EDMC 03.31.2013 EX 10.2 First Amendment to Letter of Credit Facility Agreement BNP Paribas






FIRST AMENDMENT TO THE LETTER OF CREDIT FACILITY AGREEMENT
This FIRST AMENDMENT TO THE LETTER OF CREDIT FACILITY AGREEMENT (this “First Amendment”), dated as of February 15, 2013, is entered into by and among Education Management LLC, a Delaware limited liability company (the “Account Party”), for purposes of Sections B and C hereof, Education Management Holdings LLC, a Delaware limited liability company (the “Guarantor”) and the Grantor Subsidiaries listed on the signature pages hereto, the Lender party hereto, and BNP Paribas, as Administrative Agent, Collateral Agent and Issuing Bank for the Lenders.  Unless otherwise defined herein, all capitalized terms used herein and defined in the LC Facility Agreement referred to below are used herein as therein defined.
W I T N E S S E T H :
WHEREAS, the Account Party, the Guarantor, the Grantor Subsidiaries (collectively, the “Credit Parties”), the Lenders, the Administrative Agent, the Collateral Agent and the Issuing Bank are party to that certain Letter of Credit Facility Agreement, dated as of March 9, 2012 (the “LC Facility Agreement”);


WHEREAS, the Credit Parties have requested that the Lenders agree to amend certain provisions of the LC Facility Agreement as provided for herein; and


WHEREAS, pursuant to the terms and subject to the conditions set forth below, BNP Paribas, as sole Lender is willing to agree to such amendment relating to the LC Facility Agreement.


NOW, THEREFORE, in consideration of the premises, covenants and agreements contained herein, and for other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto, intending to be legally bound, hereby agree as follows:
		
	A.
	Amendments to LC Facility Agreement:  


1.The fifth paragraph under “RECITALS” is hereby amended by adding the following text immediately prior to the period set forth therein:
“or upon or following a permanent reduction of the Commitments in accordance with Section 2.9(c), the Cash Collateral may be reduced at the written request of the Account Party to an aggregate amount not less than 105% of the Commitments after giving effect to such reduction.” 
2.The definition of “Maturity Date” contained in Section 1.1 of the LC Facility Agreement is hereby amended and restated in its entirety as follows:
'“Maturity Date” means the earliest of (a) July 8, 2014, (b) the occurrence of the 2015 Revolving Commitment Termination Date (as defined in the Existing Credit Agreement as in effect on the date hereof) and (c) the date upon which the Bank of America LC Facility Agreement has matured, been accelerated or been terminated by Bank of America, N.A. or the Account Party.'
3.The following new definitions shall be added in Section 1.1 of the LC Facility Agreement in appropriate alphabetical order:
“Bank of America Commitment” as defined in the Bank of America LC Facility Agreement.
“Bank of America LC Facility Agreement” means the Letter of Credit Facility Agreement dated as of November 30, 2011 among the Account Party, the Grantors party thereto, Bank of America, N.A. and the other parties thereto, as amended by Amendment No. 1, dated as of January 29, 2013.
4.Section 2.1(a)(v) is hereby amended and restated in its entirety as follows:
“(v)    in no event shall any Letter of Credit have an expiration date later than the earlier of (1) 5 Business Days prior to the Maturity Date and (2) unless otherwise agreed by Issuing Bank, the date which is eighteen months from the date of issuance of such Letter of Credit; and” 
5.Section 2.8(d) is hereby amended by adding the following text immediately prior to the period set forth therein:









“or upon or following a permanent reduction of the Commitments in accordance with Section 2.9(c), the Cash Collateral may be reduced at the written request of the Account Party to an aggregate amount not less than 105% of the Commitments after giving effect to such reduction.” 
6.Section 2.9 shall be amended to add a new clause (c) as follows:
“The Account Party shall, upon not less than three Business Days prior written notice, permanently terminate in whole or permanently reduce in part the Commitments proportionately in amount to the reduction of the Bank of America Commitments in accordance with Section 2.13(a) of the Bank of America LC Facility Agreement.”
7.A new Section 5.11 shall be inserted in the LC Facility Agreement as follows:
“5.11    Five Business Days prior to the occurrence thereof, notify the Administrative Agent in writing of any contemplated permanent reduction in the Bank of America Commitments as contemplated pursuant to Section 2.13(a) of the Bank of America LC Facility Agreement.”    
		
	B.
	Representations, Warranties and Miscellaneous Provisions




1.    In order to induce the Lender to enter into this First Amendment, each Credit Party hereby jointly and severally represents and warrants as follows on the date hereof that:
(a)    Each Credit Party which is party hereto has all requisite power and authority to enter into this First Amendment and to carry out the transactions contemplated by, and perform its obligations under, the LC Facility Agreement as amended by this First Amendment (the “Amended Agreement”) and the other Credit Documents; 
(b)    The execution and delivery of this First Amendment and the performance of the Amended Agreement and the other Credit Documents have been duly authorized by all necessary actions on the part of each Credit Party and each of this First Amendment, the Amended Agreement and each other Credit Document constitutes a legal, valid and binding obligation of such Credit Party enforceable against such Credit Party 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; 
(c)    No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this First Amendment that would constitute a Default or an Event of Default; 
(d)    All of the representations and warranties set forth in Section 4 of the LC Facility Agreement and each other Credit Document are true and correct in all material respects on the First Amendment Effective Date (as defined below), both before and after giving effect to this First Amendment, with the same effect as though such representations and warranties had been made on and as of the First Amendment Effective Date, except to the extent such representations and warranties expressly relate to an earlier date; and
     (e)    the letter of credit issued under the Bank of America LC Facility Agreement (as defined below) remains outstanding and undrawn as of the date hereof.
2.This First Amendment is limited as specified and shall not constitute a modification, acceptance or waiver of any other provision of the LC Facility Agreement or any other Credit Document. 
3.    This First Amendment may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which counterparts when executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.  A complete set of counterparts shall be lodged with the Account Party and the Administrative Agent.
4.    THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF. 
5.    This First Amendment shall become effective as of the date hereof (the “First Amendment Effective Date”); provided that each of the following conditions shall have been satisfied:









