the Credit Agreement.




          SECTION 3. The Guaranty. Each of the Guarantors hereby unconditionally guarantees,
jointly with the other Guarantors and severally, the full and punctual payment and performance when
due (whether at stated maturity, upon acceleration or otherwise) of the Obligations, including,
without limitation, (i) the principal of and interest on each Loan made to the Borrower pursuant to
the Credit Agreement, (ii) any obligations of the Borrower to reimburse LC Disbursements
(“Reimbursement Obligations”), (iii) all obligations of the Borrower owing to any Lender or
any affiliate of any Lender under any Swap Agreement or Banking Services Agreement, (iv) all other
amounts payable by the Borrower or any of its Subsidiaries under the Credit Agreement, any Swap
Agreement, any Banking Services Agreement and the other Loan Documents and (v) the punctual and
faithful performance, keeping, observance, and fulfillment by the Borrower of all of the
agreements, conditions, covenants, and obligations of the Borrower contained in the Loan Documents
(all of the foregoing being referred to collectively as the “Guaranteed Obligations” and
the holders from time to time of the Guaranteed Obligations being referred to collectively as the
“Holders of Guaranteed Obligations”). Upon (x) the failure by the Borrower or any of its
Affiliates, as applicable, to pay punctually any such amount or perform such obligation, and (y)
such failure continuing beyond any applicable grace or notice and cure period, each of the
Guarantors agrees that it shall forthwith on demand pay such amount or perform such obligation at
the place and in the manner specified in the Credit Agreement, any Swap Agreement, any Banking
Services Agreement or the relevant Loan Document, as the case may be. Each of the Guarantors
hereby agrees that this Guaranty is an absolute, irrevocable and unconditional guaranty of payment
and is



2









 






not a guaranty of collection. Notwithstanding the foregoing or anything else contained in
this Guaranty to the contrary, the maximum amount of Guaranteed Obligations of Apollo Global
hereunder at any time shall not exceed the aggregate outstanding amount of intercompany debt owing
by Apollo Global to the Borrower at such time.




          SECTION 4. Guaranty Unconditional. The obligations of each of the Guarantors
hereunder shall be unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:





     (A) any extension, renewal, settlement, indulgence, compromise, waiver or release of
or with respect to the Guaranteed Obligations or any part thereof or any agreement relating
thereto, or with respect to any obligation of any other guarantor of any of the Guaranteed
Obligations, whether (in any such case) by operation of law or otherwise, or any failure or
omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or
any part thereof or any agreement relating thereto, or with respect to any obligation of any
other guarantor of any of the Guaranteed Obligations;




     (B) any modification or amendment of or supplement to the Credit Agreement, any Swap
Agreement, any Banking Services Agreement or any other Loan Document, including, without
limitation, any such amendment which may increase the amount of, or the interest rates
applicable to, any of the Obligations guaranteed hereby;




     (C) any release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any other guaranties with respect to the
Guaranteed Obligations or any part thereof, or any other obligation of any person or entity
with respect to the Guaranteed Obligations or any part thereof;




     (D) any change in the corporate, partnership or other existence, structure or
ownership of the Borrower or any other guarantor of any of the Guaranteed Obligations, or
any insolvency, bankruptcy, reorganization or other similar proceeding affecting the
Borrower or any other guarantor of the Guaranteed Obligations, or any of their respective
assets or any resulting release or discharge of any obligation of the Borrower or any other
guarantor of any of the Guaranteed Obligations;




     (E) the existence of any claim, setoff or other rights which the Guarantors may have
at any time against the Borrower, any other guarantor of any of the Guaranteed Obligations,
the Administrative Agent, any Holder of Guaranteed Obligations or any other Person, whether
in connection herewith or in connection with any unrelated transactions; provided
that nothing herein shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;




     (F) the enforceability or validity of the Guaranteed Obligations or any part thereof
or the genuineness, enforceability or validity of any agreement relating thereto, or any
other invalidity or unenforceability relating to or against the Borrower or any other
guarantor of any of the Guaranteed Obligations, for any reason related to the Credit
Agreement, any Swap Agreement, any Banking Services Agreement, any other Loan Document, or
any provision of applicable law, decree, order or regulation of any jurisdiction purporting
to prohibit the payment by the Borrower or any other guarantor of the Guaranteed
Obligations, of any of the Guaranteed Obligations or otherwise affecting any term of any of
the Guaranteed Obligations;




     (G) the election by, or on behalf of, any one or more of the Holders of Guaranteed
Obligations, in any proceeding instituted under Chapter 11 of Title 11 of the United States
Code



3









 






     (11 U.S.C. 101 et seq.) (the “Bankruptcy Code”), of the application of Section
1111(b)(2) of the Bankruptcy Code;




     (H) any borrowing by the Borrower, as debtor-in-possession, under Section 364 of the
Bankruptcy Code;




     (I) the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion
of the claims of the Holders of Guaranteed Obligations or the Administrative Agent for
repayment of all or any part of the Guaranteed Obligations;




     (J) the failure of any other guarantor to sign or become party to this Guaranty or any
amendment, change, or reaffirmation hereof; or




     (K) any other act or omission to act or delay of any kind by the Borrower, any other
guarantor of the Guaranteed Obligations, the Administrative Agent, any Holder of Guaranteed
Obligations or any other Person or any other circumstance whatsoever which might, but for
the provisions of this Section 4, constitute a legal or equitable discharge of any
Guarantor’s obligations hereunder except as provided in Section 5.



          SECTION 5. Discharge Only Upon Payment In Full: Reinstatement In Certain
Circumstances. Each of the Guarantors’ obligations hereunder shall remain in full force and
effect until all Guaranteed Obligations shall have been paid in full in cash and the Commitments
and all Letters of Credit issued under the Credit Agreement shall have terminated or expired. If
at any time any payment of the principal of or interest on any Loan, any Reimbursement Obligation
or any other amount payable by the Borrower or any other party under the Credit Agreement, any Swap
Agreement, any Banking Services Agreement or any other Loan Document is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, each of the Guarantors’ obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time. The parties hereto
acknowledge and agree that each of the Guaranteed Obligations shall be due and payable in the same
currency as such Guaranteed Obligation is denominated, but if currency control or exchange
regulations are imposed in the country which issues such currency with the result that such
currency (the “Original Currency”) no longer exists or the relevant Guarantor is not able
to make payment in such Original Currency, then all payments to be made by such Guarantor hereunder
in such currency shall instead be made when due in Dollars in an amount equal to the Dollar Amount
(as of the date of payment) of such payment due, it being the intention of the parties hereto that
each Guarantor takes all risks of the imposition of any such currency control or exchange
regulations.




          SECTION 6. General Waivers; Additional Waivers.





     (A) General Waivers. Each of the Guarantors irrevocably waives acceptance hereof,
presentment, demand or action on delinquency, protest, the benefit of any statutes of
limitations and, to the fullest extent permitted by law, any notice not provided for herein,
as well as any requirement that at any time any action be taken by any Person against the
Borrower, any other guarantor of the Guaranteed Obligations, or any other Person.




     (B) Additional Waivers. Notwithstanding anything herein to the contrary, each of the
Guarantors hereby absolutely, unconditionally, knowingly, and expressly waives:




     (i) any right it may have to revoke this Guaranty as to future indebtedness or
notice of acceptance hereof;



4









 






     (ii) (a) notice of acceptance hereof; (b) notice of any loans or other financial
accommodations made or extended under the Loan Documents or the creation or existence of
any Guaranteed Obligations; (c) notice of the amount of the Guaranteed Obligations,
subject, however, to each Guarantor’s right to make inquiry of Administrative Agent and
Holders of Guaranteed Obligations to ascertain the amount of the Guaranteed Obligations
at any reasonable time; (d) notice of any adverse change in the financial condition of
the Borrower or of any other fact that might increase such Guarantor’s risk hereunder;
(e) notice of presentment for payment, demand, protest, and notice thereof as to any
instruments among the Loan Documents; (f) notice of any Default or Event of Default; and
(g) all other notices (except if such notice is specifically required to be given to such
Guarantor hereunder or under the Loan Documents) and demands to which each Guarantor
might otherwise be entitled;




     (iii) its right, if any, to require the Administrative Agent and the other Holders
of Guaranteed Obligations to institute suit against, or to exhaust any rights and
remedies which the Administrative Agent and the other Holders of Guaranteed Obligations
has or may have against, the other Guarantors, or any third party; and each Guarantor
further waives any defense arising by reason of any disability or other defense (other
than the defense that the Guaranteed Obligations shall have been fully and finally
performed and indefeasibly paid) of the other Guarantors or by reason of the cessation
from any cause whatsoever of the liability of the other Guarantors in respect thereof;




     (iv) (a) any rights to assert against the Administrative Agent and the other
Holders of Guaranteed Obligations any defense (legal or equitable), set-off,
counterclaim, or claim which such Guarantor may now or at any time hereafter have against
the other Guarantors or any other party liable to the Administrative Agent and the other
Holders of Guaranteed Obligations; (b) any defense, set-off, counterclaim, or claim, of
any kind or nature, arising directly or indirectly from the present or future
sufficiency, validity, or enforceability of the Guaranteed Obligations; (c) any defense
such Guarantor has to performance hereunder, and any right such Guarantor has to be
exonerated, arising by reason of: the impairment or suspension of the Administrative
Agent’s and the other Holders of Guaranteed Obligations’ rights or remedies against the
other Guarantors; the alteration by the Administrative Agent and the other Holders of
Guaranteed Obligations of the Guaranteed Obligations; any discharge of the other
Guarantors’ obligations to the Administrative Agent and the other Holders of Guaranteed
Obligations by operation of law as a result of the Administrative Agent’s and the other
Holders of Guaranteed Obligations’ intervention or omission; or the acceptance by the
Administrative Agent and the other Holders of Guaranteed Obligations of anything in
partial satisfaction of the Guaranteed Obligations; and (d) the benefit of any statute of
limitations affecting such Guarantor’s liability hereunder or the enforcement thereof,
and any act which shall defer or delay the operation of any statute of limitations
applicable to the Guaranteed Obligations shall similarly operate to defer or delay the
operation of such statute of limitations applicable to such Guarantor’s liability
hereunder; and




     (v) any defense arising by reason of or deriving from (a) any claim or defense
based upon an election of remedies by the Administrative Agent and the other Holders of
Guaranteed Obligations; or (b) any election by the Administrative Agent and the other
Holders of Guaranteed Obligations under Section 1111(b) of Title 11 of the United States
Code entitled “Bankruptcy”, as now and hereafter in effect (or any successor statute), to
limit the amount of, or any collateral securing, its claim against the Guarantors.



          SECTION 7. Subordination of Subrogation; Subordination of Intercompany Indebtedness.




5









 









     (A) Subordination of Subrogation. Until the Guaranteed Obligations have been fully
and finally performed and indefeasibly paid in full in cash, each of the Guarantors (i)
hereby subordinates its right of subrogation with respect to such Guaranteed Obligations to
the indefeasible payment in full in cash of the Guaranteed Obligations and (ii) hereby
agrees that it shall not enforce any right to enforce any remedy which the Holders of
Guaranteed Obligations, the Issuing Bank or the Administrative Agent now have or may
hereafter have against the Borrower, any endorser or any guarantor of all or any part of the
Guaranteed Obligations or any other Person. Should any Guarantor have the right,
notwithstanding the foregoing, to exercise its subrogation rights, each Guarantor hereby
expressly and irrevocably (A) subordinates any and all rights at law or in equity to
subrogation, reimbursement, exoneration, contribution, indemnification or set off that such
Guarantor may have to the indefeasible payment in full in cash of the Guaranteed Obligations
and (B) waives any and all defenses available to a surety, guarantor or accommodation
co-obligor until the Guaranteed Obligations are indefeasibly paid in full in cash. Each
Guarantor acknowledges and agrees that this subordination is intended to benefit the
Administrative Agent and the other Holders of Guaranteed Obligations and shall not limit or
otherwise affect such Guarantor’s liability hereunder or the enforceability of this
Guaranty, and that the Administrative Agent, the other Holders of Guaranteed Obligations and
their respective successors and assigns are intended third party beneficiaries of the
waivers and agreements set forth in this Section 7(A).




     (B) Subordination of Intercompany Indebtedness. Each Guarantor agrees that any and
all claims of such Guarantor against the Borrower or any other Guarantor hereunder (each an
“Obligor”) with respect to any “Intercompany Indebtedness” (as hereinafter defined),
any endorser, obligor or any other guarantor of all or any part of the Guaranteed
Obligations, or against any of its properties shall be subordinate and subject in right of
payment to the prior payment, in full and in cash, of all Guaranteed Obligations;
provided that, as long as no Event of Default has occurred and is continuing, such
Guarantor may receive payments of principal and interest from any Obligor with respect to
Intercompany Indebtedness. If all or any part of the assets of any Obligor, or the proceeds
thereof, are subject to any distribution, division or application to the creditors of such
Obligor, whether partial or complete, voluntary or involuntary, and whether by reason of
liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of creditors
or any other action or proceeding, then, and in any such event (such events being herein
referred to as an “Insolvency Event”), any payment or distribution of any kind or
character, either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any indebtedness of any Obligor to any Guarantor
(“Intercompany Indebtedness”) shall be paid or delivered directly to the
Administrative Agent for application on any of the Guaranteed Obligations of such Guarantor,
due or to become due, until such Guaranteed Obligations shall have first been fully paid and
satisfied (in cash). Should any payment, distribution, security or instrument or proceeds
thereof be received by the applicable Guarantor upon or with respect to the Intercompany
Indebtedness after any Insolvency Event and prior to the satisfaction of all of the
Guaranteed Obligations and the termination of all financing arrangements pursuant to any
Loan Document among the Borrower and the Holders of Guaranteed Obligations, such Guarantor
shall receive and hold the same in trust, as trustee, for the benefit of the Holders of
Guaranteed Obligations and shall forthwith deliver the same to the Administrative Agent, for
the benefit of the Holders of Guaranteed Obligations, in precisely the form received (except
for the endorsement or assignment of the Guarantor where necessary), for application to any
of the Guaranteed Obligations, due or not due, and, until so delivered, the same shall be
held in trust by the Guarantor as the property of the Holders of Guaranteed Obligations. If
any such Guarantor fails to make any such endorsement or assignment to the Administrative
Agent, the Administrative Agent or any of its officers or employees is irrevocably
authorized to



6









 







make the same. Each Guarantor agrees that until the Guaranteed Obligations (other than
the contingent indemnity obligations) have been paid in full (in cash) and satisfied and all
financing arrangements pursuant to any Loan Document among the Borrower and the Holders of
Guaranteed Obligations have been terminated, no Guarantor will assign or transfer to any
Person (other than the Administrative Agent) any claim any such Guarantor has or may have
against any Obligor.



          SECTION 8. Contribution with Respect to Guaranteed Obligations.





     (A) To the extent that any Guarantor shall make a payment under this Guaranty (a
“Guarantor Payment”) which, taking into account all other Guarantor Payments then
previously or concurrently made by any other Guarantor, exceeds the amount which otherwise
would have been paid by or attributable to such Guarantor if each Guarantor had paid the
aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion
as such Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior
to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantors
as determined immediately prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Guaranteed Obligations and termination of the
Credit Agreement, the Swap Agreements and the Banking Services Agreements, such Guarantor
shall be entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their
respective Allocable Amounts in effect immediately prior to such Guarantor Payment.




     (B) As of any date of determination, the “Allocable Amount” of any Guarantor shall be
equal to the maximum amount of the claim which could then be recovered from such Guarantor
under this Guaranty without rendering such claim voidable or avoidable under Section 548 of
Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer
Act, Uniform Fraudulent Conveyance Act or similar statute or common law.




     (C) This Section 8 is intended only to define the relative rights of the Guarantors,
and nothing set forth in this Section 8 is intended to or shall impair the obligations of
the Guarantors, jointly and severally, to pay any amounts as and when the same shall become
due and payable in accordance with the terms of this Guaranty.




     (D) The parties hereto acknowledge that the rights of contribution and indemnification
hereunder shall constitute assets of the Guarantor or Guarantors to which such contribution
and indemnification is owing.




     (E) The rights of the indemnifying Guarantors against other Guarantors under this
Section 8 shall be exercisable upon the full and indefeasible payment of the Guaranteed
Obligations in cash and the termination of the Credit Agreement, the Swap Agreements and the
Banking Services Agreements.



          SECTION 9. Stay of Acceleration. If acceleration of the time for payment of any
amount payable by the Borrower under the Credit Agreement, any Swap Agreement, any Banking Services
Agreement or any other Loan Document is stayed upon the insolvency, bankruptcy or reorganization of
the Borrower, all such amounts otherwise subject to acceleration under the terms of the Credit
Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document shall
nonetheless be payable by each of the Guarantors hereunder forthwith on demand by the
Administrative Agent.




7









 








          SECTION 10. Notices. All notices, requests and other communications to any party
hereunder shall be given in the manner prescribed in Article IX of the Credit Agreement with
respect to the Administrative Agent at its notice address therein and with respect to any
Guarantor, in care of the Borrower at the address of the Borrower set forth in the Credit Agreement
or such other address or telecopy number as such party may hereafter specify for such purpose by
notice to the Administrative Agent in accordance with the provisions of such Article IX.




          SECTION 11. No Waivers. No failure or delay by the Administrative Agent or any other
Holder of Guaranteed Obligations in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege. The rights and
remedies provided in this Guaranty, the Credit Agreement, any Swap Agreement, any Banking Services
Agreement and the other Loan Documents shall be cumulative and not exclusive of any rights or
remedies provided by law.




          SECTION 12. Successors and Assigns. This Guaranty is for the benefit of the
Administrative Agent and the other Holders of Guaranteed Obligations and their respective
successors and permitted assigns; provided, that no Guarantor shall have any right to
assign its rights or obligations hereunder without the consent of all of the Lenders, and any such
assignment in violation of this Section 12 shall be null and void; and in the event of an
assignment of any amounts payable under the Credit Agreement, any Swap Agreement, any Banking
Services Agreement or the other Loan Documents in accordance with the respective terms thereof, the
rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with
such indebtedness. This Guaranty shall be binding upon each of the Guarantors and their respective
successors and assigns.




          SECTION 13. Changes in Writing. Other than in connection with the addition of
additional Subsidiaries, which become parties hereto by executing a supplement hereto in the form
attached as Annex I, neither this Guaranty nor any provision hereof may be changed, waived,
discharged or terminated orally, but only in writing signed by each of the Guarantors and the
Administrative Agent with the consent of the Required Lenders under the Credit Agreement.




          SECTION 14. GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.




          SECTION 15. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL; IMMUNITY.





     (A) CONSENT TO JURISDICTION. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE SUPREME COURT
OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT
OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT,
OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY
LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL UNAPPEALABLE
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER




8












 






PROVIDED BY LAW. NOTHING IN THIS GUARANTY SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION
OR PROCEEDING RELATING TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR
ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.




     (B) WAIVER OF JURY TRIAL. EACH GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH HOLDER OF
GUARANTEED OBLIGATIONS HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS GUARANTY OR ANY OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH HOLDER OF GUARANTEED OBLIGATIONS (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.




     (C) EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH
(A) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.




     (D) EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 10. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.




     (E) TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR
OTHERWISE), EACH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS GUARANTY.



          SECTION 16. No Strict Construction. The parties hereto have participated jointly in
the negotiation and drafting of this Guaranty. In the event an ambiguity or question of intent or
interpretation arises, this Guaranty shall be construed as if drafted jointly by the parties hereto
and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of
the authorship of any provisions of this Guaranty.




9









 








          SECTION 17. Taxes, Expenses of Enforcement, etc.





     (A) Taxes.




          (i) All payments by any Guarantor to or for the account of any Lender, the Issuing
Bank, the Administrative Agent or any other Holder of Guaranteed Obligations hereunder or
under any promissory note or application for a Letter of Credit shall be made free and clear
of and without deduction for any and all Indemnified Taxes and Other Taxes. If any
Guarantor shall be required by law to deduct any Indemnified Taxes and Other Taxes from or
in respect of any sum payable hereunder to any Lender, the Issuing Bank, the Administrative
Agent or any other Holder of Guaranteed Obligations, (a) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 17(A)) such Lender, the Issuing Bank, the
Administrative Agent or any other Holder of Guaranteed Obligations (as the case may be)
receives an amount equal to the sum it would have received had no such deductions been made,
(b) such Guarantor shall make such deductions, (c) such Guarantor shall pay the full amount
deducted to the relevant authority in accordance with applicable law and (d) such Guarantor
shall furnish to the Administrative Agent the original or a certified copy of a receipt
issued by the applicable Governmental Authority evidencing payment thereof (or other
evidence of such payment reasonably satisfactory to the Administrative Agent) within thirty
(30) days after such payment is made.




          (ii) In addition, the Guarantors hereby agree to pay any present or future stamp or
documentary taxes and any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or under any promissory note or application for a
Letter of Credit or from the execution or delivery of, or otherwise with respect to, this
Guaranty or any promissory note or application for a Letter of Credit (“Other
Taxes”).




          (iii) The Guarantors hereby agree to indemnify the Administrative Agent, the Issuing
Bank, each Lender and any other Holder of Guaranteed Obligations for the full actual amount
of Indemnified Taxes or Other Taxes (including, without limitation, any Indemnified Taxes or
Other Taxes imposed on amounts payable under this Section 17(A)) paid by the Administrative
Agent, the Issuing Bank, such Lender or such other Holder of Guaranteed Obligations and any
penalties, interest and reasonable expenses arising therefrom or with respect thereto.
Payments due under this indemnification shall be made within thirty (30) days of the date
the Administrative Agent, the Issuing Bank, such Lender or such other Holder of Guaranteed
Obligations makes demand therefor.




          (iv) By accepting the benefits hereof, each Lender agrees that it will comply with
Section 2.17(e) of the Credit Agreement, to the extent applicable thereto.




          (v) By accepting the benefits hereof, each Lender agrees that it will comply with
Section 2.17(f) of the Credit Agreement.




     (B) Expenses of Enforcement, Etc. Subject to the terms of the Credit Agreement, after
the occurrence of an Event of Default under the Credit Agreement, the Lenders shall have the
right at any time to direct the Administrative Agent to commence enforcement proceedings
with respect to the Guaranteed Obligations. The Guarantors agree to reimburse the
Administrative Agent and the other Holders of Guaranteed Obligations for any reasonable
costs and out-of-pocket expenses (including reasonable attorneys’ fees and time charges of
one primary counsel (and one local counsel in each applicable jurisdiction) for the
Administrative Agent and one additional counsel for all the other Holders of Guaranteed
Obligations, and additional counsel as



10









 







the Administrative Agent or any Holder of Guaranteed Obligations or group thereof
reasonably determines are necessary in light of actual or potential conflicts of interest or
the availability of different claims or defenses) paid or incurred by the Administrative
Agent or any other Holder of Guaranteed Obligations in connection with the collection and
enforcement of amounts due under the Loan Documents, including without limitation this
Guaranty. The Administrative Agent agrees to distribute payments received from any of the
Guarantors hereunder to the other Holders of Guaranteed Obligations on a pro rata basis for
application in accordance with the terms of the Credit Agreement.



          SECTION 18. Setoff. At any time after all or any part of the Guaranteed Obligations
have become due and payable (by acceleration or otherwise), each Holder of Guaranteed Obligations
(including the Administrative Agent) may, without notice to any Guarantor and regardless of the
acceptance of any security or collateral for the payment hereof, appropriate and apply in
accordance with the terms of the Credit Agreement toward the payment of all or any part of the
Guaranteed Obligations (i) any indebtedness due or to become due from such Holder of Guaranteed
Obligations or the Administrative Agent to any Guarantor, and (ii) any moneys, credits or other
property belonging to any Guarantor, at any time held by or coming into the possession of such
Holder of Guaranteed Obligations (including the Administrative Agent) or any of their respective
affiliates.




          SECTION 19. Financial Information. Each Guarantor hereby assumes responsibility for
keeping itself informed of the financial condition of the Borrower and any and all endorsers and/or
other Guarantors of all or any part of the Guaranteed Obligations, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations, or any part thereof, that
diligent inquiry would reveal, and each Guarantor hereby agrees that none of the Holders of
Guaranteed Obligations (including the Administrative Agent) shall have any duty to advise such
Guarantor of information known to any of them regarding such condition or any such circumstances.
In the event any Holder of Guaranteed Obligations (including the Administrative Agent), in its sole
discretion, undertakes at any time or from time to time to provide any such information to a
Guarantor, such Holder of Guaranteed Obligations (including the Administrative Agent) shall be
under no obligation (i) to undertake any investigation not a part of its regular business routine,
(ii) to disclose any information which such Holder of Guaranteed Obligations (including the
Administrative Agent), pursuant to accepted or reasonable commercial finance or banking practices,
wishes to maintain confidential or (iii) to make any other or future disclosures of such
information or any other information to such Guarantor.




          SECTION 20. Severability. Wherever possible, each provision of this Guaranty shall
be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity without invalidating the remainder
of such provision or the remaining provisions of this Guaranty.




          SECTION 21. Merger. This Guaranty represents the final agreement of each of the
Guarantors with respect to the matters contained herein and may not be contradicted by evidence of
prior or contemporaneous agreements, or subsequent oral agreements, between the Guarantor and any
Holder of Guaranteed Obligations (including the Administrative Agent).




          SECTION 22. Headings. Section headings in this Guaranty are for convenience of
reference only and shall not govern the interpretation of any provision of this Guaranty.




          SECTION 23. Judgment Currency. If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due from any Guarantor hereunder in the currency expressed
to be payable herein (the “specified currency”) into another currency, the parties hereto
agree, to the fullest



11









 






extent that they may effectively do so, that the rate of exchange used shall be that at which
in accordance with normal banking procedures the Administrative Agent could purchase the specified
currency with such other currency at the Administrative Agent’s main New York City office on the
Business Day preceding that on which final, non-appealable judgment is given. The obligations of
each Guarantor in respect of any sum due hereunder shall, notwithstanding any judgment in a
currency other than the specified currency, be discharged only to the extent that on the Business
Day following receipt by any Holder of Guaranteed Obligations (including the Administrative Agent),
as the case may be, of any sum adjudged to be so due in such other currency such Holder of
Guaranteed Obligations (including the Administrative Agent), as the case may be, may in accordance
with normal, reasonable banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than the sum originally due
to such Holder of Guaranteed Obligations (including the Administrative Agent), as the case may be,
in the specified currency, each Guarantor agrees, to the fullest extent that it may effectively do
so, as a separate obligation and notwithstanding any such judgment, to indemnify such Holder of
Guaranteed Obligations (including the Administrative Agent), as the case may be, against such loss,
and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any
Holder of Guaranteed Obligations (including the Administrative Agent), as the case may be, in the
specified currency and (b) amounts shared with other Holders of Guaranteed Obligations as a result
of allocations of such excess as a disproportionate payment to such other Holder of Guaranteed
Obligations under Section 2.18 of the Credit Agreement, such Holder of Guaranteed Obligations
(including the Administrative Agent), as the case may be, agrees, by accepting the benefits hereof,
to remit such excess to such Guarantor.



Remainder of Page Intentionally Blank.




12









 








          IN WITNESS WHEREOF, each of the Initial Guarantors has caused this Guaranty to be duly
executed by its authorized officer as of the day and year first above written.




	 	 	 	 	 	 	 
	 	 	[GUARANTORS]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

	 	 
	 

	 	Title:	 	 	 	 






13









 






Acknowledged and Agreed

as of the date first written above:




JPMORGAN CHASE BANK, N.A.,

as Administrative Agent




	 	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 
	 	 
	Title:
	 	 	 	 






14









 






EXHIBIT F




ANNEX I TO GUARANTY




          Reference is hereby made to the Guaranty (the “Guaranty”) made as of January 4, 2008
by and among [GUARANTORS TO COME] (the “Initial Guarantors” and along with any additional
Subsidiaries of the Borrower, which become parties thereto and together with the undersigned, the
“Guarantors”) in favor of the Administrative Agent, for the ratable benefit of the Holders
of Guaranteed Obligations, under the Credit Agreement. Capitalized terms used herein and not
defined herein shall have the meanings given to them in the Guaranty. By its execution below, the
undersigned [NAME OF NEW GUARANTOR], a [corporation] [partnership] [limited liability company],
agrees to become, and does hereby become, a Guarantor under the Guaranty and agrees to be bound by
such Guaranty as if originally a party thereto. By its execution below, the undersigned represents
and warrants as to itself that all of the representations and warranties contained in Section 2 of
the Guaranty are true and correct in all respects as of the date hereof.




          [Notwithstanding the foregoing or anything else contained in the Guaranty to the contrary, the
maximum amount of Guaranteed Obligations of the undersigned under the Guaranty at any time shall
not exceed the aggregate outstanding amount of intercompany debt owing by the undersigned to the
Borrower at such time.]1




          IN WITNESS WHEREOF, [NAME OF NEW GUARANTOR], a [corporation] [partnership] [limited liability
company] has executed and delivered this Annex I counterpart to the Guaranty as of this                     
day of                     , 20___.




	 	 	 	 	 	 	 
	 	 	[NAME OF NEW GUARANTOR]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Its:
	 	 

	 	 








 




			
	1	 	To be inserted in the case of a Guarantor which is a
subsidiary of Apollo Global.




15









 










EXHIBIT G




FORM OF COMPLIANCE CERTIFICATE




APOLLO GROUP, INC.




COMPLIANCE CERTIFICATE




          I, the undersigned, [Name of Officer], [Title of Officer] of Apollo Group, Inc. (the
“Borrower”), an Arizona corporation, do hereby certify, solely in my capacity as an officer
of the Borrower and not in my individual capacity and without personal liability, on behalf of the
Borrower, that:




          1. This Certificate is furnished pursuant to the Credit Agreement, dated as of January 4,
2008, among the Borrower, the Lenders and agents party thereto, and JPMorgan Chase Bank, N.A. as
Administrative Agent (as the same may be amended, supplemented or otherwise modified from time to
time, the “Credit Agreement”). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Credit Agreement.




          2. I have reviewed the terms of the Credit Agreement and I have made, or have caused to be
made under my supervision, a detailed review of the transactions and conditions of the Borrower and
its Subsidiaries during the accounting period covered by the attached financial statements [for
quarterly financial statements add: and such financial statements present fairly in all material
respects the financial condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes];




          3. The examinations described in paragraph 2 did not disclose, except as set forth
below, and I have no knowledge of (i) the existence of any condition or event which constitutes a
Default at the end of the accounting period covered by the attached financial statements or as of
the date of this Certificate or (ii) any material change in GAAP or in the application thereof that
has occurred since the date of the audited financial statements referred to in Section 3.04 of the
Credit Agreement; and




          4. Exhibit A attached hereto sets forth financial data and computations evidencing the
Borrower’s compliance with the financial covenants set forth in Section 6.11 of the Credit
Agreement, all of which data and computations are true, complete and correct.



Described below are the exceptions, if any, to paragraph 3 by listing, in detail, the (i)
nature of the condition or event, the period during which it has existed and the action which the
Borrower has taken, is taking, or proposes to take with respect to each such condition or event or
(ii) the material change in GAAP or the application thereof and the effect of such change on the
attached financial statements:




          [                    ]



(signature page follows)




 









 








          The foregoing certifications, together with the computations set forth in Exhibit A
hereto and the financial statements delivered with this Certificate in support hereof, are made and
delivered this ___ day of                     , 20___.




	 	 	 	 	 	 	 
	 	 	APOLLO GROUP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	Name:
	 	 

 	 	 
	 

	 	Title:
	 	 	 	 






17









 







EXHIBIT A




Compliance as of                      ___, 20___ with

Section 6.11 of the Credit Agreement




	 	 	 	 	 
	I.	 	CALCULATION OF CERTAIN COMPONENTS OF FINANCIAL COVENANTS
	 
	 	 	 	 
	A.

	 	CONSOLIDATED EBITDA	 	 
	 
	 	 	 	 
	(1)

	 	Consolidated Net Income
	 	  $                    
	 
	 	 	 	 
	 

	 	plus, to the extent deducted from revenues in
determining Consolidated Net Income,	 	 
	 
	 	 	 	 
	(2)

	 	Consolidated Interest Expense
	 	+$                    
	 
	 	 	 	 
	(3)

	 	expense for taxes paid or accrued
	 	+$                    
	 
	 	 	 	 
	(4)

	 	depreciation
	 	+$                    
	 
	 	 	 	 
	(5)

	 	amortization
	 	+$                    
	 
	 	 	 	 
	(6)

	 	non-cash losses incurred other than in the ordinary
course of business
	 	+$                    
	 
	 	 	 	 
	(7)

	 	share-based non-cash compensation expense
	 	+$                    
	 
	 	 	 	 
	 	 	minus, to the extent included in Consolidated Net Income,
	 
	 	 	 	 
	(8)

	 	interest income
	 	-$                    
	 
	 	 	 	 
	(9)

	 	non-cash gains realized other than in the ordinary
course of business
	 	-$                    
	 
	 	 	 	 
	(10)

	 	the amount of any cash payments in respect of any
share-based non-cash compensation expense described in
item (7) above subsequent to the fiscal quarter in which
the relevant share-based non-compensation expense was
incurred
	 	
-$                    
	 
	 	 	 	 
	(11)

	 	Consolidated EBITDA (sum of item I.A.(1) through item
I.(A).(10)
	 	=$                    
	 
	 	 	 	 
	B.

	 	CONSOLIDATED TOTAL INDEBTEDNESS	 	 
	 
	 	 	 	 
	(1)

	 	all obligations for borrowed money
	 	  $                    
	 
	 	 	 	 
	(2)

	 	all obligations evidenced by bonds, debentures, notes or similar instruments
	 	+$                    






 









 







	 	 	 	 	 
	(3)

	 	all obligations upon which interest charges are
customarily paid (excluding interest charges applied for
late payment)
	 	+$                    
	 
	 	 	 	 
	(4)

	 	all obligations under conditional sale or other title
retention agreements relating to property acquired
	 	+$                    
	 
	 	 	 	 
	(5)

	 	all obligations in respect of the deferred purchase
price of property or services (excluding accounts
payable incurred in the ordinary course of business)
	 	

+$                    
	 
	 	 	 	 
	(6)

	 	all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on
property owned or acquired, whether or not the
Indebtedness secured thereby has been assumed
	 	



+$                    
	 
	 	 	 	 
	(7)

	 	all Guarantees of Indebtedness of others
	 	+$                    
	 
	 	 	 	 
	(8)

	 	all Capital Lease Obligations
	 	+$                    
	 
	 	 	 	 
	(9)

	 	all reimbursement obligations, contingent or otherwise,
as an account party in respect of letters of credit and
letters of guaranty
	 	

+$                    
	 
	 	 	 	 
	(10)

	 	all obligations to pay principal, contingent or
otherwise, in respect of bankers’ acceptances
	 	+$                    
	 
	 	 	 	 
	(11)

	 	all obligations under any Swap Agreement or under any
similar type of agreement
	 	+$                    
	 
	 	 	 	 
	(12)

	 	All obligations under Sale and Leaseback Transactions
	 	+$                    
	 
	 	 	 	 
	(13)

	 	Consolidated Total Indebtedness (sum of Item I.B.(1)
through Item I.B.(12)
	 	=$                    
	 
	 	 	 	 
	 
	II.

	 	CALCULATION OF FINANCIAL COVENANT COMPLIANCE	 	 
	 
	 	 	 	 
	A.

	 	MAXIMUM LEVERAGE RATIO (Section 6.11(a))	 	 
	 
	 	 	 	 
	(1)

	 	Consolidated Total Indebtedness as of the last day of
the relevant fiscal quarter (item I.B.(13) above)
	 	$                    
	 
	 	 	 	 
	(2)

	 	Consolidated EBITDA for the period of four (4)
consecutive fiscal quarters ending with the end of as
of the last day of the relevant fiscal quarter (item
I.A.(11) above)
	 	

$                    
	 
	 	 	 	 
	(3)

	 	Leverage Ratio (ratio of item II.A.(1) to item II.A.(2))
	 	___ to 1.00
	 
	 	 	 	 
	(4)

	 	Maximum Leverage Ratio
	 	2.50 to 1.00






 









 






	 	 	 	 	 
	B.

	 	MINIMUM COVERAGE RATIO (Section 6.11(b))	 	 
	 
	 	 	 	 
	(1)

	 	Consolidated EBITDA for the period of four (4)
consecutive fiscal quarters ending with the end of as
of the last day of the relevant fiscal quarter (item
I.A.(11) above)
	 	

$                    
	 
	 	 	 	 
	(2)

	 	Consolidated Rent Expense (to the extent deducted from
revenues in determining Consolidated Net Income) for
the period of four (4) consecutive fiscal quarters
ending with the end of as of the last day of the
relevant fiscal quarter
	 	

$                    
	 
	 	 	 	 
	(3)

	 	Consolidated EBITDAR (item II.B.(1) plus item II.B.(2))
	 	$                    
	 
	 	 	 	 
	(4)

	 	Consolidated Interest Expense plus Consolidated Rent
Expense, in each case for the period of four (4)
consecutive fiscal quarters ending with the end of as
of the last day of the relevant fiscal quarter
	 	

$                    
	 
	 	 	 	 
	(3)

	 	Coverage Ratio (ratio of item II.B.(3) to item II.B.(4))
	 	                     to 1.00
	 
	 	 	 	 
	(4)

	 	Minimum Coverage Ratio
	 	1.75 to 1.00
	 
	 	 	 	 
	 
	III.

	 	CALCULATION OF CERTAIN OTHER COVENANT COMPLIANCE	 	 
	 
	 	 	 	 
	A.	 	MINIMUM CONSOLIDATED DOE RATIO (Section 6.11(c))7
	 
	 	 	 	 
	(1)

	 	Consolidated DOE Ratio for the relevant fiscal year of the
Borrower
	 	                     to 1.00
	 
	 	 	 	 
	(2)

	 	Minimum Consolidated DOE Ratio
	 	1.50 to 1.00








 




			
	7	 	To be tested at fiscal year end only.






 











 





SCHEDULE 3.01




SUBSIDIARIES




	 	 	 	 	 	 	 	 	 	 	 
	 	 	State or	 	 	 	 	 	 	 	 
	 	 	Other	 	 	 	 	 	 	 	Material
	 	 	Jurisdiction	 	 	 	Ownership	 	Domestic
	Name	 	of Incorporation	 	Owner	 	%	 	Sub?
	Apollo Group, Inc.

	 	Arizona
	 	Apollo Group, Inc. Class A
Shareholders
	 	 	100	%	 	 
	Apollo Development Corporation

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	Apollo Group International Development, LLC

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	Apollo Investments, Inc.

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Apollo NB Holding Company

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Apollo NB Corporation

	 	Canada
	 	Apollo NB Holding Company
	 	 	100	%	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Apollo Online, Inc.

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Apollo Publishing & Learning Technologies, Inc.

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	Apollo University & Graduate Institute

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	The College of Financial Planning Institutes
Corporation

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	College for Financial Planning, Inc.

	 	Arizona
	 	College for Financial Planning

Institutes Corporation
	 	 	100	%	 	No
	Insight Schools, Inc.

	 	Oregon
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Institute for Professional Development, Inc.

	 	California
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	University of Phoenix, Inc.

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	Yes
	Western International University, Inc.

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	UOP Michigan

	 	Michigan
	 	University of Phoenix, Inc.
	 	 	100	%	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Apollo Canada Holding Company

	 	Arizona
	 	University of Phoenix, Inc.
	 	 	100	%	 	No
	UOP, ULC

	 	Canada
	 	Apollo Canada Holding Company
	 	 	100	%	 	No
	International Education Partners, Inc.

	 	Arizona
	 	University of Phoenix, Inc.
	 	 	100	%	 	No
	Global Education Partners, Inc.

	 	Arizona
	 	University of Phoenix, Inc.
	 	 	100	%	 	No
	 
	 	 	 	 	 	 	 	 	 	 
	Universidad de Phoenix-Mexico, SRL

	 	Mexico
	 	University of Phoenix, Inc.
	 	 	99	%	 	No
	 

	 	 	 	International Education
Partners, Inc.
	 	 	1	%	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Administradora Universidad de Phoenix-Mexico, 

SRL

	 	Mexico
	 	Universidad de Phoenix-Mexico,

SRL
	 	 	99	%	 	No
	 

	 	 	 	University of Phoenix, Inc.
	 	 	1	%	 	 
	UOP International CV

	 	Netherlands
	 	University of Phoenix, Inc.
	 	 	80	%	 	No
	 

	 	 	 	International Education Partners, Inc.
	 	 	10	%	 	 
	 

	 	 	 	Global Education Partners, Inc.
	 	 	10	%	 	 






 









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	State or	 	 	 	 	 	 	 	 
	 	 	Other	 	 	 	 	 	 	 	Material
	 	 	Jurisdiction	 	 	 	Ownership	 	Domestic
	Name	 	of Incorporation	 	Owner	 	%	 	Sub?
	UOP Europe BV

	 	Netherlands
	 	UOP International CV
	 	 	100	%	 	No
	Alumni Network

	 	Arizona
	 	 	 	 	0	%	 	No
	Apollo Education Corporation

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	Apollo Learning Group, Inc.

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	Apollo Library, Inc.

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	 
	Apollo Press, inc.

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	Computer Aided Learning Corporation, Inc.

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	 
	Riverpoint Lots 1/3/5 LLC

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	Riverpoint Lots 4/8 LLC

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	 
	Riverpoint Lot 2 LLC

	 	Arizona
	 	Apollo Group, Inc.
	 	 	100	%	 	No
	Apollo Global, Inc.

	 	Delaware
	 	Apollo Group, Inc.
	 	 	80.1	%	 	No
	 

	 	 	 	Carlyle Group
	 	 	19.9	%	 	 
	Aptimus, Inc.

	 	Washington
	 	Apollo Group, Inc.
	 	 	100	%	 	No






 









 





SCHEDULE 3.06(B)




LITIGATION1



The following litigation matters are outstanding as of the Effective Date:



1. Incentive Compensation Qui Tam Action

2. Axia Qui Tam Action

3. In re Apollo Group, Inc. Securities Litigation

4. Alaska Electrical Pension Fund v. Sperling

5. Equal Employment Opportunity Commission v. UPX

6. Barnett v. John Blair et al

7. Bamboo Partners v. Nelson et al

8. Teamsters Local Union Punitive Class Action






 




			
	1	 	Descriptions of the above listed litigation matters
are available in the Borrower’s Form 10-K filed October 29, 2007.




 









 






SCHEDULE 6.01




EXISTING INDEBTEDNESS





	•	 	Capital Leases:






	 	o	 	Lease# 89-12:
	 	 	 	
Landlord: ASHCRAFT REAL ESTATE & DEV CORP

Address: 7471 Pan American Freeway N.E., Albuquerque, NM 87109

Term End: 2/28/2008

Balance remaining at 8/31/07: $146,249

	 
	 	o	 	Lease# 01-23:
	 	 	 	
Landlord: JADE PIG VENTURES

Address: 318 River Ridge Dr NW, Grand Rapids, MI, 49544

Term End: 11/30/2010

Balance remaining at 8/31/07: $1,257,976






	•	 	Cisco Service Contract






	 	o	 	Maintenance Agreement Expires 12/31/2007
	 	o	 	
Amount Remaining at 11/30/2007 = $943,228






	•	 	John G. Sperling Deferred Compensation Agreement






	 	o	 	Balance at 11/30/2007 = $2,247,684




 









 











SCHEDULE 6.02




EXISTING LIENS





	•	 	Capital Leases:






	 	o	 	Lease# 89-12:
Landlord: ASHCRAFT REAL ESTATE & DEV CORP

Address: 7471 Pan American Freeway N.E., Albuquerque, NM 87109

Term End: 2/28/2008

Balance remaining at 8/31/07: $146,249
	 
	 	o	 	Lease# 01-23:
	 	 	 	
Landlord: JADE PIG VENTURES

Address: 318 River Ridge Dr NW, Grand Rapids, MI, 49544

Term End: 11/30/2010

Balance remaining at 8/31/07: $1,257,976




 









 











SCHEDULE 6.04




EXISTING INVESTMENTS



Walden Media and Information Technology Fund, L.P.





	 	•	 	Commitment of $2,500,000
	 
	 	•	 	Funded Balance of $2,500,000 as of November 30, 2007
	 
	 	•	 	Current Ownership 4.05%
	 
	 	•	 	Current Asset Balance $116,980 as of November 30, 2007




WaldenVC II, L.P.





	 	•	 	Commitment of $5,000,000
	 
	 	•	 	Funded Balance of $4,500,000 as of November 30, 2007
	 
	 	•	 	Current Ownership 2.26%
	 
	 	•	 	Current Asset Balance $3,024,483 as of November 30, 2007




Apollo International, Inc.





	 	•	 	Current Ownership 3.78%
	 
	 	•	 	Current Asset Balance $0 as of November 30, 2007
	 
	 	•	 	No Future Funding Commitments





 









 





SCHEDULE 6.08




RESTRICTIVE AGREEMENTS





	•	 	Capital Leases:






	 	o	 	Lease# 89-12:

Landlord: ASHCRAFT REAL ESTATE & DEV CORP

Address: 7471 Pan American Freeway N.E., Albuquerque, NM 87109

Term End: 2/28/2008

Balance remaining at 8/31/07: $146,249
	 
	 	o	 	Lease# 01-23:

Landlord: JADE PIG VENTURES

Address: 318 River Ridge Dr NW, Grand Rapids, MI, 49544

Term End: 11/30/2010

	 	 	 	Balance remaining at 8/31/07: $1,257,976