(a)     the Account Party, the Guarantor, each other Credit Party and the Lender shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered (including by way of facsimile or electronic transmission) the same to the Administrative Agent;
(b)     the Account Party shall have paid all fees and actual and reasonable costs and expenses of the Administrative Agent, the Collateral Agent and the Issuing Bank in connection with this First Amendment, including the reasonable fees, charges and disbursements of White & Case LLP, counsel for the Administrative Agent, the Collateral Agent and the Issuing Bank; 
(c)    each of the representations and warranties set for in Section B.1 above shall be true and correct on such date; and


(d)    the Account Party shall have delivered to the Administrative Agent a fully executed First Amendment of the Bank of America LC Facility Agreement dated on or prior to the date hereof providing for an extension of the Maturity Date (as defined therein) to a date no earlier than the Maturity Date set forth in this First Amendment and otherwise in a manner reasonably satisfactory to the Administrative Agent.


6.From and after the First Amendment Effective Date, all references in the LC Facility Agreement and each of the other Credit Documents shall be deemed to be references to the LC Facility Agreement as modified hereby, and the First Amendment shall be deemed to be a Credit Document.


C.    Acknowledgement and Consent
The Guarantor and each Grantor Subsidiary hereby acknowledges that it has reviewed the terms and provisions of the LC Facility Agreement and this First Amendment and acknowledges the amendment of the LC Facility Agreement effected pursuant to this First Amendment.  The Guarantor and each Grantor Subsidiary hereby confirms that each Credit Document to which it is a party or otherwise bound and all Collateral encumbered thereby will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Credit Documents the payment and performance of all “Obligations” under each of the Credit Documents to which it is a party (in each case as such term is defined in the applicable Credit Document).
The Guarantor and each Grantor Subsidiary acknowledges and agrees that any of the Credit Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable and shall not be impaired or limited by the execution or effectiveness of this First Amendment.  The Guarantor and each Grantor Subsidiary represents and warrants that all representations and warranties contained in the Amended Agreement and the Credit Documents to which it is a party or otherwise bound are true and correct in all material respects on and as of the First Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case they were true and correct in all material respects on and as of such earlier date.
The Guarantor and each Grantor Subsidiary acknowledges and agrees that (i) notwithstanding the conditions to effectiveness set forth in this First Amendment, such Person is not required by the terms of the LC Facility Agreement or any other Credit Document to consent to the amendments to the LC Facility Agreement effected pursuant to this First Amendment and (ii) nothing in the LC Facility Agreement, this First Amendment or any other Credit Document shall be deemed to require the consent of such Person to any future amendments to the LC Facility Agreement.
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IN WITNESS WHEREOF, the undersigned have caused this First Amendment to be duly executed and delivered as of the date first above written. 
	
		
	EDUCATION MANAGEMENT LLC,  as Account Party

	By

	 
	


	 
	Name: 

	 
	Title: 






	
		
	EDUCATION MANAGEMENT HOLDINGS LLC, as Holdings and Guarantor

	By

	 
	


	 
	Name: 

	 
	Title: 





















	
		
	GRANTOR SUBSIDIARIES:


The Art Institute of Atlanta, LLC
The Art Institute of Austin, Inc.
The Art Institute of Charleston, Inc.
The Art Institute of Charlotte, LLC
The Art Institute of Dallas, Inc.
The Art Institute of Michigan, Inc.
The Art Institute of Fort Worth, Inc.
The Art Institute of Fort Lauderdale, Inc.
The Art Institute of Houston, Inc.
The Art Institute of Jacksonville, Inc.
Miami International University of Art & Design, Inc.
The Art Institutes International Minnesota, Inc.
The Art Institute of Tennessee - Nashville, Inc.
The Art Institute of California - Orange County, Inc.
The Art Institute of Philadelphia LLC
The Art Institute of California - Sacramento, Inc.
The Art Institute of California - Sunnyvale, Inc.
The Art Institute of Tucson, Inc.
The Art Institute of Washington, Inc.
The Art Institute of York - Pennsylvania LLC
Argosy Education Group, Inc.
American Education Centers, Inc.
The Asher School of Business Education Corporation
Brown Mackie College - Boise, Inc.
Michiana College Education Corporation
Brown Mackie College - Greenville, Inc.
Brown Mackie College - Indianapolis, Inc.
Brown Mackie College - Kansas City LLC
Stautzenberger College Education Corporation
Southern Ohio College LLC
Brown Mackie College - Phoenix, Inc.
Brown Mackie College - Salina LLC
Brown Mackie College - Tulsa, Inc.
South University of Alabama, Inc.
South University of Virginia, Inc.
South University of Florida, Inc.
Western State University of Southern California













	
		
	By

	 
	


	 
	Name: 

	 
	Title: 

	 













	
		
	BNP PARIBAS, as Administrative Agent, Collateral Agent, AND ISSUING BANK

	By

	 
	 

	 
	Name:

	 
	Title:

	By

	 
	


	 
	Name:

	 
	Title:

	BNP PARIBAS, as SOLE LENDER

	By

	 
	 

	 
	Name:

	 
	Title:

	By

	 
	


	 
	Name:

	 
	Title: